As filed with the Securities and Exchange Commission on July 30, 1996.
Registration No. 333-
---------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------
U.S. PAWN, INC.
(Exact name of Registrant as specified in its charter)
-----------
Colorado 84-0819941
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
-----------
7215 Lowell Boulevard, Westminster, Colorado 80030
(Address of principal executive offices) (Zip Code)
1994 Management Stock Option
(Full title of the plan)
Melvin Wedgle, President
7215 Lowell Boulevard
Westminster, Colorado 80030
(303) 657-3550
(Telephone number including area code of agent for service)
Approximate date of commencement of proposed sale to public: From time to
time after the Registration Statement becomes effective.
--------------------------------
Exhibit Index Begins at Page II-5
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
CALCULATION OF REGISTRATION FEE
================================================================================================================================
Title of Amount to be Proposed Proposed Amount of
Securities Registered(1) Maximum Maximum Registration
to be Offering Aggregate Fee
Registered Price Per Offering
Share(2) Price(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
no par value 325,000 $3.75 $1,218,750 $421(1)
================================================================================================================================
(1) This Registration Statement, pursuant to Rule 416, covers any additional shares of no par value Common Stock ("shares")
which become issuable under the 1994 Management Stock Option ("Option") set forth herein by reason of any stock dividend, stock
split, recapitalization or any other similar transaction without receipt of consideration which results in an increase in the
number of shares outstanding.
(2) Estimated solely for the purpose of computing the amount of the Registration fee under Rule 457 of the Securities Act of
1933, as amended. A total of 325,000 shares are issuable under the Option at an offering price per share based upon a closing
price of the Common Stock on NASDAQ on July 25, 1995 of $3.75 per share.
ii
</TABLE>
<PAGE>
U.S. PAWN, INC.
PART I
Cross Reference Sheet Required by Item 501
Item in Form S-8 Caption In Prospectus
---------------- ---------------------
1. General Option Information.. Cover Page; Description of the Option; Tax
Consequences
2. Registrant Information and
Employee Option Annual
Information................. Available Information; Introduction;
Description of the Option
3. Incorporation of Documents
by Reference................ Incorporation of Documents by Reference
4. Description of Securities.. Description of Common Stock
5. Interests of Named Experts
and Counsel................ Counsel
6. Indemnification of
Directors and Officers..... SEC Position Regarding Indemnification
7. Exemption from Registration
Claimed.................... Not Applicable
8. Exhibits................... Not Applicable (See Part II, Item 8)
9. Undertakings............... Not Applicable (See Part II, Item 9)
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Pursuant to the requirements of the Note to Part I of Form S-8 and Rule
428(b)(1) of the Rules under the Securities Act of 1933, as amended, the
information required by Part I of Form S-8 is included in the Reoffer Prospectus
which follows. The Reoffer Prospectus together with the documents incorporated
by reference pursuant to Item 3 of Part II of this Registration Statement
constitute the Section 10(a) Prospectus.
iii
<PAGE>
REOFFER PROSPECTUS
The material which follows, up to but not including the page beginning Part
II of this Registration Statement, constitutes a prospectus, prepared on Form
S-3, in accordance with General Instruction C to Form S-8, to be used in
connection with resales of securities acquired under the Registrant's 1994
Management Stock Option by affiliates of the Registrant, as defined in Rule 405
under the Securities Act of 1933, as amended.
iv
<PAGE>
325,000 SHARES
COMMON STOCK
(No Par Value)
U.S. PAWN, INC.
---------------
1994 MANAGEMENT STOCK OPTION
---------------
This Reoffer Prospectus ("Prospectus") relates to the offering by U.S.
Pawn, Inc. (the "Company") and the Company's President of up to 325,000 shares
(subject to adjustment in certain circumstances) of the Company's no par value
Common Stock (the "shares"), purchasable by the Company's President pursuant to
Common Stock options ("options") under the Company's 1994 Management Stock
Option (the "Option"). As of the date hereof 125,000 options have been issued
under the Option to the Company's President.
---------------
This Prospectus may be used by persons who may be deemed to be "affiliates"
(as that term is defined under the Securities Act of 1933) of the Company to
effect resales of the shares. See "Selling Stockholders." The Company will
receive no part of the proceeds of any such sales.
---------------
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.
---------------
No person is authorized to give any information or to make any
representation not contained in this Prospectus in connection with the offer
made hereby, and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company. The delivery of this
Prospectus at any time does not imply that the information herein is correct as
of the time subsequent to the date hereof.
----------------
The date of this Prospectus is July 30, 1996.
1
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, including Sections 14(a) and 14(c) relating to
proxy and information statements, and in accordance therewith files reports and
other information with the Securities and Exchange Commission ("Commission").
Reports and other information filed by the Company can be inspected and copied
at the public reference facilities maintained by the Commission at 450 Fifth
Street N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; 7 World Trade Center, New York, New York 10048; and
5670 Wilshire Boulevard, Los Angeles, California 90036. Copies of such material
can be obtained from the Public Reference Section of the Commission, 450 Fifth
Street N.W., Washington, D.C. 20549 at prescribed rates. The Company's Common
Stock is traded on the NASDAQ SmallCap Market under the NASDAQ symbol "USPN."
Reports, proxy and information statements may also be inspected at the NASDAQ
National SmallCap Market offices, 1735 K Street Northwest, Washington, D.C.
20006.
The Company furnishes annual reports to its shareholders which include
audited financial statements. The Company also furnishes quarterly financial
statements to shareholders and may furnish such other reports as may be
authorized, from time to time, by the Board of Directors.
INCORPORATION BY REFERENCE
Certain documents have been incorporated by reference into this Prospectus,
either in whole or in part. The Company will provide without charge (i) to each
person to whom a Prospectus is delivered, upon written or oral request of such
person, a copy of any and all of the information that has been incorporated by
reference (not including exhibits to the information unless such exhibits are
specifically incorporated by reference into the information), and (ii) documents
and information required to be delivered to the Company's employees pursuant to
Rule 428(b). Requests for such information shall be addressed to the Company at
7215 Lowell Boulevard, Westminster, Colorado 80030, (303) 657-3550.
2
<PAGE>
TABLE OF CONTENTS
INTRODUCTION.............................................................. 4
SELLING STOCKHOLDERS...................................................... 4
METHOD OF SALE............................................................ 4
SEC POSITION REGARDING INDEMNIFICATION.................................... 4
DESCRIPTION OF THE OPTION................................................. 5
APPLICABLE SECURITIES LAW RESTRICTIONS.................................... 6
TAX CONSEQUENCES.......................................................... 6
LEGAL MATTERS............................................................. 7
EXPERTS................................................................... 8
3
<PAGE>
INTRODUCTION
The Company operates pawnshops that lend money on the security of pledged
tangible personal property, for which the Company receives a pawn service charge
to compensate it for the loan. The pawn service charge is calculated as a
percentage of the loan amount, in a manner similar to which interest is charged
on a loan, and has generally ranged from 120% (for loans of $50 and over) to
240% (for loans under $50) annually. The pledged property is held through the
term of the loan, which generally is 30 to 90 days, unless otherwise earlier
paid or renewed. Generally, the borrower pays the loans and accrued service
charge in full, redeeming the pledged property, or pays the accrued service
charges and renews the loan. In the event the borrower does not pay or renew the
loan, the unredeemed collateral is forfeited to the Company and then becomes
inventory available for sale in the pawnshop. The Company currently owns and
operates 14 pawnshops located in the states of Colorado and Wyoming. Its
executive offices are located at 7215 Lowell Boulevard, Westminster, Colorado
80030, (303) 657-3550.
SELLING STOCKHOLDERS
This Prospectus relates to possible sales, by Melvin Wedgle, the Company's
President, of shares which he may acquire through exercise of options granted
under the Option. Mr. Wedgle owns 507,388 shares of the Company's Common Stock,
including 134,250 options exercisable within 60 days from the date hereof. Mr.
Wedgle's address is the same as the Company's.
METHOD OF SALE
Sales of the shares offered by this Prospectus will be made on the NASDAQ
SmallCap Market, where the Company's Common Stock is listed for trading, in
other markets where the Company's Common Stock is traded or in negotiated
transactions. Sales will be at prices current when the sales take place and may
involve payment of brokers' commission. There is no present plan of
distribution.
SEC POSITION REGARDING INDEMNIFICATION
The Company's Article of Incorporation and Bylaws provide for
indemnification of officers and directors, among other things, in instances in
which they acted in good faith and in a manner they reasonably believed to be
in, or not opposed to, the best interests of the Company and in which, with
respect to criminal proceedings, they had no reasonable cause to believe their
conduct was unlawful.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act"), may be permitted to directors, officers or
persons controlling the Company under the provisions described above, the
Company has been informed that in the opinion of the Securities and Exchange
Commission that indemnification is against public policy as expressed in that
Act and is therefore unenforceable.
4
<PAGE>
DESCRIPTION OF THE OPTION
On March 25, 1994, the Company's shareholders approved the issuance of
600,000 options under the Option for Mr. Wedgle. Options were exercisable in
three equal installments of up to 200,000 options each if certain earnings
criteria were met as reported on the Company's three fiscal year end financial
statements, for the fiscal years ending September 30, 1994, September 30, 1995
and September 30, 1996. The options expire in March 2004. In 1994, the 200,000
options were cancelled due to the Company's failure to report required earnings
for the fiscal year ended September 30, 1994. In 1995, the Company issued
125,000 options and 75,000 options were cancelled, based upon the Company's
earnings for the fiscal year ended September 30, 1995. Up to an additional
200,000 options may be issued if the Company reports certain earnings for the
fiscal year ended September 30, 1996. The Company believes that the Option
provides an appropriate incentive to Mr. Wedgle for his continued employment
with the Company.
Mr. Wedgle must exercise options during employment or within 90 days of
termination of employment. If Mr. Wedgle is terminated for cause, any
unexercised options are cancelled as of the date of termination. The options are
granted for a term of ten years. If Mr. Wedgle is disabled or dies, he or his
representative will have one year to exercise the options. All 325,000 options
are exercisable at $1.81 per share.
Options under the Option may not be transferred, except by will or by the
laws of intestate succession. The number of shares and price per share of the
options under the Option will be proportionately adjusted to reflect forward and
reverse stock splits. Mr. Wedgle has none of the rights of a stockholder with
respect to shares issuable under options until shares are issued.
The provisions of the Federal Employee Retirement Income Security Act of
1974 do not apply to the Option. Shares issuable upon exercise of options will
not be purchased in open market transactions but will be issued by the Company
from authorized shares.
Payment for shares will be made by Mr. Wedgle in cash from his own funds.
No payroll deductions or other installment plans have been established. No
reports will be made to Mr. Wedgle except in the form of updated information for
the Prospectus.
Shares issuable under the Option may be sold in the open market, without
restrictions, as free trading securities.
No options may be assigned, transferred, hypothecated or pledged by Mr.
Wedgle. No person may create a lien on any securities under the Option, except
by operation of law. However, there are no restrictions on the resale of the
shares underlying the options.
5
<PAGE>
APPLICABLE SECURITIES LAW RESTRICTIONS
Because Mr. Wedgle is an "affiliate" (as that term is defined under the
Securities Act of 1933, as amended), the resale of the shares purchased upon
exercise of options covered hereby are subject to certain restrictions and
requirements. In addition to the requirements imposed by the Securities Act of
1933, the antifraud provisions of the Securities Exchange Act of 1934 and the
rules thereunder (including Rule 10b-5) are applicable to any sale of shares
acquired pursuant to options.
Up to 325,000 shares may be issued under the Option. The Company has
authorized 30,000,000 shares, of which 3,243,989 shares are outstanding as of
the date hereof. Common shares outstanding and those to be issued upon exercise
of options are fully paid and nonassessable, and each share of stock is entitled
to one vote at all shareholders' meetings. All shares are equal to each other
with respect to lien rights, liquidation rights and dividend rights. There are
no preemptive rights to purchase additional shares by virtue of the fact that a
person is a shareholder of the Company. Shareholders do not have the right to
cumulate their votes for the election of directors.
Mr. Wedgle must comply with certain reporting requirements and resale
restrictions pursuant to Sections 16(a) and 16(b) of the Securities Exchange Act
of 1934 and the rules thereunder upon the receipt or disposition of any options.
TAX CONSEQUENCES
If an option is exercised and if Mr. Wedgle (the "optionee") does not
dispose of the shares acquired pursuant to the exercise within two years of the
day of the granting of the option nor within one year from the transfer of the
shares to him pursuant to his exercise of the options, then there will not be
any federal income tax consequences to the Company from either the exercise of
the option or the receipt of the proceeds with respect to the exercise of the
option. In such circumstances, the optionee would not be required to recognize
any taxable income upon the exercise of the option.
Furthermore, the sale of the shares received pursuant to the exercise of
the option would result in long-term capital gain or long-term capital loss to
the optionee based on the difference between the amount received with respect to
such sale and the amount paid upon the exercise of the option.
If an optionee exercised an option and sold the shares acquired pursuant to
such exercise either within two years from the date of the granting of the
option or within one year from the date of the transfer of such shares to him
pursuant to his exercise of the option, then in general the Company would be
entitled to a deduction for federal income tax purposes equal to lessor of: (i)
the fair market value of the stock on the date of exercise over the option price
of the stock; or (ii) the amount realized on disposition over the adjusted basis
of the stock. The optionee would recognize income equal to the amount of the
Company's deduction. The Company's deduction would be allowed, and the
6
<PAGE>
optionee's income would be taxable, in the year the optionee disposed of the
shares. However, if the disposition occurs within two years of the date of the
grant and the disposition is a sale or exchange with respect to which a loss, if
sustained, would be recognized (generally any disposition other than to a
related party), then the optionee's income and the Company's deduction would not
exceed the excess (if any) of the amount realized on such sale or exchange over
the adjusted basis of such shares.
The Company believes that the options granted under the Option meet the
requirements of Section 422A of the Internal Revenue Code of 1986 such that: (i)
no taxable income will be realized by the optionee upon the exercise of his
option, provided that at all times during the period beginning with the date of
the granting of the option and ending on the day three months before the date of
such exercise, the optionee was an employee of either the corporation granting
the option, a related corporation of such corporation, or a corporation (or a
related corporation of such corporation) issuing or assuming a stock option in a
transaction to which Section 425(a) applies; (ii) the optionee, upon the
disposition of the shares acquired upon such exercise, will realize capital gain
or loss, rather than ordinary income or loss, in the amount of the difference
between the option price and the sale price, provided that no disposition of
such shares is made by the optionee within two years from date of granting the
option nor one year after the transfer of such shares to him; and (iii) the
Company will not be allowed any deduction for federal income tax purposes with
respect to the shares issued upon the exercise of the options except in those
cases where the optionee is subject to taxation at ordinary income rates for
failure to comply with the two-year and one-year holding period requirements.
For options exercised after 1987, the optionee generally must include in
alternative minimum taxable income the amount by which the option price paid is
exceeded by the fair market value at the time the optionee's rights to the
shares are freely transferable or are not subject to a substantial risk of
forfeiture. The alternative minimum tax is payable only if the alternative
minimum tax exceeds the regular income tax liability.
The provision of Section 401(a) of the Code, relating to "qualified"
pension, profit sharing and stock bonus plans, do not apply to the options or
underlying shares covered hereby.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed on
for the Company by Gary A. Agron, 5445 DTC Parkway, Suite 520, Englewood,
Colorado 80111. Mr. Agron is a director of the Company and owns 86,250 shares of
its Common Stock and options to purchase an additional 15,500 shares.
7
<PAGE>
EXPERTS
The financial statements of the Company incorporated by reference in the
Company's Annual Report on Form 10KSB for the years ended September 30, 1995 and
1994 and the transition period ended December 31, 1995 have been audited by AJ.
Robbins, P.C., as set forth in their report included therein and incorporated
herein by reference. The financial statements referred to above are incorporated
herein by reference in reliance upon such report and upon the authority of such
firm as experts in auditing and accounting.
8
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference
The Registrant hereby incorporates by reference in this Registration
Statement the following documents previously filed with the Securities and
Exchange Commission:
(a) The Registrant's Annual Report on Form 10-KSB for the years ended
September 30, 1995 and 1994 and the transition period ended December
31, 1995 filed pursuant to Section 13(a) of the Securities Exchange Act
of 1934 (the "Exchange Act");
(b) The Registrant's Quarterly Reports on Form 10-QSB for the quarters
ended June 30, 1995 and March 31, 1996 filed pursuant to Section 13(a)
of the Exchange Act; and
(c) The description of the Registrant's Common Stock that is contained
in the Company's Registration Statement on Form S-1 under the
Securities Act of 1933, as amended (Registration No. 33-40261),
including any amendments or reports filed for the purpose of updating
such descriptions.
(d) All other reports and subsequent reports filed pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended.
All reports and definitive proxy or information statements filed by the
Registrant pursuant to Section 13(a), 13(c), 14 or 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 hereby have
been sold or which deregisters all securities then remaining unsold at the time
of such amendment will be deemed to be incorporated by reference into this
Registration Statement 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
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
Not applicable.
1
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Gary A. Agron has acted as the Registrant's securities counsel in
connection with this Registration Statement. Mr. Agron is a director of the
Registrant, owns 86,250 shares of the Registrant's Common Stock and holds an
option to purchase an additional 12,500 shares at $2.00 per share at any time
until October 23, 2000 and 3,000 shares at $1.70 per share until June 2006.
Item 6. Indemnification of Directors and Officers.
Article IX of the Registrant's Articles of Incorporation provides as
follows:
ARTICLE IX
INDEMNIFICATION OF DIRECTORS
A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability to the Corporation or to its
shareholders for monetary damages for (i) any breach of the directors' duty of
loyalty to the Corporation or to its shareholders; (ii) acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law; (iii) acts specified in Section 7-5-114 of the Colorado Corporation Code;
or (iv) any transaction from which the director derived an improper personal
benefit.
If the Colorado Corporation Code is hereafter amended to authorize the
further elimination or limitation of the liability of a director, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Colorado Corporation Code, as so amended.
Any repeal or modification of the foregoing provisions of this Article by
the shareholders of the Corporation shall not affect adversely any right or
protection of a director of the Corporation in respect of any acts or omissions
of such director occurring prior to the time of such repeal or modification."
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The following is a list of Exhibits filed as part of the Registration
Statement:
4. 1994 Management Stock Option
2
<PAGE>
5. Opinion of Gary A. Agron
24. Consent of AJ. Robbins, P.C., independent certified public
accountant
Item 9. Undertakings
The 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 prospectus required by Section 10(a)(3) of the
Securities Act of 1933; (2) 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
Registration Statement; (3) that, for the purpose of determining any liability
under the Securities Act of 1933, each 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; and (4) 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 Option.
The Registrant hereby undertakes to deliver or cause to be delivered with
the prospectus to each person to whom the prospectus is sent or given, the
latest annual report to security holders that is incorporated by reference in
the prospectus and furnished pursuant to and meeting the requirements of Rule
14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where
interim financial information required to be presented by Article 3 of
Regulation S-X are not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
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 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 against the
Registrant 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 juris-diction 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.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado, on this 28th day of July,
1996.
U.S. PAWN, INC.
By:
-------------------------------------
Melvin Wedgle, Chief Executive
Officer and President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
--------- ----- ----
/s/ Melvin Wedgle Chief Executive Officer, July 28, 1996
- ------------------------- President and Director
Melvin Wedgle (Principal Executive Officer)
/s/ Charles C. Van Gundy Vice President of Finance July 28, 1996
- -------------------------- Chief Financial and Principal)
Charles C. Van Gundy Accounting Officer), Secretary
and Director
/s/ Gary A. Agron Director July 28, 1996
- --------------------------
Gary A. Agron
Director
- --------------------------
Daniel B. Rudden
Director
- --------------------------
Stanley M. Edelstein
/s/ Larry M. Snyder Director July 28, 1996
- --------------------------
Larry M. Snyder
4
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page No.
- ----------- ------- --------
4. 1994 Management Stock Option
5. Opinion of Gary A. Agron
24. Consent of AJ. Robbins, P.C.,
independent certified public
accountant.
5
U.S. PAWN, INC.
STOCK OPTION AGREEMENT
Between:
U.S. PAWN, INC. (the "Company") and MELVIN WEDGLE, (the "Management Employee")
dated March 25, 1994.
The Company hereby grants to the Management Employee an option (the
"Option") to purchase 125,000 shares of the Company's common stock upon the
following terms and conditions:
1. Purchase Price. The purchase price of the stock shall be $1.81 per
share, which is not less than the fair market value of the stock on the date of
this Agreement.
2. Non-Statutory Option. The Option shall be a Non-Statutory Stock Option.
3. Period of Exercise. The Option will expire ten years from the date of
this Agreement. The Option may be exercised only while the Management Employee
is actively employed by the Company and as provided in Section 5, dealing with
termination of employment.
4. Transferability. This Option is not transferable except by will or the
laws of descent and distribution and may be exercised during the lifetime of the
Management Employee only by him or her.
5. Termination of Employment. In the event that employment of the
Management Employee with the Company is terminated, the Option may be exercised
(to the extent exercisable at the date of his termination) by the Management
Employee within three months after the date of termination; provided, however,
that:
(a) If the Management Employee's employment is terminated because he is
disabled within the meaning of Internal Revenue Code Section 422A, the
Management Employee shall have one year rather than three months to exercise any
Options earned pursuant to paragraph 3 above.
(b) If the Management Employee dies, any Options earned pursuant to
paragraph 3 above may be exercised by his legal representative or by a person
who acquired the right to exercise such option by bequest or inheritance or by
reason of the death of the Management Employee, but the Option must be exercised
within one year after the date of the Management Employee's death.
(c) If the Management Employee's employment is terminated for cause,
this Option shall terminate immediately.
(d) In no event (including death of the Management Employee) may this
Option be exercised more than ten years from the date hereof.
6. No Guarantee of Employment. This Agreement shall in no way restrict the
right of the Company or any Subsidiary Corporation to terminate Management
Employee's employment at any time.
<PAGE>
7. Investment Representation: Legend. The Management Employee (and any
other purchaser under paragraphs S(a) or 5(b) hereof) represents and agrees that
all shares of common stock purchased by him under this Agreement will be
purchased for investment purposes only and not with a view to distribution or
resale. The Company may require that an appropriate legend be inscribed on the
face of any certificate issued under this Agreement, indicating that transfer of
the shares is restricted, and may place an appropriate stop transfer order with
the Company's transfer agent with respect to such shares.
8. Method of Exercise. The Option may be exercised, subject to the terms
and conditions of this Agreement, by written notice to the Company. The notice
shall be in the form attached to this Agreement and will be accompanied by
payment (in such form as the Company may specify) of the full purchase price of
the shares to be issued, and in the event of an exercise under the terms of
paragraphs S(a) or 5(b) hereof, appropriate proof of the right to exercise the
Option. The Company will issue and deliver certificates representing the number
of shares purchased under the Option, registered in the name of the Management
Employee (or other purchaser under paragraph 5 hereof) as soon as practicable
after receipt of the notice.
9. Withholding. In any case where withholding is required or advisable
under federal, state or local law in connection with any exercise by Management
Employee hereunder, the Company is authorized to withhold appropriate amounts
from amounts payable to Management Employee, or may require Management Employee
to remit to the Company am amount equal to such appropriate amounts.
ACCEPTED U.S. PAWN, INC.
/S/ MELVIN WEDGLE By: /S/ CHARLES C. VAN GUNDY
- ----------------------------- -------------------------------
Charles C. Van Gundy,
Vice President
2
<PAGE>
U.S. PAWN, INC.
NOTICE OF EXERCISE OF STOCK OPTION
UNDER THE STOCK OPTION AGREEMENT
To: Compensation Committee
U.S. Pawn Inc.
7215 Loweil Boulevard
Westminster, CO 80030)
I hereby exercise my Option dated to purchase shares of
no par value common stock of the Company at the option exercise price of $1.81
per share. Enclosed is a certified or cashier's check in the total amount of
$ , or payment in such other form as the Company has specified.
I represent to you that I am acquiring said shares for investment purposes
and not with a view to any distribution thereof. I understand that my stock
certificate may bear an appropriate legend restricting the transfer of my shares
and that a stock transfer order may be placed with the Company's transfer agent
with respect to such shares.
I request that my shares be issued in my name as follows:
- --------------------------------------------------------------------------------
(Print your name in the form in which you wish to have the shares registered)
-------------------------------------------------------------------------------
(Social Security Number)
- --------------------------------------------------------------------------------
(Street and Number)
- --------------------------------------------------------------------------------
(City) (State) (Zip Code)
Dated: , 199
---------------- -------
Signature:
-----------------------------
Law Office of Gary A. Agron
5445 DTC Parkway
Suite 520
Englewood, Colorado 80111 EXHIBIT 5
Telephone (303) 770-7254
Facsimile (202) 770-7257
July 28, 1996
U.S. Pawn, Inc.
7215 Lowell Boulevard
Westminster, Colorado 80030
Gentlemen:
We have assisted in the preparation and filing by U.S. Pawn, Inc. (the
"Company") of a Registration Statement on Form S-8 (the "Registration
Statement") with the Securities and Exchange Commission, relating to 325,000
shares of no par value Common Stock (the "Option Shares"), of the Company
issuable upon exercise of options granted under the Company's 1994 Management
Stock Option (the "Option").
We have examined such records and documents and have made such examination
of laws as we considered necessary to form a basis for the opinions set forth
herein. In our examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals, and the
conformity with the originals of all documents submitted to us as copies
thereof.
Based upon and subject to the foregoing we are of the opinion that the
Option Shares have been duly authorized and reserved for issuance and such
Option Shares, when issued in accordance with the terms of the Option against
payment therefor, will be duly and validly issued, fully paid and nonassessable.
The foregoing assumes that all requisite steps will be taken to comply with
the requirements of the Securities Act of 1933, as amended, and applicable state
laws relating to the offer and sales of securities.
We consent to the filing of a copy of this option in the Registration
Statement and the use of our opinion in connection therewith.
Very truly yours,
Gary A. Agron
EXHIBIT 24
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in the Registration Statement on Form S-8 of U.S. Pawn, Inc.
("Registration Statement") of our report dated March 18, 1996, included in U.S.
Pawn, Inc.'s Form 10-KSB for the year ended December 31, 1995, and to all
references to our firm included in this Registration Statement.
AJ. ROBBINS, P.C.
Certified Public Accountants
and Consultants
Denver, Colorado
July 30, 1996
