As filed with the Securities and Exchange Commission on November 21, 1997.
Registration No. 333-__________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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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) (580) 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
(580) 436-1234
(Name, address, including zip code, and 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
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]
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------ ----------------- ---------------- ---------------- -----------------
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 Registration Fee
Price(1)
- ------------------------------------ ----------------- ---------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 per 200,000 $32.69 $6,538,000 $1,981
share
- ------------------------------------ ----------------- ---------------- ---------------- -----------------
</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 November 7, 1997.
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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.
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<PAGE>
PROSPECTUS
PRE-PAID LEGAL SERVICES, INC.
ASSOCIATE INVESTMENT CLUB STOCK PURCHASE PLAN
Common Stock
Pre-Paid Legal Services, Inc. (the "Company") hereby offers to eligible
Associates (as defined herein) participation in its Associate Investment Club
Stock Purchase Plan (the "Plan"). The Plan is designed to provide to Associates
a convenient and economical way to purchase shares of the Company's common
stock, par value $ .01 per share ("Common Stock"), by making cash payments into
the Plan which are then applied to the purchase of Common Stock. A question and
answer statement of the provisions of the Plan and guidelines for participation
therein is included elsewhere in this Prospectus. See "Description of Associate
Investment Club Stock Purchase Plan." The Common Stock of the Company is listed
in the American Stock Exchange under the symbol "PPD."
Shares of Common Stock acquired pursuant to the Plan will be purchased in
the open market or in privately negotiated transactions with other shareholders,
including the "Selling Shareholder" identified elsewhere herein. See "Selling
Shareholder." If and when the Company, at its option, makes shares available for
purchase into the Plan, shares may also be purchased directly from the Company.
Shares acquired under the Plan will be acquired at 100% of the applicable market
price, as defined under Question 15 in this Prospectus.
Plan Participants will not be required to pay any administrative fees in
connection with participation in the Plan. Plan Participants will be required to
pay brokerage commissions or other charges, if any, incurred in connection with
the acquisition of shares under the Plan. All other costs of administering the
Plan will be paid by the Company.
It is recommended that this Prospectus be retained by participating
Associates for future reference.
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 November ___, 1997.
<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. In addition, the Commission maintains a
web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission
at http://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 at 86
Trinity Place, New York, New York 10006.
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-K for the year ended December 31,
1996, as amended.
2. The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 1997.
3. The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1997.
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997.
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 (580)
436-1234.
<PAGE>
TABLE OF CONTENTS
Available Information..................................................
Incorporation of Certain Documents by Reference........................
The Company............................................................
Description of Associate Investment Club Stock Purchase Plan...........
Use of Proceeds........................................................
Selling Shareholder....................................................
Indemnification and Limitation of Liability of Officers and Directors..
Legal Matters..........................................................
Experts................................................................
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 (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
(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 25 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
(580) 436-1234.
DESCRIPTION OF ASSOCIATE INVESTMENT CLUB STOCK PURCHASE PLAN
The following is a question and answer statement of the provisions of
the Associate Investment Club Stock Purchase Plan (the "Plan") offered to
eligible Associates.
1. What is the purpose of the Plan?
The Plan provides to Associates a convenient and economical way to
purchase shares of the Company's Common Stock. By facilitating share ownership
among Associates, the Plan is intended to foster enhanced financial interest
among Associates in the long-term growth and financial success of the Company.
2. Who administers the Plan for Participants?
The Company currently administers the Plan for participants, keeping
records, sending statements of transactions to participants and performing other
duties relating to the Plan. The Company may, if it deems it desirable,
designate a bank or trust company to administer the Plan and to act as agent for
participating Associates. The Company has authority in its sole discretion among
other things (i) to establish or modify eligibility standards under the Plan,
(ii) to deny or terminate a participant's participation in the Plan for any
reason whatsoever, (iii) to adopt or modify rules and procedures with respect to
the Plan, and (iv) to amend or terminate the Plan at any time and to make such
other determinations under the Plan as the Company deems necessary and
appropriate.
3. Who is eligible to participate in the Plan?
All "active" Associates of the Company are eligible to participate in
the Plan. Unless otherwise terminated by the Company, an Associate is considered
to be "active" for so long as the Associate originates sales of at least three
new legal service contracts per calendar quarter or maintains a personal legal
service contract with the Company. There is no limit on the number of "active"
Associates who may participate in the Plan.
4. How does an Associate participate in the Plan?
If an Associate is currently a participant in the Plan, no further
action will be required of the Associate to continue his or her participation.
If an eligible Associate is not currently a participant, such Associate may join
the Plan by completing and returning to the Company an Enrollment Form.
Enrollment Forms for the Plan are included in Associate enrollment packages and
also may be obtained at any time by written or telephonic request to Pre-Paid
Legal Services, Inc., Attn: Associate Investment Club, P.O. Box 145, Ada,
Oklahoma 74821-0145, telephone number (580) 436-1234.
5. When may an Associate join the Plan and when will participation commence?
An Associate may join the Plan at any time. Purchases on behalf of a new
participant will commence as promptly as practicable after the participant's
Enrollment Form is processed and an initial payment for shares to be purchased
under the Plan is received by the Company. See Question 10 below for information
concerning payments by participants and Question 13 below for information
concerning the timing of purchases under the Plan.
<PAGE>
6. What fees and costs are associated with participation in the Plan?
All brokerage commissions or charges and applicable transfer taxes in
connection with purchases of shares under the Plan relative to any monthly
Purchase Date (as defined in Question 13 below) are paid by the participants on
a pro rata basis in relation to the number of shares purchased on behalf of each
participant on such Purchase Date. All other costs of administration are paid by
the Company.
7. Are there minimum levels of investment required under the Plan?
A minimum investment of at least $25.00 per month is required in order
to participate in the Plan.
8. Is there a limit on how much a participant may invest under the Plan?
Each participant's level of participation is entirely within his or her
own discretion. The Plan has not established maximum investment limits at this
time but may due so in its sole discretion in the future.
9. May a participant make an initial or supplemental investment in the Plan in
addition to regular monthly investments?
Upon enrolling in the Plan , a participant may make a one-time initial
investment in the Plan in any amount. Such initial investment is not required,
and the decision whether or not to make such investment is entirely within the
discretion of the participant. After enrolling in the Plan, supplemental
investments, in addition to the Automatic Monthly Investment, may be made at the
Participant's discretion. Any initial or supplemental investment may be made by
check to the Company at the address set forth in Question 4 above. Payments
received by check will be processed as expeditiously as possible upon receipt,
but will not be applied for the purchase of shares for the applicable month
unless the processing of the payment is completed sufficiently in advance to
permit the Company to apply the funds to the applicable monthly purchase of
shares. Although processing time may vary, the Company requires that any
payments by check be delivered to the Company prior to the tenth day of each
month in order to be included in the current month's stock purchase.
10. How are payments made by participants under the Plan?
Except for initial and supplemental investments, participants must make
payments for shares to be purchased under the Plan by automatic electronic funds
transfer as described in Question 11 below.
11. What is the Automatic Monthly Investment feature of the Plan and how does it
work?
A participant must make his or her monthly investment of not less than
$25.00 per month by means of monthly automatic electronic funds transfers
("Automatic Monthly Investment") from an account designated by the participant
with a United States financial institution. To initiate Automatic Monthly
Investments, a participant must complete and return to the Company an Automatic
Monthly Investment Form with either an initial investment or a voided blank
check for the account from which funds are to be drawn. Automatic Monthly
Investment Forms are included in Associate enrollment packages and may also be
obtained at any time from the Company. Forms will be processed and will become
effective as soon as practicable after receipt by the Company.
Once Automatic Monthly Investment is initiated, funds will be drawn from
the participant's designated financial institution account on or about the
twelfth day of each month (the "Automatic Monthly Investment Date") and will
then be invested in Common Stock in accordance with the Company's investment
procedures described below.
A participant may change the amount of his or her Automatic Monthly
Investment by completing and submitting to the Company a new Automatic Monthly
Investment Form. Such new forms will be processed and will become effective as
soon as practicable after receipt by the Company. If a new Automatic Monthly
Investment Form is not received sufficiently in advance in order to become
effective with respect to the Automatic Monthly Investment for a particular
month, the existing Automatic Monthly Investment will be applied for such month
and the modified Automatic Monthly Investment will be applied for the next month
and thereafter until further modified or terminated.
A participant may terminate his or her Automatic Monthly Investment at
any time by notifying the Company in writing of such termination. Notices of
termination not received by the Company at least five (5) days prior to the
applicable Automatic Monthly Investment Date for such month will become
effective as of the next month.
12. What happens if a participant fails to make the minimum required monthly
investment?
If a participant fails to make the minimum required monthly investment
of at least $25.00, the Company may, in its discretion, terminate the
participant's further participation in the Plan. If participation is terminated,
a certificate for whole shares previously credited to the participant's account
will be issued to the participant along with cash payment for any fraction of a
share in such account.
13. When are payments from participants invested through the purchase of shares
under the Plan and from what sources are the shares purchased?
Purchases of Common Stock under the Plan for any month will be commenced
by the Company on or about the twentieth day of each month as determined by the
Company (the "Purchase Date") and will be completed as soon thereafter as is
practicable or at such later times as may be required in order to comply with
applicable federal securities laws. Such purchases may be made on any exchange
where the Common Stock is traded, in the over-the-counter market, or by
privately negotiated transactions with the Selling Shareholder identified
elsewhere herein or others. In addition, if and when the Company, in its
discretion, makes shares available for purchase into the Plan, shares may be
purchased directly from the Company. Should a Purchase Date fall on a date on
which the American Stock Exchange is not open, the Purchase Date will be the
next succeeding date on which the American Stock Exchange is open.
14. How many shares are purchased on behalf of participants?
The number of shares purchased on behalf of a participant for any month
depends on the amount of the participant's investment for the month. Each
participant is credited with the number of shares, including fractional shares,
equal to the total amount invested by the participant for the month divided by
the purchase price per share, including the participant's prorated portion of
brokerage charges or commissions, if any.
15. What will be the price to participants of shares purchased under the Plan?
The price to participants of shares purchased under the Plan will be
100% of the "market price" determined as set forth below. In the case of
purchases of Common Stock on the open market, the market price will be the
weighted average purchase price paid by the Company with respect to the shares
purchased for the applicable month, plus any brokerage charges or commissions.
In the case of shares of Common Stock purchased from the Company, the market
price is determined by averaging the high and low sales price of the Common
Stock as reported on the American Stock Exchange for the period of five (5)
trading days ending on the date of purchase from the Company. In the case of
privately negotiated purchases from the Selling Shareholder identified elsewhere
herein or others, the market price will be the negotiated price determined by
the Company and the Selling Shareholder or other seller, which may be less than
but will in no event exceed the applicable market price determined as set forth
above had the shares been purchased on the open market.
16. What kind of reports are sent to participants in the Plan?
Each participant in the Plan receives a statement of account at the end
of each calendar quarter. Interim reports, not more than one per month, are
available to participants upon special request. These statements are a
participant's continuing record of the dates and cost of purchases and should be
retained for income tax purposes. In addition, each participant receives all
communications sent to shareholders. Where two or more participants or
shareholder have the same address, only one copy of materials sent to
shareholders is sent to that address if all such persons agree thereto in
writing.
17. Are stock certificates issued for shares of Common Stock purchased under the
Plan?
Normally, certificates for Common Stock purchased under the Plan are not
issued to participants. The number of shares credited to an account under the
Plan is shown on the participant's statement of account. However, a participant
may receive certificates for full shares accumulated in his or her account under
the Plan at any time by sending a written request to the Company. Participants
will be assessed a handling fee of $10.00 per certificate for stock certificates
issued for less than one hundred (100) shares. If certificates for less than all
of the shares in a participant's account are issued, any remaining full shares
and fractional shares are reflected in the participant's account and the
participant remains enrolled in the Plan, unless the participant otherwise
terminates his or her participation. However, any participant whose account in
the Plan is reduced to zero as a result of the withdrawal of shares and who is
not participating in the Plan through an effective Automatic Monthly Investment
arrangement may be deemed by the Company to have withdrawn from the Plan.
Requests for issuance of certificates for shares of Common Stock which
are received by the Company will be processed as soon as practicable after
receipt.
Certificates for fractional shares are not issued under any
circumstances.
18. In whose name are accounts maintained and certificates registered when
issued?
Accounts in the Plan are maintained in the names in which the
participant registered at the time the participant entered the Plan.
Consequently, certificates for whole shares are similarly registered when
issued.
Upon written request, certificates may be issued in names other than the
account name, subject to compliance with any applicable laws and the payment by
the participant of any applicable taxes, provided that the request meets the
usual requirements of the Company for the recognition of a transfer of Common
Stock of the Company.
19. May a participant pledge to another person all or part of the participant's
interests in the Plan or the shares credited to the participant under the Plan?
A participant's rights under the Plan and shares credited to the account
of a participant under the Plan may not be pledged or transferred. A Participant
who wishes to pledge or transfer such shares must request that certificates for
such shares be issued in his or her name prior to any pledge or transfer.
However, as described under Question 18 above, certificates may be issued in the
name of the transferee.
20. When and how may a participant withdraw from the Plan?
A participant may withdraw from the Plan by giving written notice to the
Company that he or she wishes to withdraw. When a participant withdraws from the
Plan (or upon termination of the Plan or the participant's participation by the
Company), certificates for whole shares in the participant's account are issued
to the participant and cash payment is made for any fraction of a share in such
account. Requests for termination will be processed as promptly as possible
following receipt by the Company.
In order for a withdrawal and termination to become effective and to
terminate an upcoming draft on a participant's designated financial institution
account with respect to an Automatic Monthly Investment, the notice of
withdrawal should be delivered to the Company sufficiently in advance of the
applicable Automatic Monthly Investment Date.
In any event, if a notice of withdrawal is received by the Company at
least five (5) business days prior to a Purchase Date, the withdrawal will be
processed and any uninvested cash payments and Automatic Monthly Investments
will not be invested on the Purchase Date but will be returned to the
participant.
21. If the Company declares a cash dividend payable to holders of Common Stock,
how will the shares in the Plan be treated?
Although it is not presently the policy of the Company to pay any cash
dividends with respect to the Common Stock, if in the future the Company
declares a cash dividend with respect to the Common Stock, such dividends with
respect to shares credited to the account of a participant will be paid directly
to the participant in the same manner as to shareholders who are not
participants in the Plan.
22. What happens if the Company issues a stock dividend or declares a stock
split?
Any shares representing stock dividends or stock splits of Common Stock
distributed by the Company with respect to shares credited to the account of a
participant under the Plan will be added to the participant's account.
23. If the Company issues rights to purchase securities to the holders of Common
Stock, how will the rights attributable to shares held in the Plan be handled?
In the event that the Company makes available to the holders of Common
Stock rights to purchase additional shares of Common Stock or other securities,
the Company will distribute such rights accruing to shares of Common Stock to
the participants in the same manner as to shareholders who are not participants
in the Plan.
<PAGE>
24. How are shares credited to a participant's account under the Plan voted at
meetings of shareholders?
Full shares of Common Stock credited to the account of a participant
under the Plan are voted in accordance with instructions of the participant
given on an instruction form or proxy form furnished to the participant, or, if
the participant desires to vote in person at the meeting, a proxy to vote the
full number of shares credited to the participant's account under the Plan may
be obtained upon written request received by the Company at least fifteen days
before the meeting.
25. What are the Federal income tax consequences of participation in the Plan?
A participant will not realize gain or loss for Federal income tax
purposes at the time a participant acquires shares of Common Stock under the
Plan or in connection with the issuance to a participant, upon withdrawal from
the Plan or otherwise, of certificates evidencing shares acquired under the
Plan.
A participant's tax basis with respect to shares acquired under the Plan
will be the cost of the shares to the participant.
Upon receipt by a participant of cash payment under the Plan with
respect to a fractional share as a result of withdrawal from the Plan or
otherwise, and upon the sale of shares acquired under the Plan by a participant,
the participant will realize gain or loss in an amount equal to the difference
between the net proceeds received and the participant's tax basis in the
fractional share or the whole shares sold. If the shares are capital assets in
the participant's hands, such gain or loss will be capital gain or loss. Whether
the capital gain or loss realized is long-term or short-term depends upon the
holding period of the shares giving rise to the gain or loss. In general, if the
holding period is longer than eighteen months, such capital gain or loss will be
long-term. A participant's holding period for shares of Common Stock purchased
under the Plan will begin on the day following the day on which such shares were
credited to the participant's account.
The foregoing discussion is only a brief and general summary of the
Federal income tax considerations involved, and does not address state, local,
foreign or estate taxation. Participants are urged to consult their own tax
advisors to analyze, evaluate and determine all of the tax consequences of
participation in the Plan or of particular transactions in light of their
individual circumstances.
26. What is the responsibility of the Company under the Plan?
In administering the Plan, the Company is not liable for any act done in
good faith or for its good faith omission to act, including, without limitation,
any claim of liability arising out of failure to terminate a participant's
account upon such participant's death prior to receipt of notice in writing of
such death, or with respect to the prices at which shares are purchased or sold
for the participant's account and the times when such purchases or sales are
made, or with respect to any loss or fluctuation in the market value after the
purchase of shares.
27. May the Plan be changed or discontinued?
The Plan may be amended, suspended, modified or terminated at any time
without the approval of the participants. Notice of any such suspension or
termination or material amendment or modification will be sent to all
participants who shall in all events have the right to withdraw from the Plan as
described above.
28. How is the Plan to be interpreted?
Any question of interpretation arising under the Plan is determined by
the Company and any such determination is final.
29. Who bears the risk of market price fluctuations in the Common Stock?
A participant's investment in shares acquired under the Plan is not
different from investment in directly held shares in this regard. The
participant bears the risk of loss and realizes the benefits of any gain from
market price changes with respect to the Common Stock.
<PAGE>
USE OF PROCEEDS
The Company is unable to predict the number of shares of Common Stock,
if any, that may be purchased from it under the Plan or the prices at which such
shares may be purchased. The net proceeds from any sales by the Company of
Common Stock to the Plan will be added to the general funds of the Company and
will be used for working capital and other corporate purposes. The Company will
not receive any proceeds with respect to shares of Common Stock acquired in the
open market or from privately negotiated purchases from the Selling Shareholder
or others.
SELLING SHAREHOLDER
The Company may, from time to time, effect all or a portion of its
monthly acquisition of shares of Common Stock under the Plan through purchases
of shares owned by Harland C. Stonecipher. Mr. Stonecipher has been the Chairman
of the Board of Directors of the Company since its organization in 1976. Mr.
Stonecipher also served as Chief Executive Officer until March 1996 and since
January 1997. Mr. Stonecipher is referred to herein as the "Selling
Shareholder." The purchase price of shares acquired from the Selling Shareholder
will be such prices as may be negotiated between the Company and the Selling
Shareholder. Such prices may be less than, but will in no event be greater than,
the applicable market price had the shares been purchased on the open market, as
determined pursuant to Question 15 above. The Company believes that it may be
able to negotiate prices from the Selling Shareholder that are more favorable to
participants than applicable market prices. In addition, participants may
realize additional savings through the absence of broker's fees or commissions
in connection with the purchase of shares directly from the Selling Shareholder.
The Selling Shareholder owns as of the date of this prospectus 1,113,840
shares of Common Stock of the Company. The Selling Shareholder may make
available for purchase under the Plan up to 100,000 of such shares. If all of
such shares are sold in connection with the Plan and no other shares are
acquired by the Selling Shareholder, the Selling Shareholder would own 1,013,840
shares, representing 4.5% of the Company's outstanding Common Stock. The shares
proposed to be made available may or may not ultimately be sold by the Selling
Shareholder in connection with the Plan.
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.
<PAGE>
EXPERTS
The financial statements and related financial statement schedule
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 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.
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.
<PAGE>
II-4
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:
SEC Registration Fee........................................... $1,981
Legal Fees and Expenses........................................ 2,000
Accounting Fees and Expenses................................... 2,000
Miscellaneous Expenses......................................... 519
Total.......................................................... $6,500
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.
23.1 -- Consent of Crowe & Dunlevy, a Professional Corporation
(included in Exhibit 5.1).
23.2 -- Consent of Deloitte & Touche LLP.
24.1 -- Powers of Attorney.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement to:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such information
in this Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
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.
<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 November 20, 1997.
PRE-PAID LEGAL SERVICES, INC.
By: /s/ RANDY HARP
------------------------------
Randy Harp
Chief Financial Officer and
Chief Operating 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 November 20, 1997
- ------------------------- Directors and Chief
Harland C. Stonecipher Executive Officer
(Principal Executive Officer)
WILBURN L. SMITH* President and Director November 20, 1997
- -------------------------
Wilburn L. Smith
/s/ RANDY HARP Chief Operating Officer, November 20, 1997
- ------------------------- Chief Financial
Randy Harp Officer and Director
(Principal Financial Officer)
KATHLEEN S. PINSON* Vice President, Controller November 20, 1997
- ------------------------- and Director,
Kathleen S. Pinson (Principal Accounting Officer)
PETER K. GRUNEBAUM* Director November 20, 1997
- -------------------------
Peter K. Grunebaum
CHARLES H. WALLS* Director November 20, 1997
- -------------------------
Charles H. Walls
FRANCIS A. TARKENTON* Director November 20, 1997
- -------------------------
Francis A. Tarkenton
* By: /s/ RANDY HARP
- -------------------------
Randy Harp
Attorney-in-fact
INDEX TO EXHIBITS
Exhibit
No. Description
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.
24.1 Powers of Attorney.
EXHIBIT 5.1
<PAGE>
November 20, 1997
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 potential sale by the Company and a selling shareholder
("Selling Shareholder") of up to an aggregate of 200,000 shares of common stock,
$.01 par value per share ("Common Stock"), pursuant to the Company's Associate
Investment Club Stock Purchase Plan (the "Plan"). We understand that a
Registration Statement on Form S-3 (the "Registration Statement") will be filed
with the Securities and Exchange Commission on or about November , 1997. 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 shares of Common Stock that may be issued by the Company pursuant
to the Plan as described in the Registration Statement have been duly and
validly authorized for issuance and such shares, when issued by the Company and
sold to the Plan as described in the Registration Statement, will be validly
issued, fully paid and nonassessable.
2. The shares of Common Stock that may be sold by the Selling Shareholder
pursuant to the Plan as described in the Registration Statement are validly
issued, fully paid and nonassessable.
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/ J. BRADFORD HAMMOND
J. Bradford Hammond
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-3 of our report dated
February 13, 1997, appearing in the Annual Report on Form 10-K of Pre-Paid Legal
Services, Inc. for the year ended December 31, 1996, and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
Deloitte & Touche LLP
Tulsa, Oklahoma
November 20, 1997
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 shares of Common Stock of the Company
pursuant to the Company's Associate Investment Club Stock Purchase Plan 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 November 20, 1997
- ---------------------------- of Directors and Chief
Harland C. Stonecipher Executive Officer
<PAGE>
II-11
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 shares of Common Stock of the Company
pursuant to the Company's Associate Investment Club Stock Purchase Plan 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 Operating Officer, November 20, 1997
- ---------------------- Chief Financial
Randy Harp Officer and Director
<PAGE>
II-12
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 shares of Common Stock of the Company pursuant to the
Company's Associate Investment Club Stock Purchase Plan 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, Controller November 20,1997
- -------------------------- and Director
Kathleen S. Pinson
<PAGE>
II-13
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 shares of Common Stock of the
Company pursuant to the Company's Associate Investment Club Stock Purchase Plan
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/ WILBURN L. SMITH President and Director November 20, 1997
- -----------------------------
Wilburn L. Smith
/s/ PETER K. GRUNEBAUM Director November 20, 1997
- -----------------------------
Peter K. Grunebaum
/s/ CHARLES H. WALLS Director November 20, 1997
- -----------------------------
Charles H. Walls
/s/ FRANCIS A. TARKENTON Director November 20, 1997
- -----------------------------
Francis A. Tarkenton
