<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
ON DECEMBER 4, 1995
Registration No.
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WINNERS ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 84-1103135
(State or other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
</TABLE>
1461 Glenneyre Street, Suite F, Laguna Beach, California 92651
(Address of principal executive offices) (Zip Code)
Letter Agreement dated November 17, 1995
(Full title of the plan)
THOMAS K. RUSSELL, ESQ.
1461 Glenneyre Street, Suite F, Laguna Beach, California 92651
(Name and address of agent for service)
(714) 376-3010
(Telephone number, including area code, of agent for service)
Copies of Communications to:
PATRICK H. ALLEN, ESQ.
Freer & McGarry, P.C.
1000 Thomas Jefferson Street, N.W.
Suite 600
Washington, D.C. 20007
(202) 965-6565
<TABLE>
<CAPTION>
=================================================================================================================================
Title of Securities Amount to Proposed maximum Proposed maximum Amount of
to be registered be registered offering price per share aggregate offering price registration fee
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
Common Stock
$.00001 Par Value 200,000 Shares $ 1 (1) $ 200,000 $ 69
=================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee,
based upon the average bid and asked price on November 20, 1995.
<PAGE> 2
THIS DOCUMENT CONSTITUTES PART OF A REGISTRATION STATEMENT
COVERING SECURITIES THAT HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933
200,000 Shares
WINNERS ENTERTAINMENT, INC.
Common Stock
This Prospectus relates to 200,000 shares of common stock, $.00001 par
value (the "Common Stock"), of Winners Entertainment, Inc., a Delaware
corporation (the "Company"), issuable pursuant to an Agreement described
herein.
The delivery of this Prospectus at any time does not imply that the
information contained herein is correct as of any time subsequent to the date
hereof. No person has been authorized to give any information or to make any
representation other than as contained herein in connection with the offer
contained in this Prospectus, and, if given or made, such information or
representation must not be relied upon.
---------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE 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 December 4, 1995.
<PAGE> 3
DESCRIPTION OF AGREEMENT
The Company has entered into a Letter Agreement dated November 17, 1995
(the "Agreement") with Donald G. Saunders ("Saunders") pursuant to which the
Company has agreed to issue to Saunders 200,000 shares of its Common Stock (the
"Shares") in consideration for certain consulting services performed for the
Company by Saunders from January 15, 1992 to December 31, 1992.
REGISTRATION OF THE SHARES
Pursuant to the Agreement, the Company has agreed to register the
Shares on a Registration Statement on Form S-8 under the Securities Act of
1933, in connection with the original issuance of the Shares to Saunders. This
Prospectus relates to a Registration Statement on Form S-8 which was filed with
the Securities and Exchange Commission on the date hereof and which became
effective as of such filing.
RESALE OF THE SHARES
The Agreement does not impose any restriction on the resale of the
Shares. However, if a recipient of Shares becomes an "affiliate" of the
Company, as such term is defined in Rule 144 promulgated under the Securities
Act, such person shall be subject to the limitation imposed by Rule 144(e)(1)
on the number of Shares which may be sold. Rule 144(e)(1) generally provides
that the number of shares of Common Stock which may be sold in any three month
period may not exceed the greater of (i) 1% of the outstanding Common Stock as
shown by the most recent published report of the Company or (ii) the average
weekly reported volume of trading in the Common Stock, as reported through
NASDAQ, for the four weeks preceding the filing of a notice of proposed sale of
the Common Stock, if required under Rule 144(b) under the Securities Act, or
preceding the date of receipt of the order to execute the transaction by the
broker or the date of execution directly with a market maker.
Additional information regarding the Agreement may be obtained from the
Company at 1461 Glenneyre Street, Suite F, Laguna Beach, California 92651.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
At the time of issuance of the Shares, Saunders recognized ordinary
income for federal income tax purposes in an amount equal to the fair market
value of the Shares.
Saunders will recognize gain or loss on the subsequent sale of the
Shares in an amount equal to the difference between the amount realized and the
tax basis of such Shares, which will equal the amount included in Saunders'
income by reason of the issuance of the Shares. Provided such Shares are held
as a capital asset, such gain or loss will be long-term or short-term capital
gain or loss depending upon whether the Shares have been held for more than one
year.
The Agreement is not subject to any of the provisions of the Employee
Retirement Income Security Act of 1974, and is not qualified under Section
401(a) of the Code.
This discussion is only a summary of certain significant federal income
tax consequences and Saunders should consult an independent tax adviser as to
all of the federal and state income tax consequences relating to the receipt or
sale of the Shares.
CERTAIN INFORMATION
The documents incorporated by reference in Item 3 of Part II of Form
S-8, and any other documents required to be delivered pursuant to Rule 428(b),
promulgated under the Securities Act, are available from the Company, without
charge, upon written or oral request. Requests for documents should be
directed to the Chairman of the Board and President of the Company. The
documents incorporated by reference in Item 3 of Part II of the Form S-8 are
also incorporated in this Prospectus by reference thereto.
2
<PAGE> 4
WINNERS ENTERTAINMENT, INC.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INFORMATION INCORPORATED BY REFERENCE.
There are hereby incorporated by reference in this Registration
Statement the following documents and information heretofore filed under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), with the
Securities and Exchange Commission (the "Commission") by Winners Entertainment,
Inc. (the "Company" or the "Registrant"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1994.
(b) The Registrant's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1995, June 30, 1995 and September 30, 1995; and
(c) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act by the Registrant with the Commission since December 31, 1994.
All documents filed with the Commission by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after 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 by
reference in this Registration Statement and to be part hereof from the date of
filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The Company is authorized to issue 25,000,000 shares of Common Stock,
par value $.00001 per share (the "Common Stock"). Holders of the Common Stock
have one vote per share of record on each matter submitted to a vote of
stockholders, the right to receive such dividends, if any, as may be declared
by the Board of Directors out of assets legally available therefor and the
right to receive net assets in liquidation after payment of all amounts due to
creditors and all preferential amounts due to holders of any preferred stock.
Holders of the Common Stock have no conversion rights and are not entitled to
any preemptive or subscription rights. The Common Stock is not subject to
redemption or any further calls or assessments. The Common Stock has
noncumulative voting rights in the election of directors.
Under the terms of the Company's Restated Certificate of Incorporation
(the "Charter"), the Board of Directors may consider certain factors in
evaluating any proposal to acquire or merge with the Company. In addition to
the adequacy of the price, the Board is authorized to consider (i) the
interests of the Company's stockholders, (ii) compliance with applicable laws,
(iii) the consideration being offered in the proposed transaction in relation
to both the current market price of the Common Stock and the market price for
the Common Stock over a period of years, the estimated price that might be
obtained in a negotiated sale of the Company as a whole or in part through an
orderly liquidation, the premiums over market price for the securities of other
corporations in similar transactions, current political, economic and other
factors bearing on securities prices and the Company's financial condition and
future prospects, and (iv) the social, legal and economic effects upon
employees, suppliers, customers and others, including the communities in which
the Company does business. This provision of the Charter may not be amended or
repealed by the stockholders without the vote of 80% of the outstanding shares
of the Company entitled to vote.
The Charter also requires any person who becomes the beneficial owner
of 5% or more of the Common Stock to agree in writing as a condition to
becoming such beneficial owner to provide certain required information to any
gaming authority that has issued a license to the Company. In addition, if the
Board of Directors determines that the ownership of stock of the Company by any
person may result in the
II-1
<PAGE> 5
loss or denial of a gaming license, the Company may repurchase all or any
portion of the shares owned by such person at a price equal to the fair market
value of the shares or as required by applicable law. The repurchase price may
be paid in cash or in debt securities of the Company, subject to applicable
law.
The Common Stock is traded in the over-the-counter market and quoted on
NASDAQ under the symbol "WINS."
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Members of the law firm of Freer & McGarry, which is counsel to the
Company, own an aggregate of 40,267 shares of the Company's Common Stock.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the General Corporation Law of the State of Delaware and the
By-laws of the Company, the company may indemnify an existing or former
director, officer, employee or agent of the Company, against expenses,
judgments, fines and amounts paid in settlement in connection with any action,
suit or proceeding brought against such person in such present or former
capacity, including actions or suits by or in the right of the Company, so long
as such person acted in good faith and in a manner reasonably believed to be in
or not opposed to the best interests of the Company or, with respect to a
criminal action or proceeding, so long as such person had no reasonable cause
to believe his conduct was unlawful. The foregoing indemnification shall be
made only upon a determination by the Board of Directors of the Company, upon
the majority vote of a quorum of disinterested directors, the stockholders or,
in certain cases, independent legal counsel, that the applicable standard of
conduct has been met. No indemnification may be made, however, to any person
who has been adjudged to be liable to the Company, unless the Court renders an
order in favor of such indemnification.
In addition, the Charter provides that, to the extent permitted under
the General Corporation Law of the State of Delaware, a director of the company
shall not be personally liable to the Company or its stockholders for breach of
fiduciary duty except for (i) any breach of his duty of loyalty to the Company,
(ii) any act or omission not in good faith or involving intentional misconduct
or a knowing violation of law, (iii) any unlawful payment of dividends, stock
repurchase or redemption or (iv) any transaction from which he derived an
improper personal benefit.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
ITEM 8. EXHIBITS.
4.1 Letter Agreement dated November 17, 1995 between the Registrant
and Donald G. Saunders.
5.1 Opinion of Freer & McGarry.
23.1 Consent of Corbin & Wertz, Independent Public Accountants.
23.2 Consent of Freer & McGarry (included in Exhibit 5.1).
24.1 Power of Attorney (included at page S-1).
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
provide any prospectus required by Section 10(a)(3) of the Securities Act of
1933, as amended (the "Securities Act"), (ii) to reflect in the prospectus any
facts or
II-2
<PAGE> 6
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 this Registration Statement and (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 the
registration statement; provided however, that clauses (i) and (ii) above do
not apply if the information required to be included in a post-effective
amendment by those clauses is contained in periodic reports filed by the
Registrant pursuant to Sections 13 or 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining 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 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, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 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 this 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.
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<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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 Laguna Beach, State of California, on November
30, 1995.
WINNERS ENTERTAINMENT, INC.
By: /s/ EDSON R. ARNEAULT
-----------------------------------
Edson R. Arneault
Chairman of the Board and President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Edson R. Arneault and Thomas K.
Russell, or either of them, jointly and severally, his true and lawful
attorneys-in-fact and agents, with full powers of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments to this Registration Statement, and
to file the same with all exhibits thereto, and other documents in connection
therewith, with the Commission, granting unto said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully as to
all intents and purposes as he might or could do in person, hereby ratifying
and confirming all that said attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ EDSON R. ARNEAULT Chairman of the November 30, 1995
- ------------------------- Board and President
Edson R. Arneault (Principal Executive
Officer)
/s/ THOMAS K. RUSSELL Chief Financial November 30, 1995
- ------------------------- Officer (Principal
Thomas K. Russell Financial and
Accounting Officer)
and Secretary
/s/ ROBERT L. RUBEN Director November 30, 1995
- ------------------------
Robert L. Ruben
</TABLE>
S-1
<PAGE> 8
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
Winners Entertainment, Inc.
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated April 13, 1995 appearing in the Annual
Report on Form 10-K of Winners Entertainment, Inc. for the year ended December
31, 1994.
Irvine, California
December 1, 1995
S-2
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Numbered Page
-------------
<S> <C> <C>
4.1 Letter Agreement dated November 17, 1995
5.1 Opinion of Freer & McGarry, counsel to Registrant.
23.1 Consent of Corbin & Wertz, Independent Public Accountants
(included at page S-2).
23.2 Consent of Freer & McGarry (included in Exhibit 5.1).
24.1 Power of Attorney (included at page S-1).
</TABLE>
<PAGE> 1
EXHIBIT 4.1
[WINNERS ENTERTAINMENT LETTERHEAD]
November 17, 1995
Mr. Donald G. Saunders
32251 Pepper Tree Bend
San Juan Capistrano, California 92675
Dear Mr. Saunders:
The purpose of this letter is to set forth our understanding of the terms of an
agreement to issue shares of the Common Stock of Winners Entertainment, Inc.
(the "Company") to you in compensation for your services to the Company.
1. The Company agrees to issue 200,000 shares of the Company's Common
Stock (the "Shares") as compensation for your consulting services to the
Company from January 15, 1992 to December 31, 1992. in connection with the
consideration by the Company of merger and acquisition possibilities and
candidates. The issuance of the Shares shall constitute full payment for your
performance of such services for the Company during such period.
2. The Company agrees to register the Shares on a Registration
Statement on Form S-8 under the Securities Act of 1933 as soon as possible.
3. The certificates representing the Shares will be delivered upon
registration pursuant to paragraph 2 without any legend restricting the resale
of the Shares. The Company agrees to file all reports and take all other
actions necessary to keep the Registration Statement on Form S-8 effective for
a period of not less than six months commencing on the date of the Shares.
4. This letter agreement sets forth the entire understanding of the
parties with respect to the subject matter hereof; supersedes any and all prior
agreements, arrangements and understandings with respect to the subject matter
hereof; and may be modified only by another written instrument duly executed by
both parties.
5. This letter agreement may be executed in one or more counterparts,
each of which shall be deemed to constitute an original and all of which taken
together shall constitute one and the same agreement.
6. This letter agreement may not be assigned by operation of law or
otherwise, but shall be binding on the heirs, legal representatives and
successors of the respective parties hereto.
<PAGE> 2
Mr. Donald G. Saunders
November 17, 1995
Page Two
If the foregoing comports with your understanding and is acceptable to
you, please execute this letter agreement where indicated below.
Very truly yours,
WINNERS ENTERTAINMENT, INC
By /s/ EDSON R. ARNEAULT
-----------------------
Edson R. Arneault
Accepted and agreed to this 17th day of November, 1995 at San Juan Capistrano,
California.
/s/ DONALD G. SAUNDERS
---------------------------------
Donald G. Saunders
<PAGE> 1
EXHIBIT 5.1
Law Offices
FREER & McGARRY
A Professional Corporation
1000 Thomas Jefferson Street, NW
Suite 600
Washington, D.C. 20007-3835
Telephone: (202) 965-6565
Facsimile: (202) 965-4839
November 30, 1995
The Board of Directors
Winners Entertainment, Inc.
30448 Rancho Viejo Road, Suite 110
San Juan Capistrano, California 92675
Gentlemen:
We have represented Winners Entertainment, Inc. (the "Company") in
connection with that certain Letter Agreement dated November 17, 1995 between
the Company and Donald G. Saunders (the "Agreement") and the issuance of
200,000 shares of teh Company's Common Stock (the "Shares") to Mr. Saunders
pursuant to the terms of the Agreement. In connection with giving this
opinion, we have reviewed teh records of the Company's actions in connection
with entering into the Agreement and the issuance of the Shares and such other
matters that we have considered necessary to render this opinion.
Based upon the foregoing, we are of the opinion that the Shares when
issued were legally issued, fully paid and non-assessable.
We consent to the inclusion of this opinion as an exhibit to the
Registration Statement on Form S-8 relating to the Shares and to the reference
to us in the Regisration Statement.
Sincerely yours.
FREER & McGARRY, P.C.
By /s/ PATRICK H. ALLEN
-----------------------
Patrick H. Allen
/PHA
