As filed with the Securities and Exchange Commission on June 26, 1995.
Registration No. 33-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-PAID LEGAL SERVICES, INC.
(Name of registrant as specified in its charter)
Oklahoma 321 East Main Street 73-1016728
(State or jurisdiction of Ada, Oklahoma 74820 (I.R.S. Employer
incorporation or organization) (405) 436-1234 Identification No.)
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
Randy Harp
321 East Main Street
Ada, Oklahoma 74820
(405) 436-1234
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copy to:
Michael M. Stewart, Esq.
Crowe & Dunlevy, A Professional Corporation
1800 Mid-America Tower
Oklahoma City, Oklahoma 73102
(405) 235-7700
Approximate date of commencement of proposed sale to the public: From time
to time after the Registration Statement becomes effective.
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]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
<S> <C> <C> <C> <C>
Proposed Proposed
Maximum Maximum
Title of Each Class of Amount to Offering Price Aggregate Amount of
Securities to be Registered be Registered Per Share(1) Offering Price(1) Registration Fee
- -----------------------------------------------------------------------------------------------------------------------
Common Stock Purchase Options 1,000,000 (2) (2) (2)
Common Stock issuable on exercise of 1,000,000(3) $6.32 $6,320,000 $2,179.31
Purchase Options
====================================================================================================================================
</TABLE>
(1) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee, based on the average of the high and low sales
prices of the Common Stock as reported on the American Stock Exchange on June
22, 1995.
(2) No consideration is payable in connection with the grant of the Common
Stock Purchase Options and no separate registration fee is required.
(3) There is also being registered an indeterminable number of shares of
Common Stock as may become issuable pursuant to the antidilution provisions
applicable to the Common Stock Purchase Options.
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 Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
PROSPECTUS
PRE-PAID LEGAL SERVICES, INC.
MARKETING ASSOCIATE OPTION PLAN
1,000,000 COMMON STOCK PURCHASE OPTIONS
and
1,000,000 SHARES OF COMMON STOCK
This Prospectus relates to the offering of (i) up to 1,000,000
nontransferable options ("Options") each to purchase one share of common stock,
$.01 par value per share ("Common Stock"), of Pre-Paid Legal Services, Inc. (the
"Company") pursuant to the terms of the Pre-Paid Legal Services, Inc. Marketing
Associate Option Plan (the "Plan") and (ii) the shares of Common Stock issuable
upon exercise of the Options. The Options will be granted to eligible marketing
associates, some of whom may also be employees of the Company, upon achievement
by such individuals of specified sales and marketing goals described elsewhere
herein. See "Description of the Plan - Grant of Options." Each Option granted
will entitle the holder to purchase one share of Common Stock of the Company at
the market price on the date of grant and upon the other terms and conditions
specified in this Prospectus.
This Prospectus sets forth the terms and conditions of the Plan and the
grant of Options thereunder as such are in effect on effective date of the Plan.
The effective date of the Plan is the date of this Prospectus.
The Company will receive all of the proceeds of the sale of the shares
issuable upon exercise of the Options and will bear expenses in connection with
the offering of such shares estimated to be approximately $8,000.
The Common Stock of the Company is listed on the AMEX under the symbol
"PPD."
SEE INVESTMENT CONSIDERATIONS FOR A DISCUSSION OF CERTAIN FACTORS TO BE
CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is _______, 1995.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy and information statements and other information filed by the Company may
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington,
D.C. 20549, and at the following Regional Offices of the Commission, except that
copies of the exhibits may not be available at certain of the Regional Offices:
Chicago Regional Office, Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511; and New York Regional Office, 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material may also
be obtained by mail at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington,
D.C. 20549. The Common Stock of the Company is listed on the American Stock
Exchange, and reports, proxy statements and other information may also be
inspected at the public reference facility maintained by that exchange.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), with respect to the securities included in this
Prospectus. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement and the exhibits thereto, to which reference is hereby made. Any
interested party may inspect the Registration Statement, and the exhibits
thereto, without charge, at the public reference facilities of the Commission
and may obtain copies of all or any portion of the Registration Statement from
the Commission upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
1. The Company's Annual Report on Form 10-KSB for the year ended December
31, 1994.
2. The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1995.
3. The description of the Company's Common Stock contained in the Company's
Registration Statement on Form 8-A dated October 10, 1986, as amended by the
Company's Current Report on Form 8-K dated as of July 20, 1994.
In addition, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof from
the date of filing of such documents. The Company will provide without charge to
each person to whom this Prospectus is delivered, upon written or oral request,
a copy of any or all of the foregoing documents incorporated herein by reference
(other than exhibits to such documents). Requests should be made to Pre-Paid
Legal Services, Inc., Investor Relations Department, P. O. Box 145, Ada,
Oklahoma 74820. The Company's telephone number at that address is (405)
436-1234.
2
<PAGE>
TABLE OF CONTENTS
Page
Available Information................................................... 2
Incorporation of Certain Documents by Reference......................... 2
Investment Considerations............................................... 4
The Company............................................................. 4
Description of the Plan................................................. 4
Federal Income Tax Information.......................................... 7
Use of Proceeds......................................................... 8
Indemnification and Limitation of Liability of Officers and Directors... 8
Legal Matters........................................................... 9
Experts................................................................. 9
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
Prospectus in connection with the offering described herein, and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any securities covered by this Prospectus
in any jurisdiction to any person to whom it is unlawful to make any offer of
solicitation. The delivery of this Prospectus at any time does not imply that
the information contained or incorporated by reference herein is correct as of
any time subsequent to the date hereof or subsequent to the respective dates of
the documents incorporated by reference herein.
"Pre-Paid Legal Services" is a registered trademark of the Company. All
rights are fully reserved.
3
<PAGE>
INVESTMENT CONSIDERATIONS
Prospective purchasers of the Common Stock should consider carefully the
following.
Dependence on Management
The success of the Company depends substantially on the continued active
participation of its principal executive officer, Harland C. Stonecipher.
Although the Company's management includes other individuals with significant
experience in the business of the Company, the loss of the services of Mr.
Stonecipher could have a material adverse effect on the Company's financial
condition and results of operations.
THE COMPANY
The Company develops, underwrites and markets legal expense plans (referred
to as "Contracts") which provide for or reimburse a portion of the legal fees
associated with a variety of legal services in a manner similar to medical
reimbursement plans. The Company or its predecessor has been involved in the
prepaid legal services industry since 1972. As a result of over 20 years of
experience, the Company has developed a data base concerning utilization of
Contract benefits, an extensive network of independent attorneys providing
services to its members, and substantial knowledge and experience with respect
to the industry's regulatory environment.
The Company markets Contracts in part through a multi-level marketing
system utilizing the services of commissioned marketing associates
("Associates").
The address of the Company's principal executive offices is 321 East Main
Street, Ada, Oklahoma 74820, and its telephone number at that address is (405)
436-1234.
DESCRIPTION OF THE PLAN
Introduction
The Company has established the Plan in order to strengthen the mutuality
of interests between Associates and the shareholders of the Company in the
Company's long-term growth and financial success and to provide additional
incentive to Associates in connection with sales of the Company's Contracts and
the establishment and expansion of marketing organizations for the sale of
Contracts. The Plan provides for the grant of up to 1,000,000 nontransferable
Common Stock Purchase Options to eligible Associates upon achievement by
eligible Associates of specified sales and marketing goals. The effective date
for the commencement of the Plan is the date of this Prospectus, and the Plan
will terminate on July 4, 1996, except with respect to Options then outstanding.
Administration
The Plan is administered by the Company through certain officers and
employees as assigned from time to time by the Executive Committee of the Board
of Directors of the Company. The Company has authority in its sole discretion at
any time (i) to determine eligibility standards for participants under the Plan,
(ii) to determine the performance criteria and terms of grants of Options and
terms, conditions and restrictions, if any, for exercise of Options, (iii) to
adopt rules and regulations with respect to the administration of the Plan, and
(iv) to amend or rescind the Plan or the rules and regulations thereunder, and
make such other determinations under the Plan as the Company deems necessary and
appropriate.
The Plan is not subject to any of the provisions of the Employee Retirement
Income Security Act of 1974 and is not qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended ("Code").
4
<PAGE>
Securities Subject to the Plan
Under the Plan, grants of Options to purchase up to 1,000,000 shares of
Common Stock are authorized, and an aggregate of 1,000,000 shares of Common
Stock has been reserved for exercise of Options that may be granted under the
Plan. Shares subject to the Plan shall be deemed to have been used or set aside
with respect to awards of Options when such awards are granted. If any Option
granted pursuant to the Plan terminates or lapses unexercised, any such Options
and related shares of Common Stock shall again be made available for grant. In
the event of any increase or decrease in the number of issued and outstanding
shares of Common Stock pursuant to stock splits, recapitalizations, stock
dividends or similar transactions effected without receipt of consideration by
the Company, the Company shall make such proportionate adjustments as it deems
appropriate with respect to the number of shares of Common Stock in respect of
which Options may be granted under the Plan, the number of shares subject to
options theretofore granted to participants, and/or the exercise price per share
of Options theretofore granted to participants.
Options granted under the Plan are not designed to be incentive stock
options within the meaning of Section 422(A) of the Code.
Eligibility
Options may be granted to all "active" Associates. An Associate is
considered to be "active" for so long as the Associate originates at least three
new Contract sales per quarter or maintains a personal Company Contract. There
is no limit on the number of "active" Associates who may participate or on the
number of Options that may be awarded to an Associate.
Grant of Options
The Plan authorizes the grant of Options to eligible Associates based on
the attainment by Associates of specified performance goals. The Company will
monitor individual Associate performance for each month during the term of the
Plan. Options earned by eligible participants relating to performance during
each month will be treated as granted as of the end of the last day of such
month. The first monthly period for which Options may be earned under the Plan
will commence on the effective date of the Plan and will end on the last day of
the month in which the effective date occurs. The last monthly period with
respect to which Options may be awarded will be an extended period from June 1,
1996 through July 4, 1996. The Company will notify Participants of awards of
Options as soon as possible after grant.
Following are the performance levels and the number of Options earned at
each level by Associates.
================================================================================
<TABLE>
<CAPTION>
Performance Options
Level Performance Criteria Earned
<S> <C> <C>
- --------------------------------------------------------------------------------
A-1 Each personal sale of a Contract 1
- --------------------------------------------------------------------------------
A-2 First sale of a Contract by each Associate personally 5
sponsored by you
- --------------------------------------------------------------------------------
A-3 Each Associate personally sponsored by you who 250
achieves Manager Level
- --------------------------------------------------------------------------------
A-4 Each Associate personally sponsored by you who 250
achieves Executive Bonus Level
5
<PAGE>
- --------------------------------------------------------------------------------
A-5 Personally achieve Bronze Level of Executive Bonus 500
- --------------------------------------------------------------------------------
A-6 Personally achieve Silver Level of Executive Bonus 500
- --------------------------------------------------------------------------------
A-7 Personally achieve Gold Level of Executive Bonus 500
- --------------------------------------------------------------------------------
A-8 Personally achieve Platinum Level of Executive Bonus 1,000
================================================================================
</TABLE>
The performance levels indicated above and the requirements for achieving
such levels will be as provided from time to time in the Company's Associate
commission structure and marketing plans. Participants will receive awards for
sales at performance levels A-1 and A-2 only with respect to sales processed by
the Company after the effective date of the Plan. For Option awards with respect
to performance levels A-3 to A-8 which are predicated on the participating
Associate or other personally sponsored Associate achieving a specified
performance level, no Options will be awarded with respect to levels at or below
the level at which the participating Associate or personally sponsored Associate
resided as of the effective date of the Plan. In addition, a participating
Associate will be eligible to receive Option awards only with respect to the
first time the participating Associate or personally sponsored Associate
achieves the requisite level after the effective date of the Plan. For example,
if a participating Associate achieves the Executive Bonus Level after the
effective date of the Plan and receives an Option award but is not able to
maintain such level, the participating Associate will not receive an additional
Option award in the event that he or she regains the Executive Bonus Level.
Exercise Price and Exercise of Options
Each Option granted under the Plan will entitle the recipient to purchase
Common Stock at an exercise price per share equal to the Fair Market Value per
share of the underlying Common Stock on the date the Option is granted. The Fair
Market Value on such date is defined as the last sale price of the Company's
Common Stock on the applicable grant date as reported by the American Stock
Exchange ("AMEX") for such date, or if such date falls on a weekend or holiday
then as reported by the AMEX on the last trading day prior to the applicable
grant date. The aggregate exercise price of Options exercised must be paid in
full by certified or cashier's check, or in such other manner as the Company
determines at the time of the exercise.
Options granted under the Plan will be immediately exercisable as to the
full amount of the shares covered by the Option and may be exercised in whole or
in part at one time or from time to time by payment of the applicable exercise
price; provided, however, that no fewer than one hundred (100) Options may be
exercised by a participant at any one time. In addition, in order to exercise
Options granted under the Plan, the participant must have been an "active"
Associate (as described elsewhere herein) at all times between the date of grant
of the Options and the date of exercise of the Options. Options granted under
the Plan will expire at 5:00 p.m., Central Daylight Time, on July 31, 1997 (the
"Expiration Date") and may not be exercised after such time. However, the
Company may in its discretion extend the Expiration Date.
Other Provisions Applicable to the Plan and the Options
Options granted under the Plan may not be transferred other than by will or
by the laws of descent and distribution upon the death of the participant. Any
attempted transfer of an Option in violation of the foregoing provisions shall
render the Option null and void.
If a participant ceases to be an "active" Associate (as described elsewhere
herein) the right to exercise options held by the participant shall expire on
the date such participant ceases to be an "active" Associate.
6
<PAGE>
In the event of death of a participant an outstanding Option may be
exercised prior to the Expiration Date by the participant's estate or any person
who acquired the right to exercise the Option by bequest or inheritance or by
reason of the death of the participant, but only to the extent that the
participant was eligible to exercise the Option at the date of death.
The Company reserves the right to suspend, terminate or amend the Plan at
any time in such respect as it shall deem advisable. For instance, temporary
suspension or termination of grants of or the exercise of Options under the Plan
may occur at any time when operation of the Plan, in the Company's judgment,
contravenes applicable regulations, interpretations or orders of the Securities
and Exchange Commission, or any other governmental commission, agency or
instrumentality, of any court or of the AMEX or other securities exchange.
At the time of exercise of any Option, the Company shall have the right to
require payment in the amount of any Federal, state or local taxes required by
law to be withheld. Withholding may be satisfied by the withholding of shares of
Common Stock by the Company otherwise issuable upon exercise of Options, unless
the optionee shall pay to the Company an amount sufficient to cover the amount
of taxes required to be withheld, and such withholding of shares does not
violate any applicable laws, rules or regulations of Federal, State or local
authorities.
If the Company shall be the surviving or resulting corporation in any
merger or consolidation which does not result in a change of control of the
Company (as determined in the sole discretion of the Board of Directors of the
Company), any Option granted hereunder shall pertain to and apply to the
securities to which a holder of the number of shares of Common Stock subject to
the Option would have been entitled. In the event of a dissolution or
liquidation of the Company or a merger or consolidation in which the Company is
not the surviving or resulting corporation or which results in a change in
control of the Company (as determined in the sole discretion of the Board of
Directors of the Company) or a tender or exchange offer which results in a
change in control of the Company (as determined in the sole discretion of the
Board of Directors of the Company), the Board of Directors shall determine (i)
whether all or any part of the unexercised portion of any Options outstanding
under the Plan shall terminate or (ii) whether such Options may be exchanged for
options covering securities of any surviving or resulting corporation, subject
to the agreement of any such surviving or resulting corporation, on terms and
conditions substantially similar to an Option under the Plan.
The existence of the Plan and any Options granted thereunder shall not
affect or restrict in any way the right or power of the Board of Directors or
the shareholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of securities ahead of or affecting the Common Stock or the rights thereof, the
dissolution or liquidation of the Company or any sale or transfer of all or any
part of its assets or business, or any other corporate act or proceeding.
Except as otherwise required by law, no action taken under the Plan shall
be taken into account in determining any benefits under any pension, retirement,
thrift, profit sharing, group insurance or other benefit plan maintained by the
Company, unless such other plan specifically provides for such inclusion.
FEDERAL INCOME TAX INFORMATION
The following description of Federal income tax consequences of the Plan is
intended only as a basic summary and not as a definitive discussion of the
application of various complex provisions of the Internal Revenue Code of 1986,
as amended (the "Code"), governing the income tax consequences of the Plan in
all conceivable circumstances. It is strongly urged that recipients of awards
under the Plan consult with their individual tax advisers concerning the
applicability of the Federal, state and local income tax aspects of the Options
and the exercise thereof to their personal tax circumstances.
7
<PAGE>
For Federal income tax purposes, a participant who receives an Option will
not realize any income, nor will the Company be entitled to any deduction, at
the time of grant thereof.
The participant generally will realize ordinary income at the time shares
are transferred to him or her pursuant to an exercise of the Option. The amount
of such income will be equal to the difference between the exercise price and
the fair market value of the shares of Common Stock at the time of exercise. The
participant's basis in the shares received upon exercise of an Option will be
the fair market value of such shares at the time of exercise of the Option. In
general, the Company will be entitled to a deduction for Federal income tax
purposes at the same time and in the same amount as is considered to have been
realized by the participant as ordinary income under the rules described above.
When a participant disposes of shares of Common Stock acquired upon
exercise of an Option, any amount received in excess of the participant's basis
in the shares will be treated as long-term or short-term capital gain, depending
upon the holding period of the shares. If the amount received is less than such
fair market value, the loss will be treated as long-term or short-term capital
loss, depending upon the holding period of the shares. Treatment of the gain or
loss on disposition of the shares as a "capital" gain or loss depends on whether
the shares are "capital assets" in the hand of a Participant as that term is
defined under the Code. The Company receives no further deduction as a result of
a realization of any capital gain or loss as described in this paragraph.
USE OF PROCEEDS
The net proceeds from the sale of Common Stock purchased upon exercise of
Options will be used for general corporate purposes of the Company.
INDEMNIFICATION AND LIMITATION OF LIABILITY
OF OFFICERS AND DIRECTORS
The Bylaws of the Company provide that the Company shall indemnify, and
advance litigation expenses to, its directors and officers, and persons serving
at the request of the Company as directors or officers of another enterprise, to
the fullest extent permitted by the laws of the State of Oklahoma. Insofar as
indemnification for liabilities arising under the Securities Act may be
permitted to the directors and officers of the Company, the Company has been
advised that, in the opinion of the Commission, such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable.
The Oklahoma General Corporation Act authorizes an Oklahoma corporation to
limit or to eliminate the personal liability of its directors for monetary
damages for breaches of fiduciary duty. Absent such limitation or elimination, a
director may be liable to a corporation and its stockholders for monetary
damages for conduct constituting gross negligence in the exercise of the duty of
care. Although it does not change the duty of care, the Oklahoma General
Corporation Act allows the limitation of the available relief to equitable
remedies, such as an injunction or rescission. However, such relief may not be
effective in all cases. The Certificate of Incorporation of the Company limits
the liability of directors to the Company or its stockholders to the fullest
extent permitted by the Oklahoma General Corporation Act.
8
<PAGE>
LEGAL MATTERS
The validity of the issuance of the shares offered hereby will be passed
upon for the Company by Crowe & Dunlevy, A Professional Corporation, Oklahoma
City, Oklahoma.
EXPERTS
The consolidated balance sheet of the Company as of December 31, 1994 and
the related consolidated statements of operations, changes in stockholders'
equity and cash flows for the year then ended incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1994 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
The consolidated balance sheet of the Company as of December 31, 1993 and
the related consolidated statements of operations, changes in stockholders'
equity and cash flows for each of the two years in the period ended December 31,
1993 incorporated by reference to the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1994 have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
Any future financial statements hereafter incorporated by reference will be
incorporated in reliance upon the reports of the firm examining such statements
and upon the authority of any such firm as experts in auditing and accounting,
to the extent that any such firm has audited those financial statements and
consented to the incorporation herein by reference of its reports with respect
thereto.
9
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table contains an itemized statement of the estimated amounts
of expenses in connection with the issuance of the Common Stock which is the
subject of the Registration Statement, all of which expenses will be paid by the
Registrant:
<TABLE>
<S> <C>
SEC Registration Fee..................................... $2,179
Legal Fees and Expenses.................................. 1,500
Accounting Fees and Expenses............................. 3,000
Miscellaneous Expenses................................... 1,321
Total.................................................. $8,000
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 1031 of the Oklahoma General Corporation Act provides broad
authority for the indemnification of, and the advancement of litigation expenses
to, the directors and officers of an Oklahoma corporation. Section 1066 of the
Oklahoma General Corporation Act provides broad authority for the elimination or
limitation of the personal liability of directors of an Oklahoma corporation to
the Oklahoma corporation and its shareholders for monetary damages for breaches
of fiduciary duty. The Amended and Restated Certificate of Incorporation, as
amended, and Bylaws of the Registrant provide for indemnification of, and the
advancement of litigation expenses to, directors and officers to the broadest
extent permitted by Oklahoma law and provided for the elimination and limitation
of the personal liability of directors for monetary damages for breaches of
fiduciary duty to the fullest extent permitted by Oklahoma law.
Item 16. Exhibits
Exhibit
No. Description
5.1 Opinion of Crowe & Dunlevy, a Professional Corporation, on legality of
securities.
8.1 Opinion of Crowe & Dunlevy, a Professional Corporation, on tax matters
(included in Exhibit 5.1).
23.1 Consent of Crowe & Dunlevy, a Professional Corporation (included in
Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Price Waterhouse LLP.
24.1 Powers of Attorney.
Item 17. Undertakings
The Registrant hereby undertakes:
(1) To file, during any period in which it offers or sells securities, a
post-effective amendment to this Registration Statement to:
II-1
<PAGE>
(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) Reflect in the prospectus any facts or events which, individually
or together, present a fundamental change in the information in the
Registration Statement; and
(iii) Include any additional or changed material information on the
plan of distribution.
Provided, however, that the undertakings set forth in paragraphs (1)(i) and
(1)(ii) above do not apply if the information required to be included in the
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to the Securities Exchange Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That for determining liability under the Securities Act of 1993, each
such post-effective amendment shall be treated as a new registration statement
of the securities offered, and the offering of the securities at that time shall
be treated as the initial bona fide offering.
(3) To file a post-effective amendment to remove from registration any of
the securities that remain unsold at the end of the offering.
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 provisions referred to in Item 15 of this
Registration Statement, 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 Securities Act of 1933 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 Securities Act of 1933 and will be governed by the
final adjudication of such issue.
II-2
<PAGE>
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 Ada, State of Oklahoma on June 26, 1995.
PRE-PAID LEGAL SERVICES, INC.
By: /s/ RANDY HARP
Randy Harp
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Name Position Date
HARLAND C. STONECIPHER* Chairman of the Board of Directors June 26, 1995
Harland C. Stonecipher and Chief Executive Officer
(Principal Executive Officer)
JACK MILDREN* President and Director June 26, 1995
Jack Mildren
KATHLEEN S. PINSON* Vice President, Controller and June 26, 1995
Kathleen S. Pinson Director (Principal Accounting
Officer)
/s/RANDY HARP Chief Financial Officer and Director June 26, 1995
Randy Harp (Principal Financial Officer)
PETER K. GRUNEBAUM* Director June 26, 1995
Peter K. Grunebaum
WILBURN L. SMITH* Director June 26, 1995
Wilburn L. Smith
CHARLES H. WALLS* Director June 26, 1995
Charles H. Walls
*By: /s/ RANDY HARP
Randy Harp
Attorney-in-fact
II-3
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description
5.1 Opinion of Crowe & Dunlevy, A Professional Corporation,
on legality of securities.
8.1 Opinion of Crowe & Dunlevy, A Professional Corporation, on tax matters
(included in Exhibit 5.1).
23.1 Consent of Crowe & Dunlevy, A Professional Corporation
(included in Exhibit 5.1).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Price Waterhouse LLP.
24.1 Powers of Attorney.
II-4
EXHIBIT 5.1
<PAGE>
June 26, 1995
Pre-Paid Legal Services, Inc.
321 East Main Street
Ada, Oklahoma 74820
Re: Pre-Paid Legal Services, Inc. - Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Pre-Paid Legal Services, Inc. (the "Company")
in connection with the offering of 1,000,000 Common Stock Purchase Options (the
"Options") and 1,000,000 shares of common stock, $.01 par value per share
("Common Stock"), issuable upon exercise of the Options pursuant to a
Registration Statement on Form S-3 (the "Registration Statement"). We understand
that the Registration Statement will be filed with the Securities and Exchange
Commission on or about June 26, 1995. You have requested our opinion as to
certain matters in connection with the Registration Statement.
We have examined, and are familiar with, the originals or copies, the
authenticity of which have been established to our satisfaction, of all
documents and other instruments we have deemed necessary to express the opinions
hereinafter set forth. We have assumed the accuracy and completeness of such
documents and instruments and of the information contained therein.
Based on the foregoing, and upon consideration of applicable law, it is our
opinion that:
1. The 1,000,000 Options will, when issued and delivered in the manner
described in the Registration Statement, be valid and binding obligations of the
Company in accordance with their terms;
2. The 1,000,000 shares of Common Stock issuable upon exercise of the
Options will, upon payment therefor and delivery thereof in accordance with the
terms of such Options, be validly issued, fully paid and nonassessable; and
3. The description of the material federal income tax consequences
attributable to the Options contained in the Registration Statement is correct
in all material respects. This opinion is based on our review of the Prospectus
included in the Registration Statement and related documents and assumes the
accuracy of all factual matters described therein.
We hereby consent to the use of this opinion as an exhibit to the
above-captioned Registration Statement and to the reference to this firm in the
Registration Statement and the Prospectus included therein under the heading
"Legal Matters."
Respectfully submitted,
CROWE & DUNLEVY
A PROFESSIONAL CORPORATION
By: /s/ MICHAEL M. STEWART
Michael M. Stewart
EXHIBIT 23.2
<PAGE>
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in the Prospectus constituting
a part of this Registration Statement on Form S-3 of Pre-Paid Legal Services,
Inc. of our report dated February 27, 1995 appearing in the Annual Report on
Form 10-KSB of Pre-Paid Legal Services, Inc. for the year ended December 31,
1994. We also consent to the references to us under the heading "Experts" in
such Prospectus.
/s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Oklahoma City, Oklahoma
June 26, 1995
EXHIBIT 23.3
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
May 16, 1994 appearing on page 22 of Pre-Paid Legal Services, Inc.'s Annual
Report on Form 10-KSB for the year ended December 31, 1994. We also consent to
the references to us under the heading "Experts" in such Prospectus.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
Dallas, Texas
June 26, 1995
EXHIBIT 24.1
<PAGE>
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints Randy Harp and Kathleen S. Pinson, and each or any of them, his or her
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities, to sign the Registration Statement on Form S-3, relating to
the offer and sale of 1,000,000 Common Stock purchase options and 1,000,000
shares of Common Stock of the Company which may be issued upon exercise of the
Common Stock purchase options and all amendments thereto (including
post-effective amendments) and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent or any
of them, or their or his or her substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Signature Title Date
/s/ HARLAND C. STONECIPHER Chairman of the June 26, 1995
Harland C. Stonecipher Board of Directors
and Chief Executive
Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints Harland C. Stonecipher and Kathleen S. Pinson, and each or any of them,
his or her true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him or her and in his or her name, place
and stead, in any and all capacities, to sign the Registration Statement on Form
S-3, relating to the offer and sale of 1,000,000 Common Stock purchase options
and 1,000,000 shares of Common Stock of the Company which may be issued upon
exercise of the Common Stock purchase options and all amendments thereto
(including post-effective amendments) and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Signature Title Date
/s/ RANDY HARP Chief Financial June 26, 1995
Randy Harp Officer and
Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints Harland C. Stonecipher and Randy Harp, and each or any of them, his or
her true and lawful attorney-in-fact and agent, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign the Registration Statement on Form S-3, relating
to the offer and sale of 1,000,000 Common Stock purchase options and 1,000,000
shares of Common Stock of the Company which may be issued upon exercise of the
Common Stock purchase options and all amendments thereto (including
post-effective amendments) and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto each said attorney-in-fact and agent full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as he or she might or could do in person,
hereby ratifying and confirming all that said attorney-in-fact and agent or any
of them, or their or his or her substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Signature Title Date
/s/ KATHLEEN S. PINSON Vice President, June 26, 1995
Kathleen S. Pinson Controller and
Director
<PAGE>
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that the undersigned hereby constitutes and
appoints Harland C. Stonecipher, Randy Harp and Kathleen S. Pinson, and each or
any of them, his or her true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign the Registration Statement
on Form S-3, relating to the offer and sale of 1,000,000 Common Stock purchase
options and 1,000,000 shares of Common Stock of the Company which may be issued
upon exercise of the Common Stock purchase options and all amendments thereto
(including post-effective amendments) and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each said attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Signature Title Date
/s/ JACK MILDREN President June 26, 1995
Jack Mildren and Director
/s/ WILBURN L. SMITH Director June 26, 1995
Wilburn L. Smith
/s/ CHARLES H. WALLS Director June 26, 1995
Charles H. Walls
/s/ PETER K. GRUNEBAUM Director June 26, 1995
Peter K. Grunebaum
