As filed with the Securities and Exchange Commission on September 14, 1995.
Registration No. 33-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
PRE-PAID LEGAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 73-1016728
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
321 East Main Street
Ada, Oklahoma 74820
(Address of Principal Executive Offices) (Zip Code)
_____________________________________
PRE-PAID LEGAL SERVICES, INC. STOCK OPTION PLAN
AND
OPTIONS GRANTED TO CERTAIN NON-EMPLOYEE DIRECTORS
(Full title of the plan)
Randy Harp
321 East Main Street
Ada, Oklahoma 74820
(Name and address of agent for service)
(405) 436-1234
(Telephone number, including area code, of agent for service)
Copy to:
J. Bradford Hammond, Esq.
Crowe & Dunlevy, A Professional Corporation
500 Kennedy Building
321 South Boston
Tulsa, Oklahoma 74103-3133
(918) 592-9800
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Proposed Proposed
Maximum Maximum
Amount to Offering Price Aggregate Amount of
Title of Securities to be Registered be Registered Per Share (1) Offering Price (1) Registration Fee
Common Stock, par value $0.01 per $700,000 $ 4.66 $3,262,000 $1,125
share
</TABLE>
(1) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee. A total of 625,000 shares have been
reserved for issuance pursuant to options granted or to be granted under
the Registrant's Stock Option Plan and are being registered hereby. In
addition, 75,000 shares have been reserved for issuance pursuant to options
granted to certain non-employee directors of the Company and are being
registered hereby. The proposed maximum aggregate offering price of 325,000
of such shares that are subject to outstanding options has been calculated
based on the weighted average exercise price of such outstanding options of
$1.17 per share. The proposed maximum aggregate offering price of 375,000
of such shares that are not subject to outstanding options has been
calculated based on the average of the high and low sales prices of the
Common Stock as reported on the American Stock Exchange on September 12,
1995, which average price was $7.69 per share.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan Information*
Item 2. Registrant Information and Employee Plan Annual Information*
* Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from this Registration Statement in accordance
with Rule 428 under the Securities Act of 1933 and the Note to Part I
of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed by the Registrant with the Securities and
Exchange Commission are incorporated by reference in this Registration
Statement:
(1) The Registrant's Annual Report on Form 10-KSB for the year ended
December 31, 1994.
(2) The Registrant's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1995.
(3) The Registrant's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1995.
(4) The description of the Registrant's Common Stock contained in the
Registrant's Registration Statement on Form 8-A dated October 10,
1986, as amended by the Registrant's Current Report on Form 8-K dated
as of July 20, 1994.
In addition, all documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
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
Registration Statement and to be a part hereof from the date of filing such
documents.
Item 4. Description of Securities
This Registration Statement covers only Common Stock, par value $0.01 per
share, of the Registrant, which is registered under Section 12(b) of the
Securities Exchange Act of 1934. Accordingly, the information required pursuant
to Item 202 of Regulation S-B is not required to be included herein.
Item 5. Interests of Named Experts and Counsel
There are no interests of any expert or counsel that are required to be
disclosed pursuant to Item 5.
Item 6. Indemnification of Officers and Directors
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 1006 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 provide 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.
<PAGE>
Section 2 of the Registrant's Stock Option Plan (the "Plan") provides that
no member of the Board of Directors or the Stock Option Committee shall be
liable for any action or determination made in good faith in connection with the
Plan. Furthermore, the previously referenced persons shall be entitled to
indemnification and reimbursement in the manner provided in the Company's
Amended and Restated Certificate of Incorporation, or as otherwise permitted by
law.
Item 7. Exemption from Registration Claimed
There are no restricted securities being reoffered or resold pursuant to
this Registration Statement.
Item 8. Exhibits
Exhibit
No. Description
4.1 Pre-Paid Legal Services, Inc. Stock Option Plan
4.2 Stock Option Agreements between Pre-Paid Legal Services, Inc. and
certain non-employee directors.
5.1 Opinion of Crowe & Dunlevy, A Professional Corporation, on
legality of securities.
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 9. Undertakings
The undersigned 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:
(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;
(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 a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to the Securities Act of 1934 that are
incorporated by reference in this Registration Statement.
(2) That for determining liability under the Securities Act of 1933, 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 6 of the 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.
<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-8 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 September 14, 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 September 14, 1995
Harland C. Stonecipher and Chief Executive Officer
(Principal Executive Officer)
JACK MILDREN* President and Director September 14, 1995
Jack Mildren
KATHLEEN S. PINSON* Vice President, Controller and September 14, 1995
Kathleen S. Pinson Director (Principal Accounting
Officer)
/s/ RANDY HARP Chief Financial Officer and Director September 14, 1995
Randy Harp (Principal Financial Officer)
PETER K. GRUNEBAUM* Director September 14, 1995
Peter K. Grunebaum
WILBURN L. SMITH* Director September 14, 1995
Wilburn L. Smith
CHARLES H. WALLS* Director September 14, 1995
Charles H. Walls
*By: /s/ RANDY HARP
Randy Harp
Attorney-in-fact
<PAGE>
INDEX TO EXHIBITS
Exhibit
No. Description
4.1 Pre-Paid Legal Services, Inc. Stock Option Plan
4.2 Stock Option Agreements between Pre-Paid Legal Services, Inc. and
certain non-employee directors.
5.1 Opinion of Crowe & Dunlevy, A Professional Corporation, on
legality of securities.
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.
EXHIBIT 4.1
<PAGE>
NOTICE OF ADJUSTMENT
TO
PRE-PAID LEGAL SERVICES, INC.
STOCK OPTION PLAN
(effective as of January 19, 1987)
A. On December 1, 1986, the Board of Directors of Pre-Paid Legal Services,
Inc., an Oklahoma Corporation, (the "Corporation"), authorized a 5 for 4 split
of the Corporation's Common Stock. The split was effected in the form of a 25%
Common Stock dividend, which was paid on January 19, 1987 to holders of Common
Stock of record at the close of business on January 8, 1987.
B. According to Section 6.6 of the Plan, the number of shares of Common
Stock in respect to which options may be granted under the Plan shall be
proportionately adjusted for any increase in the number of issued shares of
Common Stock of the Corporation resulting from the payment of a stock dividend
or other increase in such shares effected without receipt of consideration by
the Corporation.
THEREFORE, as a result of the stock dividend and pursuant to Section 6.6 of
the Plan, the number of shares of Common Stock authorized for issuance pursuant
to option awards under the Plan was automatically adjusted (effective as of
January 19, 1987) from 500,000 to 625,000 shares.
<PAGE>
PRE-PAID LEGAL SERVICES, INC.
STOCK OPTION PLAN
1. Purpose. This Stock Option Plan ("Plan") is intended as an
incentive and to encourage stock ownership by certain key employees, officers
and directors of Pre-Paid Legal Services, Inc. ("Corporation") and of its
Subsidiaries (as hereinafter defined) in order to increase their proprietary
interest in the Corporation's success.
2. Administration. The Plan shall be administered by the Board of
Directors of the Corporation, which shall determine the persons who shall
participate in the Plan and the extent of their participation; provided,
however, that the Board of Directors shall have the authority to appoint a
committee of at least three members of the Board ("Stock Option Committee") to
administer the Plan and to make recommendations concerning the granting of
options thereunder. Each member of the Stock Option Committee shall not be
eligible to receive an option under the Plan or any other plan of the
Corporation entitling participants to acquire stock, stock options or stock
appreciation rights, if their eligibility would result in such person not being
considered "disinterested persons" as such term is defined in Rule 16b-3 under
the Securities Exchange Act of 1934. An option shall be granted to a director of
the Corporation only by, or in accordance with the recommendation of, the Stock
Option Committee.
The interpretation and construction by the Board of any provisions of
the Plan or any option granted under it and any determination by the Board or
the Stock Option Committee pursuant to any provision of the Plan or any such
option shall be final and conclusive. No member of the Board of Directors or the
Stock Option Committee, if any, shall be liable for any action or determination
made in good faith, and the members shall be entitled to indemnification and
reimbursement in the manner provided in the Corporation's Certificate of
Incorporation, or as otherwise permitted by law.
3. Stock. The stock subject to the options and other provisions of the
Plan shall be shares of the Corporation's authorized but unissued Common Stock
or treasury stock, as determined by the Board of Directors. Subject to
adjustment in accordance with the provisions of Subparagraph 6.6 hereof, the
total number of shares of Common Stock of the Corporation on which options may
be granted under the Plan shall not exceed in the aggregate 500,000 shares. In
the event that any outstanding option under the Plan for any reason expires or
is terminated prior to the end of the period during which options may be
granted, the shares of Common Stock allocable to the unexercised portion of such
option may again be subject to an option under the Plan.
4. Terms and Conditions of Incentive Options. Options may be granted
under this Plan which qualify as Incentive Stock Options ("Incentive Options")
under Section 422A of the Internal Revenue Code. Incentive Options granted
pursuant to the Plan shall comply with and be subject to the following special
terms and conditions:
4.1 Eligibility. The individuals who shall be eligible to receive
Incentive Stock Options under this Plan shall be such key employees
(including officers and directors who are employees) of the Corporation, or
of any corporation (hereinafter called a "Subsidiary") in which the
Corporation has a proprietary interest by reason of stock ownership or
otherwise, including any corporation in which the Corporation acquires a
proprietary interest after the adoption of this Plan, (but only if the
Corporation owns, directly or indirectly, stock possessing not less than
50% of the total combined voting power of all classes of stock in the
corporation), as the Board of Directors of the Corporation shall determine
from time to time.
4.2 Limitation on Aggregate Value of Shares Subject to Incentive
Option. The aggregate fair market value (determined in accordance with
Section 6.3) as of the date of the grant of shares with respect to which
options are exercisable for the first time by an optionee during any
calendar year shall not exceed $100,000.
4.3 Limitation for Certain Shareholders. Any person who owns stock
possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Corporation or its Subsidiaries may not
receive an Incentive Option under the Plan, unless at the time an option is
granted to such person the option price is at lease one hundred ten percent
(110%) of the fair value market value of the shares and the option is not
exercisable after the expiration of five (5) years from the date of the
grant. For purposes of this Section 4.3 a person shall be considered as
owning the shares owned, directly or indirectly, by or for his brothers and
sisters (whether in whole or half blood), spouse, ancestors, and lineal
descendants, and the shares owned, directly or indirectly, by and for a
corporation, partnership, estate or trust shall be considered as being
owned proportionately by or for its shareholders, partners or
beneficiaries.
4.4 Term of Incentive Option. Each Incentive Option granted under the
Plan shall not be exercisable more than 10 years from the date the option
is granted.
5. Terms and Conditions of Non-Incentive Options. In addition to
Incentive Options, options not qualifying as Incentive Options may be granted
under this Plan ("Non-Incentive Options"). Certain special terms and conditions
apply to Non-Incentive Options, as set forth below:
5.1 Eligibility. The individuals who shall be eligible for the grant
of Non-Incentive Options shall be directors, officers and employees of the
Corporation or any Subsidiary (as defined in Section 4.1 above) as the
Board of Directors of the Corporation shall determine from time to time.
5.2 Term of Option. Any Non-Incentive Option granted under the Plan
shall be for a term of more than 10 but less than 15 years, as specified at
the time of the grant.
6. Terms and Conditions for All Options. The following terms and
conditions shall apply to all options granted under the Plan.
6.1 Medium and Time of Payment. The option price shall be payable in
United States Dollars upon the exercise of the option and may be paid in
cash or by certified check, bank draft or money order payable to the order
of the Corporation, or if so determined by the Board of Directors, the
option price may be paid in property or in installment payments.
6.2 Number of Shares. The option shall state the total number of
shares to which it pertains.
6.3 Option Price. The option price shall be not less than the fair
market value, as determined by the Board of Directors, of the shares of
Common Stock of the Corporation on the date of the granting of the option.
The fair market value shall be the last sale price as reported on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") National Market System with respect to the trading day on which
the grant of the option occurs or on the first preceding day on which
trading is reported if the grant occurs on a day when there is no trading
in shares. If the shares are not listed on the NASDAQ National Market
System system, the fair market value may be established in any other manner
as the Board of Directors or the Stock Option Committee in good faith
determines.
6.4 Date of Exercise. Options shall be exercisable at the rate of 20%
of the number of shares covered thereby per year beginning one year from
the date of grant, unless otherwise provided by the Board of Directors or
the Stock Option Committee at the time the option is granted. After
becoming exercisable, the option may be exercised at any time and from time
to time in whole or in part until termination of the option as set forth in
Sections 4.5, 5.2 or 6.5.
6.5 Termination of Employment; Death of Employee. In the event that an
optionee's employment by the Corporation shall terminate, his option
whether or not then exercisable shall terminate immediately; provided,
however, that if the termination is not as a result of embezzlement, theft,
other violation of law, or termination by the Corporation for cause, the
optionee shall have the right to exercise his option (to the extent
exercisable at the date of termination) at any time within 30 days after
such termination; provided, further, that if any termination of employment
is related to retirement with the consent of the Corporation the optionee
shall have the right to exercise his option (to the extent exercisable up
to the date of retirement) at any time within 3 months after such
retirement; and provided, further, that if the optionee shall die while in
the employment of the Corporation or within the period of time after
termination of employment or retirement during which he was entitled to
exercise his option as herein provided, his estate, personal
representative, or beneficiary shall have the right to exercise his option
(to the extent exercisable at the date of death) at any time within 12
months from the date of his death.
Retirement by an optionee at his normal retirement date in accordance
with provisions of any retirement plan of the Corporation or a Subsidiary under
which the optionee is then covered shall be deemed to be a retirement with the
consent of the Corporation. Whether any other termination of employment is to be
considered a retirement with the consent of the Corporation and whether an
authorized leave of absence on military or government service or for other
reasons shall constitute a termination of employment for the purposes of the
Plan, shall be determined by the Board of Directors, or Stock Option Committee,
if any, which determination shall be final and conclusive; provided, however,
that where the period of leave exceeds 90 days and where the individual's
employment is not guaranteed by statute or contract, the employment relationship
will be deemed to have been terminated on the 91st day of any leave. Employment
by the Corporation shall be deemed to include employment by, and to continue
during any period in which an optionee is in the employment of, a Subsidiary.
6.6 Recapitalization. The aggregate number of shares of Common Stock
on which options may be granted to persons participating under the Plan,
the number of shares thereof covered by each outstanding option, and the
price per share thereof in each such option, shall all be proportionately
adjusted for any increase or decrease in the number of issued shares of
Common Stock of the Corporation resulting from a subdivision or
consolidation of shares or other capital adjustment, or the payment of a
stock dividend or other increase or decrease in such shares, effected
without receipt of consideration by the Corporation; provided, however,
that any fractional shares resulting from any such adjustment shall be
eliminated.
In the event of a change in the Corporation's Common Stock which is
limited to a change in the designation thereof to "Capital Stock" or other
similar designation, or a change in the par value thereof, or from par value to
no par value, without increase in the number of issued shares, the shares
resulting from any such change shall be deemed to be Common Stock within the
meaning of the Plan.
6.7 Reorganization of Corporation. Subject to any required action by
the stockholders, if the Corporation shall be the surviving or resulting
corporation in any merger or consolidation which does not result in change
of control of the Corporation, 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 Corporation or a merger or
consolidation in which the Corporation is not the surviving or resulting
corporation or which results in a change in control of the Corporation, or
a tender or exchange offer which results in a change in control of the
Corporation, the Board of Directors or the Stock Option Committee shall
determine: (i) whether all or any part of the unexercised portion of any
option outstanding under the Plan shall terminate; (ii) whether the options
hall become immediately exercisable; or (iii) 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
hereunder.
6.8 Assignability. No option shall be assignable or transferable
except by will or by the laws of descent and distribution. During the
lifetime of an optionee, the option shall be exercisable only by him.
6.9 Optionee's Agreement. If, at the time of the exercise of any
option, it is necessary or desirable, in order to comply with any
applicable laws or regulations relating to the sale of securities, that the
optionee exercising the option shall agree that he will purchase the shares
that are subject to the option for investment and not with any present
intention to resell the same, the optionee will, upon the request of the
Corporation, execute and deliver to the Corporation an agreement to such
effect.
6.10 Rights as a Stockholder. An optionee shall have no rights as a
stockholder with respect to shares covered by his option until the date of
the issuance of the shares to him and only after such shares are fully
paid.
6.11 Other Provisions. The option agreements authorized under the Plan
may contain such other provisions as the Board of Directors shall deem
advisable.
7. Term of Plan. No stock option shall be granted pursuant to the Plan
after December 31, 1995.
8. Amendments. The Board of Directors may from time to time amend,
alter, suspend, or discontinue the Plan or alter or amend (including decrease of
option price by cancellation and substitution of options or otherwise) any and
all option agreements granted thereunder; provided, however, that no such action
of the Board of Directors may, without approval of the stockholders, alter the
provisions of the Plan so as to (a) materially increase the benefits accruing to
participants under the Plan; (b) materially increase the number of securities
which may be issued under the Plan; or (c) materially modify the requirements as
to eligibility for participation in the Plan; and provided, further, that no
amendment may, without the consent of the optionee, affect any then outstanding
options or unexercised portions thereof.
9. No Obligation to Exercise Option. The granting of an option shall
impose no obligation upon the optionee to exercise such an option.
10. Registration under Securities Act of 1933. Provided that the
Corporation is filing reports with the Securities and Exchange Commission
pursuant to Section 15(d) of the Securities Exchange Act of 1934 or has a class
of equity securities registered pursuant to the Securities Exchange Act of 1934,
the Corporation will use its best efforts to cause the Common Stock which may be
acquired pursuant to the exercise of any option to be registered under the
Securities Act of 1933.
11. Stockholder Approval. This Plan and the options granted pursuant
to the Plan, shall be submitted to the stockholders of the Corporation for
approval and any option granted prior to such approval shall not be exercisable
unless and until such approval is obtained.
EXHIBIT 4.2
<PAGE>
PRE-PAID LEGAL SERVICES, INC.
STOCK OPTION AGREEMENT
(Peter K. Grunebaum)
This Stock Option Agreement ("Agreement") is made this 4th day of June
1992, to be effective as of March 27, 1991, between Pre-Paid Legal Services,
Inc., an Oklahoma corporation ("Corporation"), and Peter K. Grunebaum, a
director of the Corporation ("Director").
In consideration of the mutual covenants hereinafter set forth and for
other good and valuable consideration, in accordance with the resolution of the
Board of Directors of the Corporation adopted this date ratifying the terms of
this Agreement, the parties agree as follows:
1. Grant of Stock Options.
1.01 Prior Meetings. In consideration of Director's services as a
member of the Board of Directors of the Corporation in connection with
meetings of the Board held during 1991 and part of 1992, the Corporation
hereby irrevocably grants to Director the right and option to purchase
effective as of the following dates (individually referred to herein as the
"Grant Date") the number of shares of Common Stock, par value $.01 per
share, of the Corporation on the terms and conditions herein set forth:
Exercise
Grant Date Shares Price/Share
March 27, 1991 2,500 $ .56
June 4, 1991 2,500 $1.00
October 1, 1991 2,500 $1.25
December 17, 1991 2,500 $ .94
March 26, 1992 2,500 $1.25
June 3, 1992 5,000 $1.13
1.02 Future Meetings. From and after the execution date hereof,
through December 31, 1996 options covering 2,500 shares of Common Stock
shall be granted to Director for each meeting of the full Board of
Directors of Corporation held during such period at which Director is
present ("Meeting"), effective as of the date of each such Meeting;
provided, however, options may no longer be granted to Director hereunder
if at any time he becomes an employee of Corporation.
2. Purchase Price.
2.01 Previously Granted Options. The purchase price for shares of
Common Stock subject to the options described in subsection 1.01 above
shall be equal to the Exercise Price/Share of each such option set forth
above.
2.02 Future Options. The purchase price for shares subject to options
which may be granted hereunder with respect to Meetings shall be equal to
the last trade price per share of Common Stock on the date of the Meeting,
or, if no trade occurs on such date, then the purchase price shall be the
mean between the bid and asked price on such date. If the date of any
Meeting is not a business day, then the purchase price shall be established
as described in the preceding sentence based upon the trading activity of
Common Stock for the business day next preceding the date of such Meeting.
3. Fully Vested. All or any portion of the options granted hereby
shall be fully exercisable at any time and from time to time commencing as of
the date of grant and throughout the entire term of such option.
4. Term of Options. The right to exercise any options granted
hereunder shall expire on the date five years after the date of grant of such
option. Director shall have none of the rights of a stockholder with respect to
the shares of Common Stock subject to the options until such shares shall be
issued to him upon the exercise of the option. The options may not be exercised
at a time when the exercise thereof would constitute a violation of any
applicable Federal or State law or valid regulation thereunder.
5. Nontransferability. The options shall not be assignable or
transferable by Director, other than by will or the laws of descent or
distribution. During the life of Director, the options are only exercisable by
Director. If Director shall die at a time during which he is entitled to
exercise options as herein provided, his estate, personal representative, or
beneficiary shall have the right to exercise such option(s) to the extent
exercisable at the date of death at any time within twelve months from the date
of his death. More particularly (but without limiting the generality of the
foregoing), the options may not be assigned, transferred (except as provided
above), pledged or hypothecated in any way (whether by operation of law or
otherwise), and shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the options contrary to the provisions hereof, and the levy of
any execution, attachment or similar process upon the options shall be null and
void and without effect.
6. Recapitalization. The aggregate number of shares of Common Stock on
which options may be granted to Director under this Agreement, the number of
shares hereof covered by each outstanding option, and the exercise price per
share thereof, of each such option, shall all be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock of the
Corporation resulting from a subdivision or consolidation of shares or other
capital adjustment, or the payment of a stock dividend or other increase or
decrease in such shares, effected without receipt of consideration by the
Corporation; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated.
In the event of a change in the Corporation's Common Stock which is
limited to a change in the designation thereof to "Capital Stock" or other
similar designation, or a change in the par value thereof, or from par value to
no par value, without increase in the number of issued shares, the shares
resulting from any such change shall be deemed to be Common Stock within the
meaning of this Agreement.
7. Exercise of Options. Subject to the terms and conditions of this
Agreement, any of the options may be exercised by written notice to the
Corporation, Pre-Paid Legal Services, Inc., 321 East Main Street, Post Office
Box 145, Ada, Oklahoma 74820, attention of the Secretary, which notice shall
state the election to exercise the options and the number of shares in respect
of which it is being exercised; and shall be signed by the person or persons who
exercise the options. All shares issued as provided herein will be fully paid
and nonassessable.
8. Restricted Stock. No option shall be exercisable unless the shares
issuable upon exercise thereof have been registered under the Securities Act of
1933 (the "Act"), or Corporation shall have first received the opinion of its
counsel that registration under the Act is not required in connection with such
issuance. At the time of exercise, if the shares with respect to which the
option is being exercised have not been registered under the Act, the
Corporation may required the optionee to give Corporation whatever written
assurance counsel for Corporation may require that the shares are being acquired
for investment and not with a view to the distribution thereof, and that the
shares will not be disposed without the written opinion of such counsel that
registration under the Act is not required. Share certificates issued to the
optionee upon exercise of the options shall bear a legend to the foregoing
effect to the extent counsel for Corporation deems advisable. Shares will not be
issued pursuant to the exercise of any option until appropriate provisions have
been made under rules, if applicable, of any stock exchange or association of
securities dealers that may be involved in trading of such shares.
9. Availability of Shares. The Corporation shall at all times during
the term of the options reserve and keep available in the form of treasury or
authorized and unissued stock such number of shares of Common Stock as will be
sufficient to satisfy the requirements of this Agreement, shall pay all original
issue taxes with respect to the issue of shares pursuant hereto and all other
fees and expenses necessarily incurred by the Corporation in connection
therewith, and will from time to time use its best efforts to comply with all
laws and regulations which, in the opinion of counsel for the Corporation, shall
be applicable thereto.
10. Governing Law. This Agreement shall be subject to, and governed
by, the laws of the State of Oklahoma irrespective of the fact that one or more
of the parties now is, or may become, a resident of a different state.
<PAGE>
11. Construction. In the event any parts of this Agreement are found
to be void, the remaining provisions of this Agreement shall nevertheless be
binding with the same effect as though the void parts were deleted.
12. Section Headings. Section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Director has hereunto set
his hand and seal, all on the day and year first above written.
PRE-PAID LEGAL SERVICES, INC.
By: /s/ RANDY HARP
Authorized Officer
/s/ PETER K. GRUNEBAUM
Peter K. Grunebaum
<PAGE>
PRE-PAID LEGAL SERVICES, INC.
STOCK OPTION AGREEMENT
(Charles H. Walls)
This Stock Option Agreement ("Agreement") is made this 27th day of June
1994, to be effective as of March 16, 1993, between Pre-Paid Legal Services,
Inc., an Oklahoma corporation ("Corporation"), and Charles H. Walls, a director
of the Corporation ("Director").
In consideration of the mutual covenants hereinafter set forth and for
other good and valuable consideration, in accordance with the resolution of the
Board of Directors of the Corporation adopted this date ratifying the terms of
this Agreement, the parties agree as follows:
1. Grant of Stock Options.
1.01 Prior Meetings. In consideration of Director's services as a
member of the Board of Directors of the Corporation in connection with
meetings of the Board held during 1993 and part of 1994, the Corporation
hereby irrevocably grants to Director the right and option to purchase
effective as of the following dates (individually referred to herein as the
"Grant Date") the number of shares of Common Stock, par value $.01 per
share, of the Corporation on the terms and conditions herein set forth:
Exercise
Grant Date Shares Price/Share
March 16, 1993 2,500 $1.19
June 4, 1993 2,500 $1.44
September 22, 1993 2,500 $1.25
December 15, 1993 2,500 $1.37
March 23, 1994 2,500 $2.13
June 3, 1994 2,500 $1.81
1.02 Future Meetings. From and after the execution date hereof,
through December 31, 1996 options covering 2,500 shares of Common Stock
shall be granted to Director for each meeting of the full Board of
Directors of Corporation held during such period at which Director is
present ("Meeting"), effective as of the date of each such Meeting;
provided, however, options may no longer be granted to Director hereunder
if at any time he becomes an employee of Corporation.
2. Purchase Price.
2.01 Previously Granted Options. The purchase price for shares of
Common Stock subject to the options described in subsection 1.01 above
shall be equal to the Exercise Price/Share of each such option set forth
above.
2.02 Future Options. The purchase price for shares subject to options
which may be granted hereunder with respect to Meetings shall be equal to
the last trade price per share of Common Stock on the date of the Meeting,
or, if no trade occurs on such date, then the purchase price shall be the
mean between the bid and asked price on such date. If the date of any
Meeting is not a business day, then the purchase price shall be established
as described in the preceding sentence based upon the trading activity of
Common Stock for the business day next preceding the date of such Meeting.
3. Fully Vested. All or any portion of the options granted hereby shall be
fully exercisable at any time and from time to time commencing as of the date of
grant and throughout the entire term of such option.
4. Term of Options. The right to exercise any options granted hereunder
shall expire on the date five years after the date of grant of such option.
Director shall have none of the rights of a stockholder with respect to the
shares of Common Stock subject to the options until such shares shall be issued
to him upon the exercise of the option. The options may not be exercised at a
time when the exercise thereof would constitute a violation of any applicable
Federal or State law or valid regulation thereunder.
5. Nontransferability. The options shall not be assignable or transferable
by Director, other than by will or the laws of descent or distribution. During
the life of Director, the options are only exercisable by Director. If Director
shall die at a time during which he is entitled to exercise options as herein
provided, his estate, personal representative, or beneficiary shall have the
right to exercise such option(s) to the extent exercisable at the date of death
at any time within twelve months from the date of his death. More particularly
(but without limiting the generality of the foregoing), the options may not be
assigned, transferred (except as provided above), pledged or hypothecated in any
way (whether by operation of law or otherwise), and shall not be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of the options contrary to the
provisions hereof, and the levy of any execution, attachment or similar process
upon the options shall be null and void and without effect.
6. Recapitalization. The aggregate number of shares of Common Stock on
which options may be granted to Director under this Agreement, the number of
shares hereof covered by each outstanding option, and the exercise price per
share thereof, of each such option, shall all be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock of the
Corporation resulting from a subdivision or consolidation of shares or other
capital adjustment, or the payment of a stock dividend or other increase or
decrease in such shares, effected without receipt of consideration by the
Corporation; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated.
In the event of a change in the Corporation's Common Stock which is limited
to a change in the designation thereof to "Capital Stock" or other similar
designation, or a change in the par value thereof, or from par value to no par
value, without increase in the number of issued shares, the shares resulting
from any such change shall be deemed to be Common Stock within the meaning of
this Agreement.
7. Exercise of Options. Subject to the terms and conditions of this
Agreement, any of the options may be exercised by written notice to the
Corporation, Pre-Paid Legal Services, Inc., 321 East Main Street, Post Office
Box 145, Ada, Oklahoma 74820, attention of the Secretary, which notice shall
state the election to exercise the options and the number of shares in respect
of which it is being exercised; and shall be signed by the person or persons who
exercise the options. All shares issued as provided herein will be fully paid
and nonassessable.
8. Restricted Stock. No option shall be exercisable unless the shares
issuable upon exercise thereof have been registered under the Securities Act of
1933 (the "Act"), or Corporation shall have first received the opinion of its
counsel that registration under the Act is not required in connection with such
issuance. At the time of exercise, if the shares with respect to which the
option is being exercised have not been registered under the Act, the
Corporation may required the optionee to give Corporation whatever written
assurance counsel for Corporation may require that the shares are being acquired
for investment and not with a view to the distribution thereof, and that the
shares will not be disposed without the written opinion of such counsel that
registration under the Act is not required. Share certificates issued to the
optionee upon exercise of the options shall bear a legend to the foregoing
effect to the extent counsel for Corporation deems advisable. Shares will not be
issued pursuant to the exercise of any option until appropriate provisions have
been made under rules, if applicable, of any stock exchange or association of
securities dealers that may be involved in trading of such shares.
9. Availability of Shares. The Corporation shall at all times during the
term of the options reserve and keep available in the form of treasury or
authorized and unissued stock such number of shares of Common Stock as will be
sufficient to satisfy the requirements of this Agreement, shall pay all original
issue taxes with respect to the issue of shares pursuant hereto and all other
fees and expenses necessarily incurred by the Corporation in connection
therewith, and will from time to time use its best efforts to comply with all
laws and regulations which, in the opinion of counsel for the Corporation, shall
be applicable thereto.
10. Governing Law. This Agreement shall be subject to, and governed by, the
laws of the State of Oklahoma irrespective of the fact that one or more of the
parties now is, or may become, a resident of a different state.
<PAGE>
11. Construction. In the event any parts of this Agreement are found to be
void, the remaining provisions of this Agreement shall nevertheless be binding
with the same effect as though the void parts were deleted.
12. Section Headings. Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be duly
executed by its officer thereunto duly authorized, and Director has hereunto set
his hand and seal, all on the day and year first above written.
PRE-PAID LEGAL SERVICES, INC.
By: /s/ RANDY HARP
Authorized Officer
/s/ CHARLES H. WALLS
Charles H. Walls
EXHIBIT 5.1
<PAGE>
September 14, 1995
Pre-Paid Legal Services, Inc.
321 East Main Street
Ada, Oklahoma 74820
Re: Pre-Paid Legal Services, Inc. - Registration Statement on Form S-8
Ladies and Gentlemen:
You have requested our advice with respect to the legality of the common
stock, $0.01 par value per share ("Common Stock"), of Pre-Paid Legal Services,
Inc. (the "Company") issuable upon exercise of options granted or to be granted
pursuant to the Company's Stock Option Plan (the "Plan") and issuable upon
exercise of options evidenced by option agreements with certain non-employee
directors of the Company (the "Non-Employee Director Option Agreements").
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 the 625,000 authorized but unissued shares of Common Stock or
treasury stock of the Company which may be issued pursuant to the Plan and the
75,000 authorized but unissued shares of Common Stock which may be issued
pursuant to the Non-Employee Director Option Agreements will, upon payment
therefor and delivery thereof in accordance with the Plan or the Non-Employee
Director Option Agreements, be validly issued, fully paid and non-assessable.
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 AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of Pre-Paid Legal Services, Inc. on Form S-8 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.
/s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Oklahoma City, Oklahoma
September 14, 1995
EXHIBIT 23.3
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 and in the related Prospectus 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.
/s/ PRICE WATERHOUSE LLP
Price Waterhouse LLP
Dallas, Texas
September 14, 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-8 relating to
the Stock Option Plan and options granted to certain non-employee directors of
Pre-Paid Legal Services, Inc., 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 Board September 14, 1995
Harland C. Stonecipher 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-8 relating to the Stock Option Plan and options granted to certain
non-employee directors of Pre-Paid Legal Services, Inc., 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 September 14, 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-8 relating
to the Stock Option Plan and options granted to certain non-employee directors
of Pre-Paid Legal Services, Inc., 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, September 14, 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-8 relating to the Stock Option Plan and options granted to certain
non-employee directors of Pre-Paid Legal Services, Inc., 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 September 14, 1995
Jack Mildren and Director
/s/ WILBURN L. SMITH Director September 14, 1995
Wilburn L. Smith
/s/ CHARLES H. WALLS Director September 14, 1995
Charles H. Walls
/s/ PETER K. GRUNEBAUM Director September 14, 1995
Peter K. Grunebaum
