PLAY CO. TOYS & ENTERTAINMENT CORP.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FRIDAY, FEBRUARY 4, 2000
To the Shareholders of
PLAY CO. TOYS & ENTERTAINMENT CORP.
NOTICE IS HEREBY GIVEN that a Special Meeting of Common and Series E
Preferred Stock Shareholders of Play Co. Toys & Entertainment Corp. (the
"Company") will be held at the Company's offices located at 550 Rancheros Drive,
San Marcos, California 92069, on Friday, February 4, 2000, at 11:00 a.m. Pacific
Standard Time, for the following purposes:
1. To vote on the proposal to authorize the filing of an amendment to the
Company's Certificate of Incorporation to modify the conversion terms of the
Series E Preferred Stock to render all shares of same eligible for conversion on
February 4, 2000; and
2. To transact such other business as properly may be brought before the
meeting or any adjournment thereof.
The close of business on Tuesday, December 21, 1999 has been fixed as
the record date for the determination of shareholders entitled to notice of, and
to vote at, the meeting and any adjournment thereof.
You are cordially invited to attend the meeting. Whether or not you
plan to attend, please complete, date, and sign the accompanying proxy, and
return it promptly in the enclosed envelope to assure that your shares are
represented at the meeting. If you do attend, you may revoke any prior proxy and
vote your shares in person if you wish to do so. Any prior proxy automatically
will be revoked if you execute the accompanying proxy or if you notify the
Secretary of the Company, in writing, prior to the Special Meeting of
Shareholders.
By Order of the Board of Directors
James B. Frakes, Secretary
Dated: January 25, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, AND SIGN
THE ENCLOSED PROXY, AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO
ASSURE REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN
THE UNITED STATES.
PLAY CO. TOYS & ENTERTAINMENT CORP.
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 4, 2000
This proxy statement and the accompanying form of proxy were mailed on
January 25, 2000 to the shareholders of record (as of December 21, 1999) of Play
Co. Toys & Entertainment Corp. (the "Company"), a Delaware corporation, in
connection with the solicitation of proxies by the Board of Directors of the
Company for use at the Special Meeting to be held on February 4, 2000 and at any
adjournment thereof.
SOLICITATION, VOTING AND REVOCABILITY OF PROXIES
Shares of the Company's (i) Common Stock, par value $0.01 per share (the
"Common Stock") and (ii) Series E Preferred Stock, par value $0.01 per share
(the "Series E Stock") represented by effective proxies in the respective
accompanying forms will, unless contrary instructions are specified in the
proxies, be voted FOR the proposal to authorize the filing of a Certificate of
Amendment to Certificate of Incorporation pursuant to which the Company shall
amend the conversion terms of its Series E Stock such that all shares of Series
E Stock shall be eligible for conversion on February 4, 2000.
A proxy may be revoked at any time before it is voted. A shareholder may
revoke same (i) by notifying the Secretary of the Company either in writing
prior to the Special Meeting or in person at the Special Meeting; (ii) by
submitting a proxy bearing a later date; or (iii) by voting in person at the
Special Meeting. An affirmative vote of (i) a majority of the shares of Common
Stock present in person or represented by proxy at the Special Meeting and
entitled to vote thereon and (ii) a majority of the shares of Series E Stock
present in person or represented by proxy at the Special Meeting and entitled to
vote thereon is required to approve the proposal to amend the Company's
Certificate of Incorporation. A shareholder voting through a proxy who abstains
with respect to the proposal is considered to be present and entitled to vote on
the proposal at the meeting, and his abstention is, in effect, a negative vote;
however, a shareholder (including a broker) who does not give authority to a
proxy to vote or who withholds authority to vote on the proposal shall not be
considered present and entitled to vote on same.
The Company will bear the cost of the solicitation of proxies by the Board
of Directors. The Board of Directors may use the services of its executive
officers and certain directors to solicit proxies from shareholders in person
and by mail, telegram, and telephone. Arrangements may also be made with
brokers, fiduciaries, custodians, and nominees to send proxies, proxy
statements, and other material to the beneficial owners of the Common Stock and
Series E Stock held of record by such persons, and the Company may reimburse
same for reasonable out-of-pocket expenses incurred in so doing.
The Company's annual report on Form 10-KSB for the fiscal year ended March
31, 1999 accompanies this proxy statement and is incorporated herein by
reference.
The principal executive offices of the Company are located at 550 Rancheros
Drive, San Marcos, California 92069; the Company's telephone number is (760)
471- 4505.
No Dissenters' Rights
The corporate action described in this proxy statement will not afford to
shareholders the opportunity to dissent from the action described herein and to
receive an agreed or judicially appraised value for their shares.
VOTING SECURITIES AND SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The securities entitled to vote at the meeting are the Common Stock and
Series E Stock. The presence, in person or by proxy, of a majority of each of
the Common and Series E Stock entitled to vote will constitute a quorum for the
meeting. Each share of Common Stock and each share of Series E Stock entitles
its holder to one vote on each matter submitted to the shareholders. The close
of business on December 21, 1999 has been fixed as the record date for the
determination of shareholders entitled to notice of, and to vote at, the meeting
and any adjournment thereof. On that date, 5,548,857 shares of Common Stock and
5,883,903 shares of Series E Stock were outstanding. Voting of the shares of
Common and Series E Stock is on a non-cumulative basis.
The following table sets forth certain information regarding beneficial
ownership of the Company's outstanding Common Stock as of January 5, 2000 by (i)
each beneficial owner of 5% or more of the Company's Common Stock; (ii) each of
the Company's executive officers, directors, and key employees; and (iii) all
executive officers, directors, and key employees as a group:
Name and Address Number of Shares of Common Stock
of Beneficial Owner Beneficially Owned 1 Percent of Common Stock
Beneficially Owned 2,3
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Harold Rashbaum 4
c/o Play Co. Toys & Entertainment Corp.
550 Rancheros Drive 150,000 2.6%
San Marcos, CA 92069
- ------------------------------------------------------------------------------------------------------------------------------------
Richard Brady 4a
c/o Play Co. Toys & Entertainment Corp.
550 Rancheros Drive 175,587 3.1%
San Marcos, CA 92069
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James B. Frakes 5
c/o Play Co. Toys & Entertainment Corp.
550 Rancheros Drive 20,000 *
San Marcos, CA 92069
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(table continued from previous page)
Moses Mika
c/o Play Co. Toys & Entertainment Corp.
550 Rancheros Drive -- --
San Marcos, CA 92069
- ------------------------------------------------------------------------------------------------------------------------------------
Breaking Waves, Inc. 4
112 West 34th Street 1,270,000 22.9%
New York, New York 10120
- ------------------------------------------------------------------------------------------------------------------------------------
Shopnet.com, Inc. 4
14 East 60th Street, Suite 402 1,270,000 22.9%
New York, New York 10022
- ------------------------------------------------------------------------------------------------------------------------------------
United Textiles & Toys Corp. 6
1410 Broadway, Suite 1602 4,384,910 58.5%
New York, NY 10018
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Multimedia Concepts International, Inc.7
1410 Broadway, Suite 1602 4,818,420 46.5%
New York, NY 10018
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Stores Corp. 8
1385 Broadway, Suite 814 -- --
New York, New York 107018
- ------------------------------------------------------------------------------------------------------------------------------------
American Telecom, PLC 9
8-13 Chiswell Street 2,400,000 30.2%
London EC 1Y 4UP
- ------------------------------------------------------------------------------------------------------------------------------------
Europe American Capital Foundation 10
c/o Vermogenstreuhand GMBH 29,821,204 84.3%
14 Kaiser Street
Bregenz, Austria A-6900
- ------------------------------------------------------------------------------------------------------------------------------------
ABC Fund, Inc.10a
(address to be provided) 3,757,920 40.4%
- ------------------------------------------------------------------------------------------------------------------------------------
Officers and Directors as a Group
(4 persons)4,5 345,587 5.6%
- ------------------------------------------------------------------------------------------------------------------------------------
* Less than 1%
1. Unless otherwise noted, all of the shares shown are held by individuals
or entities possessing sole voting and investment power with respect to such
shares. Shares not outstanding but deemed beneficially owned by virtue of the
right of an individual or entity to acquire them within 60 days, whether by the
exercise of options or warrants, are deemed outstanding in determining the
number of shares beneficially owned by such person or entity.
(footnotes continued from previous page)
2. The "Percent of Common Stock Beneficially Owned" is calculated by
dividing the "Number of Shares Beneficially Owned" by the sum of (i) the total
outstanding shares of Common Stock of the Company, and (ii) the number of shares
of Common Stock that such person or entity has the right to acquire within 60
days, whether by exercise of options or warrants. The "Percent of Common Stock
Beneficially Owned" does not reflect shares beneficially owned by virtue of the
right of any person, other than the person named and affiliates of said person,
to acquire them within 60 days, whether by exercise of options or warrants.
3. Does not include 35,303,418 shares of Common Stock issuable upon the
conversion of 5,883,903 shares of Series E Stock outstanding except where
directly applicable.
4. Includes 150,000 shares of Common Stock into which Mr. Rashbaum's 25,000
shares Series E Stock shall be convertible as of February 4, 2000. Mr. Rashbaum,
the Company's chairman of the board, is also the president and the sole director
of Breaking Waves which is a wholly-owned subsidiary of Shopnet, a publicly
traded company. Mr. Rashbaum is also the president and a director of Shopnet. By
virtue of its ownership of Breaking Waves, Shopnet may be deemed the beneficial
owner of the Company's Common Stock owned by Breaking Waves.
4a. Includes 150,000 shares of Common Stock into which Mr. Brady's 25,000
shares of Series E Stock shall be convertible as of February 4, 2000.
5. Represents those shares underlying an option which have vested. The
final 10,000 shares underlying such option shall vest on July 1, 2000.
6. Includes 1,950,000 shares of Common Stock issuable upon the conversion
of 325,000 shares of Series E Stock. The president of United Textiles, a
publicly traded company which is the Company's parent, is Ilan Arbel who is also
the president, chief executive officer, and a director of Multimedia, a publicly
traded company which is the parent company of United Textiles (owning
approximately ____% of same). Multimedia is owned approximately ____% by U.S.
Stores Corp. ("U.S. Stores"), a company of which Mr. Arbel is the president and
a director. U.S. Stores is owned 100% by American Telecom, PLC ("ATPLC"), a
British corporation.
7. Represents shares of Common Stock issuable upon the conversion of
803,070 shares of Series E Stock. By virtue of its ownership of United Textiles,
Multimedia also may be deemed a beneficial owner of the Company's Common Stock
held by United Textiles.
8. Although U.S. Stores owns none of the Company's Common Stock, by virtue
of its ownership of Multimedia, U.S. Stores may be deemed a beneficial owner of
the Company's Common Stock held by Multimedia.
9. Represents shares of Common Stock issuable on conversion of 400,000
shares of Series E Stock. By virtue of its ownership of U.S. Stores, ATPLC also
may be deemed a beneficial owner of the Company's Common Stock beneficially
owned by U.S. Stores.
10. Represents 29,841,204 shares of Common Stock issuable upon the
conversion of 4,973,534 shares of Series E Stock. Of the 4,973,534 shares of
Series E Stock, 1,592,500 shares are owned by EACF and 3,381,034 shares shall be
issued to EACF in February 2000 in connection with its conversion of a
debenture. By virtue of its ownership of ATPLC, EACF also may be deemed a
beneficial owner of the Company's Common Stock.
10a. Represents shares of Common Stock issuable upon the conversion of
626,320 shares of Series E Stock.
The following table sets forth certain information regarding beneficial
ownership of the Company's outstanding Series E Preferred Stock as of January 5,
2000 by (i) each beneficial owner of 5% or more of the Company's Series E
Preferred Stock; (ii) each of the Company's executive officers, directors, and
key employees; and (iii) all executive officers, directors, and key employees as
a group:
Name and Address Number of Shares of Percent of Series E Preferred Stock
of Beneficial Owner Series E Preferred Stock Beneficially Owned2,3
Beneficially Owned1
- ------------------------------------------------------------------------------------------------------------------------------------
Harold Rashbaum 4
c/o Play Co. Toys & Entertainment Corp.
550 Rancheros Drive 25,000 *
San Marcos, CA 92069
- ------------------------------------------------------------------------------------------------------------------------------------
Richard Brady
c/o Play Co. Toys & Entertainment Corp.
550 Rancheros Drive 25,000 *
San Marcos, CA 92069
- ------------------------------------------------------------------------------------------------------------------------------------
James B. Frakes
c/o Play Co. Toys & Entertainment Corp.
550 Rancheros Drive -- --
San Marcos, CA 92069
- ------------------------------------------------------------------------------------------------------------------------------------
Moses Mika
c/o Play Co. Toys & Entertainment Corp.
550 Rancheros Drive -- --
San Marcos, CA 92069
- ------------------------------------------------------------------------------------------------------------------------------------
Breaking Waves, Inc. 4
112 West 34th Street -- --
New York, New York 10120
- ------------------------------------------------------------------------------------------------------------------------------------
Shopnet.com, Inc. 4
14 East 60th Street, Suite 402 -- --
New York, New York 10022
- ------------------------------------------------------------------------------------------------------------------------------------
United Textiles & Toys Corp. 5
1410 Broadway, Suite 1602 325,000 5.5%
New York, NY 10018
- ------------------------------------------------------------------------------------------------------------------------------------
Multimedia Concepts International, Inc.6
1410 Broadway, Suite 1602 803,070 13.6%
New York, NY 10018
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Stores Corp. 7
1385 Broadway, Suite 814 -- --
New York, New York 10018
- ------------------------------------------------------------------------------------------------------------------------------------
American Telecom, PLC 8
8-13 Chiswell Street 400,000 6.8%
London EC 1Y 4UP
- ------------------------------------------------------------------------------------------------------------------------------------
Europe American Capital Foundation 9
c/o Vermogenstreuhand GMBH 4,973,534 53.7%
14 Kaiser Street
Bregenz, Austria A-6900
- ------------------------------------------------------------------------------------------------------------------------------------
(table continued from previous page)
Name and Address Number of Shares of Percent of Series E Preferred Stock
of Beneficial Owner Series E Preferred Stock Beneficially Owned2,3
Beneficially Owned1
- ------------------------------------------------------------------------------------------------------------------------------------
ABC Fund, Inc. 10
(address to be provided) 626,320 10.6%
- ------------------------------------------------------------------------------------------------------------------------------------
Officers and Directors as a Group
(4 persons)4,5 50,000 *
- ------------------------------------------------------------------------------------------------------------------------------------
* Less than 1%
1. Unless otherwise noted, all of the shares shown are held by individuals
or entities possessing sole voting and investment power with respect to such
shares. Shares not outstanding but deemed beneficially owned by virtue of the
right of an individual or entity to acquire them within 60 days, whether by the
exercise of options or warrants, are deemed outstanding in determining the
number of shares beneficially owned by such person or entity.
2. The "Percent of Series E Preferred Stock Beneficially Owned" is
calculated by dividing the "Number of Shares Beneficially Owned" by the sum of
(i) the total outstanding shares of Series E Preferred Stock of the Company, and
(ii) the number of shares of Series E Preferred Stock that such person or entity
has the right to acquire within 60 days, whether by exercise of options or
warrants. The "Percent of Series E Preferred Stock Beneficially Owned" does not
reflect shares beneficially owned by virtue of the right of any person, other
than the person named and affiliates of said person, to acquire them within 60
days, whether by exercise of options or warrants.
3. Does not include 3,381,034 shares of Series E Stock issuable upon the
conversion of a debenture owned by EACF except where directly applicable.
4. Mr. Rashbaum, the Company's chairman of the board, is also the president
and the sole director of Breaking Waves which is a wholly-owned subsidiary of
Shopnet, a publicly traded company. Mr. Rashbaum is also the president and a
director of Shopnet. By virtue of its ownership of Breaking Waves, Shopnet may
be deemed the beneficial owner of the Company's securities owned by Breaking
Waves.
5. The president of United Textiles, a publicly traded company which is the
Company's parent, is Ilan Arbel who is also the president, chief executive
officer, and a director of Multimedia, a publicly traded company which owns
approximately ____% of Multimedia. Multimedia is owned approximately ____% by
U.S. Stores, a company of which Mr. Arbel is the president and a director. U.S.
Stores is owned 100% by ATPLC, a British corporation.
6. Represents 803,070 shares of Series E Stock owned by Multimedia. By
virtue of its ownership of United Textiles, Multimedia also may be deemed a
beneficial owner of the Company's Series E Stock held by United Textiles.
7. Although U.S. Stores owns none of the Company's Series E Stock, by
virtue of its ownership of Multimedia, U.S. Stores may be deemed a beneficial
owner of the Series E Stock held by Multimedia.
8. Represents 400,000 shares of Series E Stock owned by ATPLC. By virtue of
its ownership of U.S. Stores, ATPLC also may be deemed a beneficial owner of the
Series E Stock held by U.S. Stores.
9. Includes 1,592,500 shares of Series E Stock owned by EACF and 3,381,034
shares of Series E Stock to be issued to EACF in February 2000 on conversion of
its debenture. By virtue of its ownership of ATPLC, EACF also may be deemed a
beneficial owner of the Series E Stock held by ATPLC..
THE FOLLOWING MATTER SHALL BE CONSIDERED AND
VOTED UPON AT THE SPECIAL MEETING BY THE COMPANY'S COMMON AND SERIES E
PREFERRED SHAREHOLDERS:
Amendment To The Company's Certificate Of Incorporation
Modifying The Conversion Terms Of The Series E Preferred Stock
To Render All Shares Of Same Eligible For Conversion On February 4, 2000
The Board of Directors has unanimously approved, subject to shareholder
approval, the filing of an amendment to the Company's Certificate of
Incorporation which will effect a change in the conversion terms of the Series E
Stock. The full text of the proposed changes to the Company's Certificate of
Incorporation has been incorporated into the proposed Certificate of Amendment
to Certificate of Incorporation of Play Co. Toys & Entertainment Corp. included
herein as Appendix "A."
The Board of Directors believes that amendment to the conversion terms
of the Series E Stock is necessitated by the potential shareholder confusion
which might otherwise arise given the convertibility eligibility (as of December
29, 1999 and extending for a period of three years thereafter) of a certain
number of shares of Series E Stock outstanding - there being 4,200,570 of the
5,883,903 shares outstanding which are eligible for conversion as of such date -
and the ineligibility of convertibility (until March and/or June and/or July
2000 and extending for a period of three years thereafter) of 1,683,333 shares
of Series E Stock which nonetheless may be sold into the public market pursuant
to Rule 144 of the General Rules and Regulations Under the Securities Act of
1933, as amended.
In order to avoid the potential that a shareholder might purchase on
the open market a portion of the 1,683,333 shares of Series E Stock which,
unbeknownst to said shareholder, are not convertible as of December 29, 1999,
the Board of Directors has determined that by rendering all shares of Series E
Stock convertible as of a date certain, shareholder interests shall be
safeguarded.
The Company believes that the proposed amendment to the Series E Stock
conversion terms serves the best interests of all of its shareholders and,
therefore, recommends that shareholders vote in favor of the proposal to file
the amendment.
The affirmative vote of the holders of a majority of the shares of each
of (i) the Common Stock issued and outstanding on the record date, voting
together as a single class, and (ii) the Series E Stock issued and outstanding
on the record date, voting together as a single class, is required for the
approval of this proposal.
The Board of Directors deems this proposal to be in the best interests of
the Company and its shareholders and recommends that you vote "FOR" approval
thereof. Holders of 64.5% of the shares of Series E Stock outstanding and 66.8%
of the shares of Common Stock outstanding have agreed to vote in favor of the
proposal.
FINANCIAL INFORMATION
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR
ENDED MARCH 31, 1999 (SANS EXHIBITS), FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, ACCOMPANIES THIS PROXY STATEMENT. SAME SHALL BE FURNISHED (SANS
EXHIBITS) TO SHAREHOLDERS, WITHOUT CHARGE, UPON WRITTEN REQUEST THEREFOR SENT TO
JAMES B. FRAKES, SECRETARY, PLAY CO. TOYS & ENTERTAINMENT CORP., 550 RANCHEROS
DRIVE, SAN MARCOS, CALIFORNIA 92069.
II. OTHER BUSINESS
As of the date of this proxy statement, the only business which the Board
of Directors intends to present and knows that others will present at the
Special Meeting is that herein set forth. If any other matter is properly
brought before the Special Meeting or any adjournments thereof, it is the
intention of the persons named in the accompanying form of proxy to vote the
proxy on such matters in accordance with their judgment.
Shareholder Proposals
Proposals of shareholders intended to be presented at the Company's 2000
Annual Meeting of Shareholders must have been received by the Company by January
5, 2000 to be eligible for inclusion in the Company's proxy statement and form
of proxy to be used in connection with the 2000 Annual Meeting of Shareholders.
By Order of the Board of Directors,
James B. Frakes
Secretary
January 25, 2000
Whether Or Not You Expect To Attend The Meeting, Please Complete And Return
Your Proxy Promptly In The Enclosed Envelope. No Postage Is Required If It
Is Mailed In The United States Of America.
Appendix A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
PLAY CO. TOYS & ENTERTAINMENT CORP.
Under Section 242 of the Delaware Corporation Law:
The undersigned, for the purpose of amending the Certificate of
Incorporation of Play Co. Toys & Entertainment Corp. (the "Corporation"), does
hereby certify and set forth:
FIRST:
The name of the Corporation is
PLAY CO. TOYS & ENTERTAINMENT CORP.
SECOND:
The Certificate of Incorporation was filed by the Department of State on
June 15, 1994.
THIRD:
The amendment to the Certificate of Incorporation of the Corporation
effected by this Certificate of Amendment is to amend the provisions of "Article
Fourth, Subarticle (B)" to amend certain rights and preferences of the Series E
Preferred Stock so that, as amended, said Subarticle shall read as follows:
B. Series E Preferred Stock.
(i) Designation. The designation of this series of Preferred
Stock, par value $0.01 per share, shall be the "Series E Preferred
Stock." The number of shares of Series E Preferred Stock authorized
hereby shall be 25,000,000 shares.
(ii) Rank. The Series E Preferred Stock shall, with respect to
rights on liquidation, winding up, and dissolution, rank (a) junior to
any other Senior Securities established by the Board of Directors and,
if required by Section (vii), approved by the affirmative vote of the
holders of a majority of the shares of the Series E Preferred Stock,
the terms of which shall specifically provide that such series shall
rank prior to the Series E Preferred Stock; (b) on a parity with any
other Parity Securities established by the Board of Directors, the
terms of which shall specifically provide that such series shall rank
on a parity with the Series E Preferred Stock; and (c) prior to any
other Junior Securities of the Corporation.
(iii) Dividends. The Series E Preferred Stock shall not have any
right to dividends.
(iv) Liquidation Preference.
(a) In the event of any voluntary or involuntary
liquidation, dissolution, or winding up of the affairs of the
Corporation, the holders of the shares of Series E Preferred
Stock then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its
stockholders an amount in cash equal to $1.00 per share for each
share outstanding, before any payment shall be made or any assets
distributed to the holders of any of the Junior Securities,
provided, however, that the holders of the outstanding shares of
the Series E Preferred Stock shall not be entitled to receive
such liquidation payment until the liquidation payments on all
outstanding shares of Senior Securities, if any, shall have been
paid in full. If the assets of the Corporation are not sufficient
to pay in full the liquidation payments payable to the holders of
the outstanding shares of the Series E Preferred Stock or any
other Parity Securities, then the holders of all such shares
shall share ratably in such distribution of assets in accordance
with the amount which would be payable on such distribution if
the amounts to which the holders of the outstanding shares of
Series E Preferred Stock and the holders of outstanding shares of
such other Parity Securities are entitled were paid in full.
(b) For the purposes of this Article FOURTH, neither the
voluntary sale, conveyance, lease, exchange, nor transfer (for
cash, shares of stock, securities, or their consideration) of all
or substantially all of the property or assets of the Corporation
or the consolidation or merger of the Corporation with one or
more other corporations shall be deemed to be a liquidation,
dissolution, or winding up, voluntary or involuntary, unless such
voluntary sale, conveyance, lease, exchange, or transfer shall be
in connection with a dissolution or winding up of the business of
the Corporation.
(v) Redemption. The shares of Series E Preferred Stock are not
redeemable by the Corporation.
(vi) Conversion.
(a) Subject to, and upon compliance with, the provisions of
this Section (vi), the holder of a share of Series E Preferred
Stock designated shall have the right, at such holder's option,
at any time commencing two years from issuance and terminating
five years from issuance, to convert such share into 6 fully paid
and non-assessable shares of Common Stock of the Corporation.
Notwithstanding the foregoing, as of February 4, 2000, all shares
of Series E Preferred Stock shall be eligible for such
conversion.
(b) (1) In order to exercise the conversion privilege, the
holders of Series E Preferred Stock to be converted shall
surrender the certificates representing such shares to the office
of the transfer agent for the Series E Preferred Stock, appointed
for such purpose by the Corporation, with the Notice of Election
to Convert on the back of said certificate completed and signed.
Unless the shares of Common Stock issuable on conversion are to
be issued in the same name in which such shares of Series E
Preferred Stock are registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder
or such holder's duly authorized attorney and an amount
sufficient to pay any transfer or similar tax.
(2) As promptly as practicable after the surrender of
the certificates for shares of Series E Preferred Stock as
aforesaid, the Corporation shall issue and shall deliver to
such office to such holder, or on his written order, a
certificate or certificates for the number of full shares of
Common Stock issuable upon the conversion of such Series E
Preferred Stock in accordance with the provisions of this
Section (iv).
(3) Each conversion shall be deemed to have been
effected immediately prior to the close of business on the
date on which the certificates for shares of Series E
Preferred Stock shall have been surrendered and such notice
shall have been received by the Corporation as aforesaid,
and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares
represented thereby at such time on such date, unless the
stock transfer books of the Corporation shall be closed on
that date, in which event such person or persons shall be
deemed to have become such holder or holders of record at
the close of business on the next succeeding day on which
such stock transfer books are open and such notice is
received by the Corporation. All shares of Common Stock
delivered upon conversion of the Series E Preferred Stock
will upon delivery be duly and validly issued and fully paid
and non-assessable, free of all liens and charges and not
subject to any preemptive rights.
(c) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of
the aggregate of its authorized but unissued shares of Common
Stock or its issued shares of Common Stock held in its treasury,
or both, for the purposes of effecting conversions of the Series
E Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of
Series E Preferred Stock not theretofore converted. For purposes
of this subsection (d), the number of shares of Common Stock
which shall be deliverable upon the conversion of all outstanding
shares of Series E Preferred Stock shall be computed as if at the
time of computation all such outstanding shares were held by a
single holder.
(vii) Voting Rights. The holders of record of shares of the
Series E Preferred Stock shall not be entitled to any voting rights
except as hereinafter provided in this Section (vii)(a) or as
otherwise provided by law.
(a) So long as any shares of the Series E Preferred Stock
are outstanding, the Corporation will not, without the
affirmative vote or consent of the holders of at least a majority
of the outstanding shares of the Series E Preferred Stock, voting
as a class, vote to amend the Corporation's Certificate of
Incorporation to (i) increase or decrease the aggregate number of
authorized shares of the Series E Preferred Stock; (ii) increase
or decrease the par value of the Series E Preferred Stock; or
(iii) alter the preferences, powers, or rights of the Series E
Preferred Stock so as to affect them adversely.
(b) in exercising the voting rights set forth in this
section (vii), each share of series e preferred stock shall have
one vote per share.
FOURTH: The amendment to the Certificate of Incorporation of the
Corporation set forth above was adopted by majority consent of the Corporation's
shareholders and by unanimous written consent of the Corporation's directors on
the 19th day of November 1999.
IN WITNESS WHEREOF, the undersigned President of this Corporation has
executed this Certificate of Amendment on this 4th day of February 2000.
PLAY CO. TOYS & ENTERTAINMENT CORP.
By:
Richard Brady, President
By:
James B. Frakes, Secretary
APPENDIX B
PLAY CO. TOYS & ENTERTAINMENT CORP.
Special Meeting of Shareholders - February 4, 2000
COMMON STOCK PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard Brady and James B. Frakes, and
each of them, proxies, with full power of substitution to each, to vote all
Common Shares of Play Co. Toys & Entertainment Corp. (the "Company") owned by
the undersigned at the Special Meeting of Shareholders of the Company to be held
on February 4, 2000 and at any adjournments thereof, hereby revoking any proxy
heretofore given. The undersigned instructs such proxies to vote as follows:
I. PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO RENDER
ALL SHARES OF SERIES E PREFERRED STOCK ELIGIBLE FOR CONVERSION AS OF FEBRUARY 4,
2000.
o FOR o AGAINST o ABSTAIN
and to vote upon any other business as may properly come before the meeting or
any adjournment thereof, all as described in the Proxy Statement dated January
25, 2000, receipt of which is hereby acknowledged.
(Continued and to be signed on the reverse side)
Either of the proxies or his respective substitute who shall be present and
acting shall have and may exercise all the powers hereby granted.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE PROPOSAL TO
AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO MODIFY THE CONVERSION TERMS
OF THE SERIES E PREFERRED STOCK TO RENDER ALL SUCH SHARES ELIGIBLE FOR
CONVERSION AS OF FEBRUARY 4, 2000, UNLESS CONTRARY INSTRUCTIONS ARE GIVEN.
Said proxies will use their discretion with respect to any other matters
which properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. PLEASE SIGN
AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE.
Dated: , 2000
PLAY CO. TOYS & ENTERTAINMENT CORP.
Special Meeting of Shareholders - February 4, 2000
SERIES E PREFERRED STOCK PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Richard Brady and James B. Frakes, and
each of them, proxies, with full power of substitution to each, to vote all
Series E Preferred Shares of Play Co. Toys & Entertainment Corp. (the "Company")
owned by the undersigned at the Special Meeting of Shareholders of the Company
to be held on February 4, 2000 and at any adjournments thereof, hereby revoking
any proxy heretofore given. The undersigned instructs such proxies to vote as
follows:
I. PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO RENDER
ALL SHARES OF SERIES E PREFERRED STOCK ELIGIBLE FOR CONVERSION AS OF FEBRUARY 4,
2000.
o FOR o AGAINST o ABSTAIN
and to vote upon any other business as may properly come before the meeting or
any adjournment thereof, all as described in the Proxy Statement dated January
25, 2000, receipt of which is hereby acknowledged.
(Continued and to be signed on the reverse side)
Either of the proxies or his respective substitute who shall be present and
acting shall have and may exercise all the powers hereby granted.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE PROPOSAL TO
AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION TO MODIFY THE CONVERSION TERMS
OF THE SERIES E PREFERRED STOCK TO RENDER ALL SUCH SHARES ELIGIBLE FOR
CONVERSION AS OF FEBRUARY 4, 2000, UNLESS CONTRARY INSTRUCTIONS ARE GIVEN.
Said proxies will use their discretion with respect to any other matters
which properly come before the meeting.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. PLEASE SIGN
AND RETURN THE PROXY IN THE ENCLOSED ENVELOPE.