SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 13, 2000
PRE-PAID LEGAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 001-09293 73-1016728
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification No.)
incorporation)
321 East Main Street
Ada, Oklahoma 74820
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (580) 436-1234
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Item 5. Other Events.
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On June 30, 2000, Pre-Paid Legal Services, Inc. (the "Company")
completed the redemption of the remaining 1,027 outstanding shares of the
Company's $3.00 Cumulative Convertible Preferred Stock, par value $1.00 per
share ("$3.00 Preferred Stock"), and 10,585 shares of $1.00 Non-Cumulative
Convertible Special Preferred Stock, par value $1.00 per share ("$1.00 Special
Preferred Stock") resulting in total payments of $166,878.90. The shares of
$3.00 Preferred Stock and $1.00 Special Preferred Stock previously converted
into common stock, par value $.01 per share ("Common Stock"), or redeemed by
the Company according to their respective terms have returned to the status of
authorized but unissued shares of preferred stock, par value $1.00 per share,
and special preferred stock, par value $1.00 per shares, respectively. No shares
of $3.00 Preferred Stock or $1.00 Special Preferred Stock remain outstanding and
none will be issued in the future.
This Current Report on Form 8-K is filed for purposes of amending the
description of the Company's Common Stock previously filed in connection with
the registration of the Common Stock under Section 12(b) of the Securities
Exchange Act of 1934 in order to reflect the elimination of the $3.00 Preferred
Stock and the $1.00 Special Preferred Stock. The following is a description of
the Common Stock, as well as certain provisions of the Company's Certificate of
Incorporation affecting the holders of Common Stock. The following description
is qualified in its entirety by reference to the terms of the Company's Restated
Certificate of Incorporation contained as an exhibit hereto.
Authorized Shares
The Company's Certificate of Incorporation, authorizes the Company to
issue 400,000 shares of preferred stock, par value $1.00 per share, 500,000
shares of special preferred stock, par value $1.00 per share, and 100,000,000
shares of common stock, par value $0.01 per share.
The Board of Directors is authorized to issue the authorized but
unissued shares of preferred stock and special preferred stock in series and,
with respect to each series, to fix its designation, rights (including voting,
dividend, conversion, sinking fund and redemption rights), preferences
(including with respect to dividends and liquidation), qualifications,
restrictions and limitations. As of the date hereof, no shares of preferred
stock or special preferred stock were outstanding and no series of preferred
stock or special preferred stock were designated.
Common Stock
Holders of Common Stock are entitled to one vote for each share of
Common Stock held of record on each matter submitted to the stockholders.
Cumulative voting for the election of directors is not permitted and the holders
of a majority of the shares of Common Stock voting for the election of directors
will be able to elect all of the directors standing for election.
Subject to the rights of the holders of any class or series of stock at
the time ranking senior to the Common Stock as to the payment of dividends,
holders of record of Common Stock are entitled to receive dividends when, as and
if declared by the Board of Directors out of funds of the Company legally
available for the payment of dividends. In the event of the liquidation of the
Company, a holder of Common Stock will participate, pro rata, in any
distribution of the assets of the Company, subject to the prior rights of
holders of any class or series of stock then ranking senior to the Common Stock
as to liquidation. Holders of Common Stock have no conversion, redemption or
pre-emptive rights.
Certain Charter Provisions
The Company's Certificate of Incorporation provides that certain
business combinations involving the Company and persons beneficially owning 5%
or more of the outstanding voting stock of the Company ("Interested
Stockholder") may be effected only if, in addition to any approval of the
holders of any class or series of stock of the Company required by law or the
Company's Certificate of Incorporation, such business combination is approved by
the holders of not less than 80% of the voting power of all outstanding shares
of the Company's voting stock, voting as a single class at an annual meeting or
special meeting called for such purpose. Such an affirmative vote is not
required, however, for any business combination which shall have been authorized
by a majority of the Board of Directors of the Company prior to the time that
the Interested Stockholder became the beneficial owner of 5% or more of the
outstanding voting stock of the Company.
The Certificate of Incorporation provides that the directors of the
Company shall be divided into three classes as nearly equal in number as
possible. The term of each director is three years, and in each year the terms
of the directors in one class expire. Vacancies on the Board of Directors
resulting from the increase in the authorized number of directors or the
resignation or retirement of existing directors may only be filled by the
affirmative vote of 80% of the directors then in office. Directors may be
removed only by the affirmative vote of the holders of 80% of the shares
entitled to vote in an election of directors or by the affirmative vote of at
least two-thirds of the directors then in office.
The provisions of the Certificate of Incorporation relating to certain
business combinations with Interested Stockholders may only be amended with the
approval of 80% of the voting power of all outstanding shares of the Company's
voting stock, voting as a single class, and the provisions relating to election
of directors may only be amended with the approval of 80% of the voting power of
all outstanding shares then entitled to vote in an election of directors, voting
as a single class.
The provisions of the Certificate of Incorporation described above, as
well as the ability of the Board of Directors to issue shares of preferred stock
and special preferred stock and to set voting rights, preferences and other
terms thereof without further shareholder action, could work to delay or
frustrate the assumption of control of the Company by the holder of a large
block of the Company's capital stock or the removal of incumbent directors even
if such action would be beneficial to the stockholders as a whole and could
discourage or prevent a merger, tender offer or proxy contest even if such event
would be favorable to the interests of the stockholders. In particular, the
special vote required in connection with certain business combinations with
Interested Stockholders may make it easier for management to successfully oppose
certain proposed business combinations so long as it retains its present level
of ownership of the Company's Common Stock. Furthermore, even with the
cooperation of management, it may be difficult or impossible to obtain the
required 80% approval due to the widely held nature of the Common Stock and the
possibility that a significant number of stockholders may not vote at or return
proxies in connection with meetings called to approve Interested Stockholder
transactions.
By discouraging takeover attempts, these provisions may have the
incidental effect of inhibiting the temporary fluctuations of the market price
of the Company's Common Stock or other securities which may result from actual
or rumored takeover attempts. In addition, these provisions could limit or
reduce the price that investors might be willing to pay for the securities of
the Company and may limit the ability of security holders of the Company to
receive premium prices for their securities which an acquiring party might be
willing to pay in connection with the acquisition of control of the Company.
Item 7. Exhibits.
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The following exhibit is filed as a part of this Report:
Exhibit No. Description
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4.1 Restated Certificate of Incorporation of the Company as
filed with the Secretary of State of Oklahoma on August
29, 2000.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PRE-PAID LEGAL SERVICES, INC.
By:/s/ Randy Harp
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Randy Harp
Chief Operating Officer
Date: September 13, 2000
