SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_____
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d)
of
the
Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported):
April
4,
2006 (March 30, 2006)
JAKKS
PACIFIC, INC.
(Exact
Name of registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction of incorporation)
|
0-28104
(Commission
File Number)
|
95-4527222
(I.R.S.
Employer Identification
No.)
|
|
22619
Pacific Coast Highway
Malibu,
California
(Address
of principal executive
offices)
|
90265
(Zip
Code)
|
Registrant's
telephone number, including area code: (310) 456-7799
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
oWritten
communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting
material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
oPre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
JAKKS
PACIFIC, INC.
INDEX
TO FORM 8-K
FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION
APRIL
4, 2006
ITEMS
IN FORM 8-K
|
Page
|
||
|
Facing
Page
|
1
|
|
| Item 1.01 | Entry into a Material Definitive Agreement |
3
|
| Item 8.01 | Other Events |
3
|
| Item 9.01 | Financial Statements and Exhibits |
3
|
| Signatures |
4
|
|
| Exhibit Index |
5
|
2
| Item 1.01. | Entry into a Material Definitive Agreement. |
The
employment agreements for Jack Friedman, our Chairman and Chief Executive
Officer, and Stephen Berman, our President and Chief Operating Officer, provide,
inter
alia,
that
for each fiscal year between 2005 through 2010, their respective bonuses
will
depend on our achieving certain earnings per share growth targets, with such
earnings per share growth targets to be determined annually by the Compensation
Committee of our Board of Directors. This bonus will be paid in accordance
with
the terms and conditions of our 2002 Stock Award and Incentive Plan (the
“Plan”). The criteria for their respective 2006 bonuses have been set by the
Compensation Committee as follows:
The
percentage set forth on the following table, which corresponds to the increase
in our Adjusted EPS (as defined below) for 2006 over the Adjusted EPS during
2005, multiplied by their respective base salaries in 2006:
|
Adjusted
EPS Growth
|
Bonus
Equals
%
of Salary
|
|
<
20%
|
0%
|
|
20
- 22.999%
|
80%
|
|
23
- 26.499%
|
90%
|
|
26.5
- 27.3499%
|
100%
|
|
27.375
- 28.2499%
|
125%
|
|
28.25
- 29.12499%
|
150%
|
|
29.125
- 29.999%
|
175%
|
|
30
- 30.499%
|
200%
|
|
30.5
- 30.999%
|
210%
|
|
31
- 31.499%
|
220%
|
|
31.5
- 31.999%
|
230%
|
|
32
- 32.499%
|
240%
|
|
32.5
- 32.999%
|
250%
|
|
33
- 33.499%
|
260%
|
|
33.5
- 33.999%
|
270%
|
|
34
- 34.499%
|
280%
|
|
34.5
- 34.999%
|
290%
|
|
>
35%
|
300%
|
The
term
“Adjusted EPS” was defined by the Compensation Committee to mean the net income
per share of our common stock, calculated on a fully-diluted basis as determined
by our then current auditors in accordance with GAAP, applied on a basis
consistent with past periods, as adjusted in the sole discretion of the
Compensation Committee to take account of extraordinary or special items,
or as
otherwise may be permitted by the Plan, and such determination by the auditors,
absent manifest error, as adjusted by the Compensation Committee, will be
conclusive and binding upon us and the respective executive. The Compensation
Committee also reserved the right to reduce the bonus targets and amounts
in the
exercise of its negative discretion.
The
foregoing is only a summary of certain of the terms of our employment agreements
with these named executives. For a complete description, copies of such
agreements are annexed herein in their entirety as exhibits or are otherwise
incorporated herein by reference.
| Item 8.01. | Other Events. |
| (a) |
Convertible
Notes
|
In
June
2003, we sold an aggregate of $98.0 million of 4.625% convertible senior
notes due June 15, 2023. Pursuant to the terms of the notes,
beginning with the second quarter of 2006 holders have the right
to surrender any of their notes for conversion into our common stock,
because during the first quarter of 2006, the closing sale price of our common
stock for at least 20 trading days in the 30 trading day period ending on the
last day of such quarter exceeded 120% of the accreted conversion price of
the
notes (or $24.00). The notes may be converted at a rate of 50.0 shares of common
stock per note into an aggregate of 4.9 million shares.
Any
conversion of notes to shares of our common stock will have no impact on our
diluted earnings per share, as we have been including such shares in our diluted
share count since fiscal 2004.
To
convert a note into shares of common stock, a holder must (1) complete and
manually sign a conversion notice and deliver the conversion notice to the
conversion agent, (2) surrender the note to the conversion agent,
(3) if required by the conversion agent, furnish appropriate endorsements
and transfer documents and (4) if required, pay all transfer or similar
taxes, all as more particularly described in the notes, a form of which is
annexed hereto as an exhibit and incorporated herein by reference.
| (b) |
Litigation
|
On
March
31, 2006, we announced in a press release that the U.S. District Court for
the
Southern District of New York dismissed two of the three substantive federal
claims brought against us by WWE in the WWE Action. A copy of the release
is
annexed hereto as an exhibit and is incorporated herein by
reference.
| (c) |
Executive
Trading Plans
|
Stephen
Berman
On
March
30, 2006, Stephen Berman, our President and Chief Operating Officer, entered
into a trading plan intended to comply with Rule 10b5-1 of the Exchange
Act. Mr. Berman’s trading plan provides for the sale of up to 150,000
shares of our common stock, which sales will not commence until shortly
after
the public announcement of our financial results for the quarter ending
September 30, 2006. The sales under Mr. Berman’s plan are intended to span
between two and three months after the initial sale thereunder.
Jack
Friedman
On
April
3, 2006, Jack Friedman, our Chairman and Chief Executive Officer, entered
into a
trading plan intended to comply with Rule 10b5-1 of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). Mr. Friedman’s trading plan
provides for the sale of up to 200,000 shares of our common stock, which
sales
will not commence until shortly after the public announcement of our financial
results for the quarter ending September 30, 2006. The sales under
Mr. Friedman’s plan are intended to span between two and three months after
the initial sale thereunder.
| Item 9.01. | Financial Statements and Exhibits. |
|
(d)
|
Exhibits |
|
Exhibit
Number
|
Description
|
|
4.1
|
Form
of certificate evidencing shares of common stock(1)
|
|
4.2
|
Indenture,
dated as of June 9, 2003, by and between the Registrant and Wells
Fargo
Bank(2)
|
|
4.3
|
Form
of 4.625% Convertible Senior
Note(2)
|
|
10.1
|
Amended
and Restated Employment Agreement between the Company and Jack
Friedman,
dated as of March 26, 2003(3)
|
|
10.2
|
Amended
and Restated Employment Agreement between the Company and Stephen
G.
Berman dated as of March 26, 2003(3)
|
|
99.1*
|
March
31, 2006 Press Release
|
__________________
*
Filed herewith
|
(1)
|
Filed
on May 1, 1996 as an exhibit to the Company’s Registration Statement on
Form SB-2 (Reg. No. 333-2048-LA), and incorporated herein by reference.
|
| (2) | Filed on August 14, 2003 as an exhibit to the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended June 30, 2003, and incorporated herein by reference. |
|
(3)
|
Filed
on March 31, 2003 as an exhibit to the Company’s Annual Report on
Form 10-K for its fiscal year ended December 31, 2002, and
incorporated herein by reference.
|
3
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| JAKKS PACIFIC, INC. | ||
| |
|
|
| Dated: April 4, 2006 | By: | /s/ Jack Friedman |
| Jack Friedman | ||
| Chairman and Chief Executive Officer | ||
4
Exhibit
Index
|
Exhibit
Number
|
Description
|
|
4.1
|
Form
of certificate evidencing shares of common stock(1)
|
|
4.2
|
Indenture,
dated as of June 9, 2003, by and between the Registrant and Wells
Fargo
Bank(2)
|
|
4.3
|
Form
of 4.625% Convertible Senior
Note(2)
|
|
10.1
|
Amended
and Restated Employment Agreement between the Company and Jack
Friedman,
dated as of March 26, 2003(3)
|
|
10.2
|
Amended
and Restated Employment Agreement between the Company and Stephen
G.
Berman dated as of March 26, 2003(3)
|
|
99.1*
|
March
31, 2006 Press Release
|
__________________
*
Filed herewith
|
(1)
|
Filed
on May 1, 1996 as an exhibit to the Company’s Registration Statement on
Form SB-2 (Reg. No. 333-2048-LA), and incorporated herein by
reference.
|
| (2) | Filed on August 14, 2003 as an exhibit to the Company’s Quarterly Report on Form 10-Q for its fiscal quarter ended June 30, 2003, and incorporated herein by reference. |
|
(3)
|
Filed
on March 31, 2003 as an exhibit to the Company’s Annual Report on
Form 10-K for its fiscal year ended December 31, 2002, and
incorporated herein by reference.
|
5
Exhibit
99.1
JAKKS
Pacific(TM) Reports Dismissal of Two of Three Substantive Federal Causes of
Action in First Round of Motions to Dismiss WWE Action
Friday
March 31, 7:20 pm ET
MALIBU,
Calif.--(BUSINESS WIRE)--March 31, 2006--JAKKS Pacific, Inc.
(Nasdaq:JAKK
-
News)
today
announced that the U.S. District Court for the Southern District of New York,
in
the action captioned World Wrestling Entertainment, Inc. v. JAKKS Pacific,
Inc.,
et al., 1:04-CV-08223-KMK (the "WWE Action"), dismissed two of the three
substantive federal claims brought against the Company by WWE. The Court granted
the Company's motion to dismiss WWE's Robinson-Patman and Sherman Act claims,
but denied the Company's motion to dismiss directed to the sufficiency of WWE's
allegation of a RICO enterprise.
In
so
doing, the Court specifically noted that it was not ruling on several additional
grounds advanced by the Company to dismiss WWE's RICO claim. Under the
bifurcated briefing schedule ordered by the Court, the Company will be moving
to
dismiss the WWE's RICO claim -- which is now WWE's sole basis for its assertion
that the United States District Court has jurisdiction over the WWE Action
-- on
a variety of additional legal grounds.
About
JAKKS Pacific, Inc.
JAKKS
Pacific, Inc. is a multi-brand company that designs and markets a broad range
of
toys and consumer products. The product categories include: Action Figures,
Art
Activity Kits, Stationery, Writing Instruments, Performance Kites, Water Toys,
Sports Activity Toys, Vehicles, Infant/Pre-School, Plush, Construction Toys,
Electronics, Dolls, Dress-Up, Role Play, and Pet Toys and Accessories. The
products are sold under various brand names, including JAKKS Pacific®, Play
Along®, Flying Colors®, Creative Designs International(TM), Road Champs®, Child
Guidance®, Pentech®, Trendmasters®, Toymax®, Funnoodle®, Go Fly a Kite®, Color
Workshop®, JPI(TM) and Plug It In & Play TV Games(TM). JAKKS and THQ Inc.
participate in a joint venture that has worldwide rights to publish and market
World Wrestling Entertainment video games. For further information, visit
www.jakkspacific.com.
This
press release contains forward-looking statements (within the meaning of the
Private Securities Litigation Reform Act of 1995) that are based on current
expectations, estimates and projections about JAKKS Pacific's business based
partly on assumptions made by its management. These statements are not
guarantees of future performance and involve risks, uncertainties and
assumptions that are difficult to predict. Therefore, actual outcomes and
results may differ materially from what is expressed or forecasted in such
statements due to numerous factors, including, but not limited to, those
described above, changes in demand for JAKKS' products, product mix, the timing
of customer orders and deliveries, the impact of competitive products and
pricing, and difficulties with integrating acquired businesses. The
forward-looking statements contained herein speak only as of the date on which
they are made, and JAKKS undertakes no obligation to update any of them to
reflect events or circumstances after the date of this release.
Contact:
JAKKS
Pacific, Inc.
Genna
Rosenberg, 310-455-6235
gennar@jakks.net
or
Integrated
Corporate Relations
John
Mills, 310-395-2215
jmills@icrinc.com