Exhibit 4.4
JUST TOYS, INC.
STOCK OPTION
OPTION dated this 5th day of December 1996 (the "Effective Date"),
granted by Just Toys, Inc., a Delaware corporation (hereinafter the
"Company"), to Xxxxxx X. Xxxx (the "Holder").
WHEREAS, the Company desires to afford the Holder the opportunity to
purchase shares of its Common Stock, par value $.01 per share (the "Common
Stock"), as hereinafter provided; and
WHEREAS, on December 5, 1996, the Board of Directors authorized the
grant of the option conferred hereby to the Holder.
NOW, THEREFORE, in consideration of the foregoing premises, the Company
hereby agrees as follows:
1. Grant of Option. The Company hereby grants to the Holder an
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option (the "Option") to purchase up to an aggregate of 50,000 shares of
Common Stock (such number of shares being subject to adjustment as provided
in paragraph 5 hereof) on the terms and subject to the conditions
hereinafter set forth. The Holder shall not have any of the rights of a
shareholder of the Company with respect to the shares of Common Stock
covered by the Option except to the extent that one or more certificates for
such shares shall be delivered to him upon the due exercise of the Option.
2. Purchase Price. The purchase price per share of the shares of
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Common Stock to be issued upon exercise of the Option shall be the closing
price of a share of the Common Stock on the Nasdaq National Market on the
Effective Date.
3. Expiration Date; Vesting of Option. (a) Subject to the provisions
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of paragraph 5 hereof, the Option shall expire at 5:00 P.M. New York time on
December 4, 2006 (the "Expiration Date"), and any portion of the Option
remaining unexercised after such time shall be cancelled without further
notice or action.
(b) The Option may be exercised in full or in installments at any
time after the Effective Date and prior to the Expiration Date.
4. Non-Transferability. The Option, and the rights and privileges
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conferred hereby, are not transferable by the Holder other than by will or
under the laws of descent and distribution. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option, shall render the Option null
and void.
5. Adjustments. (a) New option rights may be substituted for the
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Option, or the Company's duties as to the Option may be assumed, by a
corporation other than the Company, or by a parent or subsidiary of the
Company or such corporation, in connection with any merger, consolidation,
acquisition, separation, reorganization, liquidation or like occurrence in
which the Company is involved. Notwithstanding the foregoing or the
provisions of Sections 5.1(b) and (c) hereof, in the event such corporation,
or parent or subsidiary of the Company or such corporation, does not
substitute new option rights for and substantially equivalent to, the
Option, or assume the Option, the Option shall terminate and thereupon
become null and void (i) upon dissolution or liquidation of the Company, or
similar occurrence, (ii) upon any merger, consolidation, acquisition,
separation, reorganization, or similar occurrence, where the Company will
not be a surviving entity or (iii) upon a transfer of substantially all of
the assets of the Company or more than 80% of the outstanding shares of
Common Stock in a single transaction; provided, however, that the Holder
shall have the right immediately prior to or concurrently with such
dissolution, liquidation, merger, consolidation, acquisition, separation,
reorganization or similar occurrence, to exercise any unexpired portion of
the Option whether or not then exercisable.
(b) The existence the Option shall not affect in any way the right
or power of the Company or its stockholders to make or authorize any or all
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation
of the Company, or any issuance of Common Stock or subscription rights
thereto, or any merger or consolidation of the Company, or any issuance of
bonds, debentures, preferred or prior preference stock ahead of or affecting
the Common Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
(c) In the event that the Stock Option Committee (the "Committee")
of the Company's Board of Directors determines that any dividend or other
distribution (whether in the form of cash, Common Stock, other securities,
or other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company,
issuance of warrants or other rights to purchase Common Stock or other
securities of the Company, or other corporate transaction or event affects
the Common Stock such that an adjustment is determined by the Committee to
be appropriate in order to prevent dilution or enlargement of the benefits
or potential benefits intended to be made available under the Option, then
the Committee shall, in such manner as it may deem equitable, adjust any or
all of (i) the number of shares of Common Stock subject to the Option and
(ii) the exercise price with respect to the Option or, if deemed
appropriate, make provision for a cash payment to the Holder. Without
limiting the generality of the foregoing, any such adjustment shall be
deemed to have prevented any dilution and enlargement of the Holder's rights
if the Holder receives in any such adjustment rights
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which are substantially similar (after taking into account the fact that the
Holder has not paid the applicable exercise price) to the rights the Holder
would have received had he exercised the Option and become a shareholder of
the Company immediately prior to the event giving rise to such adjustment.
(d) Adjustments and elections under this Section 5 shall be made
by the Committee whose determination as to what adjustments, if any, shall
be made and the extent thereof shall be final, binding and conclusive.
6. Securities Regulations. (a) If at any time the Company's Board of
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Directors shall in its discretion determine that the listing, registration
or qualification of the shares of Common Stock subject to the Option upon
any securities exchange or under any federal or state law, or the approval
or consent of any governmental regulatory body, is necessary or desirable in
connection with the issuance or purchase of such shares hereunder, the
Option shall not be exercisable in whole or in part unless such listing,
registration, qualification, approval or consent shall have been effected or
obtained free from any conditions not reasonably acceptable to the Company's
Board of Directors.
(b) Unless at the time of the exercise of the Option and the
issuance of the shares of Common Stock purchased by the Holder pursuant
thereto there shall be in effect as to such shares a Registration Statement
under the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations of the Securities and Exchange Commission (the "Commission"),
the Holder shall deliver to the Company at the time of exercise, a
certificate in a form reasonably satisfactory to the Company and/or counsel
to the Company (i) acknowledging that the shares of Common Stock so acquired
may be "restricted securities" within the meaning of Rule 144 promulgated
under the Act; (ii) certifying that he is acquiring the shares of Common
Stock issuable to him upon such exercise for the purpose of investment and
not with a view to their sale or distribution; and (iii) containing the
Holder's agreement that such shares of Common Stock may not be sold or
otherwise disposed of except in accordance with applicable provisions of the
Act. The Company shall not be required to issue or deliver certificates for
shares of Common Stock until there shall have been compliance with all
applicable laws, rules and regulations, including rules and regulations of
the Commission.
7. Loans and Financial Accommodations to Holder. (a) In order to
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assist the Holder with the acquisition of shares of Common Stock pursuant to
the exercise of the Option, including the payment of any taxes resulting
from such exercise, the Committee may, in its discretion authorize (i) the
extension of a loan to the Holder by the Company, (ii) the payment by the
Holder of the purchase price of such shares in installments, (iii) the
guarantee by the Company of a loan obtained by the Holder from a third party
or (iv) such other reasonable arrangements to facilitate the exercise of the
Option in accordance with applicable law.
(b) The Committee or the Board of Directors shall determine the
terms of any loan or guarantee made pursuant hereto, including the interest
rate and other terms of repayment thereof, and whether such loan or
guarantee shall be secured or unsecured. Each loan shall be
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evidenced by a promissory note having a maximum term to maturity of not more
than sixty (60) months. The maximum amount of any loan or guarantee shall
be the option price for shares purchased upon exercise of the Option plus
(i) related interest payments and (ii) the amount of tax liability incurred
by the Holder as a result of the exercise of the Option. No amount loaned
to the Holder and no amount the repayment of which is guaranteed by the
Company shall be used for any purpose other than payment of (i) the purchase
price of shares acquired upon the exercise of the Option, (ii) taxes
attributable to such exercise and (iii) interest.
8. Method of Exercising Option. (a) The Option (or installments
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thereof) may be exercised by executing and delivering an Option Exercise
Notice in the form attached hereto as Exhibit A. Such notice shall be
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accompanied by payment of the full purchase price as follows: (i) in cash
(including check, bank draft or money order) payable to the order of the
Company or (ii) at the discretion of the Committee, by delivering to the
Company shares of Common Stock already owned by the Holder, and having a
fair market value (as defined in paragraph 8(b)) on the date of exercise
equal to the option price or a combination of such shares and cash, or (iii)
by any other proper method specifically approved by the Committee.
(b) For the purpose of any computation under paragraph 8(a) of
the fair market value per share of Common Stock, such value shall be deemed
to mean (i) if the of Common Stock is quoted on the Nasdaq National Market
System or listed on a national securities exchange, the closing price on
such market or such exchange, (ii) if the of Common Stock is not quoted on
the Nasdaq National Market System or listed on a national securities
exchange, the mean between the closing bid and asked prices of publicly-
traded shares of Common Stock in the over-the-counter market as reported on
the Nasdaq system or by any nationally recognized quotation service selected
by the Company, or (iii) if the Common Stock is not then publicly-traded, as
determined, in good faith, by the Committee, on the date of exercise of the
Option, or if such date shall not be a day during which shares of Common
Stock were traded, then on the next date immediately preceding such date
during which such trades were effected.
(c) If the Option should be exercised in part only, the Company
shall, upon surrender of the Option for cancellation, execute and deliver a
new option evidencing the rights of the Holder to purchase the balance of
the shares of Common Stock purchasable hereunder. All shares purchased
hereunder shall be deemed to be fully paid and non-assessable.
9. Conditions to Issuance of Shares. The Company shall not be
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required to issue any certificate for shares of Common Stock purchased upon
the exercise of the Option unless such shares are at the time of such
exercise listed on the Nasdaq National Market or any national securities
exchange on which the Common Stock may then be listed.
10. General. (a) The Option shall be construed in accordance with
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the laws of the State of New York and shall be binding upon the Company and
inure to the benefit of the Holder and any successors of the business of the
Company, but, except as provided for herein, neither the Option nor any
rights or privileges conferred hereunder shall be assignable by the Holder.
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(b) The Company may establish from time to time, appropriate
procedures to provide for payment or withholding of such income or other
taxes as may be required by law to be paid or withheld in connection with
the exercise of the Option. The Holder shall pay the Company all such
amounts requested by the Company to permit the Company to take any deduction
available to it resulting from the exercise of the Option. The Company may
also establish, from time to time, appropriate procedures to ensure that the
Company receives prompt advice concerning the occurrence of any event which
may create, or affect the timing or amount of, any obligation to pay or
withhold any such taxes or which may make available to the Company any tax
deduction resulting from the occurrence of such event, and the Holder will
comply with all such procedures so established.
IN WITNESS WHEREOF, the Company has caused the Option to be duly
executed by its duly authorized officer, on the day and year first above
written.
JUST TOYS, INC.
By: /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx
President and Chief Operating Officer
Agreed to and Accepted:
/s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
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EXHIBIT A
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FORM OF OPTION EXERCISE NOTICE
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____________ __, ____
Just Toys, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Ladies and Gentlemen:
The undersigned hereby irrevocably elects to exercise the within
Option to the extent of purchasing ________ shares of Common Stock at
$__________ per share for an aggregate purchase price of
$__________________. Enclosed is payment of the purchase price as follows
(check applicable box):
[ ] 1. Payment in Cash.
Check, bank draft or money order in the aggregate amount of the
exercise price, payable to Just Toys, Inc.
[ ] 2. Payment with Common Stock or Common Stock and Cash.
(a) Delivery of Certificate No.(s)__________ representing ________
shares of Common Stock, duly endorsed to Just Toys, Inc. The
shares of Common Stock evidenced by such certificate have been
valued at $_______ per share, in accordance with Section 8(b)
of the Option. I understand that if the enclosed certificate
represents more full shares of Common Stock than are necessary
to cover the exercise price, the Company will deliver to the
undersigned a certificate covering the excess number of full
shares.
(b) Check, bank draft or money order for the remaining exercise
price of $__________, payable to Just Toys, Inc. (required if
a fractional share is involved or if payment is being made
only partly with Common Stock).
Please have the certificate representing said shares forwarded to
me as indicated below.
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Instructions: PLEASE PRINT YOUR NAME BELOW (FIRST, MIDDLE
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INITIAL, LAST). If joint tenancy is requested, please xxxx the box below
and list both names in full.
Mr._________________ Soc. Sec. # __________________
Mrs.________________ Soc. Sec. # __________________
Miss________________ Soc. Sec. # __________________
Ms._________________ Soc. Sec. # __________________
Joint Tenancy [ ]
Street Address _______________________________________
City ________________ State ___________ Zip Code _____
Very truly yours,
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________________________
(Signature)
________________________
(Signature)
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