SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
PLAY-BY-PLAY TOYS & NOVELTIES, INC.
(Name of Registrant as Specified in its Charter)
_____________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1. Amount Previously Paid:
2. Form, Schedule or Registration Statement No.:
3. Filing Party:
4. Date Filed:
<PAGE>
PLAY-BY-PLAY TOYS & NOVELTIES, INC.
4400 TEJASCO
SAN ANTONIO, TEXAS 78218-0267
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 7, 1998
To the Shareholders of
Play-By-Play Toys & Novelties, Inc.
NOTICE IS HEREBY GIVEN that the 1998 Annual Meeting of Shareholders of
PLAY-BY-Play Toys & Novelties, Inc. (the "Company") will be held at the San
Antonio Doubletree Hotel and Conference Center, 37 N. E. Loop 410, San Antonio,
Texas 78216 on the 7th day of December, 1998, at 3:00 p.m. (local time) for the
following purposes:
1. "FOR" the election of Directors of the nominees named on the
accompanying Proxy; and
2. "FOR" the ratification of the selection of PricewaterhouseCoopers LLP,
as certified public accountants, for the Company for the fiscal year
ending July 31, 1999; and
3. To transact such other business as may properly come before the meeting
or any adjournments thereof.
Only common shareholders of record at the close of business on November 17,
1998, are entitled to notice of and to vote at the annual meeting.
All shareholders are cordially invited to attend the meeting in person.
However, if you are unable to attend in person and wish to have your shares
voted, PLEASE FILL IN, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT IN THE
ACCOMPANYING ENVELOPE AS PROMPTLY AS POSSIBLE. Your proxy may be revoked by
appropriate notice to the Secretary of Play-By-Play Toys & Novelties, Inc. at
any time prior to the voting thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ SAUL GAMORAN
SAUL GAMORAN
EXECUTIVE VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
San Antonio, Texas
November 18, 1998
<PAGE>
PLAY-BY-PLAY TOYS & NOVELTIES, INC.
4400 TEJASCO
SAN ANTONIO, TEXAS 78218-0267
(210) 829-4666
NOVEMBER 17, 1998
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 7, 1998
This Proxy Statement and the accompanying Proxy and Notice of Annual
Meeting of Shareholders are furnished to holders of common shares, without par
value (the "Common Shares"), of Play-By-Play Toys & Novelties, Inc. (the
"Company") in connection with the solicitation by its Board of Directors (the
"Board") of proxies to be used at the 1998 Annual Meeting of Shareholders of the
Company (the "Annual Meeting") to be held on Monday, December 7, 1998, at 3:00
p.m. at the San Antonio Doubletree Hotel and Conference Center, 37 N.E. Loop
410, San Antonio, Texas 78216, and at any postponements or adjournments thereof.
Only those shareholders of record at the close of business on November 17, 1998
will be entitled to receive notice of, and to vote at, the Annual Meeting.
Copies of this Proxy Statement and the accompanying Proxy and Notice of Annual
Meeting of Shareholders are first being mailed to shareholders on or about
November 23, 1998.
All Common Shares represented by each properly executed Proxy received by
the Board pursuant to this solicitation will be voted in accordance with the
shareholder's directions specified on the Proxy. If no directions have been
specified on a Proxy, the Common Shares represented by that Proxy will be voted
as follows:
"FOR" the election of Directors of the nominees named on the
accompanying Proxy; and
"FOR" the ratification of the selection of PricewaterhouseCoopers LLP as
independent certified public accountants for the Company for fiscal year
1999.
Management knows of no other matters that may properly be brought, or
which are likely to be brought, before the Annual Meeting. However, if any other
matters are properly brought before the Annual Meeting, the persons named as
proxies in the accompanying Proxy or their substitutes will vote in accordance
with their best judgment on such matters.
Without affecting any vote previously taken, a shareholder signing and
returning a Proxy has the power to revoke it at any time prior to its exercise
by giving notice to the Company in writing mailed to Saul Gamoran, Secretary of
the Company, at the Company's executive offices at 4400 Tejasco, San Antonio,
Texas 78218-0267, by executing a subsequent Proxy, or by attending the Annual
Meeting and declaring to the Company such shareholder's intent to vote in
person. Attendance at the Annual Meeting will not, in and of itself, constitute
revocation of a Proxy.
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The presence, in person or by proxy, of the holders of a majority of the
Common Shares issued and outstanding on November 17, 1998, is necessary to
constitute a quorum at the Annual Meeting. As of November 17, 1998, the Company
had 7,315,000 Common Shares issued and outstanding.
Under Texas law and the Company's Amended and Restated Bylaws, each
shareholder is entitled to one vote for each Common Share held. Common Shares
represented in person or by proxy but not voted with respect to a proposal are
counted as present. In votes other than for the election of directors, the
effect of abstention or a non-vote is the same as a "no" vote. In the election
of directors, Common Shares as to which the authority to vote is withheld and
the Common Shares represented in person or by proxy but not voted with respect
to the election of directors are not counted toward the election of directors or
toward the election of the individual nominees specified on the proxy.
All costs of solicitation of the proxies will be borne by the Company.
Solicitation will be made by mail. Proxies may be further solicited at no
additional compensation by officers, directors or employees of the Company by
telephone, written communication or in person. Upon request, the Company will
reimburse banks, brokerage firms, and other custodians, nominees and fiduciaries
for expenses reasonably incurred by them in sending proxy materials to the
beneficial owners of Common Shares of the Company. No solicitation will be made
by specially engaged employees or other paid solicitors.
MANAGEMENT
The names of the directors and executive officers of the Company, their
respective ages, positions and director terms are as follows:
<TABLE>
<CAPTION>
DIRECTOR
NAME AGE POSITION TERM
---- --- -------- ----
<S> <C> <C>
Arturo G. Torres 62 Chief Executive Officer and 2001
Chairman of the Board
Mark A. Gawlik 36 President, Chief Operating Officer 2000
and Director
Saul Gamoran 39 Executive Vice President, General 2001
Counsel, Secretary
and Director
Raymond G. Braun 42 Chief Financial Officer, Treasurer 2000
and Director
Francisco Saez Moya 49 President - Play-By-Play Toys & 1999
Novelties Europa, S.A., Vice
Chairman of the Board and Director
Ottis W. Byers 53 Director 1999
Tomas Duran 53 Director 2000
Berto Guerra, Jr. 48 Director 2001
Steve K.C. Liao 52 Director 1999
James F. Place 66 Director 2000
</TABLE>
ARTURO G. TORRES has been Chief Executive Officer and Chairman of the
Board of the Company since April 1993. Prior thereto, Mr. Torres was the
Founder, Chairman of the Board, Chief Executive Officer and President of Pizza
Management, Inc. ("PMI") from its inception in 1972 to its eventual sale in
1992. PMI was the largest (approximately 240 restaurants) private Pizza Hut,
Inc. franchisee in the world with operations in the United States, the
Commonwealth of Puerto Rico, Spain and the United States Virgin Islands.
Although Mr. Torres is actively involved in the management of the Company, he is
also involved in private business endeavors which include Veladi Ranch Steak
House, Inc., a privately held steak house chain with six restaurants open.
2
<PAGE>
MARK A. GAWLIK has been President and a Director of the Company since its
inception in January 1992, and became Chief Operating Officer in April 1993.
From January 1990 until the May 1992 acquisition by the Company, Mr. Gawlik was
Co-General Manager of the Toys and Novelties Division of PMI. From February 1986
through December 1989, Mr. Gawlik was Controller of PMI. From June 1983 through
February 1986, he was employed by Deloitte, Haskins & Sells, San Antonio, Texas,
most recently as Senior Accountant. Mr. Gawlik received a Bachelor of Business
Administration degree in accounting, summa cum laude, from The University of
Texas at Austin in 1984.
SAUL GAMORAN has been Executive Vice President, General Counsel, Secretary
and a Director of the Company since May 1996. From April 1995 through May 1996,
Mr. Gamoran was President of Renaissance Strategies, Ltd., a consulting firm
specializing in consumer products. From June 1988 through March 1995, Mr.
Gamoran was Executive Vice President of Ace Novelty Co., Inc. Mr. Gamoran is a
past board member of the Toy Manufacturers of America, a toy industry trade
association. Mr. Gamoran received a Juris Doctor degree from Northwestern
University in 1984 and a Bachelor of Science degree in speech from Northwestern
in 1981.
RAYMOND G. BRAUN has been Chief Financial Officer, Treasurer and a
Director of the Company since January 1997. Prior to that, Mr. Braun served as
the Company's engagement partner with the independent accounting and advisory
firm of Coopers & Lybrand, L.L.P. Mr. Braun served in various roles at Coopers &
Lybrand since 1980, having joined the firm immediately after graduation. Mr.
Braun received a Bachelor of Business Administration degree in accounting from
The University of Texas at Austin.
FRANCISCO SAEZ MOYA has been President of Play-By-Play Toys & Novelties
Europa, S.A. ("Play-By-Play Europe") since April 1995. Mr. Moya is a nominee to
the Board of Directors for the 1999 annual shareholders' meeting. Mr. Moya was
elected to the office of Vice Chairman of the Board of Directors in February
1998. From May 1992 until April 1995, Mr. Moya was Vice-President - European
Operations of the Company and has served as a Director of the Company since May
1992. Mr. Moya also serves as Administrator of Play By Play Europe, a position
he has held since 1989. From May 1986 through May 1992, he served as Vice
President - Spain for the Restaurant Division of PMI. Mr. Moya is fluent in
English, Spanish, Italian, Portuguese and French. Mr. Moya received a M.H.C.C.
degree in Hotel and Catering Management-Accounting from the College of Further
Education of Hastings, England in 1973.
OTTIS W. BYERS has been a Director of the Company since
September 1995. Mr. Byers is a nominee to the Board of Directors
for the 1999 annual shareholders' meeting. Since May 1998, Mr.
Byers has been owner of Circle CB Transport, Inc. of Crockett,
Texas. Since 1990, Mr. Byers has owned 4-B Ranch in Crockett,
Texas. From 1978 through 1994, Mr. Byers owned Byers Enterprises,
which operated three Mexican food restaurants in Texas. Mr. Byers
received a Bachelor of Science degree in history from Sam Houston
State University, Huntsville, Texas, in 1968.
TOMAS DURAN has been a Director of the Company since November 1992. Mr.
Duran has owned an insurance consulting business located in Corpus Christi,
Texas, since August 1992. From 1988 through July 1992, he was Director of
Management and Budget and Senior City Manager for the City of Corpus Christi,
Texas. Mr. Duran served as Trade Representative for the Monterrey, Veracruz and
Mexico City Foreign Trade Mission and served as President of the Texas Public
Employees Labor Relations Association from 1985 through 1986. Mr. Duran studied
engineering at Universidad de Madrid, Madrid, Spain from 1964 through 1965 and
received a Bachelor of Arts degree in international relations from West Texas
State University in 1970.
3
<PAGE>
BERTO GUERRA, JR. has been a Director of the Company since its inception
in May 1992. Mr. Guerra is the Executive Vice President, External Affairs
Southwestern Bell Telephone, and has been employed by that company or another
subsidiary since 1978. Mr. Guerra served on President Bush's Hispanic Alliance
on Free Trade from 1989 through 1992 and has served on the College of Education
Foundation Advisory Council of The University of Texas from 1988 to the present.
In April 1995, Mr. Guerra was elected to the Board of Trustees of The University
of Texas-Pan American Foundation. Mr. Guerra received a Bachelor of Science
degree in interdisciplinary management from Southwest Texas State University in
1984.
STEVE K.C. LIAO has been a Director of the Company since October 1995. Mr.
Liao is a nominee to the Board of Directors for the 1999 annual shareholders'
meeting. Since 1989, Mr. Liao has also been a real estate investor and property
manager of multi-family properties in Houston, Texas.
JAMES F. PLACE has most recently been a Director of the Company since
March 1996, also served as a Director from October 1994 through January 1996.
Since 1967, Mr. Place has owned and managed various commercial real estate
properties and other investments primarily located in Texas, which has been his
primary business occupation. Mr. Place was a director of PMI from 1976 to June
1992. Mr. Place has been a director of Grand Prix Tours, Inc., a tour operation
for automobile racing events, since January 1988.
There are no family relationships among any of the executive officers or
directors of the Company.
NUMBER, TERM AND COMPENSATION OF DIRECTORS
The Company's Articles of Incorporation divide the Board into three
classes of as equal size as possible, with the terms of each class expiring in
consecutive years so that only one class is elected in any given year.
Successors to directors whose terms have expired are required to be elected by
shareholder vote. Vacancies in unexpired terms and any additional positions
created by Board action are filled by action of the existing Board. The terms of
Messrs. Moya, Byers and Liao will expire at the 1999 annual meeting of
shareholders of the Company; the terms of Messrs. Gawlik, Braun, Duran and Place
will expire at the 2000 meeting of shareholders, and the terms of Messrs.
Torres, Gamoran and Guerra will expire at the 2001 annual meeting of
shareholders. The executive officers of the Company are elected annually by the
Board following the annual meeting of shareholders and serve at the discretion
of the Board until their successors are elected and qualified.
Outside members of the Board are compensated $1,000 per meeting for
attending Board meetings, $500 per meeting for attending Board committee
meetings and receive reimbursement for out-of-pocket expenses incurred for
attendance at meetings. During fiscal 1998, total outside directors' fees of
$38,000 were paid in cash. Management directors receive no fees for their
services.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Messrs. Moya, Byers and Liao are the Board's nominees for election as
directors, to serve as Category II directors until the 2002 annual meeting of
shareholders or until their successors are elected and qualified. Information
concerning the nominees is set forth above. Messrs. Byers and Liao were
previously elected to the Board by the Company's shareholders. Mr. Moya was
previously appointed to the Board by the Board.
4
<PAGE>
The Board currently consists of ten members. The Board has determined to
nominate three persons for election. The proxies cannot be voted for a greater
number of persons than the number of nominees named.
If, for any reason, any of the nominees shall become unavailable for
election, the individuals named in the enclosed Proxy may exercise their
discretion to vote for any substitutes proposed by the Board, unless the Board
should decide to reduce the number of directors to be elected at the Annual
Meeting. The affirmative vote of a majority of the votes cast is required for
the election of each nominee for director.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR EACH OF THE NOMINEES LISTED
HEREIN.
MEETINGS AND CERTAIN COMMITTEES OF THE BOARD
BOARD MEETINGS
The Board held five meetings during the fiscal year ended July 31, 1998.
All directors attended at least 75% of the meetings of the Board and Board
committees of which they are members.
BOARD COMMITTEES
The Company's Board has two standing committees: the Audit Committee and
the Compensation Committee. The functions of the Audit Committee, of which
Messrs. Byers, Duran, Guerra, Liao and Place are members, are to make
recommendations to the Board regarding the engagement of the Company's
independent accountants and to review with management and the independent
accountants the Company's internal controls, financial statements, basic
accounting and financial policies and practices, audit scope and competency of
accounting personnel. The Audit Committee held three meetings during fiscal
1998. The functions of the Compensation Committee, of which Messrs. Byers,
Duran, Guerra, Place and Liao are members, are to review and recommend to the
Board the compensation, stock options and employment benefits of all officers of
the Company, to administer the Play-By-Play Toys & Novelties, Inc. 1994
Incentive Plan (the "Incentive Plan"), to fix the terms of other employee
benefit arrangements and to make awards under such arrangements. The
Compensation Committee held three meetings during fiscal 1998. During fiscal
1998, none of the individuals serving on the Compensation Committee was an
officer or employee of the Company. The Board does not have a Nominating
Committee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires each director and officer of the Company, and each
person who owns more than 10% of a registered class of the Company's equity
securities, to file by specific dates with the United States Securities and
Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Officers, directors and 10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file. The
Company is required to report in this Proxy Statement any failure of its
directors and officers and beneficial owners of more than 10% of the Company's
Common Stock to file by the relevant due date any of these reports during the
Company's fiscal year.
5
<PAGE>
To the Company's knowledge, during fiscal 1998 all Section 16(a) filing
requirements applicable to the Company's officers, directors and 10%
shareholders were complied with, except for two late filings as to Arturo G.
Torres and one late filing as to Steve Liao.
EXECUTIVE COMPENSATION
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
THE EXCHANGE ACT THAT MIGHT INCORPORATE FUTURE FILINGS BY REFERENCE, INCLUDING
THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING REPORT OF THE
COMPENSATION COMMITTEE AND THE PERFORMANCE GRAPH SHALL NOT BE INCORPORATED BY
REFERENCE INTO ANY SUCH FILINGS, AND SHALL NOT BE DEEMED SOLICITING MATERIAL OR
FILED UNDER THE SECURITIES ACT OR THE EXCHANGE ACT.
REPORT OF THE COMPENSATION COMMITTEE
THE COMPENSATION COMMITTEE
The Compensation Committee's stated purpose is to review and recommend to
the Board the compensation, stock options and employment benefits of all
officers of the Company, administer the Incentive Plan, fix the terms of other
employee benefit arrangements and make awards under such arrangements. The
Compensation Committee is composed of directors who have never served as
officers of the Company. The following is a summary of policies of the
Compensation Committee that affect the compensation paid to executive officers,
as reflected in the tables and text set forth elsewhere in this Proxy Statement.
GENERAL COMPENSATION POLICY. The Compensation Committee's overall policies
with respect to executive officers is to offer competitive compensation
opportunities for such persons based upon their personal performance, the
financial performance of the Company and their contribution to that performance.
Each executive officer's compensation package is comprised of three elements:
(i) base salary that reflects individual performance and is designed primarily
to be competitive with salary levels in the industry, (ii) stock-based incentive
awards designed to strengthen the mutuality of interests between the executive
officers and the Company's shareholders, and (iii) for executive officers and
certain personnel that perform sales and marketing functions, annual cash
bonuses related to the performance of the Company for such individual's
respective functional area.
FACTORS. Several important factors considered in establishing the
components of each executive officer's compensation package for the 1998 fiscal
year are summarized below. Additional factors were taken into account to a
lesser degree. The Compensation Committee may, in its sole discretion, apply
entirely different factors, such as different measures of financial performance
for future fiscal years. However, it is presently contemplated that all
compensation decisions will be designed to further the overall compensation
policy described above.
BASE SALARY. The base salary for each executive officer is set on the
basis of personal performance, the salary levels in effect for comparable
positions in similarly situated companies within the toy industry or similarly
sized public companies and internal comparability considerations. However, the
Compensation Committee did not conduct a formal survey of executive officer
salaries at such companies. The Compensation Committee believes that the
Company's most direct competitors for executive talent are not limited to the
companies that the Company would use in a comparison for shareholder returns.
6
<PAGE>
Therefore, the compensation comparison group is not the same as the industry
group index used in the "Performance Graph" section below.
STOCK-BASED INCENTIVE COMPENSATION. The Company adopted the Incentive Plan
in August 1994. The Incentive Plan authorizes the Company to award incentive
stock options and non-qualified stock options to purchase Common Stock and
restricted stock to officers and other employees of the Company. The purpose of
the Incentive Plan is to attract, retain and motivate officers and employees. On
June 27, 1996, the Company registered with the SEC 700,000 shares authorized
under the Incentive Plan. On December 11, 1997, the shareholders approved to
increase the number of shares authorized to award incentive options and
non-qualified stock options by 600,000 shares to 1,300,000 shares. On March 17,
1998, the Company registered with the SEC the additional 600,000 shares. Stock
options may be exercised at a purchase price as recommended by the Compensation
Committee and determined by the Board of Directors, provided that the exercise
price per share under the Incentive Plan shall be an amount not less than 100%
of the fair market value on the date the option is granted or 110% of fair
market value for beneficial owners of 10% or more of the Company's outstanding
shares. Thus, the optionee receives a return only if the market price of the
shares appreciates over the option term. The grants are designed to align the
interests of the optionees with those of the shareholders and provide each
individual with a significant incentive to manage the Company from the
perspective of an owner with an equity stake in the business, even though
certain executive officers of the Company are already significant shareholders
of the Company (see "Principal Shareholders"). Moreover, the long-term vesting
schedules encourage a long-term commitment to the Company by its executive
officers and other optionees. The size of the option grant to each optionee is
set at a level that the Compensation Committee deems appropriate in order to
create a meaningful opportunity for stock ownership based upon the individual's
current position with the Company, but also takes into account the individual's
potential for future responsibility and promotion over the option vesting
period, and the individual's performance in recent periods. The Compensation
Committee periodically reviews the number of shares owned by, or subject to
options held by, each executive officer, and additional awards are considered
based upon past performance of the executive officer.
ANNUAL CASH BONUSES. The Company does not have a formal cash bonus program
for executive officers, although cash bonuses have been paid from time to time
in the past to selected executive officers in recognition of superior individual
performance. The Compensation Committee recommended, and the Company awarded a
$200,000 cash bonus to Mr. Arturo G. Torres, Chairman and Chief Executive
Officer of the Company, during fiscal 1998.
CHIEF EXECUTIVE OFFICER
In fiscal 1998, Arturo G. Torres, Chairman and Chief Executive Officer of
the Company, received total cash payments of $368,154 in salary and $200,000 in
a cash bonus. In fiscal 1998, Mr. Torres was also granted options outside the
Incentive Plan to purchase 150,000 shares of Common Stock at an exercise price
of $19.00 (which was 100% of the closing sales price of the Common Shares on the
date of the grant) and 50,000 shares of Common Stock pursuant to the Company's
Incentive Plan at an exercise price of $18.9375 (which was 100% of the closing
sales price of the Common Shares on the date of the grant). One half vest in six
months from the date of grant and the remaining option shares vest on the first
anniversary. The Compensation Committee notes that the Company under the strong
leadership of Mr. Torres produced significant growth in sales and earnings
during the period. The Compensation Committee considers this level of
compensation appropriate in light of Mr. Torres' leadership of a growth oriented
toy company which has experienced significant increases in fiscal 1998 net sales
and net income of 29.6% and 35.9%,
7
<PAGE>
respectively, as compared to fiscal 1997. Mr. Torres does not have an employment
agreement with the Company.
LIMITATIONS ON DEDUCTIBILITY
The Compensation Committee has reviewed the Company's informal
compensation policies in light of amendments to the Internal Revenue Code
enacted during 1993 that generally limit deductions for compensation paid to
certain executive officers to $1,000,000 per annum (certain performance based
compensation is not subject to that limit). At present levels of compensation,
these amendments do not limit the deductions to which the Company is entitled
and the Compensation Committee has therefore concluded that no changes in the
Company's compensation policies as a result of these amendments are appropriate.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Tomas Duran, a director of the Company served on the Compensation
Committee during fiscal year 1998. Mr. Duran is affiliated with an insurance
agency which provided certain property, casualty and liability insurance to the
Company in fiscal 1998. In connection with this transaction, Mr. Duran received
commissions from the insurance companies in the amount of $5,421 for the year
ended July 31, 1998. The Company paid premiums on policies issued by the
affiliated insurance agency totaling $272,600 during fiscal 1998. The Company
believes that the arrangements with and the amounts paid to the insurance
companies are fair and reasonable. This transaction is required to be reported
under Item 404 of Regulation S-K.
SUMMARY
The Compensation Committee believes that the compensation programs of the
Company and the administration of those programs well serve the interests of the
Company's shareholders. These programs allow the Company to attract, retain and
motivate exceptional management talent and to compensate executives in a manner
that reflects their contribution to both the short and long-term performance of
the Company. The Company intends to continue to emphasize programs that it
believes positively affect shareholder value.
PLAY-BY-PLAY TOYS & NOVELTIES, INC. COMPENSATION COMMITTEE
1998 MEMBERS
Ottis W. Byers, Tomas Duran, Berto Guerra, Jr.,
Steve K. C. Liao and James F. Place
8
<PAGE>
PERFORMANCE GRAPH
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OR THE EXCHANGE ACT THAT MIGHT
INCORPORATE FUTURE FILINGS, INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART,
THIS SECTION ENTITLED "PERFORMANCE GRAPH" SHALL NOT BE INCORPORATED BY REFERENCE
INTO ANY FILINGS OR INTO ANY FUTURE FILINGS, AND SHALL NOT BE DEEMED SOLICITING
MATERIAL OR FILED UNDER THE SECURITIES ACT OR THE EXCHANGE ACT.
The following graph compares the cumulative total shareholder return on
the Company's Common Stock from July 19, 1995 (the date the Company became a
public company) until July 31, 1998, with the cumulative total return of the
Standard and Poor's Index and the Peer Group Index (as defined below). The graph
assumes the investment of $100 in the Company's Common Stock and in each of the
indexes on July 19, 1995 and reinvestment of all dividends. The initial public
offering price of the Company's Common Stock on July 19, 1995 was $12.25 per
share.
COMPARISON OF CUMULATIVE TOTAL RETURN*
FOR THE PERIOD ENDED JULY 31, 1998
[LINEAR GRAPH PLOTTED FROM DATA IN TABLE BELOW]
CUMULATIVE TOTAL RETURN
------------------------------------------
7/19/95 7/95 7/96 7/97 7/98
------ ------ ----- ------ -----
PLAY-BY-PLAY TOYS & NOVELTIES, INC.. 100.00 107.00 75.00 124.00 80.00
PEER GROUP ......................... 100.00 110.16 231.20 219.13 116.44
S & P 500 .......................... 100.00 102.01 118.92 180.92 215.81
CUMULATIVE TOTAL RETURN* JULY 31, 1998
- ------------------------ -------------
PLAY-BY-PLAY TOYS & NOVELTIES, INC. ................................. 80.00
S&P 500 ............................................................. 215.81
PEER GROUP** ........................................................ 116.44
* ANNUAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS. THERE WERE NO DIVIDENDS PAID
BY THE COMPANY DURING THE PERIOD PRESENTED. CUMULATIVE TOTAL RETURN ASSUMES
AN INITIAL INVESTMENT OF $100 ON JULY 19, 1995.
** PEER GROUP INDEX IS COMPOSED OF TOY COMPANIES WITH SIMILAR MARKET
CAPITALIZATION. THESE COMPANIES ARE GALOOB LEWIS TOYS INC., EMPIRE OF
CAROLINA, INC., EQUITY MARKETING INC., JANEX INTERNATIONAL, INC. AND JUST
TOYS, INC.
9
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth-certain information concerning compensation
of (i) the Company's Chief Executive Officer, and (ii) the four highest paid
executive officers (other than the CEO) of the Company whose annual compensation
exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------------------------- -----------------------------------
#SHARES
OTHER RESTRICTED UNDERLYING
NAME AND FISCAL ANNUAL STOCK OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARDS (2)(3)(5) COMPENSATION
------------------ ---- ------ ----- --------------- ------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Arturo G. Torres, ................... 1998 $368,154 $200,000 - - 200,000 --
Chairman of the Board ............. 1997 $284,635 -- - - 60,000 --
and Chief Executive Officer ....... 1996 $196,962 $ 68,250 - - 10,000 --
Mark A. Gawlik, ..................... 1998 $211,058 -- - - 70,000 --
President and Chief ............... 1997 $190,000 -- - - 30,000 --
Operating Officer ................. 1996 $152,884 $ 30,250 - - 10,000 --
Saul Gamoran, ....................... 1998 $210,219 -- - - 70,000 --
Executive Vice President, ......... 1997 $180,008 -- - - 30,000 --
General Counsel and ............... 1996 $ 31,731 -- - - 100,000 --
Secretary
Raymond G. Braun, ................... 1998 $200,577 -- - - 70,000 --
Chief Financial Officer ........... 1997 $101,635 -- - - 200,000 --
and Treasurer (4) ................. 1996 -- -- - - -- --
Francisco Saez Moya ................. 1998 $200,577 -- - - 70,000 --
President - Play By Play .......... 1997 $156,057 -- - - 30,000 --
Europe and Vice Chairman .......... 1996 $125,000 $ 16,000 - - -- --
Chairman of the Board
</TABLE>
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(1) Certain of the Company's executive officers receive personal benefits in
addition to salary; however, the Company has concluded that the aggregate
amounts of such personal benefits did not exceed the lesser of $50,000 or
10% of annual salary reported for any named executive officer.
(2) All 1996 options were originally granted on September 29, 1995, except for
Mr. Gamoran's which were granted on May 16, 1996. All such options were
re-priced on December 9, 1996. The options are exercisable according to the
original vesting schedule.
(3) The outstanding options were granted pursuant to the Company's Incentive
Plan except for Mr. Braun whom was granted 200,000 non-qualified stock
options pursuant to his employment agreement.
(4) Mr. Braun joined the Company on January 2, 1997.
(5) Options granted on August 29, 1997 were granted outside the Incentive Plan
at an exercise price of $19.00 and options granted on December 11, 1997
were granted pursuant to the Company's Incentive Plan at an exercise price
of $18.9375.
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EMPLOYMENT ARRANGEMENTS
Other than employment agreements with Mr. Gamoran, Mr. Braun and two other
employees, the Company does not have employment agreements with any of its
United States employees. In May 1996, the Company entered into an employment
agreement with Mr. Gamoran, which agreement will automatically expire May 1999,
unless it is terminated by the Company or Mr. Gamoran. In November 1996, the
Company entered into an employment agreement with Mr. Braun, which agreement
will automatically expire January 2, 2000, unless it is terminated by the
Company or Mr. Braun. The Company does have standard national employment
contracts with all of its Spanish employees.
STOCK OPTION GRANT TABLE
The following table sets forth certain information concerning options
granted to the named executive officers during the Company's fiscal year ended
July 31, 1998:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS EXERCISE
UNDERLYING GRANTED TO OR BASE GRANT DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED(#) FISCAL 1998(1) ($/SHARE) DATE ($/SH)(2)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arturo G. Torres 200,000 19.34% $ 19.00 8/29/07 $7.26
50,000 4.84% $ 18.9375 12/11/07 $7.10
Mark A. Gawlik 50,000 4.84% $ 19.00 8/29/07 $7.26
20,000 1.93% $ 18.9375 12/11/07 $7.10
Saul Gamoran 50,000 4.84% $ 19.00 8/29/07 $7.26
20,000 1.93% $ 18.9375 12/11/07 $7.10
Raymond G. Braun 50,000 4.84% $ 19.00 8/29/07 $7.26
20,000 1.93% $ 18.9375 12/11/07 $7.10
Francisco Saez Moya 50,000 4.84% $ 19.00 8/29/07 $7.26
20,000 1.93% $ 18.9375 12/11/07 $7.10
</TABLE>
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(1) Based upon 1,034,000 options to purchase shares of Common Stock granted in
fiscal 1998.
(2) The per share value is based on the Black-Scholes Option pricing model. The
calculation included the following assumptions: estimated volatility of
30.3% based on historical stock prices of comparable companies); risk-free
interest rate ranging from 5.39% to 6.67% (based on returns available
through U.S. Treasury bonds); no dividend yield; and an expected life of 5
years for 10-year options and expected life of 2.5 years for 5-year options.
Option values are dependent on general market conditions and the performance
of the Common Stock. There can be no assurance that the values in this table
will be realized.
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AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
The following table sets forth, with respect to the executive officers
named in the Summary Compensation Table, information with respect to the
aggregate amount of options exercised during fiscal 1998, any value realized
thereon, the number of unexercised options at the end of fiscal year 1998
(exercisable and unexercisable) and the value with respect thereto.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END(#) AT FISCAL YEAR END($)(1)
ACQUIRED VALUE ----------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Arturo G. Torres - - 260,000 25,000 - -
Mark A. Gawlik - - 82,000 40,000 - -
Saul Gamoran - - 131,834 66,666 - -
Raymond G. Braun - - 103,346 166,654 $146,692 $253,308
Francisco Saez Moya - - 72,000 40,000 - -
</TABLE>
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(1) Total value of options based on fair market value of $10.00 per share as of
July 31, 1998, the last date reported sale price of the Common Stock as
reported by the Nasdaq National Market on that date.
1994 INCENTIVE PLAN
SCOPE. During fiscal 1995, the Board of Directors and shareholders of the
Company approved the Incentive Plan. The Incentive Plan authorizes the Company
to award incentive stock options and non-qualified stock options to purchase
Common Stock and restricted stock to officers and other employees of the
Company. On June 27, 1996, the Company registered with the Securities and
Exchange Commission 700,000 shares authorized under the Incentive Plan. On
August 29, 1997, the Board of Directors amended the Incentive Plan to increase
the number of shares authorized to award incentive options and non-qualified
stock options by 600,000 shares to 1,300,000. This amendment was approved at the
December 1997 shareholders' meeting. On March 17, 1998, the Company registered
with the Securities and Exchange Commission the additional 600,000 shares. The
purpose of the Incentive Plan is to attract, retain and motivate officers and
employees. If an award made under the Incentive Plan expires, is canceled or
otherwise is terminated, those shares will be available for future awards under
the Incentive Plan. The Incentive Plan will terminate on August 24, 2004.
ADMINISTRATION. The Incentive Plan is administered by the Company's
Compensation Committee (the "Committee"). Subject to the provisions of the
Incentive Plan, the Committee will have authority to select those officers and
other employees of the Company to receive awards, to determine the time or times
of receipt, to determine the types of awards and the number of shares covered by
the awards, and to establish the terms, conditions and provisions of such
awards.
STOCK OPTIONS. Both incentive stock options and non-qualified stock
options (collectively referred to as "Stock Options") may be granted pursuant to
the Incentive Plan. All Stock Options granted under the Incentive Plan will have
an exercise price per share to be determined by the Committee, provided that the
exercise price per share under each Stock Option shall not be less than the fair
market value of a share of Common Stock at the time the Stock Option is granted
(110% of such fair market value in the case of incentive stock options granted
to a shareholder who owns 10% or more of the Company's Common Stock).
12
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The maximum term for all Stock Options granted under the Incentive Plan is ten
years (five years in the case of an incentive stock option granted to a
shareholder who owns 10% or more of the Company's Common Stock). Stock Options
are exercisable at such time and in such installments as the Committee may
provide at the time the Stock Option is granted. During fiscal 1998, the
Committee granted incentive stock options to purchase 534,000 shares of Common
Stock under the Incentive Plan to certain officers and employees of the Company.
At July 31, 1998, 1,020,000 incentive stock options were outstanding. The
options generally have a four-year vesting period and are exercisable at prices
per share ranging from $9.75 to $19.00. One-fifth of such options will become
exercisable six months after the date of grant and on each of the first four
anniversaries of the date of grant. In the event of a change in control of the
Company, as defined in the Incentive Plan, awards under the Incentive Plan
become exercisable within 60 days of the change in control. The options
exercisable as of July 31, 1998 are 486,734.
RESTRICTED STOCK. Restricted stock awards are grants of Common Stock made
to officers and employees subject to conditions established by the Committee.
The terms of a restricted stock award, including the restrictions placed on such
shares and the time or times at which such restrictions will lapse, shall be
determined by the Committee at the time the award is made. Unless the Committee
determines otherwise, holders of restricted stock shall have the right to vote
the shares of restricted stock and to receive all dividends thereon. The
Committee may determine at the time of an award of restricted stock that
dividends paid on such shares may be paid to the grantee or deferred. Deferred
dividends (together with any interest accrued thereon) will be paid upon the
lapsing of the restrictions on the shares of restricted stock or forfeited upon
the forfeiture of the shares of restricted stock. The agreements evidencing
awards of restricted stock shall set forth the terms and conditions of such
awards and the effect of a grantee's termination of employment. No restricted
stock shares have been issued pursuant to the Incentive Plan as of July 31,
1998.
TERMINATION AND AMENDMENT. The Incentive Plan may be terminated or amended
by the Board, provided that, in the absence of shareholder approval, no
amendment of the Incentive Plan may materially increase the total number of
shares of Common Stock with respect to which awards may be made under the
Incentive Plan, change the exercise price of a Stock Option, materially modify
the requirements as to eligibility for participation in the Incentive Plan or
materially increase the benefits accruing to participants under the Incentive
Plan. No amendment of the Incentive Plan may adversely alter or impair any Stock
Option or share of restricted stock awarded under the Incentive Plan prior to
such amendment without the consent of the holder thereof.
NON-PLAN OPTIONS
In addition to the Stock Options granted pursuant to the Incentive Plan,
during fiscal 1998, the Company granted non-qualified stock options outside of
the Incentive Plan to purchase 150,000 shares of Common Stock to Mr. Arturo G.
Torres and 50,000 shares each to Messrs. Gawlik, Braun, Gamoran, and Moya. The
Non-Plan Options were granted at an exercise price equal to $19.00 (which was
100% of the closing sales price of the Common Shares on the date of the grant)
and expire five years thereafter. Half of Mr. Torres' options vest six months
from the date of grant and the remainder vest twelve months from the date of
grant. One-fourth of Messrs. Gawlik, Braun, Gamoran, and Moya's such options
will become exercisable six months after the date of grant and on each of the
first three anniversaries of the date of grant. The Non-Plan Options exercisable
as of July 31, 1998 are 322,800.
On August 29, 1997, the Company granted non-qualified stock options
outside of the Incentive Plan to purchase 20,000 shares of Common Stock to each
of Messrs. Byers, Duran, Guerra, Liao and Place. The Non-Plan Options were
granted at an exercise price equal to $19.00 (which was 100% of the quoted price
of the Common Stock on the date of grant) and expire five years thereafter. Half
of such options vest six months from the date of grant and the remainder vest
twelve months from the date of grant.
On February 6, 1998, the Company granted non-qualified stock options
outside of the Incentive Plan to purchase 10,000 shares of Common Stock to each
of Messrs. Byers, Duran, Guerra, Liao and Place. The Non-Plan Options were
granted at an exercise price equal to $19.625 (which was 100% of the quoted
price of
13
<PAGE>
the Common Stock on the date of grant) and expire five years thereafter. Half of
such options vest six months from the date of grant and the remainder vest
twelve months from the date of grant.
In connection with the employment of Raymond Braun in January 1997,
options to purchase 200,000 shares of Common Stock were granted at a purchase
price of $8.00 per share. These options vest on or after the first day of each
calendar month, commencing February 1, 1997, through and including January 1,
2002, up to one sixtieth (1/60) of the total number of shares. In connection
with these option grants, the Company recognized $140,000 of compensation
expense and has a balance of $478,333 of unearned compensation in fiscal 1998.
REGISTRATION OF SHARES
On June 27, 1996, the Company registered 700,000 shares of Common Stock
that are issuable pursuant to the Incentive Plan and such non-qualified stock
options with the United States Securities and Exchange Commission. On March 17,
1998, the Company registered additional 600,000 shares that are issuable
pursuant to the Incentive Plan and such non-qualified stock options with the
United States Securities and Exchange Commission.
14
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table presents certain information as of July 31, 1998
regarding the beneficial ownership of the Company's Common Stock by (i) each
person the Company knows to be the beneficial owner of 5% or more of the
outstanding shares of Common Stock, (ii) each named executive officer, (iii)
each director of the company and (iv) all executive officers and directors of
the Company as a group. Except as indicated in the footnotes to this table and
pursuant to applicable community property laws, the Company believes that each
shareholder named in this table has sole investment and voting power with
respect to the shares set forth opposite such shareholder's name.
NUMBER
SHARES
BENEFICIALLY
Name OWNED PERCENTAGE
- -------------------------------------------------------------
Arturo G. Torres 1,742,990(1) 23.01%
Mark A. Gawlik 230,321 3.11%
Francisco Saez Moya 309,986 4.20%
Saul Gamoran 131,834 1.77%
Raymond G. Braun 101,943 1.37%
Berto Guerra, Jr. 66,065 *
James F. Place 79,873 1.08%
Tomas Duran 35,400 *
Ottis W. Byers 43,000 *
Steve K. C. Liao 45,500 *
-----------
All directors and executive
officers as a group
(ten persons 2,786,912
===========
* Less than 1%
(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 and
has sole voting and investment power.
The business address of all officers and directors of the Company is 4400
Tejasco, San Antonio, Texas 78218-0267.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company leases a building used as a video arcade located in Odessa,
Texas, from Mr. Torres. Rental expense for such arcade was approximately $7,100
during fiscal 1998. The Company believes that the terms of the lease are fair
and reasonable and are on terms at least as favorable as would be available from
non-affiliated parties.
Mr. Place, a Director of the Company, was a partner in Espinoza's Pizza
Company, Ltd. ("Espinoza") which owns and operates 11 restaurants in which the
Company has placed coin-operated amusement game machines. The Company paid
Espinoza, as its percentage of revenues attributable to such games,
approximately $76,000 during fiscal 1998. The Company believes that the
arrangements with and the amounts paid to Espinoza are fair and reasonable and
are on terms at least as favorable as would be available from non-affiliated
parties. On May 28, 1998, Mr. Place sold his 35% interest in Espinoza.
15
<PAGE>
Mr. Torres leases seven land and building packages to certain franchisees
of Pizza Hut of America, Inc. ("Pizza Hut") and one land and building package to
Espinoza. The Company has entered into revenue sharing agreements with Pizza Hut
and Espinoza concerning the placement of amusement machines, which may benefit
Mr. Torres due to percentage rent provisions in these real property leases. The
Company paid such franchisees approximately $436,000 and Espinoza approximately
$76,000 during fiscal 1998, pursuant to the terms of such revenue sharing
agreements. The Company believes the amounts paid to such franchisees and
Espinoza were fair and reasonable and were on terms at least as favorable as
would be available from non-affiliated parties.
Mr. Duran, a director of the Company is affiliated with an insurance
agency which provided certain property, casualty and liability insurance to the
Company in fiscal 1998. In connection with this transaction, Mr. Duran received
commissions from the insurance companies in the amount of $5,421 for the year
ended July 31, 1998. The Company paid premiums on policies issued by the
affiliated insurance agency totaling $272,600 during fiscal 1998. The Company
believes that the arrangements with and the amounts paid to the insurance
companies are fair and reasonable.
In the future, all transactions between the Company and its affiliated
entities, executive officers, directors or significant shareholders will be on
terms, which will continue to be no less favorable to the Company than the
Company could obtain from non-affiliated parties.
PROPOSAL NO. 2
RATIFICATION OF INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP has served as the Company's independent
accountants since its appointment for fiscal 1992. The Board, on the unanimous
recommendation of the Audit Committee, has selected PricewaterhouseCoopers LLP
as the Company's independent accountants for the fiscal year ending July 31,
1999, subject to ratification by the shareholders at the Annual Meeting.
Representatives of PricewaterhouseCoopers LLP are expected to be present at the
meeting to respond to questions and will have an opportunity to make a statement
if they desire to do so.
All services provided to the Company by PricewaterhouseCoopers LLP were
approved by the Audit Committee. The Audit Committee also considered the
possible effect on the independence of PricewaterhouseCoopers LLP by reason of
its rendering such services.
Audit services of PricewaterhouseCoopers LLP for fiscal 1998 included the
examination of the consolidated financial statements, services related to
filings with the SEC, and the performance of limited reviews of the Company's
unaudited financial information.
The affirmative vote of a majority of the votes cast on this proposal will
constitute ratification of the appointment of PricewaterhouseCoopers LLP.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT
PUBLIC ACCOUNTANTS FOR FISCAL YEAR 1999.
16
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Board knows of no other
business that will be presented by management for consideration at the Annual
Meeting. If any other business properly comes before the Annual Meeting, the
proxy holders intend to vote the proxies as recommended by the Board.
SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
Shareholder proposals intended to be presented at the 1999 annual meeting
of the shareholders must be received by the Company in writing no later than
July 24, 1999. Proposals must be mailed to Play-By-Play Toys & Novelties, Inc.,
4400 Tejasco, San Antonio, Texas 78218-0267, Attention: Secretary, Saul Gamoran.
17
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ANNUAL REPORT (FORM 10-K)
The Company undertakes, on written request and without charge, to provide
each person from whom the accompanying Proxy is solicited with a copy of the
Company's Annual Report on Form 10-K for the fiscal year ended July 31, 1998, as
filed with the SEC, including the financial statements and schedules. Requests
should be addressed to Play-By-Play Toys & Novelties, Inc., 4400 Tejasco, San
Antonio, Texas 78218-0267, Attention: Secretary, Saul Gamoran.
By Order of the Board of Directors
/s/ SAUL GAMORAN
Saul Gamoran
Executive Vice President,
General Counsel and Secretary
November 18, 1998
18
<PAGE>
PLAY-BY-PLAY TOYS & NOVELTIES, INC
4400 Tejasco
San Antonio, Texas 78218-0267
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Arturo G. Torres, Mark A. Gawlik and Saul
Gamoran, or any one or more of them, as proxies, each with the power to appoint
his substitute, and hereby authorizes each of them to represent and to vote, as
designated below, all the shares of common stock of Play By Play Toys &
Novelties, Inc. (the "Company") held of record by the undersigned on November
17, 1998 at the Annual Meeting of Shareholders to be held on December 7, 1998,
or any adjournments thereof.
1. ELECTION OF DIRECTORS
FOR all nominees listed below WITHHOLD AUTHORITY
(except as marked to the To vote for all nominees
contrary below) [ ] listed below [ ]
(INSTRUCTIONS TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW)
Francisco Saez Moya, Ottis W. Byers, Steve K. C. Liao
2. Proposal to ratify the appointment of PricewaterhouseCoopers LLP, certified
public accountants, as the independent auditors for the Company for the fiscal
year ending July 31, 1999.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments thereof.
(BACK OF PROXY CARD)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
Please sign exactly as name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign full corporate name by President or authorized officer. If a partnership,
please sign in partnership name by authorized person.
Dated___________________________
________________________________
Signature
________________________________
Signature if held jointly
PLEASEMARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING
THE ENCLOSED ENVELOPE.
