JUST TOYS, INC.
00 XXXXXXXXXXX XXXXXX
XXXXX XXXXX, XXX XXXX 00000
Stock Option
OPTION dated this 23rd day of March 1999 (the "Effective Date"),
granted by Just Toys, Inc., a Delaware corporation (hereinafter the "Company"),
to ________________ (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 March 23, 1999, 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 option
(the "Option") to purchase up to an aggregate of _______ 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 Common
Stock to be issued upon exercise of the Option shall be $.391.
3. Expiration Date; Vesting of Option. (a) Subject to the provisions of
paragraph 5 hereof, the Option shall expire at 5:00 P.M. New York time on March
22, 2009 (the "Expiration Date"), and any portion of the Option remaining
unexercised after such time shall be canceled without further notice or action.
(b) The Option may be exercised in full or in installments at any
time after August 31, 1999 and prior to the Expiration Date.
4. Non-Transferability. The Option, and the rights and privileges
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
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(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 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
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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
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 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 evidenced by a promissory note
having a maximum term to maturity of not more than sixty (60)
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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
thereof) may be exercised by executing and delivering an Option Exercise Notice
in the form attached hereto as Exhibit A. Such notice shall be 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 Stock Market 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 Stock Market 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 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 Stock 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 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: ____________________
Xxxxx Xxxxxxx
President
Agreed to and Accepted
______________________
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EXHIBIT A
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Form of Option Exercise Notice
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----------- ---, -----
Just Toys, Inc.
00 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 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 $.391 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).
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Please have the certificate representing said shares forwarded
to me as indicated below.
Instructions: PLEASE PRINT YOUR NAME BELOW (FIRST, MIDDLE
INITIAL, LAST). If joint tenancy is requested, please mark 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,
________________________
(Signature)
________________________
(Signature)
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