As filed with the Securities and Exchange Commission on March 17, 1998
Registration No. 333-07031
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 1 TO 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)
Raymond G. Braun Chief Financial Officer &
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:
Gregory B. Klenda, Esq.
KLENDA, MITCHELL, AUSTERMAN & ZUERCHER, L.L.C.
1600 Epic Center
301 North Main Street
Wichita, KS 67202-4888
(Continued on Following Page)
<PAGE>
CALCULATION OF REGISTRATION FEE
Approximate date of commencement of proposed sale to public: from
time-to-time after the Registration Statement becomes effective.
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF AMOUNT MAXIMUM MAXIMUM
SECURITIES TO TO BE OFFERING PRICE AGGREGATE AMOUNT OF
BE REGISTERED REGISTERED(10) PER SHARE OFFERING PRICE REGISTRATION FEE
- ------------- -------------- --------- -------------- ----------------
<S> <C> <C> <C> <C>
Common Stock, 700,000 Shares $15.0625(11) $10,543,750(11) $3,635.77(14)
No Par Value(1)
Common Stock, 52,500 Shares $19.00(13)(15) $826,500(13)(15) $243.82(15)
No Par Value(2)
Common Stock, 451,500 Shares $18.9375(13) $8,550,281(13) $2,522.33
No Par Value(2)
Common Stock, 15,000 Shares $19.625(13)(14) $294,375(13) $86.84
No Par Value(2)
Common Stock, 81,000 Shares $21.7188(12) $1,759,223(12) $518.97(12)
No Par Value(2)
Common Stock, 12,000 Shares $15.0625(11) $180,750(11) $62.33(14)
No Par Value(3)
Common Stock, 50,000 Shares $15.0625(11) $753,125(11) $259.70(14)
No Par Value(4)
Common Stock, 10,000 Shares $9.75(13) $97,500(13) $28.76
No Par Value(5)
Common Stock, 200,000 Shares $8.00(13) $1,600,000(13) $472.00
No Par Value(6)
Common Stock, 50,000 Shares $11.00(13) $550,000(13) $162.25
No Par Value(7)
Common Stock, 450,000 Shares $19.00(13) $8,550,000(13) $2,522.25
No Par Value(8)
Common Stock, 5,000 Shares $18.9375(13) $94,688(13) $27.93
No Par Value(9)
Common Stock, 50,000 Shares $19.625(13) $981,250(13) $289.47
No Par Value(9)
----------
Total: 2,127,000 Shares(10) $10,832.42(14)
</TABLE>
2
<PAGE>
1) Represents Common Stock issuable under the Play-By-Play Toys & Novelties,
Inc. 1994 Incentive Plan (the "Plan").
2) Represents additional Common Stock issuable under the Plan, as amended.
3) Represents Common Stock issuable under certain Non-Plan Stock Option
Agreements granted on or about April 13, 1995.
4) Represents Common Stock issuable under certain Non-Plan Stock Option
Agreements granted on or about September 29, 1995.
5) Represents Common Stock issuable under a certain Non-Plan Stock Option
Agreement granted on or about July 29, 1996.
6) Represents Common Stock issuable under a certain Non-Plan Stock Option
Agreement granted on or about November 4, 1996, as amended August 29,
1997.
7) Represents Common Stock issuable under certain Non-Plan Stock Option
Agreements granted on or about December 9, 1996.
8) Represents Common Stock issuable under certain Non-Plan Stock Option
Agreements granted on or about August 29, 1997.
9) Represents Common Stock issuable under a certain Non-Plan Stock Option
Agreement granted on or about December 11, 1997.
10) Plus such additional number of shares as may hereafter become issuable
pursuant to the Plan or the applicable Non-Plan Stock Option Agreements 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.
11) 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.
12) This estimate is made solely for the purpose of determining the amount of
the registration fee and is based upon the amount of $21.7188 per share,
the average high and low sale prices for the Registrant's stock as traded
on the NASDAQ National Market System on March 13, 1998.
13) This estimate is made solely for the purpose of determining the amount of
the registration fee and is based upon the exercise price per share under
the terms of the applicable option agreement.
14) Includes $3,957.80 previously paid.
15) Registration fee calculated based upon 43,500 shares. The registration fee
for the balance of 9,000 shares was previously paid.
3
<PAGE>
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, as amended, (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.
4
<PAGE>
REOFFER PROSPECTUS
2,127,000 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 1,300,000 shares of the Company's no par value common
stock purchasable pursuant to the Company's 1994 Incentive Plan, as amended (the
"Plan"), and of up to 827,000 shares of common stock, no par value, issuable
upon the exercise of certain Non-Plan Options granted outside of the Plan. As of
March 1, 1998, 1,084,000 shares were subject to outstanding options under the
Plan, 70,100 shares have been issued pursuant to the exercise of options and
145,000 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 Shareholders." 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 Shareholders.
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 a 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 March 17, 1998.
<PAGE>
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, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the following regional
offices of the Commission: Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, IL 60661-2511 and Seven World Trade Center, 13th Floor, New York, NY
10048. Copies of such materials may be obtained from the Public Reference Branch
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. The Commission maintains an Internet Web site that contains
reports, proxy statements and other information regarding the Company and which
can be accessed at http://www.sec.gov. 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 including, for example, its Annual Report (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. Raymond G. Braun, Chief Financial Officer and Treasurer, at 4400 Tejasco,
San Antonio, TX 78218-0267, telephone (210) 829-4666.
2
<PAGE>
TABLE OF CONTENTS
PAGE
----
Introduction......................................................... 4
Selling Shareholders................................................. 4
Use of Proceeds...................................................... 6
Method of Sale....................................................... 6
SEC Position Regarding Indemnification............................... 7
Incorporation of Certain Documents by Reference...................... 7
Legal Matters........................................................ 8
Experts.............................................................. 8
3
<PAGE>
INTRODUCTION
Play-By-Play Toys & Novelties, Inc. (the "Company") designs, develops,
markets and distributes stuffed toys, novelty items and its Playo Faces(R) line
of sculpted toy pillows based on licensed characters and trademarks. The Company
also designs, develops, markets and distributes electronic toys and non-licensed
stuffed toys and markets and distributes a broad line of non-licensed novelty
items. The Company markets and distributes its products in both amusement and
retail markets and believes that it is the leading supplier of stuffed toys and
novelty items to the domestic 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 SHAREHOLDERS
This Prospectus relates to possible sales by directors and officers of the
Company of Shares which they may acquire through exercise of options granted
under the Play-By-Play Toys & Novelties, Inc. 1994 Incentive Plan ("Plan") or
through the exercise of options granted outside of the Plan ("Non-Plan
Options"). The names of certain Affiliates (all of whom are officers or
directors) who may be Selling Shareholders 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(17) ($/SHARE) DATE
- ---- ------ ------------ ----------- --------- ----
<S> <C> <C> <C> <C> <C>
Arturo G. Torres 1,450,990(1) 20.0% 15,000(2) $12.10 04/13/00
10,000(3) $12.10 09/29/00
60,000(9) $12.10 12/09/01
150,000(11) $19.00 08/29/02
50,000(14) $18.94 12/11/02
Mark A. Gawlik 178,321 2.5% 12,000(4) $11.00 04/13/00
10,000(3) $11.00 09/29/00
30,000(9) $11.00 12/09/01
50,000(12) $19.00 08/29/02
20,000(15) $18.94 12/11/02
Francisco Saez Moya 233,586 3.2% 12,000(2) $11.00 04/13/00
30,000(9) $11.00 12/09/01
50,000(12) $19.00 08/29/02
20,000(15) $18.94 12/11/02
Raymond G. Braun 960 * 200,000(10) $8.00 01/02/09
50,000(12) $19.00 08/29/02
20,000(15) $18.94 12/11/02
Saul Gamoran -- * 100,000(8) $11.00 05/16/04
30,000(9) $11.00 12/09/01
50,000(12) $19.00 08/29/02
20,000(15) $18.94 12/11/02
</TABLE>
(Continued on Following Page)
4
<PAGE>
(Continued from Previous Page)
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED EXERCISE
----------------------------- OPTIONS PRICE EXPIRATION
NAME NUMBER PERCENTAGE** GRANTED(17) ($/SHARE) DATE
- ---- ------ ------------ ----------- --------- ----
<S> <C> <C> <C> <C> <C>
Berto Guerra, Jr. 30,665 * 3,000(5) $13.475 04/13/00
10,000(7) $14.58 09/29/00
10,000(9) $11.00 12/09/01
20,000(13) $19.00 08/29/02
10,000(16) $19.63 02/08/03
Tomas Duran -- * 3,000(5) $13.475 04/13/00
10,000(7) $14.58 09/29/00
10,000(9) $11.00 12/09/01
20,000(13) $19.00 08/29/02
10,000(16) $19.63 02/08/03
Ottis W. Byers -- * 10,000(7) $14.58 09/29/00
10,000(9) $11.00 12/09/01
20,000(13) $19.00 08/29/02
10,000(16) $19.63 02/08/03
Steve K.C. Liao 2,500 * 10,000(6) $14.03 10/17/00
10,000(9) $11.00 12/09/01
20,000(13) $19.00 08/29/02
10,000(16) $19.63 02/08/03
James F. Place 16,873 * 3,000(5) $13.475 04/13/00
10,000(7) $14.58 09/29/00
10,000(9) $11.00 12/09/01
20,000(13) $19.00 08/29/02
10,000(16) $19.63 02/08/03
</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 originally granted on April 13, 1995, for the number
of shares indicated. All such options were canceled and reissued on
December 9, 1996 at the price indicated. The options are exercisable
according to the original vesting schedule in five increments of 20% each
commencing on October 13, 1995, and on each of the four anniversaries of
the date of original grant and expire five years from the date of grant.
3) All such options were originally granted on September 29, 1995, for the
number of shares indicated. All such options were canceled and reissued on
December 9, 1996 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 originally granted on April 13, 1995, for the number
of shares indicated. All such options were canceled and reissued on
December 9, 1996 at the price indicated. The options are exercisable
commencing on April 13, 1996, and expire five years from the date of
grant.
5) 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.
6) All 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.
7) All such options were granted on September 29, 1995, for the number of
shares and the price indicated. The options are exercisable in five
increments of 20% each commencing on March 29, 1996, and on each of the
four anniversaries of the date of grant and expire five years from the
date of grant.
8) All such options were originally granted on May 16, 1996, for the number
of shares indicated. All such options were canceled and repriced on
December 9, 1996 at the price indicated. The options are exercisable in
four increments, of which 20,000 are exercisable as of May 16, 1996, and
the remaining options vest in three approximately equal increments of
26,667 shares, 26,667
5
<PAGE>
shares and 26,666 shares, respectively, on the first, second and third
anniversaries of the date of original grant and expire five years from the
date each increment vests.
9) All such options were granted on December 9, 1996, for the number of
shares and the price indicated. The options are exercisable in two equal
increments of 50% each commencing on June 9, 1997, and December 9, 1997,
and expire five years from the date of grant.
10) All such options were granted on January 2, 1997, for the number of shares
and the price indicated. The options vest on a pro rata monthly basis
beginning on February 1, 1997, and ending January 1, 2002. Such options
immediately vest in the event either (i) Mr. Arturo G. Torres is no longer
serving as either Chairman of the Board or Chief Executive Officer of the
Company or (ii) the Company is a party to a merger, consolidation or other
business combination whereby the Company is not the surviving entity. All
such options expire on January 2, 2009.
11) All such options were granted on August 29, 1997, for the number of shares
and the price indicated. The options are exercisable in two equal
increments of 50% each commencing on March 1, 1998, and August 29, 1998,
and expire five years from the date of grant. However, if Mr. Torres
resigns his position as Chief Executive Officer then all such options
immediately vest.
12) All such options were granted on August 29, 1997, for the number of shares
and the price indicated. The options are exercisable in four equal
increments of 25% each commencing on March 1, 1998, and on each of the
three anniversaries of the date of grant and expire five years from the
date of grant.
13) All such options were granted on August 29, 1997, for the number of shares
and the price indicated. The options are exercisable in two equal
increments of 50% each commencing on March 1, 1998, and December 29, 1998,
respectively, and expire five years from the date of grant.
14) All such options were granted on December 11, 1997, for the number of
shares and the price indicated. The options are exercisable in two equal
increments of 50% each commencing on June 11, 1998, and December 11, 1998,
and expire five years from the date of grant. However, if Mr. Torres
resigns his position as Chief Executive Officer then all such options
immediately vest.
15) All such options were granted on December 11, 1997, for the number of
shares and the price indicated. The options are exercisable in four equal
increments of 25% each commencing on June 11, 1998, and on each of the
three anniversaries of the date of grant and expire five years from the
date of grant.
16) All such options were granted on February 8, 1998, for the number of
shares and the price indicated. The options are exercisable in two equal
increments of 50% each commencing on August 8, 1998, and February 8, 1999,
respectively, and expire five years from the date of grant.
17) 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 Shareholder 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 Shareholders for their own
accounts. The Shares may be sold or transferred for value by the Selling
Shareholders, or by pledgees, donees, transferees, or other successors in
interest to the Selling Shareholders, in one or more transactions on the NASDAQ
National Market System, in negotiated transactions or in a combination of such
methods
6
<PAGE>
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
Shareholders 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 Shareholders
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 Shareholders 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 officers and
former directors and officers 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 or officer. However, 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 such 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 Exchange Act of 1934:
1. 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;
2. The Company's Annual Report on Form 10-K for the year ended July 31,
1997, as filed under Section 13(a) of the Securities Exchange Act of
1934; and
7
<PAGE>
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
October 31, 1997, as filed under Section 13(a) of the Securities
Exchange Act of 1934.
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 the filing of the initial Registration Statement and any
amendment thereto 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 Prospectus 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, 1997 and 1996, and the consolidated statements
of income, shareholders' equity and cash flows for each of the three years in
the period ended July 31, 1997, 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
<PAGE>
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
Exchange Act of 1934:
1. 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;
2. The Company's Annual Report on Form 10-K for the year ended
July 31, 1997, as filed under Section 13(a) of the Securities
Exchange Act of 1934; and
3. The Company's Quarterly Report on Form 10-Q for the quarter
ended October 31, 1997, as filed under Section 13(a) of the
Securities Exchange Act of 1934.
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 the filing of the initial
Registration Statement and any amendment thereto 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.
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
9
<PAGE>
exists or may hereafter be amended, directors and officers and
former directors and officers 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 or officer.
However, 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 such 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.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
Not Applicable.
Item 8. EXHIBITS
The exhibits to this Registration Statement are listed in the
Exhibit Index on Page 14 of this Registration Statement, 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 that for the
purposes of determining any liability under the Securities Act of
1933, each such post-effective amendment 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.
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
10
<PAGE>
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.
The undersigned Registrant hereby undertakes to deliver or
cause to be delivered with the prospectus to each person to whom the
prospectus 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 prospectus 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
prospectus, 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 that
Act and will be governed by the final adjudication of such issue.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Amendment No. 1 to
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
17th day of March, 1998.
PLAY-BY-PLAY TOYS
& NOVELTIES, INC.
Dated: March 17, 1998 By /s/ RAYMOND G. BRAUN
Raymond G. Braun,
Chief Financial Officer 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 Raymond G. Braun, 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 March 17, 1998
Arturo G. Torres Chief Executive Officer
(Principal Executive Officer)
/s/ MARK A. GAWLIK President, Chief Operating March 17, 1998
Mark A. Gawlik Officer and Director
/s/ RAYMOND G. BRAUN Chief Financial Officer, March 17, 1998
Raymond G. Braun Treasurer and Director
(Principal Financial Officer)
/s/ SAUL GAMORAN Executive Vice President, March 17, 1998
Saul Gamoran General Counsel,
Secretary and Director
(Continued on Following Page)
12
<PAGE>
(Continued from Prior Page)
/s/ FRANCISCO SAEZ MOYA Vice President - European March 17, 1998
Francisco Saez Moya Operations and Vice
Chairman of the Board
/s/ OTTIS W. BYERS Director March 17, 1998
Ottis W. Byers
/s/ TOMAS DURAN Director March 17, 1998
Tomas Duran
/s/ BERTO GUERRA, JR. Director March 17, 1998
Berto Guerra, Jr.
/s/ STEVE K.C. LIAO Director March 17, 1998
Steve K.C. Liao
/s/ JAMES F. PLACE Director March 17, 1998
James F. Place
13
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NUMBER OF EXHIBIT
------ ----------
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.
4.2 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.
4.3 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.
4.4 Form of April 1995 Non-Plan Stock Option Agreements, incorporated by
reference from Company's Registration Statement on Form S-8
(Commission File No. 333-07031 as filed on June 27, 1996).
4.5 Form of September 1995 Non-Plan Stock Option Agreements,
incorporated by reference from Company's Registration Statement on
Form S-8 (Commission File No. 333-07031, as filed on June 27, 1996).
4.6 Form of Non-Qualified Stock Option Agreements.
4.7 Non-Qualified Stock Option Agreement dated November 4, 1996, between
the Company and Raymond G. Braun, as amended by Amendment No. 1 to
Non-Qualified Stock Option Agreement dated August 29, 1997,
incorporated by reference from Company's Annual Report on Form 10-K
for the period ended July 31, 1997.
4.8 Incentive Stock Option Agreement dated May 16, 1996, between the
Company and Saul Gamoran.
5 Opinion and Consent of Klenda, Mitchell, Austerman & Zuercher,
L.L.C.
14
<PAGE>
10.1 Play-By-Play Toys & Novelties, Inc. 1994 Incentive Plan, as amended,
incorporated by reference from Company's Registration Statement on
Form S-1 (Commission File No. 33-9-2204), Exhibit No. 10.1
23 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (included on the signature page of this
Registration Statement
15
<PAGE>
March 17, 1998
THIS DOCUMENT CONSTITUTES PART OF A
PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES
ACT OF 1933
PLAY-BY-PLAY TOYS & NOVELTIES, INC.
1994 INCENTIVE PLAN
NON-PLAN OPTIONS
COMMON STOCK
This Prospectus relates to the offering of a maximum of 1,300,000 shares
of common stock, no par value (the "Common Stock"), of Play-By-Play Toys &
Novelties, Inc., a Texas corporation (the "Company"), to officers and other
employees of the Company and its subsidiaries pursuant to the Play-By-Play
Toys & Novelties, Inc. 1994 Incentive Plan, as amended (the "Plan") which is
herein described. An offer made in connection with a grant under the Plan is
made at the price and on the terms and conditions contained in such grant. This
Prospectus also relates to the offering of a maximum of 827,000 shares of Common
Stock to certain affiliates of the Company pursuant to certain option agreements
issued outside of the Plan (the "Non-Plan Options") which are herein described.
The Company's common stock is traded on the NASDAQ National Market System under
the symbol "PBYP."
The Company has filed a Registration Statement on Form S-8, as amended,
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
shares of Common Stock (the "Common Shares") covered by this Prospectus. This
Prospectus does not contain all of the information set forth in such
Registration Statement and exhibits thereto.
Typically, purchasers of Common Shares issued under the Plan and
purchasers of Common Shares issued under the Non-Plan Options, who are
affiliates of the Company within the meaning of the Securities Act may sell or
transfer such shares only in accordance with the provisions of Rule 144 under
the Securities Act, pursuant to an effective registration statement covering
such resales or pursuant to an effective exemption from the registration
requirement of the Securities Act. However, such affiliates may use the Reoffer
Prospectus filed as part of the Registration Statement for the reoffer or resale
of Common Shares obtained pursuant to the Plan or upon exercise of the Non-Plan
Options. Purchasers of shares issued under the Plan who are not affiliates may
resell their shares in any way permitted by law and the Plan.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
AVAILABLE INFORMATION
<PAGE>
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, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following regional offices of the Commission: Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661-2511 and Seven
World Trade Center, 13th Floor, New York, NY 10048. Copies of such materials may
be obtained from the Public Reference Branch of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
maintains an Internet Web site that contains reports, proxy and information
statements and other information regarding the Company and which can be accessed
at http://www.sec.gov.
The Company hereby undertakes to provide without charge to each person to
whom a Prospectus is delivered, upon written request of such person, a copy of
any and all documents required to be delivered pursuant to Rule 428(b) under the
Securities Act and a copy of any and all of the information that has been
incorporated by reference in this Prospectus (not including exhibits to the
information that is incorporated by reference unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates). Any such requests should be directed to: Mr. Raymond G. Braun,
Chief Financial Officer and Treasurer, Play-By-Play Toys & Novelties, Inc. at
4400 Tejasco, San Antonio, TX 78218-0267, telephone (210) 829-4666. Additional
information about the Plan and its administration can also be obtained from the
Company at the address and telephone number listed above.
TABLE OF CONTENTS
PAGE
----
Available Information............................................. 2
The Plan . . . . . ............................................... 3
General Information......................................... 3
Description of the Plan..................................... 3
Administration.......................................... 3
Termination and Amendment............................... 3
Stock Options........................................... 3
Restricted Stock........................................ 4
Tax Withholding......................................... 4
Change in Control....................................... 4
Adjustments............................................. 4
Rights as Shareholder................................... 4
Non-Transferability..................................... 5
No Right of Employment.................................. 5
Resale Restrictions on Shares........................... 5
Non-Plan Options.................................................. 5
Federal Income Tax Consequences................................... 7
Documents Incorporated by Reference............................... 7
2
<PAGE>
THE PLAN
GENERAL INFORMATION
The Company is the sole issuer of Common Stock offered and to be offered
under the Plan. The Board of Directors amended the Plan, subject to shareholder
approval, by allocating 600,000 additional shares to be used under the Plan to
an aggregate of 1,300,000 on August 29, 1997. The Board procured shareholder
approval at the Annual Meeting of Shareholders held December 11, 1997. The Plan
authorizes the award of shares of Common Shares to be used for Incentive Stock
Options, Non-Qualified Stock Options and Restricted Stock. Provided, not more
than 66 2/3% of such shares may be awarded as Restricted Stock under the Plan.
If an award made under the Plan expires, is canceled or is otherwise terminated,
those shares will be available for future awards under the Plan. The Plan was
adopted by the Board of Directors of the Company on August 25, 1994, and
approved by the Shareholders of the Company at a Special Meeting of Shareholders
held on October 21, 1994. The Plan will terminate on August 24, 2004, but may be
terminated sooner by action of the Board of Directors. No awards under the Plan
may be made after its termination. Termination of the Plan will not affect the
terms or conditions of any award or grant made prior to termination. The Plan is
not subject to any provisions of the Employee Retirement Income Security Act of
1974.
The purpose of the Plan is to attract, retain and motivate officers and
employees whose efforts will result in the long-term growth and profitability of
the Company. The following description of the Plan is qualified in its entirety
by reference to the Plan, a copy of which is available from Mr. Raymond G.
Braun, Chief Financial Officer and Treasurer, Play-By-Play Toys & Novelties,
Inc. at 4400 Tejasco, San Antonio, TX 78218-0267, telephone (210) 829-4666. Each
capitalized term used herein without definition shall have the meaning given to
such term under the Plan.
DESCRIPTION OF THE PLAN
ADMINISTRATION. The Plan is administered by a Board-appointed committee
(the "Committee") which is composed of at least three directors who are
"non-employees" within the meaning of Rule 16b-3 promulgated under Section 16(b)
of the Exchange Act. Each member serves on an "at will basis," meaning that they
can be removed at any time by the Board of Directors. Subject to the provisions
of the Plan, the Committee will have authority to select those officers and
other employees of the Company (and any subsidiary) 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. In making such award determinations, the
Committee may take into account the nature of services rendered by the officer
or employee, his or her present and potential contribution to the Company's
growth and success, and such other factors as the Committee deems relevant. The
Committee is authorized to interpret the Plan, to establish, amend, and revoke
any rules and regulations relating to the Plan, to determine the terms and
provisions of any agreements made pursuant to the Plan, and to make all other
determinations that may be necessary or advisable for the administration of the
Plan.
TERMINATION AND AMENDMENT. The Plan may be terminated or amended by the
Board of Directors, provided that, in the absence of shareholder approval, no
amendment of the Plan may materially increase the total number of Common Shares
with respect to which awards may be made under the Plan (except as discussed in
"- Adjustments" below), change the exercise price of a Stock Option, materially
modify the requirements as to eligibility for participation in the Plan or
materially increase the benefits accruing to participants under the Plan. No
amendment of the Plan may adversely alter or impair any Stock Option or share of
Restricted Stock awarded under the Plan prior to such amendment without the
consent of the holder thereof.
STOCK OPTIONS. Both Incentive Stock Options and Non-Qualified Stock
Options (collectively referred to as "Stock Options") may be granted pursuant to
the Plan. All Stock Options granted under the Plan will have an exercise price
per share to be determined by the Committee, provided that the exercise price
per share under each Incentive Stock Option shall not be less than the fair
market value of a share of Common Shares at the time the Incentive 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). The maximum term for all Stock Options granted under the 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 Shares).
3
<PAGE>
Moreover, no Stock Options may be granted under the Plan more than ten years
after the date of its adoption (August 24, 2004). Stock Options are exercisable
at such time and in such installments as the Committee may provide at the time
the Stock Option is granted. The Committee may accelerate the exercisability of
any Stock Option at any time. The purchase price for shares acquired pursuant to
the exercise of a Stock Option must be paid in the manner determined by the
Committee. The terms and conditions of Stock Options relating to their treatment
upon termination of the optionee's employment (whether by reason of death,
disability or otherwise) will be determined at the time the Stock Options are
granted. The principal difference between Incentive Stock Options and
Non-Qualified Stock Options is as follows: the option exercise price of an
Incentive Stock Option may not be less than the fair market value of the Common
Shares on the date of grant of such option. However, if the recipient of the
Incentive Stock Option is a 10% holder, the option exercise price may not be
less than the price required by the Internal Revenue Code of 1986, as amended
(the "Code"). Currently, the Code requires an option exercise price of not less
than 110% of fair market value.
RESTRICTED STOCK. Restricted Stock awards are grants of Common Shares made
to participants subject to conditions established by the Committee. The terms of
any Restricted Stock award, including the restrictions placed on such shares and
the time or times when such restrictions will lapse, will be determined by the
Committee at the time the award is made. Unless the Committee determines
otherwise, holders of Restricted Stock will 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 will set forth the terms and conditions of such awards and the
effect of a grantee's termination of employment.
TAX WITHHOLDING. The Company can require, prior to the issuance or
delivery of any Common Shares or the payment of any cash pursuant to an award
under the Plan, payment by the holder of such award of any federal, state, local
or other taxes which may be required to be withheld or paid in connection with
such award. As determined by the Committee at the time of grant of an award, the
holder may satisfy any such obligation by either: (i) a cash payment to the
Company; or (ii) timely authorizing the Company to withhold from the Common
Shares issuable or the amount of cash payable to the holder, the number of
Common Shares having an aggregate fair market value or the amount of cash
necessary to satisfy any such obligation; PROVIDED, HOWEVER, that the Committee
shall have sole discretion to disapprove any such election and, in the case of a
person who is subject to Section 16 of the Exchange Act, the Company may require
that the method of satisfying any such obligation be in compliance with Section
16 and the rules and regulations thereunder.
CHANGE IN CONTROL. In the event of certain acquisitions of 20% or more of
the Common Stock of the Company, a two-thirds change in the composition of the
Board of Directors, or the approval by shareholders of a reorganization, merger
or consolidation (unless the Company's shareholders receive 70% or more of the
stock of the surviving company) or the approval by shareholders of a complete
liquidation, dissolution or sale of all or substantially all of the Company's
assets, subject to compliance with Section 16 of the Exchange Act, all awards
will be "cashed out" by the Company, all outstanding Options will become
exercisable in full, all other awards will vest to the maximum extent, and each
option or other award will represent a right to acquire the appropriate number
of shares of common stock received in the merger or similar transaction.
ADJUSTMENTS. In the event of any change in the outstanding Common Stock of
the Company by reason of any 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 or similar change in the corporate structure, the
number of shares of Restricted Stock with respect to which awards may be made
under the Plan and the number of Common Shares underlying any outstanding Stock
Options may be equitably adjusted by the Committee in its sole discretion.
RIGHTS AS SHAREHOLDER. No person will have any right as a shareholder of
the Company with respect to any shares of Common Stock or other equity security
of the Company which is subject to an award under the Plan unless and until such
person becomes a shareholder of record with respect to such shares of Common
Stock or equity security.
4
<PAGE>
NON-TRANSFERABILITY. No Stock Option or Restricted Stock may be
transferred other than by will or the laws of descent and distribution or a
qualified domestic relations order. Each Stock Option or Restricted Stock may be
exercised or settled during the participant's lifetime only by such participant
or such participant's guardian or legal representative. Except as permitted by
the preceding sentence, no Stock Option or Restricted Stock may be sold,
transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed
of (whether by operation of law or otherwise) or be subject to execution,
attachment or similar process.
NO RIGHT OF EMPLOYMENT. Neither the Plan nor any award made thereunder
will confer upon any person any right to continued employment by the Company or
any affiliate of the Company or affect in any manner the right of the Company or
any affiliate of the Company to terminate the employment of any person at any
time without liability under the Plan.
RESALE RESTRICTIONS ON SHARES. Except for provisions regarding Restricted
Stock described above, the provisions of the Plan do not impose restrictions
upon the resale of Common Stock acquired under the Plan. However, under the
federal securities laws, participants who are deemed to be "affiliates" of the
Company are restricted in the resale of Common Stock owned by them (whether
acquired under the Plan or otherwise). For this purpose, an "affiliate" of the
Company is any person who controls the Company, is controlled by the Company, or
is under common control with the Company, whether directly or indirectly through
one or more intermediaries. For this purpose, officers are deemed to be
affiliates.
Resales by affiliates may be made only pursuant to an effective
registration statement under the Securities Act, or pursuant to an exemption
from the registration requirements thereunder. One such exemption provides for
certain "brokers' transactions" which comply with all the conditions set forth
in Rule 144 under the Securities Act. The Company has filed a Registration
Statement covering its Common Shares, including a Reoffer Prospectus suitable
for the reoffer or resale of Common Shares obtained pursuant to the Plan by
affiliates. However, any resales by an affiliate will nevertheless need to be
made in compliance with the applicable provisions of Rule 144(e) or pursuant to
another available exemption from registration. In general, Rule 144(e) provides
that as to Common Shares acquired under the Plan, during any three-month period
an affiliate may sell no more than such number of shares as may equal 1% of the
outstanding common stock of the Company or the average weekly reported volume of
trading in such securities on an automated quotation system of a registered
securities association (I.E., the NASDAQ National Market) during the four
calendar weeks preceding the filing of the required notice or if no such notice
is required then the four calendar weeks preceding the date of receipt of the
order to execute a sales transaction on behalf of an affiliate by a broker or
the date of execution of the sale directly with a market maker.
The restrictions imposed by Section 16 of the Exchange Act upon any
officer, director or holder of more than 10% of any class of equity security of
the Company and the registration requirements of any applicable state securities
laws may also restrict the exercise of options granted under the Plan and resale
of Common Stock acquired pursuant to the Plan by such persons. Accordingly, such
persons should consult their legal advisors prior to engaging in such
transactions.
Each award made under the Plan is subject to the requirement that if at
any time the Company determines that the listing, registration or qualification
of the Common Shares subject to such award upon any securities exchange or under
any law, or the consent or approval of any governmental body, or the taking of
any other action is necessary or desirable as a condition of, or in connection
with, the delivery of such shares thereunder, such shares shall not be delivered
unless such listing, registration, qualification, consent, approval or other
action shall have been effected or obtained, free of any conditions not
acceptable to the Company.
NON-PLAN OPTIONS
From time to time the Company has granted non-qualified stock options
outside of the Plan (collectively, the "Non-Plan Options") to the non-employee
directors, to an officer and to an independent agent of the Company:
On April 13, 1995, non-qualified options (the "April '95 Non-Plan
Options") to purchase 3,000 Common Shares were granted to each of the
non-employee directors and to an independent agent of the Company. The April '95
Non-Plan Options were granted at an exercise price equal to 110% of the Fair
Market Value of the Common Shares on the date of grant. One-fifth of such
Options became exercisable six months after the date of grant (October 1995) and
one-fifth of the
5
<PAGE>
balance will become exercisable on each of the first four anniversaries of the
date of grant. The April '95 Non-Plan Options expire five years from the date of
grant.
On or about September 29, 1995 and October 17, 1995, non-qualified options
(the "September '95 Non-Plan Options") to purchase 10,000 Common Shares were
granted to each of the non-employee directors. The September '95 Non-Plan
Options were granted at a price equal to 110% of the Fair Market Value of the
Common Shares on the date of grant. The September '95 Non-Plan Options are fully
exercisable upon the date of grant and expire five years thereafter.
On or about December 9, 1996, non-qualified options (the "December '96
Non-Plan Options") to each purchase 10,000 Common Shares were granted to each of
the non-employee directors. The December '96 Non-Plan Options were granted at a
price equal to 100% of the Fair Market Value of the Common Shares on the date of
grant. The December '96 Non-Plan Options are exercisable in two equal
installments commencing on June 9, 1997, and December 9, 1997, respectively, and
expire on December 9, 2001.
On or about January 2, 1997, non-qualified options (the "January 2 '97
Non-Plan Options") to purchase 200,000 Common Shares were granted to Mr. Raymond
G. Braun, an officer and director. The January 2 '97 Non-Plan Options were
granted at a price equal to $8.00 per share. The options vest on a pro rata
monthly basis beginning on February 1, 1997, and ending on January 1, 2002.
However, the January 2 '97 Non-Plan Options immediately vest in the event either
(i) Mr. Torres is no longer serving as either Chairman of the Board or Chief
Executive Officer of the Company or (ii) the Company is a party to a merger,
consolidation or other business combination whereby the Company is not the
surviving entity. The January 2 '97 Non-Plan Options expire on January 1, 2009.
On or about August 29, 1997, non-qualified options (the "August '97
Non-Plan Options-Torres") to purchase 150,000 Common Shares were granted to Mr.
Arturo G. Torres. The August '97 Non-Plan Options-Torres were granted at a price
equal to 110% of the Fair market Value of the Common Shares on the date of
grant. The August '97 Non-Plan Options-Torres are exercisable in two equal
increments of 50% each commencing on March 1, 1998, and August 29, 1998, and
expire on August 29, 2002. However, if Mr. Torres resigns his position as Chief
Executive Officer then all such options immediately vest.
On or about August 29, 1997, non-qualified options (the "August '97
Non-Plan Options-Management") to each purchase 50,000 Common Shares were granted
to Messrs. Mark A. Gawlik, Francisco Saez Moya, Raymond G. Braun and Saul
Gamoran. The August '97 Non-Plan Options-Management were granted at a price
equal to 100% of the Fair market Value of the Common Shares on the date of
grant. The August '97 Options-Management are exercisable in four equal
increments of 25% each commencing on March 1, 1998, and on each of the three
anniversaries of the date of grant and expire on August 29, 2002.
On or about August 29, 1997, non-qualified options (the "August '97
Non-Plan Options") to each purchase 20,000 Common Shares were granted to each of
the non-employee directors. The August '97 Non-Plan Options were granted at a
price equal to 100% of the Fair Market Value of the Common Shares on the date of
grant. The August '97 Non-Plan Options are exercisable in two equal installments
on March 1, 1998, and on August 29, 1998, and also expire on August 29, 2002.
On December 11, 1997, non-qualified options (the "December '97 Non-Plan
Options") to purchase 5,000 Common Shares were granted to Ma Jin Sheng. The
December '97 Non-Plan Options were granted at a price equal to 100% of the Fair
Market Value of the Common Shares on the date of grant. The December '97
Non-Plan Options are exercisable in four equal increments of 20% each commencing
on June 11, 1998, and on each of the four anniversaries of the date of grant and
expire on June December 11, 2002.
On or about February 8, 1998, non-qualified options (the "February '98
Non-Plan Options") to each purchase 10,000 Common Shares were granted to each of
the non-employee directors. The February '98 Non-Plan Options were granted at a
price equal to 100% of the Fair Market Value of the Common Shares on the date of
grant. The February '98 Non-Plan Options are exercisable in two equal
installments commencing on August 8, 1998, and February 8, 1999, respectively,
and expire on February 8, 2003.
6
<PAGE>
The terms of the Non-Plan Options are substantially identical to the terms
applicable to Stock Options issued under the Plan. See "The Plan - Change in
Control"; "- Adjustments"; "- Rights as Shareholder"; "- Non-Transferability;
and Resale Restrictions on Shares" above. Upon the death of a holder of Non-Plan
Options, such Stock Options may be exercised by such holder's legal
representative to the extent then otherwise exercisable by the holder. Some of
the Non-Plan Options held by such non-employee directors further provide that if
the holder ceases to serve as a member of the Board of Directors during the
period of time when any portions of their Non-Plan Options are unexercised, any
unexercised portion of their Non-Plan Options will immediately terminate.
FEDERAL INCOME TAX CONSEQUENCES
The following is a brief overview of the United States federal income tax
consequences of participation in the Plan or Non-Plan Options and should not be
relied upon as being a complete analysis of the law. Each participant should
consult his or her tax adviser with respect to the specific tax consequences of
participation in the Plan or with the Non-Plan Options.
A person receiving a Non-Qualified Stock Option under the Plan or Non-Plan
Options will not recognize taxable income upon the grant of the option, but will
recognize taxable income at the time of exercise in the amount of the difference
between the exercise price and the fair market value on the date of exercise of
the Common Shares acquired pursuant to the exercise of the option. At that time,
the Company will be entitled to a deduction as compensation expense in an amount
equal to the amount taxable to the participant as income, except to the extent
the deduction limits of Section 162(m) of the Code apply.
A participant receiving an Incentive Stock Option will not recognize
taxable income upon the grant or exercise of the Stock Option, but will
recognize income or loss upon disposition of the Common Shares acquired pursuant
to the exercise of the Stock Option, which may be ordinary income or capital
gain (or loss), depending on the length of time the shares have been held. The
Company will not be entitled to any deduction with respect to the grant or
exercise of a participant's Incentive Stock Option. However, if the participant
disposes of the shares acquired pursuant to the exercise of the option before
the latter of two years from the date of grant and one year from the date of
exercise, the participant will recognize ordinary income and the Company will
receive a deduction, except to the extent the deduction limits of Section 162(m)
of the Code apply. Such ordinary income is the amount by which the lesser of the
fair market value of the shares on the date of exercise or on the date of
disposition exceeds the exercise price of the option.
A participant receiving Restricted Stock will not recognize taxable income
at the time of grant, and the Company will not be entitled to a tax deduction at
such time, unless the participant makes an election to be taxed at the time
Restricted Stock is granted. If such election is not made, the participant will
recognize taxable income at the time the restrictions lapse or the stock becomes
vested, in an amount equal to the excess of the fair market value of the shares
at such time over the amount, if any, paid for such shares. The amount of
ordinary income recognized by a participant by making the above-described
election or upon the lapse of the restrictions or upon vesting is deductible by
the Company as compensation expense, except to the extent the deduction limits
of Section 162(m) of the Code apply. In addition, a participant receiving
dividends with respect to Restricted Stock for which the above-described
election has not been made and prior to the time the restrictions lapse or
vesting will recognize taxable compensation, rather than dividend income, in an
amount equal to the dividends paid and the Company will be entitled to a
corresponding deduction, except to the extent the deduction limits of Section
162(m) of the Code apply.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference herein and made a part hereof:
A) 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;
B) The Company's Annual Report on Form 10-K for the year ended July 31,
1997, as filed under Section 13(a) of the Securities Exchange Act of
1934; and
7
<PAGE>
C) The Company's Quarterly Report on Form 10-Q for the quarter ended
October 31, 1997, as filed under Section 13(a) of the Securities
Exchange Act of 1934.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act, subsequent to the date of the filing of the
initial Registration Statement and any amendment thereto and prior to the filing
of a post-effective amendment to the Registration Statement under the Securities
Act to which this Prospectus relates which indicate that all securities offered
hereby and thereby have been sold or which deregister all securities then
remaining unsold shall be deemed to be incorporated herein by reference and made
a part hereof from the respective dates of filing of such documents. Any
statement contained in a document incorporated by reference or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in this
Prospectus or in any subsequently filed document which also is incorporated or
deemed to be incorporated by reference in this Prospectus modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
All documents incorporated into this Prospectus have also been
incorporated by reference into the Registration Statement under the Securities
Act to which this Prospectus relates.
8
PLAY BY PLAY TOYS & NOVELTIES, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
Date of Grant: August 29, 1997
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 an employee or officer of the Company; and
WHEREAS, the Board of Directors of Company considers Grantee to be a
person who is eligible for a grant of non-qualified stock options under the
Plan, and has determined that it would be in the best interest of Company to
grant the non-qualified stock options documented herein.
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 XX shares of common stock of the Company (the "Stock") at a
purchase price per share of XX.XX Dollars ($XX.XX) 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."
-1-
<PAGE>
2. VESTING OF EXERCISE RIGHTS. Subject to the other terms of this
Agreement, the Option shall become exercisable in four (4) 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-quarter (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-quarter (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-quarter (ignoring fractional shares) of the
total number of Option Shares; and
(d) On and after the third 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 employed by the Employer, the Option, to the extent not
previously exercised, shall terminate and become null and void
immediately upon such termination of Grantee's employment, except
in a case where the termination of Grantee's employment is by
reason of retirement, disability or death. Upon a termination of
Grantee's employment by reason of retirement, disability or
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.
(d) A transfer of Grantee's employment between Company and any
subsidiary of Company, or between any subsidiaries of Company,
shall not be deemed to be a termination of Grantee's employment.
-2-
<PAGE>
(e) Notwithstanding anything to the contrary set forth herein or in
the Plan, in the event Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting Company or any subsidiary of
Company, (ii) breach any covenant not to compete, or employment
contract, with Company or any subsidiary of Company, or (iii)
engage in conduct that would warrant Grantee's discharge for
cause (excluding general dissatisfaction with the performance of
Grantee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon Company or any
subsidiary of Company), any unexercised portion of the Option
shall immediately terminate and be 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
in 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.
-3-
<PAGE>
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 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 transferable 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. NO RIGHT TO CONTINUED EMPLOYMENT. The granting of the Option nor its
exercise shall not be construed as granting to Grantee any right with respect to
continuance of employment by the Employer. Except as may otherwise be limited by
a written agreement between the Employer and Grantee, the right of the Employer
to terminate at will Grantee's employment with the Employer at any time (whether
by dismissal, discharge, retirement or otherwise) is specifically reserved by
Company, as the Employer or on behalf of the Employer (whichever the case may
be), and acknowledged by Grantee.
10. DISPOSITION OF SHARES. 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.
-4-
<PAGE>
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.
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-
PLAY BY PLAY TOYS & NOVELTIES, INC.
GRANT OF INCENTIVE STOCK OPTION
Date of Grant: May 16, 1996.
This Grant of Incentive Stock Option (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 SAUL GAMORAN,
an individual,
hereinafter referred to as
"GRANTEE"
WHEREAS, the Board of Directors of Company (the "Board") on August 25,
1994, adopted, with subsequent shareholder approval, the TMI, Inc. 1994
Incentive Plan (the "Plan");
WHEREAS, Grantee is an employee or officer of Company or one of its
subsidiaries (Grantee's employer is sometimes referred to herein as the
"Employer");
WHEREAS, the Plan provides for the granting of incentive stock options by
a committee to be appointed by the Board (the "Committee") to employees and
officers of Company or any subsidiary of Company to purchase, or to exercise
certain rights with respect to, shares of the common stock, no par value, of the
Company (the "Stock"), in accordance with the terms and provisions thereof; and
WHEREAS, the Committee considers Grantee to be a person who is eligible
for a grant of incentive stock options under the Plan, and has determined that
it would be in the best interest of Company to grant the incentive stock options
documented herein.
<PAGE>
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, Company and Grantee hereby agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions hereinafter set
forth, Company, with the approval and at the direction of the Committee, hereby
grants to Grantee, as of the Date of Grant, an option to purchase up to one
hundred thousand (100,000) shares of Stock at a purchase price per share of
Thirteen and 75/100 Dollars ($13.75). 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." The Option is intended
by the parties hereto to be, and shall be treated as, an incentive stock option
(as such term is defined under Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code")).
2. VESTING OF EXERCISE RIGHTS. Subject to the other terms of this
Agreement, the Option shall become exercisable in four (4) 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 Date of Grant, up to Twenty Thousand (20,000)
shares of the total number of Option Shares;
(b) On and after the first anniversary of the Date of Grant, up to an
additional twenty-six thousand six hundred sixty-seven (26,667)
shares of the total number of Option Shares;
(c) On and after the second anniversary of the Date of Grant, up to an
additional twenty-six thousand six hundred sixty-seven (26,667)
shares of the total number of Option Shares;
(d) On and after the third anniversary of the Date of Grant, the
remaining twenty-six thousand six hundred sixty-six (26,666) shares
of the Option Shares.
3. TERMINATION OF OPTION.
(a) Each installment of the Option under Paragraph 2 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 vesting of each
such installment of the Option (the "Option Term").
(b) Upon the occurrence of Grantee's employment with Company being
terminated by Company for any reason, the Option shall become
immediately fully vested and shall be exercisable during the six (6)
month period following the date of such termination of Grantee's
employment. Upon a termination of Grantee's employment by reason of
Grantee's termination of employment or by retirement, disability or
death, all vested installments of the Option shall be exercisable
during the following periods: (i) the six (6) month period following
the date of such termination of Grantee's employment
2
<PAGE>
in the case of a disability (within the meaning of Section 22(e)(3)
of the Code) or in the case of employment termination by Grantee,
(ii) 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, in the case of Grantee's death
during his or her employment by the Employer, but not later than one
year after Grantee's death, and (iii) the six-month period following
the date of such termination in the case of retirement on or after
attainment of age 65, or in the case of disability other than as
described in (i) above. 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.
(d) A transfer of Grantee's employment between Company and any
subsidiary of Company, or between any subsidiaries of Company, shall
not be deemed to be a termination of Grantee's employment.
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 Committee, 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 Committee 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 Committee.
3
<PAGE>
(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 Committee, Grantee shall
deliver to the Committee, 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 Committee, delivery of such
representation prior to the delivery of any certificates 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. NO RIGHT TO CONTINUED EMPLOYMENT. The granting of the Option nor its
exercise shall not be construed as granting to Grantee any right with respect to
continuance of employment by the Employer. Except as set forth in the Employment
Agreement dated May 2, 1996 between the Employer and Grantee, the right of the
Employer to terminate at will Grantee's employment with the Employer at any time
(whether by dismissal, discharge, retirement or otherwise) is specifically
reserved by Company, as the Employer or on behalf of the Employer (whichever the
case may be), and acknowledged by Grantee.
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,
4
<PAGE>
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 or the
Committee at any time (a) if the Board 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 Committee; provided, however, that (a) if the
Stock is admitted to trading on a national securities exchange, Fair Market
Value on any date shall be the last sale price reported for the 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.
13. INCORPORATION OF PLAN BY REFERENCE. The Option is granted pursuant to
the terms of the Plan, the terms of which are incorporated herein by reference,
and the Option shall in all respects be interpreted in accordance with the Plan.
The Committee shall interpret and construe the Plan and this instrument, and its
interpretations and determinations shall be conclusive and binding on the
parties hereto and any other person claiming an interest hereunder, with respect
to any issue arising hereunder or thereunder.
14. CONFLICT IN AGREEMENTS. In the event any provision of this Agreement
conflicts with any provision of that certain Employment Agreement by and between
Company and Grantee dated May 2, 1996 (the "Employment Agreement"), then the
provisions of the Employment Agreement shall be controlling and this Agreement
shall be modified to the extent to make the Employment Agreement and this
Agreement consistent.
5
<PAGE>
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 _________________________________
Saul Gamoran
"GRANTEE"
6
March 17, 1998 EXHIBIT 5
Play By Play Toys & Novelties, Inc.
4400 Tejasco
San Antonio, TX 78218-0267
RE: Play By Play Toys & Novelties, Inc.
Amendment No. 1 to Form S-8 Registration Statement
Gentlemen:
We have acted as securities counsel for Play By Play Toys & Novelties, Inc. (the
"Company") in connection with the preparation of the above referenced amended
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 or about March 17, 1998, in connection with the
registration of one million three hundred thousand (1,300,000) 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 eight hundred twenty-seven
thousand (827,000) shares issuable upon the exercise of certain Non-Plan Options
granted outside of the Plan (the "Non-Plan Options") (the aggregate of such two
million one hundred twenty-seven thousand (2,127,000) shares of Common Stock are
referred to herein as the "Shares").
In connection with the preparation of the amended Registration Statement and the
proposed issuance and sale of the Shares in accordance with the terms and
conditions of the Plan and the Non-Plan Options, and the 10(a) prospectus and
reoffer 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 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 amended 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, as amended, to be
delivered to participants in the Plan and/or
<PAGE>
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 amended
Registration Statement and further consent to the reference to this firm in the
amended 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,
/s/ KLENDA, MITCHELL, AUSTERMAN & ZUERCHER, L.L.C.
Klenda, Mitchell, Austerman & Zuercher, L.L.C.
2
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 1 to the
registration statement on Form S-8 (File No. 333-07031) of our report dated
October 20, 1997, 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
March 17, 1998
