PROSPECTUS Prospectus Filed
Pursuant to Rule 424(b)(3)
Registration Statement No. 333-15047
PRE-PAID LEGAL SERVICES, INC.
COMMON STOCK
This Prospectus relates to up to 328,531 shares of common stock, $0.01
par value per share ("Common Stock"), of Pre-Paid Legal Services, Inc. (the
"Company") which may be offered and sold from time to time by certain persons
named herein (the "Selling Shareholders"). The shares included in this
Prospectus for offer and sale by the Selling Shareholders consist of outstanding
shares of Common Stock and shares of Common Stock issuable upon exercise of
certain warrants of the Company. For more information, see "Selling
Shareholders" elsewhere herein.
The distribution of the shares included in this Prospectus by each
Selling Shareholder may be effected from time to time in one or more
transactions which may involve individual or private transactions, transactions
on the American Stock Exchange ("AMEX"), negotiated transactions or otherwise,
at market prices prevailing at the time of sale, at prices relating to such
prevailing market prices or at negotiated prices. In connection with such
transactions, the Selling Shareholders may employ dealers or agents who may
receive commissions for sales made by them. Additionally, dealers or agents may
acquire the shares or interests therein as pledgee and may, from time to time,
effect distributions of such shares or interests in such capacity.
No part of the proceeds of the sale by the Selling Shareholders of the
shares included in this Prospectus will be received by the Company. The Company
will bear expenses in connection with the offering of the shares estimated to be
approximately $7,000.
The Common Stock of the Company is listed on the AMEX under the symbol
"PPD."
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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.
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The date of this Prospectus is November 13, 1996.
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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 Commission also maintains a site on
the worldwide web at "www.sec.gov." 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, 1995.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996.
3. The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996.
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996.
5. 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.
TABLE OF CONTENTS
Available Information.......................................................
Incorporation of Certain Documents by Reference.............................
The Company.................................................................
Selling Shareholders........................................................
Indemnification and Limitation of Liability of Officers and Directors.......
Legal Matters...............................................................
Experts.....................................................................
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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.
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"Pre-Paid Legal Services (R)" is a registered trademark of the Company.
All rights are fully reserved.
<PAGE>
THE COMPANY
The Company develops, underwrites and markets legal expense plans
nationally. The plans provide for or reimburse legal service benefits, including
consultation, will preparation, traffic violation defense, automobile-related
criminal charges, letter writing, document preparation and review and a general
trial defense benefit. 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 plan
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 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.
SELLING SHAREHOLDERS
The following table sets forth as of October 23, 1996 certain information
known to the Company with respect to the beneficial ownership of shares of the
Company's Common Stock by each Selling Shareholder. Shares proposed to be
offered may or may not ultimately be sold by any Selling Shareholder.
Shares Beneficially Shares Shares Beneficially
Owned Prior to to be Owned After Offering(1)
Selling Shareholder Offering Sold Number Percent
------------------- -------- ---- ------ -------
Vince Eysoldt 126,031 (2) 126,031 - -
Wilburn L. Smith (3) 49,719 (4) 39,000 10,719 *
Kennith R. Moore 19,271 (5) 6,250 13,021 *
Murray Saltzman 2,500 (6) 2,500 - -
David A. Savula 64,250 (7) 62,500 1,750 *
Woody and Fran Alexander 9,289 (8) 2,500 6,789 *
Michael L. Smith 1,007 (9) 1,000 7 *
Dave Roller 4,437(10) 3,750 687 *
Kathryn Walden (11) 4,007(12) 3,750 257 *
Larry and Mary King 23,154(13) 3,750 19,404 *
Marilyn M. Thompson 5,184(14) 3,750 1,434 *
Jack and Shirley Clark 4,252(15) 3,750 502 *
The Staubach Foundation 85,000 60,000 25,000 *
Purcell Marian High School 2,000(16) 2,000 - -
Mark D. Eysoldt 2,000(16) 2,000 - -
Jill M. Eysoldt 2,000(16) 2,000 - -
Jeff P. Eysoldt 2,000(16) 2,000 - -
Rebecca Smith 2,000(16) 2,000 - -
__________________
* Less than 1%
(1) Assumes all shares proposed to be offered hereby are sold and no other
shares of Common Stock are purchased or sold.
(2) Includes 10,000 shares issuable upon exercise of outstanding warrants.
(3) Wilburn L. Smith currently serves as Vice President of Cooperative
Marketing Programs for the Company. Mr. Smith served as Vice President of
Marketing and Agency Director from 1991 until 1995. Mr. Smith was also a
director of the Company from 1993 until 1995.
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(4) Includes 39,000 shares issuable upon exercise of outstanding warrants.
(5) Includes 6,520 shares issuable upon exercise of outstanding warrants.
(6) Includes 2,500 shares issuable upon exercise of outstanding warrants.
(7) Includes 63,028 shares issuable upon exercise of outstanding warrants.
(8) Includes 3,038 shares issuable upon exercise of outstanding warrants.
(9) Includes 1,000 shares issuable upon exercise of outstanding warrants.
(10) Includes 3,750 shares issuable upon exercise of outstanding warrants.
(11) Kathryn Walden serves as Secretary and Director of Group Marketing for
the Company.
(12) Includes 3,907 shares issuable upon exercise of outstanding warrants.
(13) Includes 4,147 shares issuable upon exercise of outstanding warrants.
(14) Includes 5,184 shares issuable upon exercise of outstanding warrants.
(15) Includes 4,210 shares issuable upon exercise of outstanding warrants.
(16) Includes 2,000 shares issuable upon exercise of outstanding warrants.
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.
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.
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EXPERTS
The consolidated balance sheets of the Company as of December 31, 1994
and 1995 and the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the years then ended incorporated in
this Prospectus by reference from the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1995 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 statements of operations, changes in stockholders'
equity and cash flows for the year ended December 31, 1993 incorporated by
reference from the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1995 have been so incorporated in reliance on the reports 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.
