As filed with the Securities and Exchange Commission on August 5, 1996
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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WESTMARK GROUP HOLDINGS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3784149
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
355 N.E. Fifth Avenue Norman J. Birmingham
Delray Beach, Florida 33483 355 N.E. Fifth Avenue
(407) 243-8010 Delray Beach, Florida 33483
(713) 652-2792 (Name, address, including zip code,
(Address, including zip code, and and telephone number, including
telephone number, including area code, of agent for service)
area code of registrant's
principal executive offices)
CONSULTING AGREEMENT
OF I.W. MILLER
(Full Title of the Plan)
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COPY TO:
Thomas C. Pritchard
Brewer & Pritchard, P.C.
1111 Bagby, 24th Floor
Houston, Texas 77002
Phone (713) 659-1744
Fax (713) 659-2430
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CALCULATION OF REGISTRATION FEE
PROPOSED
MAXIMUM
TITLE OF PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE AMOUNT BEING OFFERING PRICE OFFERING REGISTRATION
REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
---------------- ------------- ---------------- --------- ------------
Common Stock, par value
$.001 per share........ 100,000 $.75 $75,000 $100
(1) Pursuant to Rule 416 under the Securities Act of 1933, as amended, the
number of shares of the issuer's Common Stock registered hereunder will be
adjusted in the event of stock splits, stock dividends or similar
transactions.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457, on the basis of the last sales
price of the Common Stock as reported by the Nasdaq SmallCap Market on
August 2, 1996.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed by Westmark Group Holdings, Inc. ("Company"
or "Registrant") with the Securities and Exchange Commission are incorporated
herein by reference:
1. The Company's latest annual report filed pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act"),
or, either (i) the Company's latest prospectus filed pursuant to Rule 424(b)
under the Securities Act of 1933, as amended ("Securities Act") that contains
audited financial statements for the Company's latest fiscal year for which such
statements have been filed, or (ii) the Company's effective Registration
Statement on Form 10 or Form 10-SB filed under the Exchange Act containing
audited financial statements for the Company's latest fiscal year.
2. 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 document referred
to in (1) above.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to the Registration Statement which indicates that all
shares of common stock offered have been sold or which deregisters all of such
shares then remaining unsold, shall be deemed to be incorporated by reference in
the Registration Statement and to be a part thereof from the date of filing of
such documents.
ITEM 4. DESCRIPTION OF SECURITIES
Under the Company's Certificate of Incorporation, the authorized
capital stock of the Company consists of 60 million shares, of which 50 million
shares are Common Stock and 10 million shares are preferred stock. As of August
5, 1996, the Company had outstanding 2,971,882 shares of Common Stock and
118,750 shares of Series A Preferred Stock, 300,000 shares of Series B Preferred
Stock, and 200,000 shares of Series C Preferred Stock held of record by 14
persons. The Company has reserved 495,433 shares to be issued hereby, 331,905
shares for issuance upon exercise of outstanding options, 666,666 shares for
issuance upon exercise of warrants, and 708,690 shares for issuance upon
conversion of the Series A and Series B Preferred Stock.
The following summary description of the securities of the Company is
qualified in its entirety by reference to the Certificate of Incorporation, a
copy of which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share with
respect to all matters required by law to be submitted to stockholders of the
Company. The holders of Common Stock have the sole right to vote, except as
otherwise provided by law or by the Company's Certificate, including provisions
governing any preferred stock. The Common Stock does not have any cumulative
voting, preemptive, subscription or conversion rights. Election of directors and
other general shareholder action requires the affirmative vote of a majority of
shares represented at a meeting in which a quorum is represented. The
outstanding shares of Common Stock are, and the shares of Common Stock offered
hereby will be, upon payment therefor as contemplated herein, validly issued,
fully paid and non-assessable.
Subject to the rights of any outstanding shares of preferred stock, the
holders of Common Stock are entitled to receive dividends when, as and if
declared by the Board of Directors out of funds legally available therefor. In
the event of liquidation, dissolution or winding up of the affairs of the
Company, the holders of Common Stock are entitled to share ratably in all assets
remaining available for distribution to them after payment or provision for all
liabilities and any preferential liquidation rights of any preferred stock then
outstanding.
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PREFERRED STOCK
The Board of Directors is authorized, without action by the holders of
the Common Stock, to provide for the issuance of the preferred stock in one or
more series, to establish the number of shares to be included in each series and
to fix the designations, powers, preferences and rights of the shares of each
such series and the qualifications, limitations or restrictions thereof. This
includes, among other things, voting rights, conversion privileges, dividend
rates, redemption rights, sinking fund provisions and liquidation rights which
shall be superior to the Common Stock. The issuance of one or more series of the
preferred stock could adversely affect the voting power of the holders of the
Common Stock and could have the effect of discouraging or making more difficult
any attempt by a person or group to attain control of the Company. The Company
has no present plans to issue any additional shares of preferred stock.
SERIES A PREFERRED STOCK. In April 1996, the Board of Directors
established a series of shares setting forth the preferences, rights and
limitations and authorizing the issuance of up to 200,000 shares of series A
cumulative preferred stock ("Series A Preferred Stock"). In April 1996, an
aggregate of 100,000 shares of Series A Preferred Stock were issued with an
aggregate stated value of $400,000 to Mr. Hollenbeck and an aggregate of 18,750
shares of Series A Preferred Stock were issued to an unaffiliated third party.
The Series A Preferred Stock has a liquidation preference of $4 per share, plus
any accrued unpaid dividends, is redeemable by the Company at a redemption price
of $4 per share, plus accrued unpaid dividends to the date of redemption, after
October 1, 1996 the holder can force redemption by the Company upon the same
redemption terms that the Company possesses, and does not have any voting
rights. The shares of Series A Preferred Stock are convertible into shares of
Common Stock at the lessor or (i) $1.50 or (ii) 84% of the closing bid price on
the day prior to conversion (subject to adjustment).
SERIES B PREFERRED STOCK. In April 1996, the Board of Directors
established a series of shares setting forth the preferences, rights and
limitations and authorizing the issuance of up to 300,000 shares of series B
cumulative preferred stock ("Series B Preferred Stock"). In April 1996, an
aggregate of 300,000 shares of Series B Preferred Stock were issued with an
aggregate stated value of $600,000. The Series B Preferred Stock has a
liquidation preference of $2 per share, plus any accrued unpaid dividends, is
redeemable by the Company at a redemption price of $2 per share, plus accrued
unpaid dividends to the date of redemption, and does not have any voting rights.
The shares of Series B Preferred Stock are convertible by the holders in shares
of Common Stock at the lesser of (i) $2.00 or (ii) 84% of the closing bid price
on the day prior to conversion (subject to adjustment). The shares of Series B
Preferred Stock automatically convert, at the above referenced conversion rate,
into shares of Common Stock in April 1998.
SERIES C PREFERRED STOCK. In March 1996, the Board of Directors
established a series of shares setting forth the preferences, rights and
limitations and authorizing the issuance of up to 500,000 shares of series C
cumulative preferred stock ("Series C Preferred Stock"). Effective March 1996,
an aggregate of 200,000 shares of Series C Preferred Stock were issued with an
aggregate stated value of $700,000. The Series C Preferred Stock has a
liquidation preference of $3.50 per share, plus any accrued unpaid dividends, is
redeemable by the Company at a redemption price of $3.50 per share, plus accrued
unpaid dividends to the date of redemption, and does not have any voting rights.
After December 15, 1997, the shares of Series C Preferred Stock are convertible
by the holders in shares of Common Stock at the rate of 84% of the closing bid
price on the day prior to conversion (subject to adjustment).
WARRANTS
There are warrants outstanding authorizing the holders to purchase an
aggregate of 666,666 shares of Common Stock, currently exercisable and expiring
between one and eight years from the date of this Prospectus at exercise prices
between $1.00 and $9.00.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
A. The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he 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
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director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
B. The Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any 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 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, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation and except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
C. To the extent that a director, officer, employee or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections (A) and (B), or in defense
of any claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
D. Any indemnification under subsections (A) and (B) (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 director, officer,
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in subsections (A) and (B). Such
determination shall be made (i) by a majority vote of the directors who are not
parties to such action, suit or proceeding, even though less than a quorum, or
(ii) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (iii) by the stockholders.
E. Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such amount if
it shall ultimately be determined that he is not entitled to be indemnified by
the Corporation as authorized by the Certificate of Incorporation. Such expenses
(including attorneys' fees) incurred by other employees and agents may be so
paid upon such terms and conditions, if any, as the Board of Directors deems
appropriate.
F. The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this Article shall not be deemed
exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office.
G. 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, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under the Certificate of Incorporation.
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H. The indemnification and advancement of expenses provided by, or
granted pursuant to, this Article shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
ITEM 8. EXHIBITS
The following exhibits are filed as part of this Registration
Statement:
4.1(1) Form of specimen Common Stock
5.1(2) Opinion Regarding Legality
10.1(2) Consulting Agreement of I.W. Miller
24.1(2) Consent of Comiskey & Company, P.C.
24.2(2) Consent of Brewer & Pritchard, P.C. (Contained in
Exhibit 5.1)
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(1) The information required by this exhibit is incorporated by reference to
the exhibits filed in connection with the Company's Registration Statement
on Form SB-2 (Commission File No. 333-05599)
(2) Filed herewith.
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:
i. To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
ii. To reflect in the prospectus any facts or events arising
after the effective date of the 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 the
registration statement; and
iii. To include any additional or changed material
information with respect to the plan of distribution.
(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.
(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 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.
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(c) 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 foregoing provisions, 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 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 Act and will
be governed by the final adjudication of such issue.
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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 SB-2 and authorized this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Delray, State of Florida, on the 5 day of August, 1996.
Westmark Group Holdings, Inc.
By /s/ NORMAN J. BIRMINGHAM
Norman J. Birmingham,
President, Chief Executive
Officer and Director
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Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ NORMAN J. BIRMINGHAM President, Chief Executive August 5, 1996
Norman J. Birmingham Officer and Director
/s/ MARK SCHAFTLEIN Director and Chief Financial August 5, 1996
Mark Schaftlein Officer (Principal Financial
and Accounting officer)
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EXHIBIT 5.1
August 5, 1996
Westmark Group Holdings, Inc.
355 N.E. Fifth Avenue
Delray Beach, Florida 33483
Re: Westmark Group Holdings, Inc.
Registration Statement on Form S-8
Gentlemen:
We have represented Westmark Group Holdings, Inc., a Colorado
corporation ("Company"), in connection with the preparation of a registration
statement filed with the Securities and Exchange Commission on Form S-8
("Registration Statement") relating to the proposed issuance of up to 100,000
shares ("Shares") of the Company's common stock, par value $.001 per share
("Common Stock") pursuant to the terms of a Consulting Services Agreement with
I. W. Miller dated July 25, 1996 ("Plan"). In this connection, we have examined
originals or copies identified to our satisfaction of such documents, corporate
and other records, certificates, and other papers as we deemed necessary to
examine for purposes of this opinion, including but not limited to the Plan, the
Certificate of Incorporation of the Company, the Bylaws of the Company, and
resolutions of the Board of Directors of the Company.
We are of the opinion that the Shares will be, when issued pursuant to
the Plan, legally issued, fully paid and nonassessable.
We hereby consent to the filing of this Opinion as an Exhibit to the
Registration Statement.
Very truly yours,
BREWER & PRITCHARD
EXHIBIT 10.1
CONSULTING SERVICES AGREEMENT
This Consulting Services Agreement dated July 25, 1996 ("Agreement") is by
and between, WESTMARK GROUP HOLDINGS, INC. ("Company") and I.W. MILLER
("Consultant").
W I T N E S S E T H:
WHEREAS, the Company is in the mortgage lending business; and
WHEREAS, Consultant desires to provide certain consulting services to the
Company; and
WHEREAS, the Company and Consultant desire to set forth in writing the
terms and conditions of their agreement and understanding concerning a one year
consulting arrangement; and
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
agreements, and considerations herein contained, the parties hereto agree as
follows:
1. ENGAGEMENT. Subject to the terms and provisions of this Agreement, the
Company hereby engages Consultant, as an independent contractor, to provide
consulting services ("Services") as set forth in Section 2 below. Consultant
hereby accepts such engagement and shall, during the term of this Agreement,
perform the Services as herein provided.
2. SERVICES. Subject to the terms and conditions of this Agreement, the
term "Services" shall mean providing certain consulting services to the Company
as may be mutually agreed upon by the parties, and attached hereto on Exhibit
"A". Consultant agrees to provide such Services on a non-exclusive basis and as
an independent contractor and not as an employee of the Company. Nothing in this
Agreement shall be construed to prevent Consultant from performing services on
behalf of himself or any person or entity.
3. COMPENSATION. For the Services performed by Consultant for the Company,
the Company will pay Consultant in full by issuing to Consultant 100,000 shares
of common stock of the Company, the issuance of which shall be registered
pursuant to a S-8 Registration Statement. Company agrees to have an additional
150,000 shares of common stock put into an escrow account upon execution of this
contract. Upon an agreed upon performance level, said shares will be issued
to I.W. Miller & Co., Inc.
4. STATUS REPORTS. For the term of this Agreement, at the Company's
written request, Consultant shall prepare and submit to the Company a written
status report describing the status of any and all projects for which Consultant
has provided Services.
5. TERM. The term of this Agreement shall commence on the date hereof and
shall continue in full force and effect for a period of one year from the date
hereof.
6. AUTHORITY. Consultant understands and agrees that under the terms and
provisions of this Agreement, Consultant is not an employee, representative or
agent of the Company or any of its affiliates and therefore has no power or
authority whatsoever to act on behalf of, or bind the Company or any of its
affiliates, with respect to any matter or contract. Furthermore, this Agreement
does not create and shall not be construed to create any joint venture or
partnership relationship
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between the parties. No officer, employee, agent or independent contractor of
either party or their respective affiliates shall be deemed at any time to be an
employee, servant, agent or contractor of the other for any purpose whatsoever.
7. CONFIDENTIALITY. In the course of the performance of Consultant's
duties hereunder, Consultant recognizes and acknowledges that Consultant may
have access to certain confidential and proprietary information of the Company
or any of its affiliates. Without the prior written consent of the Company,
Consultant shall not disclose any such confidential or proprietary information
to any person or firm, corporation, association, or other entity for any reason
or purpose whatsoever, and shall not use such information, directly or
indirectly, for Consultant's own behalf or on behalf of any other party.
Consultant agrees and affirms that all such information is the sole property of
the Company and that at the termination and/or expiration of this Agreement, at
the Company's written request, Consultant shall promptly return to the Company
any and all such information so requested by the Company.
The provisions of this Section 7 shall not, however, prohibit
Consultant from disclosing to others or using in any manner information that:
(a) has been published or has become part of the public domain other
than by acts, omissions or fault of Consultant;
(b) has been furnished or made known to Consultant by third parties
(other than those acting directly or indirectly for or on behalf of
Consultant) as a matter of legal right without restriction on its use or
disclosure;
(c) was in the possession of Consultant prior to obtaining such
information from the Company in connection with the performance of this
Agreement; or
(d) is required to be disclosed by law.
8. MISCELLANEOUS.
(a) ASSIGNMENT. All of the terms, provisions and conditions of this
Agreement shall be binding upon and shall inure to the benefit of and be
enforceable by the parties hereto and their respective successors and
permitted assigns. This Agreement shall not be assigned or transferred by
either party, nor shall any interest herein be assigned, transferred,
pledged or hypothecated by either party without the prior written consent
of the other party.
(b) APPLICABLE LAW. This Agreement shall be construed in accordance
with and governed by the laws of the State of Florida.
(c) ENTIRE AGREEMENT, AMENDMENTS AND WAIVERS. This Agreement
constitutes the entire agreement of the parties hereto and expressly
supersedes all prior and contemporaneous
2
understandings and commitments, whether written or oral, with respect to
the subject matter hereof. No variations, modifications, changes or
extensions of this Agreement or any other terms hereof shall be binding
upon any party hereto unless set forth in a document duly executed by such
party or an authorized agent or such party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.
WESTMARK GROUP HOLDINGS, INC.
By ____________________________________
Norman J. Birmingham, President
CONSULTANT
I.W. MILLER
By:___________________________________
Name:_________________________________
Title:________________________________
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EXHIBIT A
Consultant shall perform advertising services for the Company.
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EXHIBIT 24.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in this Form S-8 registration
statement of our report, dual dated March 20, 1996 and April 19, 1996, on the
financial statements of Westmark Group Holdings, Inc., and to reference to our
firm under the caption "experts" in the prospectus.
Aurora, Colorado
August 5, 1996 COMISKEY & COMPANY, A
PROFESSIONAL CORPORATION
