AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 6, 2002
REGISTRATION NO. 333-83568
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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JAKKS PACIFIC, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-4527222
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
22619 PACIFIC COAST HIGHWAY, MALIBU, CALIFORNIA 90265, (310) 456-7799
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JACK FRIEDMAN
CHAIRMAN
JAKKS PACIFIC, INC.
22619 PACIFIC COAST HIGHWAY
MALIBU, CALIFORNIA 90265
(310) 456-7799
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
MURRAY L. SKALA, ESQ.
FEDER, KASZOVITZ, ISAACSON, WEBER, SKALA, BASS & RHINE LLP
750 LEXINGTON AVENUE, NEW YORK, NEW YORK 10022-1200
(212) 888-8200
FAX: (212) 888-7776
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: Not
applicable.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE(1)
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Common Stock, par value $.001 per
share............................ 308,992 Shares $19.15(2) $5,917,197 $545
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(1) Estimated solely for the purpose of computing the amount of the registration
fee pursuant to Rule 457(c) (previously paid).
(2) Represents the average of the high and low sales prices of the Common Stock
for February 26, 2002 as reported by the Nasdaq National Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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PROSPECTUS
308,992 SHARES
JAKKS PACIFIC, INC.
COMMON STOCK
This Prospectus relates to 308,992 shares of common stock of JAKKS Pacific,
Inc., a Delaware corporation. The shares may be sold from time to time by the
holders thereof in the open market or in negotiated transactions. No shares will
be sold by or for our account and we will not receive any proceeds from the sale
of the shares. We will bear all costs associated with the offering and sale of
the shares, other than any underwriting discounts, agency fees, brokerage
commissions or similar costs applicable to the sale of any shares. These costs
will be borne by the holders of the shares sold hereunder. Our common stock is
traded on the Nasdaq National Market under the symbol JAKK. On March 5, 2002,
the last reported sale price of our common stock was $18.68.
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SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this Prospectus is March 7, 2002.
In this prospectus, JAKKS, the Company, we, us and our refer to JAKKS
Pacific, Inc. and, where the context requires (such as when we discuss our
business, operations, properties or products), our subsidiaries.
TABLE OF CONTENTS
PAGE
----
Prospectus Summary.......................................... 1
Risk Factors................................................ 3
Disclosure Regarding Forward-Looking Statements............. 8
Use of Proceeds............................................. 9
Selling Shareholders........................................ 9
Plan of Distribution........................................ 10
Incorporation of Certain Information by Reference........... 11
Legal Matters............................................... 11
Experts..................................................... 11
Material Changes............................................ 11
Where You Can Find More Information......................... 12
PROSPECTUS SUMMARY
All of the information in this summary is qualified in its entirety by the
more detailed information appearing elsewhere in this prospectus, including
information under "Risk Factors."
JAKKS PACIFIC, INC.
JAKKS
We are a multi-line, multi-brand toy company that designs, develops,
produces and markets toys and related products. Our principal products are (1)
action figures and accessories featuring licensed characters, principally from
the World Wrestling Federation, (2) Flying Colors molded plastic activity sets,
compounds playsets and lunch boxes, (3) Wheels division products, including Road
Champs die-cast collectible and toy vehicles and Remco toy vehicles and
role-play toys and accessories, (4) Pentech writing instruments and activity
products, (5) Child Guidance infant and pre-school electronic toys, toy foam
puzzle mats and blocks, activity sets and outdoor products and (6) fashion dolls
and related accessories. We focus our business on evergreen branded products
that are less subject to market fads or trends and feature well-known brand
names and simpler, lower-priced toys and accessories.
We formed a joint venture with THQ in June 1998 to develop, manufacture and
market, under an exclusive license with World Wrestling Federation
Entertainment, video games based on World Wrestling Federation characters and
themes. The joint venture's first products were released in November 1999.
We have been successful at acquiring and capitalizing on evergreen brands,
which are well-recognized trademarks or corporate, trade or brand names, some
with long product histories. We continually review the marketplace to identify
and evaluate evergreen brands that, for various reasons, we believe have
potential for significant growth. We seek to acquire or license these brands and
revitalize them by intensifying the marketing effort to restore and enhance
consumer recognition and retailer interest. We reinforce brands by linking them
with other evergreen brands on our products, adding to the branded product lines
new items that we expect to enjoy greater popularity, eliminating products with
fading popularity, adding new features and improving the functionality of
products in the line. We also try to improve point-of-sale brand visibility
through better shelf positioning and more eye-catching product packaging.
We license much of the intellectual property we use in our business. We
license the World Wrestling Federation trademark, as well as numerous other
trademarks, corporate, trade and brand names and logos, from third parties,
including Nickelodeon, Rugrats, Blue's Clues, Mickey Mouse, Barney, Teletubbies,
Sesame Street, Looney Tunes and Powerpuff Girls. This enables us to use
high-profile marks at a lower cost than that which we would incur if we
purchased these marks or developed comparable marks on our own. By licensing
marks, we have access to a far greater range of marks than those that would be
available for purchase, and we maintain the flexibility to acquire newly-popular
marks and to discontinue our use of marks whose popularity or value has faded.
We also license technology produced by unaffiliated inventors and product
developers to improve the design and functionality of our products. We believe
that our experience in the toy industry, our flexibility and our recent success
in developing and marketing products make us more attractive to toy inventors
and developers.
Most of our current products are relatively simple and inexpensive toys. We
believe that these products have proven to have enduring appeal and are less
subject to general economic conditions, toy product fads and trends, changes in
retail distribution channels and other factors. In addition, the simplicity of
these products enables us to choose among a wider range of manufacturers and
affords us greater flexibility in product design, pricing and marketing.
We sell our products through our in-house sales staff and independent sales
representatives. Purchasers of our products include toy and mass-market retail
chain stores, department stores, toy specialty stores and wholesalers. The Road
Champs, Flying Colors and Pentech products are also sold to smaller hobby shops,
specialty retailers and corporate accounts, among others. Our five largest
customers are Target, Kmart,
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Toys 'R Us, Wal-Mart, and Kay Bee Toys, which accounted for approximately 54.7%
of our net sales in 2001. No other customers accounted for more than 2% of our
net sales in 2001.
JAKKS was incorporated in Delaware in January 1995 and began operations in
April 1995. Our executive offices are located at 22619 Pacific Coast Highway,
Malibu, California 90265 and our telephone number is (310) 456-7799.
THE OFFERING
In December 2001, we acquired (the "Acquisition") all of the outstanding
securities of Kidz Biz Limited, a private limited company organized under the
laws of England ("KBUK"), and Kidz Biz Far East Limited, a Hong Kong private
limited company ("KBHK"). As partial consideration for the Acquisition, the
shareholders of KBUK and KBHK (the "Kidz Biz Shareholders") were issued an
aggregate of 308,992 shares of our common stock. As an inducement for the Kidz
Biz Shareholders to consummate the Acquisition, we agreed to register the shares
for offer and sale to the public. The shares are being offered for sale
hereunder by the Kidz Biz Shareholders.
Securities offered............ 308,992 shares of common stock
Sellers....................... The shares are being offered by our
shareholders and not by us.
Offering prices............... Prices then available on the Nasdaq National
Market or in individually negotiated
transactions.
Common stock to be outstanding
after the offering(1)......... 18,829,504 shares
Use of proceeds............... We will not receive any proceeds from the sale
of the shares.
Risk factors.................. An investment in the shares involves a high
degree of risk. See "Risk Factors."
Nasdaq National System trading
symbol........................ "JAKK"
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(1) Does not include (i) 2,785,129 shares reserved by us for issuance upon
exercise of all stock options included in our Third Amended and Restated
1995 Employee Stock Option, of which options to purchase 2,344,703 shares at
prices ranging from $4.75 to $26.00 and expiring at various times from
October 7, 2002 to January 1, 2012 have already been granted by us; and (ii)
166,875 shares reserved by us for issuance upon the exercise of outstanding
warrants, at a price of $6.67 and expiring on June 9, 2008.
2
RISK FACTORS
The purchase of the shares involves a high degree of risk, including, but
not necessarily limited to, the risks described below. Before purchasing the
shares, you should consider carefully the general investment risks enumerated
elsewhere in this prospectus and the following risk factors, as well as the
other information contained in this prospectus.
WE ARE SUBJECT TO CHANGING CONSUMER PREFERENCES AND NEW PRODUCT INTRODUCTIONS
Consumer preferences in the toy industry are continuously changing and
difficult to predict. Relatively few products become popular with consumers and
they often have short life cycles. We cannot assure you that:
- our current products will continue to be popular with consumers;
- our product lines or products that we introduce will achieve any
significant degree of market acceptance; or
- the life cycles of our products will be sufficient to permit us to
recover licensing, design, manufacturing, marketing and other costs
associated with those products.
Accordingly, our success will depend on our ability to enhance existing product
lines and to develop new products and product lines. The failure of new product
lines to achieve or sustain market acceptance could adversely affect our
business, financial condition and results of operations. In addition, the
success of many of our character- and theme-related products depends on the
popularity of characters in movies, television programs, live wrestling
exhibitions and other media. We cannot assure you that:
- if the media related to our existing character- and theme-related product
lines are successful, this success will result in substantial promotional
value to our products;
- we will be successful in obtaining licenses to produce new character- and
theme-related products in the future; or
- media related to our character- and theme-related product lines will be
released at the times we expect or will be successful.
THERE ARE RISKS ASSOCIATED WITH OUR LICENSE AGREEMENTS
1. Our Current Licenses Require Us to Pay Minimum Royalties
Sales of products under trademarks or trade or brand names licensed from
others accounted for substantially all of our net sales to date. Product
licenses allow us to capitalize on characters, designs, concepts and inventions
owned by others or developed by toy inventors and designers. Our license
agreements generally require us to make specified minimum royalty payments, even
if we fail to sell a sufficient number of units to cover these amounts. In
addition, under certain of our license agreements, if we fail to achieve certain
prescribed sales targets, we may be unable to retain or renew these licenses.
Royalties earned under our license agreements were approximately $23 million in
2001. As of December 31, 2001, our aggregate minimum royalty payments in 2002
under our then current license agreements were approximately $3.2 million.
2. The Use of Our Licenses Is Restricted
Under some of our license agreements, the licensors have the right to
review and approve our use of licensed products, designs or materials before we
are permitted to make any sales. The refusal to permit our use of any licensed
property in the way we propose, or any delay resulting from their review
process, could prohibit or impede our development or sale of new products.
3. New Licenses Are Difficult to Obtain
Our success will depend in part on our ability to obtain additional
licenses. Competition for desirable licenses is intense. We cannot assure you
that we will be able to secure or renew significant licenses on terms
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acceptable to us. In addition, as we add licenses, the need to fund additional
royalty advances and guaranteed minimum royalty payments may strain our cash
resources.
OUR JOINT VENTURE WITH THQ IS SUBJECT TO NUMEROUS RISKS AND UNCERTAINTIES
In addition to the risks relating to us and the toy industry, our joint
venture with THQ faces the following risks:
- The joint venture depends entirely on a single license, which gives it
the exclusive right to produce and market video games based on World
Wrestling Federation characters and themes. The popularity of wrestling,
in general, and the World Wrestling Federation, in particular, is subject
to changing consumer tastes and demands. A decline in the popularity of
the World Wrestling Federation could adversely affect the joint venture's
and our business, financial condition and results of operations.
- The joint venture relies on hardware manufacturers and THQ's
non-exclusive licenses with them for the right to publish titles for
their platforms and for the manufacture of the joint venture's titles. If
THQ's licenses were to terminate and the joint venture could not
otherwise obtain these licenses from the manufacturers, it would be
unable to publish additional titles for these manufacturers' platforms,
which would materially adversely affect its and our business, financial
condition and results of operations.
- The software industry has experienced periods of significant growth in
consumer interest, followed by periods in which growth has substantially
declined. The joint venture's sales of software titles will be dependent,
among other factors, on the popularity and unit sales of platforms
generally, as well as on the relative popularity and unit sales of
various platforms. The relative popularity of platforms has fluctuated
significantly in recent years. An unexpected decline in the popularity of
a particular platform can be expected to have a material adverse effect
on consumer demand for titles released or to be released by the joint
venture for these platforms.
- The joint venture's failure to timely develop titles for new platforms
that achieve significant market acceptance, to maintain net sales that
are commensurate with product development costs or to maintain
compatibility between its PC CD-ROM titles and the related hardware and
operating systems would adversely affect the joint venture's and our
business, financial condition and results of operations.
- In general, THQ controls the day-to-day operations of the joint venture
and all of its product development and production operations and,
accordingly, the joint venture will rely exclusively on THQ to manage
these operations effectively.
THE TOY INDUSTRY IS HIGHLY COMPETITIVE
The toy industry is highly competitive. Many of our competitors have
certain competitive advantages over us due to:
- greater financial resources;
- larger sales and marketing and product development departments;
- stronger name recognition;
- longer operating histories; and
- greater economies of scale.
In addition, the toy industry has no significant barriers to entry.
Competition is based primarily on the ability to design and develop new toys, to
procure licenses for popular characters and trademarks and to successfully
market products. Many of our competitors offer similar products or alternatives
to our products. Our competitors have obtained and are likely to continue to
obtain licenses that overlap our licenses with respect to products, geographic
areas and markets. We cannot assure you that we will be able to obtain
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adequate shelf space in retail stores to support our existing products or to
expand our products and product lines or that we will be able to continue to
compete effectively against current and future competitors.
WE MAY NOT BE ABLE TO SUSTAIN OR MANAGE OUR RAPID GROWTH
We experienced rapid growth in net sales and net income in each of the last
five years. As a result, comparing our period-to-period operating results may
not be meaningful and results of operations from prior periods may not be
indicative of future results. We cannot assure you that we will continue to
experience growth in, or maintain our present level of, net sales or net income.
Our growth strategy calls for us to continuously develop and diversify our
toy business by acquiring other companies, entering into additional license
agreements and expanding into international markets, which will place additional
demands on our management, operational capacity and financial resources and
systems. The increased demand on management may necessitate our recruitment and
retention of additional qualified management personnel. We cannot assure you
that we will successfully recruit and retain qualified personnel or expand and
manage our operations effectively and profitably.
In addition, implementation of our growth strategy is subject to risks
beyond our control, including competition, market acceptance of new products,
changes in economic conditions, our ability to obtain or renew licenses on
commercially reasonable terms and our ability to finance increased levels of
accounts receivable and inventory necessary to support our sales growth, if any.
Accordingly, we cannot assure you that our growth strategy will be implemented
successfully.
WE NEED TO BE ABLE TO ACQUIRE AND INTEGRATE COMPANIES AND NEW PRODUCT LINES
SUCCESSFULLY
Our growth strategy depends in part upon our ability to acquire companies
or new product lines. To do this, we may require financing from external sources
which we may not be able to obtain on acceptable terms. Future acquisitions will
only succeed if we can effectively assess characteristics of potential target
companies or product lines, such as:
- financial condition and results of operations;
- attractiveness of products;
- suitability of distribution channels;
- management ability; and
- the degree to which acquired operations can be integrated with our
operations.
We cannot assure you that we can identify attractive acquisition candidates
or negotiate acceptable acquisition terms, and our failure to do so may
adversely affect our results of operations and our ability to sustain growth.
Our acquisition strategy involves a number of risks, each of which could
adversely affect our operating results, including:
- difficulties in integrating acquired businesses or product lines,
assimilating new facilities and personnel and harmonizing diverse
business strategies and methods of operation;
- diversion of management attention from operation of our existing
business;
- loss of key personnel from acquired companies; and
- failure of an acquired business to achieve targeted financial results.
A FEW CUSTOMERS ACCOUNT FOR A LARGE PORTION OF OUR NET SALES
Our five largest customers accounted for 54.7% of our net sales in 2001.
Except for outstanding purchase orders for specific products, we do not have
written contracts with or commitments from any of our customers. A substantial
reduction in or termination of orders from any of our largest customers could
adversely affect our business, financial condition and results of operations. In
addition, pressure by large customers seeking a
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reduction in prices, financial incentives, a change in other terms of sale or
for us to bear the risks and the cost of carrying inventory could also adversely
affect our business, financial condition and results of operations.
WE DEPEND ON OUR KEY PERSONNEL
Our success is largely dependent upon the experience and continued services
of Jack Friedman, our Chairman and Chief Executive Officer, and Stephen G.
Berman, our President and Chief Operating Officer. We cannot assure you that we
would be able to find an appropriate replacement for Mr. Friedman or Mr. Berman
if the need should arise, and any loss or interruption of Mr. Friedman's or Mr.
Berman's services could adversely affect our business, financial condition and
results of operations.
OUR BUSINESS MAY BE ADVERSELY AFFECTED BY POLITICAL OR ECONOMIC DEVELOPMENTS IN
CHINA
Substantially all of our products are produced by manufacturers in the
People's Republic of China. As a result, our operations may be affected by many
factors, including:
- economic, political, governmental and labor conditions in China;
- the possibility of expropriation, supply disruption, currency controls
and exchange fluctuations;
- China's relationship with the United States; and
- fluctuations in the exchange rate of the U.S. dollar against foreign
currencies.
1. Loss of China's Most Favored Nation Status
China currently enjoys Most Favored Nation status under United States
tariff laws. China's Most Favored Nation status is reviewed annually by
Congress, and the renewal of this status is subject to significant political
uncertainties. The loss of China's Most Favored Nation status or the imposition
of retaliatory or protectionist trade policies, such as a substantial increase
in the duty on products we import into the United States from China, would
adversely affect our business, financial condition and results of operations.
2. Imposition of Trade Restrictions
China may be subject to retaliatory trade restrictions imposed by the
United States under various provisions of the Trade Act of 1974. The imposition
by the United States of trade sanctions and subsequent actions by China would
result in manufacturing and distribution disruptions or higher costs to us
which, in turn, would adversely affect our business, financial condition and
results of operations.
3. Political Uncertainty in Hong Kong
We maintain an office in Hong Kong to supervise and monitor manufacturing
and product promotion in China. On July 1, 1997, sovereignty over Hong Kong was
transferred from the United Kingdom to China. If Hong Kong's business climate
were to become less favorable as a result of the transfer of sovereignty, it
would adversely affect our business, financial condition and results of
operations.
OUR PRODUCT SALES ARE SUBJECT TO SEASONAL AND QUARTERLY FLUCTUATIONS
Our product sales are highly seasonal, with a majority of our sales
occurring between September and December, the traditional holiday season. As a
result, approximately 54.2% of our 2001 net sales occurred in the third and
fourth quarters. This seasonality causes our quarterly operating results and
working capital needs to fluctuate significantly.
OUR BUSINESS IS SUBJECT TO EXTENSIVE GOVERNMENT REGULATION AND TO POTENTIAL
PRODUCT LIABILITY CLAIMS
Our business is subject to various laws, including the Federal Hazardous
Substances Act, the Consumer Product Safety Act, the Flammable Fabrics Act and
the rules and regulations promulgated under these acts. These statutes are
administered by the Consumer Product Safety Commission, which has the authority
to
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remove from the market products that are found to be defective and present a
substantial hazard or risk of serious injury or death. The Consumer Product
Safety Commission can require a manufacturer to recall, repair or replace these
products under certain circumstances. We cannot assure you that defects in our
products will not be alleged or found. Any such allegations or findings could
result in:
- product liability claims;
- loss of sales;
- diversion of resources;
- damage to our reputation;
- increased warranty costs; and
- removal of our products from the market.
Any of these results may adversely affect our business, financial condition and
results of operations. There can be no assurance that our product liability
insurance will be sufficient to avoid or limit our loss in the event of an
adverse outcome of any product liability claim.
WE DEPEND ON OUR PROPRIETARY RIGHTS
We rely on trademark, copyright and trade secret protection, nondisclosure
agreements and licensing arrangements to establish, protect and enforce our
proprietary rights in our products. The laws of certain foreign countries may
not protect intellectual property rights to the same extent or in the same
manner as the laws of the United States. We cannot assure you that we or our
licensors will be able to successfully safeguard and maintain our proprietary
rights. Further, certain parties have commenced legal proceedings or made claims
against us based on our alleged patent infringement, misappropriation of trade
secrets or other violations of their intellectual property rights. We cannot
assure you that third parties will not assert intellectual property claims
against us in the future. These claims could divert management attention from
operating our business or result in unanticipated legal and other costs, which
could adversely affect our business, financial condition and results of
operations.
WE DEPEND ON THIRD-PARTY MANUFACTURERS
We depend on third parties to manufacture all our products. Although we own
the tools, dies and molds used to manufacture our products, we have limited
control over the manufacturing processes themselves. As a result, any
difficulties encountered by the third-party manufacturers that result in product
defects, production delays, cost overruns or the inability to fulfill orders on
a timely basis could adversely affect our business, financial condition and
results of operations.
We do not have long-term contracts with our third-party manufacturers.
Although we believe we would be able to secure other third-party manufacturers
to produce our products as a result of our ownership of the tools, dies and
molds used in the manufacturing process, our operations would be adversely
affected if we lost our relationship with any of our current suppliers or if our
current suppliers' operations or sea or air transportation with our China-based
manufacturers were disrupted or terminated even for a relatively short period of
time. Our tools, dies and molds are located at the facilities of our third-party
manufacturers. Accordingly, significant damage to these facilities could result
in the loss of or damage to a material portion of our tools, dies and molds, in
addition to production delays while new facilities were being arranged and
replacement tools, dies and molds were being produced. We do not maintain an
inventory of sufficient size to provide protection for any significant period
against an interruption of supply, particularly if we were required to utilize
alternative sources of supply.
Although we do not purchase the raw materials used to manufacture our
products, we are potentially subject to variations in the prices we pay our
third-party manufacturers for products, depending on what they pay for their raw
materials.
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THE MARKET PRICE OF OUR COMMON STOCK MAY BE VOLATILE
Market prices of the securities of toy companies are often volatile. The
market price of our common stock may be affected by many factors, including:
- fluctuations in our financial results;
- the actions of our customers and competitors (including new product line
announcements and introductions);
- new regulations affecting foreign manufacturing;
- other factors affecting the toy industry in general; and
- sales of our common stock into the public market.
In addition, the stock market periodically has experienced significant
price and volume fluctuations which may have been unrelated to the operating
performance of particular companies.
FUTURE SALES OF OUR SHARES COULD ADVERSELY AFFECT OUR STOCK PRICE
As of February 26, 2002, there were 18,829,504 shares of our common stock
outstanding. An additional 1,091,387 shares of our common stock are issuable
upon the exercise of currently exercisable warrants and options. If all these
shares were issued, we would have 19,920,891 shares of our common stock
outstanding. In addition, 1,420,191 shares of our common stock are issuable upon
the exercise of outstanding options that are not currently exercisable. Any sale
of a substantial number of shares of our common stock in the public market after
this offering, or the perception that such sales could occur, may adversely
affect the market price of our common stock.
OUR MANAGEMENT EXERCISES SUBSTANTIAL CONTROL OVER OUR BUSINESS
As of February 26, 2002, our directors and executive officers beneficially
owned, in the aggregate, 1,113,013 shares of our common stock, representing
approximately 5.6% of the common stock outstanding. Accordingly, if these
persons act together, they could exercise considerable influence over matters
requiring approval of our stockholders, including the election of our Board of
Directors.
OUR ABILITY TO ISSUE BLANK CHECK PREFERRED STOCK AND OUR OBLIGATION TO MAKE
SEVERANCE PAYMENTS COULD PREVENT OR DELAY TAKEOVERS
Our certificate of incorporation authorizes the issuance of blank check
preferred stock (that is, preferred stock which our Board of Directors can
create and issue without prior stockholder approval) with rights senior to those
of our common stock. In addition, our employment agreements with certain of our
senior officers require us, under certain conditions, to make substantial
severance payments to them if they resign after a change of control. These
provisions could delay or impede a merger, tender offer or other transaction
resulting in a change in control of JAKKS, even if such a transaction would have
significant benefits to our stockholders. As a result, these provisions could
limit the price that certain investors might be willing to pay in the future for
shares of our common stock.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. When we use words like "intend," "anticipate," "believe,"
"estimate," "plan" or "expect," we are making forward-looking statements. We
believe that the assumptions and expectations reflected in such forward-looking
statements are reasonable, based on information available to us on the date of
this prospectus, but we cannot assure you that these assumptions and
expectations will prove to have been correct or that we will take any action
that we may presently be planning. We have disclosed certain important factors
that could cause our actual results to differ materially from our current
expectations under "Risk Factors" elsewhere in this prospectus. You should
8
understand that forward-looking statements made in connection with this offering
are necessarily qualified by these factors. We are not undertaking to publicly
update or revise any forward-looking statement if we obtain new information or
upon the occurrence of future events or otherwise.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares covered by
this prospectus.
SELLING SHAREHOLDERS
The following table sets forth certain information regarding beneficial
ownership of our common stock as of March 5, 2002 by the selling shareholders.
We believe that the persons named in this table have sole voting and investment
power with respect to all shares of common stock shown as beneficially owned by
them.
AMOUNT AND
NAME OF NATURE OF BENEFICIAL SHARES REGISTERED BENEFICIALLY OWNED
BENEFICIAL OWNER OWNERSHIP* FOR SALE AFTER SALE*
---------------- -------------------- ----------------- ------------------
John Nimmo(1)....................... 154,496 154,496 -0-
David Lipman(1)(2).................. 137,501(3) 137,501 -0-
Marilyn Lipman(2)................... 16,995(3) 16,995 -0-
---------------
* The number of shares of common stock beneficially owned by a person or
entity is determined under rules promulgated by the United States Securities
and Exchange Commission. Under such rules, beneficial ownership includes any
shares as to which a person or entity has sole or shared voting power or
investment power. Included among the shares owned by such person are any
shares which such person or entity has the right to acquire within 60 days
after March 7, 2002. The inclusion herein of any shares deemed beneficially
owned does not constitute an admission of beneficial ownership of such
shares. Except for information in our records and reports filed by him or
her with us, if any, we have no knowledge of whether a selling shareholder
owns any other shares of our common stock or options or warrants to purchase
shares of our common stock. We believe that none of the selling shareholders
will own 1% or more of our outstanding shares if they sell all of their
shares registered for sale.
(1) Messrs. Nimmo and Lipman were both directors of each of KBUK and KBHK until
the closing of the Acquisition.
(2) David Lipman and Marilyn Lipman are husband and wife, and, in accordance
with rules promulgated by the United States Securities and Exchange
Commission, are deemed to beneficially own any shares owned by their
spouses.
(3) Does not include options issued to Mr. Lipman to purchase 50,000 shares of
our common stock, none of which are exercisable within 60 days after March
7, 2002.
EARN OUT
Pursuant to the terms of the Stock Purchase Agreement entered into in
connection with the Acquisition, in the event KBUK and KBHK meet certain minimum
sales requirements in any of 2002, 2003, 2004 or 2005, we will become obligated
to issue additional shares of our common stock to the selling shareholders (the
"Earn Out Shares"). The aggregate number of shares we may become obligated to so
issue will never exceed 25,749 shares per each year in which the minimum sales
requirements are met. In the event the maximum number of Earn Out Shares are
issued to the selling shareholders in each of 2002, 2003, 2004 and 2005, we will
have issued an aggregate of 102,996 Earn Out Shares to the selling shareholders.
We have agreed to file, on behalf of the selling shareholders, a registration
statement with the Commission on Form S-3 covering the Earn Out Shares within
two months after the issuance thereof.
Each of David Lipman and Marilyn Lipman (each, a "Locked-Up Shareholder")
have agreed not to sell, assign, pledge or otherwise transfer, or engage in
short selling or hedging transactions with respect to the Earn
9
Out Shares issued thereto upon the closing of the Acquisition (the "Closing")
during any calendar quarter of 2002 in excess of the following amounts:
- 3 months following the Closing -- 25% of the Earn Out Shares issued to
the respective Locked-Up Shareholder;
- 6 months following the Closing -- 50% of the Earn Out Shares issued to
the respective Locked-Up Shareholder;
- 9 months following the Closing -- 75% of the Earn Out Shares issued to
the respective Locked-Up Shareholder; and
- 1 year following the Closing -- 100% of the Earn Out Shares issued to the
respective Locked-Up Shareholder.
DAVID LIPMAN EMPLOYMENT
Simultaneously with the closing of the Acquisition, David Lipman, one of
the selling shareholders, entered into an employment agreement with us, pursuant
to which he is required to perform certain executive and supervisory duties on
our behalf. This agreement expires on December 31, 2005 (unless terminated
earlier in accordance with its terms). In consideration for the services to be
performed by Mr. Lipman, he will receive, inter alia, a base salary of L305,000
per annum, which amount increases to L315,000 per annum upon the first
anniversary of the employment agreement for the remainder of the term, and he
has been issued an option to purchase 50,000 shares of common stock at an
exercise price of $19.02. The right to acquire 12,500 shares under this option
vests on each of December 27, 2002, 2003, 2004 and 2005. This option will not be
exercisable after 5:00 p.m. Pacific Time on December 26, 2007.
PLAN OF DISTRIBUTION
We are registering 308,992 shares of our common stock covered by this
prospectus on behalf of the selling shareholders. We will pay the costs and fees
of registering our common stock, but the selling shareholders will pay any
brokerage commissions, discounts or other expenses relating to their sale of
their common stock.
The selling shareholders may, from time to time, sell all or a portion of
their shares of our common stock on any market upon which the common stock may
be quoted, in privately negotiated transactions or otherwise, at fixed prices
that may be changed, at market prices prevailing at the time of sale, at prices
related to the prevailing market prices, or at negotiated prices.
In effecting sales, brokers and dealers engaged by the selling shareholders
may arrange for other brokers or dealers to participate. Brokers and dealers may
receive commissions, discounts or concessions for their services from the
selling shareholders or, if any such broker-dealer acts as agent for the
purchaser of such shares, from such purchaser, in amounts to be negotiated.
These commissions or discounts are not expected to exceed those customary in the
types of transactions involved.
The selling shareholders and any broker-dealer or agent involved in the
sale or resale of the common stock may qualify as "underwriters" within the
meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the
"Securities Act"), and a portion of any proceeds of sale and the broker-dealers'
or agents' commissions, discounts, or concessions may be deemed to be
underwriters' compensation under the Securities Act.
In addition to selling their common stock under this prospectus, the
selling shareholders may transfer their common stock in other ways not involving
market makers or established trading markets, including directly by gift,
distribution, or other transfer; and the sale of such shares may be made by such
transferees in the public securities markets by delivery of this prospectus to
the buyers in such transactions.
10
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by us with the Securities and Exchange
Commission (the "Commission") are incorporated by reference in this prospectus.
Our Commission file number to be used to locate these documents is 0-28104.
(a) Our Annual Report on Form 10-K for the year ended December 31, 2000, as
amended on October 5, 2001.
(b) Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2001 (as amended on September 10, 2001), June 30, 2001 (as amended on September
10, 2001) and September 30, 2001.
(c) Our Current Report on Form 8-K, filed with the Commission on March 5,
2002.
(d) The description of our common stock contained in our Registration
Statement on Form 8-A (File No. 0-28104), filed March 29, 1996, and the
Description of Securities -- Common Stock incorporated therein by reference to
our Registration Statement on Form SB-2 (Reg. No. 333-2048-LA).
All documents subsequently filed by us pursuant to Section 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"), prior to
the termination of this offering, shall be deemed to be incorporated by
reference in this prospectus and to be a part of this prospectus from the date
of filing of such documents. Any statement contained herein or in a document
incorporated 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 herein or in any other subsequently filed document which
also is incorporated or deemed to be incorporated by reference herein modifies
or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
prospectus.
LEGAL MATTERS
The legality of the Shares offered hereby has been passed upon for us by
Feder, Kaszovitz, Isaacson, Weber, Skala, Bass & Rhine LLP, New York, New York.
Murray L. Skala, a partner of that firm, is one of our directors and holds
options to purchase 75,271 shares of our common stock, all of which are
currently exercisable.
EXPERTS
Our consolidated financial statements as of December 31, 1999 and 2000 and
for each of the three years in the period ended December 31, 2000 incorporated
by reference in this prospectus and elsewhere in this registration statement
have been audited by Pannell Kerr Forster, Certified Public Accountants, A
Professional Corporation, Los Angeles, California, independent auditors, as
stated in their report incorporated by reference herein and are included in
reliance upon the report of that firm given upon their authority as experts in
accounting and auditing.
MATERIAL CHANGES
PROPOSED TOYMAX ACQUISITION
We have recently entered into definitive agreements to acquire, through a
wholly-owned subsidiary, Toymax International, Inc. ("Toymax") in two stages.
The acquisition is subject to customary closing conditions, including compliance
with the Hart-Scott-Rodino waiting period and other regulatory approvals and, as
to the second stage, the approval of Toymax's stockholders. We expect to
complete the first phase of the transaction in late February, at which point we
will acquire operating control of Toymax, and to complete the second phase in
the second quarter of 2002.
11
In the first stage, we will purchase approximately 8.1 million shares of
Toymax common stock, representing approximately 66.3% of the outstanding shares,
from four principal stockholders. The purchase price for the Toymax common stock
will be $4.50 per share, consisting of $3.00 in cash and 0.0798 shares of our
common stock (based on a base value of $18.797 per share). The purchase price
will be subject to certain adjustments if the value of our common stock (as
determined in accordance with the Stock Purchase Agreement entered into between
such shareholders and our subsidiary) varies by more than 10% from the base
value and, in certain cases, all or part of the portion of the purchase price
that would be payable in shares of our common stock may be payable in cash. At
the closing of the stock purchase under the Stock Purchase Agreement (the "First
Closing"), which is expected to be held promptly after the expiration or early
termination of the Hart-Scott-Rodino waiting period, we will purchase these
shares for an aggregate purchase price of approximately $36,450,000 and will, as
soon as practicable thereafter, install our designees in a majority of Toymax's
directorships. We expect to thereby assume operating control of Toymax. At the
First Closing, all options and warrants for Toymax common stock held by the
principal stockholders or their affiliates will be terminated.
In the second stage of the transaction, we will cause our subsidiary to
merge into Toymax, so that Toymax will become our wholly-owned subsidiary and
the stockholders of Toymax, other than us or our affiliates, will receive merger
consideration of $4.50 per share, which will be payable in the same form
provided for, and subject to the same adjustment provisions as apply to, the
stock purchase at the First Closing. We will cause Toymax to call a meeting of
its stockholders to consider and act upon the merger. We intend to vote at the
meeting in favor of the merger. Because we will own a majority of the
outstanding shares of Toymax common stock, approval of the merger under the
applicable state law would be assured.
Promptly after approval of the merger at the meeting, we will cause the
merger to become effective and pay the merger consideration in an aggregate
amount of approximately $18,516,000. In addition to the payment of the merger
consideration to the unaffiliated stockholders of Toymax, we have agreed to
provide for the exchange of all of Toymax's then outstanding options and
warrants for options to purchase our common stock or, under certain limited
circumstances, the redemption for cash, in whole or in part, of Toymax's then
outstanding options and warrants.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting requirements of the Exchange Act. In
accordance with the Exchange Act, we have and will continue to file reports,
proxy statements and other information with the Commission. Reports and other
information filed by us may be inspected and copied at the public reference
facilities of the Commission in Washington, D.C. Copies of such materials can be
obtained from the Public Reference Room of the Commission, at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. You may obtain information on
the operation of the Public Reference Room by calling the Commission at
1-800-SEC-0330. In addition, the Commission maintains a web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. Our common stock is listed on the Nasdaq National Market and reports
and information concerning us can also be inspected through the Nasdaq Stock
Market. We intend to furnish our shareholders with annual reports containing
audited financial statements and such other periodic reports as we deem
appropriate or as may be required by law.
We will provide without charge to each person who receives this prospectus,
upon written or oral request of such person, a copy of any of the information
that is incorporated by reference unless the exhibits are themselves
specifically incorporated by reference. Such requests should be directed by mail
to our Chief Financial Officer at the following address, facsimile number and
telephone number:
JAKKS Pacific, Inc.
22619 Pacific Coast Highway
Malibu, California 90265
Facsimile: (310) 455-6352
Telephone: (310) 456-7799
12
We have filed with the Commission a registration statement on Form S-3 and
all schedules and exhibits thereto under the Securities Act with respect to the
common stock offered by this prospectus. This prospectus does not contain all of
the information set forth in the registration statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission. For
further information with respect to us and this offering, reference is made to
such registration statement, including the exhibits filed therewith, which may
be inspected without charge at the Commission's principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. Copies of the registration statement may
be obtained from the Commission at its principal office upon payment of
prescribed fees. Statements contained in this prospectus as to the contents of
any contract or other document are not necessarily complete and, where the
contract or other document has been filed as an exhibit to the registration
statement, each such statement is qualified in all respects by reference to the
applicable document filed with the Commission.
13
PART II -- INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
It is expected that the following expenses will be incurred in connection
with the issuance and distribution of the Common Stock being registered. All
such expenses are being paid by the Company.
SEC Registration fee....................................... $ 545
*Printing and Edgarization.................................. 2,500
*Accountants' fees and expenses............................. 1,000
*Attorneys' fees and expenses............................... 7,500
*Miscellaneous.............................................. 500
---------
*Total...................................................... $ 12,045
=========
---------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Registrant's Certificate of Incorporation provides that the personal
liability of the directors of the Registrant shall be limited to the fullest
extent permitted by the provisions of Section 102(b)(7) of the General
Corporation Law of the State of Delaware (DGCL). Section 102(b)(7) of the DGCL
generally provides that no director shall be liable personally to the Registrant
or its stockholders for monetary damages for breach of fiduciary duty as a
director, provided that the Certificate of Incorporation does not eliminate the
liability of a director for (1) any breach of the director's duty of loyalty to
the Registrant or its stockholders; (2) acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law; (3) acts or
omissions in respect of certain unlawful dividend payments or stock redemptions
or repurchases; or (4) any transaction from which such director derives an
improper personal benefit. The effect of this provision is to eliminate the
rights of the Registrant and its stockholders to recover monetary damages
against a director for breach of her or his fiduciary duty of care as a director
(including breaches resulting from negligent or grossly negligent behavior)
except in the situations described in clauses (1) through (4) above. The
limitations summarized above, however, do not affect the ability of the
Registrant or its stockholders to seek nonmonetary remedies, such as an
injunction or rescission, against a director for breach of her or his fiduciary
duty.
In addition, the Certificate of Incorporation provides that the Registrant
shall, to the fullest extent permitted by Section 145 of the DGCL, indemnify all
persons whom it may indemnify pursuant to Section 145 of the DGCL. In general,
Section 145 of the DGCL permits the Registrant to indemnify a director, officer,
employee or agent of the Registrant or, when so serving at the Registrant's
request, another company who was or is a party or is threatened to be made a
party to any proceeding because of his or her position, if he or she acted in
good faith and in a manner reasonably believed to be in or not opposed to the
best interests of the Registrant and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The Registrant maintains a directors' and officers' liability insurance
policy covering certain liabilities that may be incurred by any director or
officer in connection with the performance of his or her duties and certain
liabilities that may be incurred by the Registrant, including the
indemnification payable to any director or officer. This policy provides for $20
million in maximum aggregate coverage, including defense costs. The entire
premium for such insurance is paid by the Registrant.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers, or persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
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ITEM 16. EXHIBITS
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
5.1 Opinion of Feder, Kaszovitz, Isaacson, Weber, Skala, Bass &
Rhine LLP, counsel for the Registrant(1)
23.1 Consent of Pannell Kerr Forster, Certified Public
Accountants, A Professional Corporation(1)
23.2 Consent of Feder, Kaszovitz, Isaacson, Weber, Skala, Bass &
Rhine LLP (included in Exhibit 5.1)(1)
24.1 Power of Attorney(1)
---------------
(1) Filed as an exhibit to the initial filing of this Registration Statement,
filed with the Commission on February 28, 2002 and incorporated herein by
reference.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
1. 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
this registration statement or any material change to such information in this
registration statement.
2. That for the purpose 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.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered that remain unsold at the termination of the
offering.
4. That for 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 Exchange Act of 1934 that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
5. That insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
6. That for purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of the registration
statement as of the time it was declared effective.
7. That for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
II-2
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-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Malibu, State of California, on March 6, 2002.
JAKKS PACIFIC, INC.
By: /s/ JACK FRIEDMAN
------------------------------------
Jack Friedman
Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
--------- ----- -------------
/s/ JACK FRIEDMAN Chairman and Chief Executive March 6, 2002
------------------------------------------------ Officer (Principal Executive
Jack Friedman Officer)
/s/ JOEL M. BENNETT Chief Financial Officer (Principal March 6, 2002
------------------------------------------------ Financial and Accounting Officer)
Joel M. Bennett
/s/ STEPHEN G. BERMAN Director March 6, 2002
------------------------------------------------
Stephen G. Berman
/s/ DAVID C. BLATTE Director March 6, 2002
------------------------------------------------
David C. Blatte
/s/ ROBERT E. GLICK Director March 6, 2002
------------------------------------------------
Robert E. Glick
/s/ MICHAEL G. MILLER Director March 6, 2002
------------------------------------------------
Michael G. Miller
/s/ MURRAY L. SKALA Director March 6, 2002
------------------------------------------------
Murray L. Skala
II-3
EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
5.1 Opinion of Feder, Kaszovitz, Isaacson, Weber, Skala, Bass &
Rhine LLP, counsel for the Registrant(1)
23.1 Consent of Pannell Kerr Forster, Certified Public
Accountants, A Professional Corporation(1)
23.2 Consent of Feder, Kaszovitz, Isaacson, Weber, Skala, Bass &
Rhine LLP (included in Exhibit 5.1)(1)
24.1 Power of Attorney(1)
---------------
(1) Filed as an exhibit to the initial filing of this Registration Statement,
filed with the Commission on February 28, 2002 and incorporated herein by
reference.
II-4