<PAGE> 1
As filed with the Securities and Exchange Commission on November 3, 1994
Registration Statement No. 33-____________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FRETTER, INC.
(Exact name of registrant as specified in its charter)
MICHIGAN 38-1557359
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
12501 GRAND RIVER
BRIGHTON, MICHIGAN 48116
(810) 220-5000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
FRETTER, INC. 1993 LONG TERM INCENTIVE PLAN
(Full title of the plan)
STUART GARSON, ESQ.
General Counsel
Fretter, Inc.
12501 Grand River
Brighton, Michigan 48116
(810) 220-5010
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES OF ALL COMMUNICATIONS TO:
DAVID D. WARNER, ESQ.
Jaffe, Raitt, Heuer & Weiss
Professional Corporation
One Woodward Avenue, Suite 2400
Detroit, Michigan 48226
(313) 961-8380
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered Offering Price Per Share(1) Aggregate Offering Price Registration Fee
- ------------------- ------------- ------------------------ ------------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock 3,264,000 1,785,000 @ $0.98 $6,748,631.30(1) $2,327.12(1)
1,006,550 @ $3.50
472,450 @ $3.125
</TABLE>
(1) The offering price and the registration fee have been calculated pursuant
to Rule 457(h) based on the average of the high and low prices reported on the
Nasdaq NMS on November 1, 1994.
In addition, pursuant to Rule 416(a) under the Securities Act of 1983, this
registration statement also covers any additional indeterminate number of
shares as may be issued as a result of the antidilution provisions of the 1993
Plan.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated
herein by reference:
(a) The Company's Annual Report on Form 10-K for its fiscal year ended
January 31, 1994.
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by the annual report
referred to in (a) above.
(c) The description of the Company's Common Stock contained in the
Company's registration statement under Section 12 of the Exchange Act,
including any amendment or report filed for the purpose of updating such
description.
In addition, all documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this
registration statement and 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 herein
by reference and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated, or deemed to be
incorporated, by reference herein shall be deemed to be modified or superseded
to the extent that a statement contained herein or in any subsequently filed
document which also is, or is deemed to be, incorporated by reference herein
modifies or supersedes such statement. Except as so modified or superseded,
such statement shall not be deemed to constitute a part of the Prospectus or
registration statement.
ITEM 4. DESCRIPTION OF COMMON STOCK
The Company's Common Stock is registered under Section 12 of the
Exchange Act.
ITEM 5. EXPERTS
The financial statements incorporated in this registration statement by
reference to the Company's Annual Report on Form 10-K for the fiscal year ended
January 31, 1994 have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm as
experts in auditing and accounting.
II-1
<PAGE> 3
ITEM 6. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Sections 561-565 of the Michigan Business Corporation Act (MCLA Section
Section 451.1561 - .1566) provide:
450.1561 INDEMNIFICATION OF CERTAIN PERSONS GENERALLY.
Section 561. A corporation has the power to indemnify a person who was
or is a party or is threatened to be made a party to a threatened,
pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative and whether formal or
informal, other than an action by or in the right of the corporation, by
reason of the fact that he or she is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, partner, trustee,
employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, or other enterprise, whether for
profit or not, against expenses, including attorneys' fees, judgments,
penalties, fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with the action, suit, or
proceeding, if the person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of
the corporation or its shareholders, and with respect to a criminal
action or proceeding, if the person had no reasonable cause to believe
his or her conduct was unlawful. The termination of an action, suit,
or proceeding by judgment, order, settlement, conviction or upon a plea
of nolo contendere or its equivalent does not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he or she reasonably believed to be in or not opposed to the best
interests of the corporation or its shareholders, and, with respect to
a criminal action or proceeding, had reasonable cause to believe that
his or her conduct was unlawful.
450.1562 ADDITIONAL PROVISIONS FOR INDEMNIFICATION OF CERTAIN PERSONS.
Section 562. A corporation has the power to indemnify a person who was
or is a party or is threatened to be made a party to a threatened,
pending, or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact
that he or she is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as
a director, officer, partner, trustee, employee, or agent of another
foreign or domestic corporation, partnership, joint venture, trust, or
other enterprise, whether for profit or not, against expenses,
including attorneys' fees, and amounts paid in settlement actually and
reasonably incurred by the person in connection with the action or
suit, if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of
the corporation or its shareholders. Indemnification shall not be made
for a claim, issue, or matter in which the person has been found liable
to the corporation except to the extent authorized in Section 564c.
II-2
<PAGE> 4
450.1563 INDEMNIFICATION AGAINST ACTUAL AND REASONABLE EXPENSES.
Section 563. To the extent that a director, officer, employee, or
agent of a corporation has been successful on the merits or otherwise
in defense of an action, suit, or proceeding referred to in Section 561
or 562, or in defense of a claim, issue, or matter in the action, suit,
or proceeding, he or she shall be indemnified against actual and
reasonable expenses, including attorneys' fees, incurred by him or her
in connection with the action, suit, or proceeding and an action, suit,
or proceeding brought to enforce the mandatory indemnification provided
in this section.
450.1564A INDEMNIFICATION UNDER SECTION SECTION 450.561 OR 450.562;
DETERMINATION AND EVALUATION; DESIGNATION OF COMMITTEE OR SELECTION OF
INDEPENDENT LEGAL COUNSEL PARTIAL INDEMNIFICATION.
Section 564(a). (1) An indemnification under section 561 or 562,
unless ordered by the Court shall be made by the corporation only as
authorized in the specific case upon a determination that
indemnification of the director, officer, employee, or agent is proper
in the circumstances because he or she has met the applicable standard
of conduct set forth in sections 561 and 562 and upon an evaluation of
the reasonableness of expenses and amounts paid in settlement. This
determination and evaluation shall be made in any of the following
ways:
(a) By a majority vote of a quorum of the board consisting of
directors who are not parties or threatened to be made parties to
the action, suit or proceeding.
(b) If a quorum cannot be obtained under subdivision (a), by
majority vote of a committee duly designated by the board and
consisting solely of two or more directors not at the time parties
or threatened to be made parties to the action, suit, or
proceeding.
(c) By independent legal counsel in a written opinion, which
counsel shall be selected in one of the following ways:
(i) By the board or its committee in the manner prescribed in
subdivision (a) or (b).
(ii) If a quorum of the board cannot be obtained under
subdivision (a) and a committee cannot be designated under
subdivision (b), by the board.
(d) By all independent directors who are not parties or threatened
to be made parties to the action, suit or proceeding.
(e) By the shareholders, but shares held by directors, offices,
employees, or agents who are parties or threatened to be made
parties to the action, suit, or proceeding may not be voted.
II-3
<PAGE> 5
(2) In the designation of a committee under subsection (1)(b) or in
the selection of independent legal counsel under subsection (1)(c)(ii),
all directors may participate.
(3) If a person is entitled to indemnification under Section 561 or
562 for a portion of expenses, including reasonable attorneys' fees,
judgments, penalties, fines, and amounts paid in settlement, but not
for the total amount, the corporation may indemnify the person for the
portion of the expenses, judgments, penalties, fines, and amounts paid
in settlement, but not for the total amount, the corporation may
indemnify the person for the portion of the expenses, judgments,
penalties, fines or amounts paid in settlement for which the person is
entitled to be indemnified.
450.1564B PAYMENT OR REIMBURSEMENT OF A PARTY IN ADVANCE OF FINAL
DISPOSITION OF PROCEEDING; UNDERTAKING AS UNLIMITED GENERAL OBLIGATION;
DETERMINATIONS OF PAYMENTS.
Section 564b. (1) A corporation may pay or reimburse the reasonable
expenses incurred by a director, officer, employee, or agent who is a
party or threatened to be made a party to an action, suit, or
proceeding in advance of final disposition of the proceeding if all of
the following apply:
(a) The person furnishes the corporation a written affirmation of
his or her good faith belief that he or she has met the applicable
standard of conduct set forth in sections 561 and 562.
(b) The person furnishes the corporation a written undertaking,
executed personally or on his or her behalf, to repay the advance
if it is ultimately determined that he or she did not meet the
standard of conduct.
(c) A determination is made that the facts then known to those
making the determination would not preclude indemnification under
this act.
(2) The undertaking required by subsection(1)(b) must be an unlimited
general obligation of the person but need not be secured.
(3) Determinations of payments under this section shall be made in the
manner specified in section 564a.
450.1564C APPLICATION FOR INDEMNIFICATION TO COURT; DETERMINATION.
Section 564c. A director, officer, employee, or agent of the
corporation who is a party or threatened to be made a party to an
action, suit, or proceeding may apply for indemnification to the court
conducting the proceeding or to another court of competent
jurisdiction. On receipt of an application, the court after giving any
notice it considers necessary may order indemnification if it
determines that the person is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether or
not he or she met the applicable standard of conduct set forth in
sections 561 and 562 or was adjudged liable as described in section
562, but if he or she was adjudicated liable, his or her
indemnification is limited to reasonable expenses incurred.
II-4
<PAGE> 6
450.1565 LIMITATION ON TOTAL AMOUNT OF EXPENSES ADVANCED OR
INDEMNIFIED; DURATION OF INDEMNIFICATION.
Section 565. (1) The indemnification or advancement of expenses
provided under sections 561 to 564c is not exclusive of other rights to
which a person seeking indemnification or advancement of expenses may
be entitled under the articles of incorporation, bylaws, or a
contractual agreement. The total amount of expenses advanced or
indemnified from all sources combined shall not exceed the amount of
actual expenses incurred by the person seeking indemnification or
advancement of expenses.
(2) The indemnification provided for in sections 561 to 565
continues as to a person who ceases to be a director, officer,
employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of the person.
Section 2 of Article VIII of the Registrant's Articles of Incorporation
provides:
Section 2. Indemnification. The corporation shall indemnify any of its
directors and officers and may indemnify any of its employees and agents
(in each case including such person's heirs, executors, administrators and
legal representatives) who are made or threatened to be made a party to an
action, suit or proceeding (whether civil, criminal, administrative or
investigative) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation or serves or served at the
request of the corporation as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation, partnership,
joint venture, trust or other enterprise, whether for profit or not, to the
fullest extent authorized or permitted under the Act or other applicable
law, as the same presently exist or may hereafter be amended, but, in the
case of any such amendment, only to the extent that such amendment permits
the corporation to provide broader indemnification rights than authorized
or permitted before such amendment. Without limiting the generality of the
foregoing, the following provisions, except to the extent they limit the
indemnity which may be provided pursuant to the foregoing, shall apply:
2.1 -- Indemnification of Directors and Officers: Claims by Third
Parties. The corporation shall, to the fullest extent authorized or
permitted by the Act or other applicable law, as the same presently
exist or may hereafter be amended, but, in the case of any such
amendment, only to the extent such amendment permits the corporation to
provide broader indemnification rights than before such amendment,
indemnify a director or officer (the "Indemnitee") who was or is a
party or is threatened to be made a party to a threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal, other
than an action by or in the right of the corporation, by reason of the
fact that he or she is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation
as a director, officer, partner, trustee, employee, or agent of another
foreign or domestic corporation, partnership, joint venture, trust, or
other enterprise, whether for profit or not, against expenses,
including attorneys' fees, judgments, penalties, fines, and amounts
paid in settlement actually and reasonably incurred by him or her in
connection with the action, suit, or proceeding, if the Indemnitee
acted in good faith and in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation or its
shareholders, and with respect to a criminal action
II-5
<PAGE> 7
or proceeding, if the Indemnitee had no reasonable cause
to believe his or her conduct was unlawful. The termination of an
action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, does not, of
itself, create a presumption that the Indemnitee did not act in good
faith and in a manner which he or she reasonably believed to be in or
not opposed to the best interests of the corporation or its
shareholders, and, with respect to a criminal action or proceeding, had
reasonable cause to believe that his or her conduct was unlawful.
2.2 -- Indemnification of Directors and Officers: Claims Brought By or
In the Right of the Corporation. The corporation shall, to the fullest
extent authorized or permitted by the Act or other applicable law, as
the same presently exist or may hereafter be amended, but, in the case
of any such amendment, only to the extent such amendment permits the
corporation to provide broader indemnification rights than before such
amendment, indemnify a director or officer (the "Indemnitee") who was
or is a party to or is threatened to be made a party to a threatened,
pending, or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact
that he or she is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as
a director, officer, partner, trustee, employee, or agent of another
foreign or domestic corporation, partnership, joint venture, trust, or
other enterprise, whether for profit or not, against expenses,
including actual and reasonable attorneys' fees, and amounts paid in
settlement incurred by the Indemnitee in connection with the action or
suit, if the Indemnitee acted in good faith and in a manner the
Indemnitee reasonably believed to be in or not opposed to the best
interests of the corporation or its shareholders. However,
indemnification shall not be made under this subsection 2.2 for a
claim, issue, or matter in which the Indemnitee has been found liable
to the corporation unless and only to the extent that the court in
which the action or suit was brought has determined upon application
that, despite the adjudication of liability but in view of all
circumstances of the case, the Indemnitee is fairly and reasonably
entitled to indemnification for the expenses which the court considers
proper.
2.3 -- Actions Brought by the Indemnitee. Notwithstanding the
provisions of subsections 2.1 and 2.2, the corporation shall not be
required to indemnify an Indemnitee in connection with an action, suit,
proceeding or claim (or part thereof) brought or made by such
Indemnitee unless such action, suit, proceeding or claim (or part
thereof): (i) was authorized by the Board of Directors of the
corporation; or (ii) was brought or made to enforce this Section 2 and
the Indemnitee has been successful in such action, suit, proceeding or
claim (or part thereof).
2.4 -- Approval of Indemnification. An indemnification under
subsections 2.1 or 2.2 hereof unless ordered by a court, shall be made
by the corporation only as authorized in the specific case upon a
determination that indemnification of the Indemnitee is proper in the
circumstances because such Indemnitee has met the applicable standard
of conduct set forth in subsections 2.1 or 2.2, as the case may be.
This determination shall be made in any of the following ways:
(a) By a majority vote of a quorum of the Board consisting of
directors who were not parties to the action, suit, or proceeding.
II-6
<PAGE> 8
(b) If the quorum described in subdivision (a) is not obtainable,
then by a majority vote of a committee of directors who are not parties
to the action. The committee shall consist of not less than two (2)
disinterested directors.
(c) By independent legal counsel in a written opinion.
(d) By the shareholders.
2.5 -- Advancement of Expenses. Expenses incurred in defending a civil
or criminal action, suit, or proceeding described in subsections 2.1 or
2.2 above shall be paid by the corporation in advance of the final
disposition of the action, suit or proceeding upon receipt of an
undertaking by or on behalf of the Indemnitee to repay the expenses if
it is ultimately determined that the Indemnitee is not entitled to be
indemnified by the corporation. The undertaking shall be by unlimited
general obligation of the person on whose behalf advances are made but
need not be secured.
2.6 -- Partial Indemnification. If an Indemnitee is entitled to
indemnification under subsections 2.1 or 2.2 for a portion of expenses
including attorneys' fees, judgments, penalties, fines, and amounts
paid in settlement, but not for the total amount thereof, the
corporation shall indemnify the Indemnitee for the portion of the
expenses, judgments, penalties, fines, or amounts paid in settlement
for which the Indemnitee is entitled to be indemnified.
2.7 -- Indemnification of Employees and Agents. Any person who is not
covered by the foregoing provisions of this Section 2 and who is or was
an employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, partner, trustee,
employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, whether for
profit or not, may be indemnified to the fullest extent authorized or
permitted by the Act or other applicable law, as the same exist or may
hereafter be amended, but, in the case of any such amendment, only to
the extent such amendment permits the corporation to provide broader
indemnification rights than before such amendment, but in any event
only to the extent authorized at any time or from time to time by the
Board of Directors.
2.8 -- Other Rights of Indemnification. The indemnification or
advancement of expenses provided under subsections 2.1 through 2.7 is
not exclusive of other rights to which a person seeking indemnification
or advancement of expenses may be entitled under the Articles of
Incorporation or Bylaws, or an agreement. However, the total amount of
expenses advanced or indemnified from all sources combined shall not
exceed the amount of actual expenses incurred by the person seeking
indemnification or advancement of expenses. The indemnification
provided for in subsections 2.1 through 2.7 continues as to a person
who ceases to be a director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors, and administrators of the
person.
2.9 -- Definitions. "Other enterprise" shall include employee benefit
plans: "fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan: and "serving at the request
of the corporation" shall include any service as a director, officer,
employee, or agent of the corporation which imposes duties
II-7
<PAGE> 9
on, or involves services by, the director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
or she reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be considered to have
acted in a manner "not opposed to the best interests of the corporation
or its shareholders" as referred to in subsections 2.1 and 2.2.
2.10 -- Liability Insurance. The corporation shall have the power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation or is or was
serving at the request of the corporation as a director, officer,
partner, trustee, employee or agent of another corporation,
partnership, joint venture, trust, or other enterprise, whether for
profit or not, against any liability asserted against and incurred by
such person in any such capacity or arising out of such person's status
as such, regardless of whether or not the corporation would have the
power to indemnify such person against such liability under the
pertinent provisions of the Act.
2.11 -- Enforcement. If a claim under this Section 2 is not paid in
full by the corporation within thirty days after a written claim has
been received by the corporation, the claimant may at any time
thereafter bring suit against the corporation to recover the unpaid
amount of the claim, and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting
such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the corporation)
that the claimant has not met the standards of conduct which make it
permissible under the Act for the corporation to indemnify the claimant
for the amount claimed, but the burden of proving such defense shall be
on the corporation. Neither the failure of the corporation (including
its Board of Directors, a committee thereof, independent legal counsel,
or its shareholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is
proper in the circumstances because such claimant has met the
applicable standard of conduct set forth in the Act nor an actual
determination by the corporation (including its Board of Directors, a
committee thereof, independent legal counsel or its shareholders) that
the claimant has not met such applicable standard of conduct, shall be
a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
2.12 -- Contract with the Corporation. The right to indemnification
conferred in this Section 2 shall be deemed to be a contract right
between the corporation and each director or officer who serves in any
such capacity at any time while this Section 2 is in effect, and any
repeal or modification of this Section 2 shall not affect any rights or
obligations then existing with respect to any state of facts then or
theretofore existing or any action, suit or proceeding theretofore or
thereafter brought or threatened based in whole or in part upon any
such state of facts.
2.13 -- Application to a Resulting or Surviving Corporation or
Constituent Corporation. The definition for "corporation" found in
Section 569 of the Act, as the same exists or may hereafter be amended
is, and shall be, specifically excluded from application to this
Section 2. The indemnification and other obligations set forth in this
Section 2 of the corporation shall be binding upon any resulting or
II-8
<PAGE> 10
surviving corporation after any merger or consolidation with the
corporation. Notwithstanding anything to the contrary contained herein
or in Section 569 of the Act, no person shall be entitled to the
indemnification and other rights set forth in this Section 2 for acting
as a director or officer of another corporation prior to such other
corporation entering into a merger or consolidation with the
corporation.
2.14 -- Severability. Each and every paragraph, sentence, term and
provision of this Section 2 shall be considered severable in that, in
the event that a court finds any paragraph, sentence, term or provision
to be invalid or unenforceable, the validity and enforceability,
operation, or effect of the remaining paragraphs, sentences, terms or
provisions shall not be affected, and this Section 2 shall be construed
in all respects as if such invalid or unenforceable matter had been
omitted.
Also in connection with the matter of director and officer indemnification,
the Registrant has entered into indemnification agreements with its officers
and directors.
Indemnification available to a director or officer under the Registrant's
Articles of Incorporation or Bylaws could be changed without the consent of
such director or officer by amendment of the Articles of Incorporation or
Bylaws. By contrast, the indemnification agreements are intended to create
binding obligations of the Registrant which cannot unilaterally be changed by
the Registrant. In addition, the indemnification agreements are designed to
provide indemnification to directors and officers beyond what currently is
required by the Michigan Act or the Registrant's Articles of Incorporation.
A summary description of certain provisions of the indemnification
agreements follows.
The indemnification agreements require the Registrant to purchase and
maintain liability insurance coverage for the benefit of the person entering
into the agreement (the "Indemnitee"). However, the insurance coverage need
not be provided if in the reasonable business judgment of the Registrant's
Board of Directors the premium cost of such insurance is substantially
disproportionate to the coverage provided or the coverage provided is so
limited by exclusions that there is no substantial benefit to such insurance.
In such event, the Registrant agrees to provide a substitute for such liability
insurance to the extent reasonably available, which substitute may be in the
form of insurance issued by an affiliated issuer or insurance for which the
premiums may be adjusted retroactively based on claims experience, or similar
arrangements, or in the form of a trust fund or other form of funded
arrangement. If the Registrant does not purchase and maintain in effect
liability insurance at least comparable to that which is presently in effect,
then the Registrant is obligated to indemnify the Indemnitee to the full extent
of the coverage which otherwise would have been provided for the benefit of the
Indemnitee pursuant to such insurance.
Subject to certain limitations, an officer or director entering into such
an indemnification agreement is intended to be indemnified by the Registrant
against expenses and all other costs (including judgments, fines and
settlements) in connection with the proceedings described therein (which
include Registrant and derivative actions), without regard to whether he or she
is successful on the merits and without the necessity of a prior court
determination of entitlement to indemnification. Accordingly, the
indemnification agreements might require indemnification even where the conduct
giving rise to the claim for indemnification was negligent, grossly negligent
or reckless. In addition, the indemnification agreements might extend
indemnification to conduct that is alleged, but not finally adjudged by a
court, to be willful misconduct.
II-9
<PAGE> 11
Insofar as the Registrant knows, the question of the permissibility of
indemnification broader than that expressly provided for in Sections 561 and
562 of the Michigan Act has not been adjudicated by any Michigan court. A
court might consider the fact that the Michigan Act expressly authorizes such
indemnification with respect to other proceedings but not expressly with
respect to Registrant or derivative proceedings to be indicative that such
broader indemnification rights should not be enforceable in connection with
Registrant or derivative proceedings. Such an adjudication of unenforceability
probably would occur if and to the extent a court were to conclude that the
non-exclusivity provisions of Section 565(1) of the Michigan Act do not
authorize such broader indemnification in the agreements. In addition, it is
possible that a court, if required to consider the issue, could conclude that
such broader indemnification, while generally permissible and enforceable even
with respect to Registrant and derivative proceedings, should not be
enforceable in one or another particular context as a matter of public policy.
It is intended that such broader indemnification provisions of the
indemnification agreements entered into by the Registrant be fully enforceable
against the Registrant, subject to the express limitations of such agreements.
To the extent, if any, that it should be conclusively adjudicated that such
broader indemnification is prohibited by law, the Registrant would not be
required by the indemnification agreements to provide and would not provide
such indemnification.
The granting of indemnification or its equivalent under the agreements for
judgments or settlements in derivative proceedings is circular to a certain
extent, since any recovery from an indemnified party in a derivative proceeding
inures to the benefit of the Registrant but the Registrant may also be
responsible for indemnifying the indemnified party against such recovery.
The indemnification agreements further require the Registrant to pay
expenses incurred by the Indemnitee in defending actions subject to
indemnification promptly after request therefor in advance of a final
disposition of the action. The Indemnitee undertakes to repay, such amounts
unless ultimately determined not to be entitled to indemnification. The
Indemnitee's undertaking in this regard is an unlimited general obligation but
need not be secured.
In the event that the Indemnitee is required to commence an action to
enforce the agreement and is successful, the Registrant will be obligated to
reimburse the Indemnitee for the costs and expenses, including reasonable
attorneys fees, of such action. The indemnification agreement contains
miscellaneous other provisions including a specification of certain remedies
available to the Indemnitee and an undertaking by the Registrant to take all
necessary action, at its own expense, to secure the requisite shareholder
approval of one or more amendments to the Registrant's Articles of
Incorporation to limit the personal liability of directors of the Registrant to
the fullest extent permitted by the Michigan Act or any amendment thereof.
Finally, the indemnification agreements provide that in the event the
Registrant shall enter into any agreement to merge or consolidate with another
company or to sell, lease, exchange, transfer or otherwise dispose of all or
substantially all of its assets, or shall adopt a plan or proposal for a
spin-off, split-up, or split-off, it will provide in any such agreement, plan
or proposal, a provision pursuant to which the successor company shall assume
the obligations of the Registrant under the indemnification agreement and that
the successor company consents to and ratifies the agreement. Further, in the
event that a majority interest of the voting shares of the Registrant are sole
pursuant to a tender offer or purchase agreement approved or
II-10
<PAGE> 12
supported by the Board of Directors of the Registrant, the Registrant is
obligated to obtain an agreement with the acquiring party pursuant to which the
acquiring party assumes the liabilities and obligations of the Registrant under
the agreement, consents to and ratifies the indemnification agreement, and
guarantees the full, prompt and faithful payment, performance and discharge of
each of the provisions and conditions of the agreement.
In connection with the Registrant's acquisition in December 1993 of Dixons
U.S. Holdings, Inc. ("DUS") via the issuance of shares (the "Share Issuance"),
the Registrant agreed to certain indemnification and insurance arrangements.
The Registrant agreed to use its best efforts to obtain and maintain, for a
period of six years after the Share Issuance, a policy or policies of
directors' and officers' liability insurance ("D&O Insurance") insuring the
past directors and officers of DUS and its subsidiaries, on terms no less
favorable to the directors and officers than those of the Registrant's present
D&O Insurance policy. However, in no event shall the Registrant be obligated
to pay an annual cost of D&O Insurance in excess of $125,000. If D&O Insurance
with this coverage and premium limit is not available to the Registrant, the
Registrant must obtain the maximum insurance coverage available for $125,000
per year.
Also as part of the Share Issuance, the Registrant will be obligated to
indemnify the persons who prior to the Share Issuance were directors and
officers of DUS and its subsidiaries against liabilities arising out of their
service as such, to the extent that the D&O Insurance policy does not pay such
liability (unless the failure to pay is due to a breach of any obligation to
cooperate or assist in defense and settlement, or a refusal to consent to a
monetary settlement approved by the insurer). The Registrant's indemnification
liability will be no broader than the most restrictive of the indemnification
provisions (a) of the Registrant's present bylaws, or (b) under applicable
Michigan law.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The exhibits filed herewith are set forth on the exhibit index filed as
part of this registration statement.
ITEM 9. UNDERTAKINGS
(a) 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 include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, 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.
II-11
<PAGE> 13
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(e) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant 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. 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 and will be governed
by the final adjudication of such issue.
II-12
<PAGE> 14
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 Brighton, State of Michigan, on the 3rd day of
November, 1994.
Date: November 3, 1994 FRETTER, INC.
By: /s/ John B. Hurley
------------------------------------
John B. Hurley,
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME TITLE DATE
- ---- ----- ----
<S> <C> <C>
/s/ Ernest L. Grove, Jr. Chairman of the Board of Directors November 3,
- ---------------------------------- 1994
Ernest L. Grove, Jr.
/s/ John B. Hurley President, Chief Executive Officer, Chief November 3,
- ---------------------------------- Financial Officer and Director 1994
John B. Hurley
/s/ Dale R. Campbell Executive Vice President, Treasurer, November 3,
- ---------------------------------- Principal Accounting Officer and Director 1994
Dale R. Campbell
/s/ Oliver L. Fretter Director November 3,
- ---------------------------------- 1994
Oliver L. Fretter
/s/ Peter A. Dow Director November 3,
- ---------------------------------- 1994
Peter A. Dow
Director November 3,
- ---------------------------------- 1994
Brian K. Friedman
Director November 3,
- ---------------------------------- 1994
Robert Shrager
</TABLE>
II-13
<PAGE> 15
FRETTER, INC.
EXHIBIT INDEX
<TABLE>
<Caption
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
Incorporated Page
Exhibit Herein by Filed Number
No. Description Reference to: Herewith Herein
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
5.0 Opinion of Jaffe, Raitt, Heuer & X
Weiss, Professional Corporation,
regarding legality of the
Common Stock
24.1 Consent of Jaffe, Raitt, Heuer & X See Exhibit
Weiss, Professional Corporation 5.0
24.2 Consent of Price Waterhouse LLP X
</TABLE>
II-14
<PAGE> 1
EXHIBIT 5.0
DAVID D. WARNER
November 2, 1994
Fretter, Inc.
12501 Grand River
Brighton, Michigan 48116
Dear Sirs/Mesdames:
We have acted as special counsel to Fretter, Inc., a Michigan corporation
(the "Company"), in connection with the registration by the Company under the
Securities Act of 1933 on the Form S-8 Registration Statement to which this
opinion is an exhibit (the "Registration Statement") of 3,264,000 shares of the
Company's Common Stock offered pursuant to the Fretter, Inc. 1993 Long Term
Incentive Plan (the "Plan") and such additional number of shares as may be
offered pursuant to the antidilution provisions of the Plan (the "Common
Stock").
In rendering the opinion contained in this letter, we have assumed without
investigation that the information supplied to us by the Company is accurate
and complete. Based upon and subject to the foregoing, it is our opinion that,
when the Common Stock is sold, issued and delivered in accordance with the
terms and conditions of the Plan, it will be legally issued, fully paid and
non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
JAFFE, RAITT, HEUER & WEISS
Professional Corporation
David D. Warner
EXHIBIT 5.0
II-15
<PAGE> 1
EXHIBIT 24.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 20, 1994 appearing on Page F-2
of Fretter, Inc.'s Annual Report on Form 10-K for the fiscal year ended January
31, 1994. We also consent to the reference to us under the heading "Experts"
in such Registration Statement.
PRICE WATERHOUSE LLP
Detroit, Michigan
November 2, 1994
