AMENDED & RESTATED 1993 STOCK OPTION PLAN



 




EXHIBIT 10.16


GRAND TOYS INTERNATIONAL, INC.




AMENDED AND RESTATED

1993 STOCK OPTION PLAN

as at September 28, 2000





	1.	 	Purpose of the plan. The Grand Toys International, Inc. Amended and
Restated 1993 Stock Option Plan (the “Plan”) is intended to advance the
interests of Grand Toys International, Inc. (the “Company”) by inducing
persons of outstanding ability and potential to join and remain with the
Company, by encouraging and enabling employees to acquire proprietary
interests in the Company, and by providing the participating employees
with an additional incentive to promote the success of the Company. This
is accomplished by providing for the granting of “Options” (which term as
used herein includes both “Incentive Stock Options” and “Nonstatutory
Stock Options,” as later defined), to qualified employees. In addition,
the Plan also provides for the granting of “Nonstatutory Stock Options” to
all non-employee Directors of the Company, as consideration for their
services and for attending meetings of the Board of Directors.
	 
	2.	 	Administration. The Plan shall be administered by a committee (the
“Committee”) consisting of at least two (2) Directors chosen by the Board
of Directors, each of which is a “disinterested person” as such term is
defined in Rule 16b-3 promulgated under the Securities Exchange Act of
1934, as amended (the “Exchange Act”). Except as herein specifically
provided, the interpretation and construction by the Committee of any
provision of the Plan or of any Option granted under it shall be final and
conclusive. The receipt of Options by Directors, or any members of the
Committee, shall not preclude their vote on any matters in connection with
the administration or interpretation of the Plan, except as otherwise
provided by law.
	 
	3.	 	Shares subject to the Plan. The stock subject to grant under the Plan
shall be shares of the Company’s common stock, $.001 par value (the
“Common Stock”), whether authorized but unissued or held in the Company’s
treasury or shares purchased from shareholders expressly for use under the
Plan. The maximum number of shares of Common Stock which may be issued
pursuant to Options granted under the Plan shall not exceed six hundred
thousand (600,000) shares (originally one million five hundred thousand
(1,500,000) shares restated to three hundred thousand (300,000) shares
upon the one to five reverse split of August 4, 1997, expanded to six
hundred thousand (600,000) shares on September 28, 2000, and restated to
one hundred and fifty thousand (150,000) shares upon the one to four
reverse split of September 4, 2001), subject to adjustment in accordance
with the provisions of Section 13 hereof. The Company shall at all times
while the Plan is in force reserve such number of shares of Common Stock
as will be sufficient to satisfy the requirements of all outstanding
Options granted under the Plan. In the event any Option granted under the
Plan shall expire or terminate for any reason without having been
exercised in full or shall cease for any reason to be exercisable in whole
or in part, the unpurchased shares subject thereto shall again be
available for Options under this Plan.
	 
	4.	 	Stock Option Agreement. Each Option granted under the Plan shall be
authorized by the Committee and shall be evidenced by a Stock Option
Agreement which shall be executed by the Company and by the person to whom
such Option is granted. The Stock Option Agreement shall specify the
number of



 









 





GRAND TOYS INTERNATIONAL, INC.


	 	 	shares of Common Stock as to which any Option is granted, the period during
which the Option is exercisable and the option price per share thereof.





	5.	 	Discretionary Grant Participation. The class of persons which shall be
eligible to receive discretionary grants of Options under the Plan shall
be all key employees (including officers) of either the Company or any
subsidiary corporation of the Company. Such persons shall be entitled to
receive (i) Incentive Stock Options, as described in Section 7 hereafter
and (ii) Nonstatutory Stock Options, as described in Section 8 hereafter.
The Committee, in its sole discretion, but subject to the provisions of
the Plan, shall determine the employees of the Company or its subsidiary
corporations to whom Options shall be granted and the number of shares to
be covered by each Option taking into account the nature of the employment
or services rendered by the individuals being considered, their annual
compensation, their present and potential contributions to the success of
the Company and such other factors as the Committee may deem relevant.
	 
	6.	 	Non-Employee Director Participation. On January 1st, April 1st, July 1st
and October 1st of each year during the term of the Plan, commencing with
January 1, 1994, non-employee Directors of the Company then serving in
such capacity, shall each be granted an Option to purchase 125 (restated
from two thousand five hundred (2,500) shares upon the one to five reverse
split of August 4, 1997 and upon the one to four reverse split of
September 4, 2001) of the Company’s Common Stock. The option price of the shares subject to such Options shall be the fair market value (as defined
in Section 7 (f) hereafter) of the Company’s Common Stock on the date such
Options are granted. All of such Options shall be Nonstatutory Stock
Options, as described in Section 8 hereafter. The Options granted
pursuant to this Section 6 shall vest immediately upon grant and shall be
exercisable for a period of ten (10) years.
	 
	7.	 	Incentive Stock Options. The Committee may grant Options under the Plan
which are intended to meet the requirements of Section 422 of the Internal
Revenue Code of 1986 (the “Code) (such an Option referred to herein as an
“Incentive Stock Option”), and which are subject to the following terms
and conditions and any other terms and conditions as may at any time be
required by Section 422 of the Code:





	 	(a)	 	No Incentive Stock Option shall be granted to individuals other
than key employees of the Company or of a subsidiary corporation of the
Company.
	 
	 	(b)	 	Each Incentive Stock Option under the Plan must be granted prior to
June 29, 2003, which is within ten (10) years from the date the Plan
was adopted by the Board of Directors.
	 
	 	(c)	 	The option price of the shares subject to any Incentive Stock
Option shall not be less than the fair market value of the Common Stock
at the time such Incentive Stock Option is granted; provided, however,
if an Incentive Stock Option is granted to an individual who owns, at
the time the Incentive Stock Option is granted, more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company or of a subsidiary corporation of the Company, the option price
of the shares subject to the Incentive Stock Option shall be at least
one hundred ten percent (110%) of the fair market value of the Common
Stock at the time the Incentive Stock Option is granted.




-2-









 








GRAND TOYS INTERNATIONAL, INC.





	 	(d)	 	No Incentive Stock Option granted under the Plan shall be
exercisable after the expiration of ten (10) years from the date of its
grant. However, if an Incentive Stock Option is granted to an
individual who owns, at the time the Incentive Stock Option is granted,
more than ten (10%) of the total combined voting power of all classes
of stock of the Company or of a subsidiary corporation such Incentive
Stock Option shall not be exercisable after the expiration of five (5)
years from the date of its grant. Every Incentive Stock Option granted
under the Plan shall be subject to earlier termination as expressly
provided in Section 11 hereof.
	 
	 	(e)	 	For purposes of determining stock ownership under this Section 7,
the attribution rules of Section 425 (d) of the Code shall apply.
	 
	 	(f)	 	For purposes of the Plan, fair market value shall be determined by
the Committee and, if the Common stock is listed on a national
securities exchange or traded on the Over-the-Counter market, the fair
market value shall be the closing price of the Common Stock on such
exchange, or on the Over-the-Counter market as reported by the National
Quotation Bureau, Incorporated, as the case may be, on the day on which
the Option is granted or on the day on which a determination of fair
market value is required under the Plan, or, if there is no trading or
closing price on that day, the closing price on the most recent day
preceding the day for which such prices are available.





	8.	 	Nonstatutory Stock Options. The Committee may grant Options under the
plan which are not intended to meet the requirements of Section 422 of the
Code, as well as Options which are intended to meet the requirements of
Section 422 of the Code, but the terms of which provide that they will not
be treated as Incentive Stock Options (referred to herein as a
“Nonstatutory Stock Option”). Nonstatutory Stock Options which are not
intended to meet these requirements shall be subject to the following
terms and conditions:





	 	(a)	 	A Nonstatutory Stock Option may be granted to any person eligible
to receive an Option under the Plan pursuant to Section 5 hereof,
except that no such Option may be granted to any person who owns stock
possessing more than 10% of the total combined voting power or value of
all classes of stock of the Company or its parent or subsidiary
corporation.
	 
	 	(b)	 	Persons eligible to receive Nonstatutory Stock Options pursuant to
Section 6 hereof are granted Options automatically under the Plan,
without any determination by the Committee.
	 
	 	(c)	 	Subject to the price provisions of Section 6 hereof, the option
price of the shares subject to a Nonstatutory Stock Option shall be
determined by the Committee, in its absolute discretion, at the time of
the grant of the Nonstatutory Stock Option.
	 
	 	(d)	 	Subject to the provisions of Section 6 hereof, a Nonstatutory Stock
Option granted under the Plan may be of such duration as shall be
determined by the Committee (not to exceed 10 years), and shall be
subject to earlier termination as expressly provided in Section 11
hereof.





	9.	 	Rights of Option Holders. The holder of any Option granted under the
Plan shall have none of the rights of a shareholder with respect to the shares covered by his Option until such shares shall be issued to him upon
the exercise of his Option.




-3-









 








GRAND TOYS INTERNATIONAL, INC.





	10.	 	Transferability. No Option granted under the Plan shall be transferable
by the individual to whom it was granted otherwise than by Will or the
laws of decent and distribution, and, during the lifetime of such
individual, shall not be exercisable by any other person, but only by him.
	 
	11.	 	Termination of Employment or Death.





	 	(a)	 	If the employment of an employee by the Company or any subsidiary
of the Company shall be terminated voluntarily by the employee or for
cause, then his Options shall expire forthwith. Except as provided in
subsections (b) and (c) of this Section 11, if such employment or
services shall, terminate for any other reason, then such Options may
be exercised at any time within three (3) months after such
termination, subject to the provisions of subparagraph (e) of this
Section 11. For purposes of the Plan, the retirement of an individual
either pursuant to a pension or retirement plan adopted by the Company
or at the normal retirement date prescribed from time to time by the
Company shall be deemed to be termination of such individual’s
employment other than voluntarily or for cause. For purposes of this
subparagraph, an employee who leaves the employ of the Company to
become an employee of a subsidiary corporation of the Company or a
corporation (or subsidiary or parent corporation of the corporation)
which has assumed the Option of the Company as a result of a corporate
reorganization, etc., shall not be considered to have terminated his
employment.
	 
	 	(b)	 	If the holder of any Options under the Plan dies (i) while employed
by the company or a subsidiary of the Company, or (ii) within three (3)
months after the termination of his employment or services other than
voluntarily by the employee or for cause, then such Options may,
subject to the provisions of subparagraph (e) of this Section 11, be
exercised by the estate of the employee or by a person who acquired the
right to exercise such Options by bequest or inheritance or by reason
of the death of such employee at any time within one (1) year after
such death.
	 
	 	(c)	 	If the holder of any Options under the Plan ceases employment
because of permanent and total disability (with the meaning of Section
22 (e)(3) of the Code) while employed by the Company or a subsidiary of
the Company, then such Options may, subject to the provision of
subparagraph (e) of this Section 11, be exercised at any time within
one (1) year after his termination of employment due to this
disability.
	 
	 	(d)	 	If the services of a non-employee Director of the Company shall be
terminated by the Company for cause, then his options shall expire
forthwith. If such services shall terminate for any other reason
(including the death or disability of a non-employee Director), then
such Options may be exercised at any time within three (3) years after
such termination, subject to the provisions of subparagraph (e) of this
Section 11. In the event of the death of non-employee Director, his
Options may be exercised by his estate or by a person who acquired the
right to exercise such Options by bequest or inheritance or by reason
of the death of such non-employee Director at any time within three (3)
years after such death.
	 
	 	(e)	 	An Option may not be exercised pursuant to this Section 11 except
to the extent that the holder was entitled to exercise the Option at
the time of termination of employment, termination of Directorship, or
death, and in any event may not be exercised after the expiration of
the Option.




-4-









 








GRAND TOYS INTERNATIONAL, INC.





	 	(f)	 	For purposes of this Section 11, the employment relationship of an
employee of the Company or of a subsidiary corporation of the Company
will be treated as continuing intact while he is on military or sick
leave or other bona fide leave of absence (such as temporary employment
by the Government) if such leave does not exceed ninety (90) days, or,
of longer, so long as his right to reemployment is guaranteed either by
statute or by contract.





	12.	 	Exercise of Options.





	 	(a)	 	Unless otherwise provided in the Stock Option Agreement, any Option
granted under the Plan shall be exercisable in whole at any time, or in
part from time to time, prior to expiration. The Committee, in its
absolute discretion, may provide in any Stock Option Agreement that the
exercise of any option granted under the Plan shall be subject (i) to
such condition or conditions as it may impose, including but not
limited to, a condition that the holder thereof remain in the employ or
service of the Company or a subsidiary corporation of the company for
such period or periods of time from the date of grant of the Option, as
the Committee, in its absolute discretion, shall determination; and
(ii) to such limitations as it may impose, including, but not limited
to, a limitation that the aggregate fair market value of the Common
Stock with respect to which Incentive Stock Options are exercisable for
the first time by any employee during any calendar year (under all
plans of the Company and its parent and subsidiary corporations) shall
not exceed One Hundred Thousand Dollars ($100,000). In addition, in
the event that under any Stock Option Agreement the aggregate fair
market value of the Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any employee during any
calendar year (under all plans of the Company and its parent and
subsidiary corporations) exceeds One Hundred Thousand Dollars
($100,000) the Committee may, when shares are transferred upon exercise
of such Options, designate those shares which shall be treated as
transferred upon exercise of an Incentive Stock Option and those shares
which shall be treated as transferred upon exercise of a Nonstatutory
Stock Option.
	 
	 	(b)	 	An Option granted under the Plan shall be exercised by the delivery
by the holder thereof to the Company at its principal office (attention
of the Secretary) of written notice of the number of shares with
respect to which the Option is being exercised. Such notice shall be
accompanied by payment of the full option price of such shares, and
payment of such option price shall be made by the holder’s delivery of
his check payable to the order of the Company; provided, however, that
notwithstanding the foregoing provisions of this Section 12 or any
other terms, provisions or conditions of the Plan, at the written
request of the optionee and upon approval by the Board of Directors or
the Committee, shares acquired pursuant to the exercise of any Option
may be paid for in full at the time of exercise by the surrender of shares of Common Stock of the company held by or for the account of the
optionee at the time if exercise to the extent permitted by subsection
(c) (5) of Section 422 of the Code and, with respect to any person who
is subject to the reporting requirements of Section 16 (a) of the
Exchange Act, to the extent permitted by Section 16 (b) of the Exchange
Act and the Rules of the Securities and Exchange Commission, without
liability to the Company. In such case, the fair market value of the
surrendered shares shall be determined by the Committee as of the date
of exercise in the same manner as such value is determined upon the
grant of an Incentive Stock Option.





	13.	 	Adjustment Upon Change in Capitalization.




-5-









 








GRAND TOYS INTERNATIONAL, INC.





	 	(a)	 	In the event that the outstanding Common Stock is hereafter changed
by reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split-up, combination of shares, stock
dividends or the like, an appropriate adjustment shall be made by the
Committee in the aggregate number of shares available under the Plan
and in the number of shares and option price per share subject to
outstanding Options. If the Company shall be reorganized, consolidated
or merged with another corporation, or if all of substantially all of
the assets of the Company shall be sold or exchanged, the holder of an
Option shall, at the time of issuance of the stock under such a
corporate event, be entitled to receive upon the exercise of his Option
the same number and kind of shares of stock or the same amount of
property, cash or securities as he would have been entitled to receive
upon the happening of such corporate event as if he had been,
immediately prior to such event, the holder of the number of shares
covered by his Option; provided, however, that in such event the
Committee shall have the discretionary power to take any action
necessary or appropriate to prevent any Incentive Stock Option granted
hereunder from being disqualified as an “incentive stock option” under
the then existing provisions of the Code or any law amendatory thereof
or supplemental thereto.
	 
	 	(b)	 	Any adjustment in the number of shares shall apply proportionately
to only the unexercised portion of the Option granted hereunder. If
fractions of a share would result from any such adjustment, the
adjustment shall be revised to the next lower whole number of shares.





	14.	 	Further Conditions of Exercise.





	 	(a)	 	Unless prior to the exercise of the Option the shares issuable upon
such exercise have been registered with the Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended (the
“Securities Act”), the notice of exercise shall be accompanied by a
representation or agreement of the individual exercising the Option to
the Company to the effect that such shares are being acquired for
investment and not with a view to the resale of distribution thereof or
such other documentation as may be required by the Company unless in
the Opinion of Counsel to the Company such representation, agreement or
documentation is not necessary to comply with the Securities Act.
	 
	 	(b)	 	The Company shall not be obligated to deliver any Common Stock
until it has been listed on each securities exchange on which the
Common Stock may then be listed or until there has been qualification
under or compliance with such state or federal laws, rules or
regulations as the Company may deem applicable. The Company shall use
reasonable efforts to obtain such listing, qualifications and
compliance.





	15.	 	Effectiveness of the Plan. The Plan was originally adopted by the sole
Director of the Company on June 18, 1993. The Plan was approved by the
affirmative vote of a majority of the outstanding shares of capital stock
of the Company present in person or by proxy at a meeting of shareholders
of the Company convened for such purpose on June 29, 1993. The Plan was
amended by the affirmative vote of a majority of the outstanding shares of
capital stock of the Company present in person or by proxy at the annual
meeting of shareholders of the Company convened for such purpose on
September 28, 2000.
	 
	16.	 	Termination, Modification and Amendment.



-6-









 









GRAND TOYS INTERNATIONAL, INC.





	 	(a)	 	The Plan (but not Options previously granted under the Plan) shall
terminate on June 29, 2003, which is within ten (10) years from the
date of its adoption by the Board of Directors, or sooner as
hereinafter provided, and no Option shall be granted after termination
of the Plan.
	 
	 	(b)	 	The Plan may from time to time be terminated, modified or amended
by the affirmative vote of the holders of a majority of the outstanding shares of capital stock of the Company present in person or by proxy at
a meeting of shareholders of the Company convened for such purpose;
provided, however, that Section 6 of the Plan may not be amended more
than once every six (6) months, other than to comply with changes in
the Code, the Employee Retirement Income Security Act, or the rules
thereunder.
	 
	 	(c)	 	The Board of Directors may at any time, on or before the
termination date referred to in Section 16 (a) hereof, terminate the
Plan, or from time to time make such modifications or amendments to the
Plan as it may deem advisable; provided, however, that the Board of
Directors shall not, without approval by the affirmative vote of the
holders of a majority of the outstanding shares of capital stock of the
Company present in person or by proxy at a meeting of shareholders of
the Company convened for such purpose, increase (except as provided by
Section 13 hereof) the maximum number of shares as to which Incentive
Stock Options may be granted, or change the designation of the
employees or class of employees eligible to receive Options or make any
other change which would prevent any Incentive Stock Option granted
hereunder which is intended to be an “incentive stock option” from
disqualifying as such under the then existing provisions of the Code or
any law amendatory thereof or supplemental thereto.
	 
	 	(d)	 	No termination, modification or amendment of the Plan, may without
the consent of the individual to whom an Option shall have been
previously granted, adversely affect the rights conferred by such
Option.





	17.	 	Not a Contract of Employment. Nothing contained in the Plan or in any
Stock Option Agreement executed pursuant hereto shall be deemed confer
upon any individual to whom an Option is or may be granted hereunder any
right to remain in the employ or service of the Company or a subsidiary
corporation of the Company.
	 
	18.	 	Use of Proceeds. The proceeds from the sale of shares pursuant to
Options granted under the Plan shall constitute general funds of the
Company.
	 
	19.	 	Indemnification of Board of Directors or Committee. In addition to such
other rights of indemnification as they may have, the members of the Board
of Directors or the Committee, as the case may be, shall be indemnified by
the Company to the extent permitted under applicable law against all costs
and expenses reasonably incurred by them in connection with any action,
suit or proceeding to which they or any of them may be a party by reason
of any action taken or failure to act under or in connection with the Plan
or any rights granted thereunder and against all amounts paid by them in
settlement thereof or paid by them in satisfaction of a judgment of any
such action, suit or proceeding, except a judgment based upon a finding of
bad faith. Upon the institution of any such action, suit or preceding,
the member or members of the Board of Directors or the Committee, as the
case may be, shall notify the Company in writing, giving the Company an
opportunity at its own cost to defend the same before such member or
members undertake to defend the same on their own behalf.




-7-









 








GRAND TOYS INTERNATIONAL, INC.





	20.	 	Definitions. For purposes of the Plan, the terms “parent corporation”
and “subsidiary corporation” shall have the same meanings a set forth in
Sections 425 (e) and 425 (f) of Code, respectively, and the masculine
shall include the feminine and the neuter as the context requires.
	 
	21.	 	Governing Law. The Plan shall be governed by, and all questions arising
hereunder shall be determined in accordance with, the law of the State of
New York.





-8-