As filed with the Securities and Exchange Commission on April 21, 1997.
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)
1995 Directors' Stock Option Plan
----------------------------------
(Full title of the plan)
Melvin Wedgle, President
7215 Lowell Boulevard
Westminster, Colorado 80030
(303) 657-3550
----------------------------------
(Name, address, including zip code,
and 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 90,000 $4.375 $393,750 $120
=======================================================================================================
</TABLE>
(1) This Registration Statement, pursuant to Rule 416, covers any
additional shares of no par value Common Stock ("shares") which become issuable
under the 1995 Directors' Stock Option Plan ("Plan") 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 90,000 shares are issuable under the Plan at an offering price per
share based upon the closing price of the Common Stock on NASDAQ on April 16,
1997 of $4.375 per share.
ii
<PAGE>
<TABLE>
<CAPTION>
U.S. PAWN, INC.
PART I
Cross Reference Sheet Required by Item 501
Item in Form S-8 Caption In Prospectus
---------------- ---------------------
<S> <C> <C>
1. General Plan Information.................... Cover Page; Issuer and Participating Employees;
Description of the Plan; Tax Consequences
2. Registrant Information and
Employee Plan Annual
Information................................. Available Information
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)
</TABLE>
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 1995
Directors' Stock Option Plan by directors of the Registrant, as defined in Rule
405 under the Securities Act of 1933, as amended.
iv
<PAGE>
90,000 SHARES
COMMON STOCK
(No Par Value)
U.S. PAWN, INC.
---------------
1995 DIRECTORS' STOCK OPTION PLAN
---------------
This Reoffer Prospectus ("Prospectus") relates to the offering by U.S.
Pawn, Inc. (the "Company") and the Company's directors of up to 90,000 shares
(subject to adjustment in certain circumstances) of the Company's no par value
Common Stock (the "shares"), purchasable by directors of the Company pursuant to
Common Stock options ("options") under the Company's 1995 Directors' Stock
Option Plan (the "Plan"). As of the date hereof 78,000 options issued under the
Plan are outstanding.
---------------
This Prospectus will be used by persons who are "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 April 21, 1997.
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
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 may furnish such other reports as may
be authorized, from time to time, by its 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 directors 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.................................................. 5
SEC POSITION REGARDING INDEMNIFICATION.......................... 5
DESCRIPTION OF THE PLAN......................................... 6
APPLICABLE SECURITIES LAW RESTRICTIONS.......................... 7
TAX CONSEQUENCES................................................ 8
LEGAL MATTERS................................................... 9
EXPERTS ....................................................... 9
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 18 pawnshops located in Colorado, Wyoming and Nevada. Its executive
offices are located at 7215 Lowell Boulevard, Westminster, Colorado 80030, (303)
657-3550.
SELLING STOCKHOLDERS
This Prospectus relates to possible sales by directors of the Company of
shares they acquire through exercise of options granted under the Plan. The
names of directors who may be Selling Stockholders from time to time are listed
below, along with the number of shares of Common Stock currently owned by them
and the number of shares offered for sale hereby. The number of shares offered
for sale by such individuals may be updated in supplements to this Prospectus,
which will be filed with the Securities and Exchange Commission in accordance
with Rule 424(b) under the Securities Act of 1933, as amended.
<TABLE>
<CAPTION>
Number of
Shareholdings Shares Which
Name of Selling Stockholder Number Percent May Be Sold
- --------------------------- ------ ------- -----------
<S> <C> <C> <C>
Melvin Wedgle(1)(2)(4) 613,638 15.8% 13,000
Gary A. Agron(1)(4) 56,750 1.4% 13,000
Daniel B. Rudden(4) 8,000 * 13,000
Stanley M. Edelstein(3)(4) 20,500 * 13,000
Charles C. Van Gundy(5) 31,750 * 13,000
Larry M. Snyder(6) 20,500 * 13,000
</TABLE>
- ----------
* Less than 1%
(1) Includes currently exercisable stock options to purchase 12,500 shares held
by Messrs. Wedgle and Agron at $2.00 per share exercisable until October
23, 2000. Mr. Wedgle's options include 6,250 options held by Teresa R.
O'Neill.
4
<PAGE>
(2) Includes currently exercisable stock options to purchase 220,000 shares at
$1.81 per share until March 25, 2004.
(3) Includes currently exercisable stock options to purchase 12,500 shares at
$4.36 per share until October 2, 2001.
(4) Includes currently exercisable stock options to purchase 8,000 shares at
$1.70 per share until December 28, 2005.
(5) Includes currently exercisable options to purchase 10,000 shares at $2.06
per share until March 24, 2005, 12,500 at $4.38 per share until January 16,
2007, 8,000 shares at $1.70 per share until December 28, 2005 and 1,250
shares at $5.12 per share until January 20, 2000.
(6) Includes currently exercisable options to purchase 12,500 shares at $4.38
per share until January 16, 2007 and 8,000 shares at $1.70 per share until
December 28, 2005.
The address of each Selling Stockholder is the same as the Company's
address. All shares listed above for sale represent shares issuable upon
exercise of options granted under the Plan.
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 will
generally involve payment of brokers' commissions. 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, 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.
5
<PAGE>
DESCRIPTION OF THE PLAN
In July 1995, the Company's Board of Directors approved the Plan for the
benefit of directors of the Company. The Company believes that the Plan provides
an incentive to individuals to act as directors of the Company and to maintain a
continued interest in the operations and future of the Company. All options were
issued under Section 422A of the Internal Revenue Code.
The terms of the Plan provide that the Company is authorized to grant
options to purchase shares of Common Stock ("options" or "option shares") to
directors of the Company upon the majority consent of the Company's directors.
All directors are eligible to receive options under the Plan. The purchase price
to be paid by optionees for the option shares must not be less than the fair
market value of the options shares as reported by the NASDAQ SmallCap Market on
the date of the grant. Options must be exercised within 10 years following the
date of grant, and the optionee must exercise options during service to the
Company or within 30 days of termination of such service (12 months in the event
of death on disability). If directors are terminated for cause, any unexercised
options are cancelled as of the date of termination.
A total of 90,000 shares of the Company's authorized but unissued Common
Stock have been reserved for issuance pursuant to the Plan of which 78,000
options are currently outstanding at an exercise price of $1.70 per share. Up to
12,000 remaining stock options may be issued based upon a formula determined by
the Company's net profits as a percentage of total revenue.
Options under the Plan 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 Plan will be proportionately adjusted to reflect forward and
reverse stock splits. The holder of an option under the Plan has none of the
rights of a shareholder until shares are issued.
Amendments to the Plan may be made by the Board of Directors, except that
no amendments may be made without the approval of the shareholders which, (i)
change the number of shares subject to the Plan, (ii) change the designation of
the class of persons eligible to receive options, or (iii) decrease the price at
which options may be granted.
The Plan is administered by the full Board of Directors, who have the power
to interpret the Plan, determine which persons are to be granted options and the
amount of such options.
In the event the Company acquires, in whole or in part, the assets or
equity securities of any other entity, no adjustment will be made to the
optionee's option shares. In the event the Company is acquired by another
company or merges with another company, the optionee shall have a period of 180
days to exercise all option shares that have accrued for purchase. Any option
shares that have not accrued as of the date of the closing of the merger will
automatically expire.
6
<PAGE>
The provisions of the Federal Employee Retirement Income Security Act of
1974 do not apply to the Plan. 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 the Company's directors in cash from
their own funds. No payroll deductions or other installment plans have been
established. No reports will be made to participating directors except in the
form of updated information for the Prospectus.
Shares issuable under the Plan may be sold in the open market, without
restrictions, as free trading securities.
There are no assets administered under the Plan, and, accordingly, no
investment information is furnished herewith.
No options may be assigned, transferred, hypothecated or pledged by the
option holder. No person may create a lien on any securities under the Plan,
except by operation of law. However, there are no restrictions on the resale of
the shares underlying the options.
The Plan will remain in effect until July 28, 2005 and may be extended by
the Company's Board of Directors. Additional information concerning the Plan and
its administrators may be obtained from the Company at the address and telephone
number indicated above.
APPLICABLE SECURITIES LAW RESTRICTIONS
If the optionee is deemed to be 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 will be subject to certain
restrictions and requirements. The Company's legal counsel may be called upon to
discuss these applicable restrictions and requirements with any optionee who may
be deemed to be an affiliate, prior to exercising an option.
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 90,000 shares may be issued under the Plan. The Company has
authorized 30,000,000 shares, of which 3,668,446 shares are outstanding as of
April 15, 1997. 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.
7
<PAGE>
Directors 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 the optionee does not dispose of the
shares acquired pursuant to the exercise within two years of the date of the
granting of the option nor within one year from the transfer of the shares
pursuant to 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: (1)
the fair market value of the stock on the date of exercise over the option price
of the stock; or (2) 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
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 expects that optionees will be
required to exercise their options within five years from the date of grant
although optionees may hold the shares issuable upon exercise of the options
indefinitely.
For options exercised after 1987, an individual 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 individual'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.
8
<PAGE>
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 36,250 shares of
its Common Stock and options to purchase an additional 20,500 shares including
8,000 options granted under the Plan.
EXPERTS
The financial statements of the Company incorporated by reference in the
Company's Annual Report on Forms 10KSB for the year ended September 30, 1995,
the transition period ended December 31, 1995 and the year ended December 31,
1996 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.
9
<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 Forms 10K and 10KSB for the year
ended September 30, 1995, the transition period ended December 31, 1995 and
the year ended December 31, 1996 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 March 31, 1996, June 30, 1996 and September 30, 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.
II-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 36,250 shares of the Registrant's Common Stock and holds
options to purchase 12,500 shares at $2.00 per share at any time until October
2000 and 8,000 shares at $1.70 per share until December 2005.
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. 1995 Directors' Stock Option Plan
II-2
<PAGE>
4.1 Form of 1995 Directors' Stock Option Agreement under the 1995
Directors' Stock Option Plan
5. Opinion of Gary A. Agron
24. Consent of AJ. Robbins, P.C., independent certified public accountants
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 Plan.
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.
II-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 Westminster, State of Colorado, on this 18th day of
April, 1997.
U.S. PAWN, INC.
By: /s/ Melvin Wedgle
-----------------------------------
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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Melvin Wedgle Chief Executive Officer, April 18, 1997
- ------------------------------------
Melvin Wedgle President and Director
(Principal Executive
Officer)
/s/ Charles C. Van Gundy Vice President of Finance April 18, 1997
- ------------------------------------
Charles C. Van Gundy (Chief Financial and Principal
Accounting Officer), Secretary
and Director
/s/ Gary A. Agron Director April 18, 1997
- ------------------------------------
Gary A. Agron
- ------------------------------------ Director
Daniel B. Rudden
- ------------------------------------ Director
Stanley M. Edelstein
/s/ Larry M. Snyder Director April 18, 1997
- ------------------------------------
Larry M. Snyder
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Exhibit Page No.
- ----------- ------- --------
4. 1995 Directors' Stock Option Plan
4.1 Form of 1995 Directors' Stock Option Agreement
under the Directors' Stock Option Plan
5. Opinion of Gary A. Agron
24. Consent of AJ. Robbins, P.C., independent
certified public accountants
II-5
U.S. PAWN, INC.
1995 DIRECTORS'
STOCK: OPTION PLAN
Article I. Establishment and Purpose
------------------------------------
1.1 Establishment. U.S. Pawn. Inc., a Colorado corporation (the "Company"),
hereby establishes a stock option plan for its Directors as described herein,
which shall be known as the 1995 Directors' Stock Option Plan (the "Plan"). It
is intended that certain of the options issued pursuant to the Plan may
constitute incentive stock options within the meaning of Section 422A of the
Internal Revenue Code, and that other options issued pursuant to the Plan shall
constitute nonstatutory options. The Board shall determine which options are to
be incentive stock options and which are to be nonstatutory options and shall
enter into option agreements with recipients accordingly.
1.2 Purpose. The purpose of this Plan is to enhance stockholder investment
by attracting, retaining and motivating Directors of the Company and to
encourage stock ownership by such Directors by providing a means to acquire a
proprietary interest in the Company's success.
Article II. Definitions
-----------------------
2.1 Definitions. Whenever used herein, the following terms shall have the
respective meanings set forth below, unless the context clearly requires
otherwise. and when said meaning is intended, the term shall be capitalized.
(a) "Board" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Committee provided for by Article IV hereof,
which may be created at the discretion of the Board.
(d) "Company" means U.S. Pawn, Inc. a Colorado Corporation.
(e) "Date of Exercise" means the date the Company receives notice, by an
Optionee, of the exercise of an option pursuant to Section 8.1 of this
Plan. Such notice shall indicated the number of shares of Stock the
Optionee intends to exercise.
(f) "Director" shall mean a member of the Board of Directors of the
Company.
(g) "Employee" means any person, including an officer or director of the
Company who is employed by the Company.
(h) "Fair Market Value" means the fair market value of Stock upon which an
option is granted under this Plan.
(i) "Incentive Stock Option" means an Option granted under this Plan which
is intended to qualify as an incentive stock option within the meaning of
Section 422A of the Code.
95dirp1 1. doc
<PAGE>
(j) "Management" or "Management Employee" means an executive officer as
that term is defined under the rules and regulations promulgated under the
Securities Act of 1933, as amended.
(k) "Nonstatutory Option" means an Option granted under this Plan which is
not intended to quality as an incentive stock option within the meaning of
Section 422A of the Code. Nonstatutory Options may be granted at such times
and subject to such restrictions as the Board shall determine without
conforming to the statutory rules of Section 422A of the Code applicable to
incentive stock options.
(1) "Option" means the right granted under this Plan, to purchase Stock of
the Company at the option price for a specified period of time. For
purposes of this Plan, an Option may be either an Incentive Stock Option or
a Nonstatutory Option.
(m) "Optionee" means a Director holding an Option under the Plan.
(n) "Significant Shareholder" means an individual who, within the meaning
of Section 422A(b)(6) of the Code, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company. In determining whether an individual is a Significant Shareholder,
an individual shall be treated as owning stock owned by certain relatives
of the individual and certain stock owned by corporations in which the
individual is a shareholder, partnerships in which the individual is a
partner, and estates or trusts of which the individual is a beneficiary,
all as provided in Section 425(d) of the Code.
(o) "Stock" means the no par value common stock of the Company.
2.2 Gender and Number. Except when otherwise indicated by the context, any
masculine terminology when used in this Plan also shall include the feminine
gender, and the definition of any term herein in the singular also shall include
the plural.
Article III. Eligibility and Participation
------------------------------------------
3.1 Eligibility and Participation. All Directors are eligible to
participate in this Plan and receive Incentive Stock Options and/or Nonstatutory
Options hereunder.
Article IV. Administration
--------------------------
4.1 Administration. The Board shall be responsible for administering the
Plan.
The Board is authorized to interpret the Plan; to prescribe, amend, and
rescind rules and regulations relating to the Plan; to provide for conditions
and assurances deemed necessary or advisable to protect the interests of the
Company and to make all determinations necessary~ or advisable for the
administration of the Plan, but only to the extent not contrary to the express
provisions of the Plan. Determinations, interpretations or other actions made or
taken by the Board, pursuant to the provisions of this Plan, shall be final and
binding and conclusive for all purposes and upon all persons.
At the discretion of the Board, this Plan may be administered by a
Committee which shall be an executive committee of the Board, consisting of not
less than three (3) members of the Board. The members of such Committee may be
directors who are eligible to receive Options under this Plan, but Options may
<PAGE>
be granted to such persons only by action of the full Board and not by action of
the Committee. Such Committee shall have full power and authority, subject to
the limitations of the Plan and any limitations imposed by the Board, to
construe, interpret and administer this Plan and to make determinations which
shall be final, conclusive and binding upon all persons. including, without
limitation. the Company, the stockholders, the directors and any persons having
any interests in any Options which may be granted under this Plan, and, by
resolution or resolutions providing for the creation and issuance of any such
Option, to fix the terms upon which. the time or times at or within which, and
the price or prices at which any such shares may be purchased from the Company
upon the exercise of such Option, which terms, time or times and price or prices
shall, in every case, be set forth or incorporated by reference in the
instrument or instruments evidencing such Option, and shall be consistent with
the provisions of the Plan.
The Board may from time to time remove members from or add members to the
Committee. The Board may terminate the Committee at any time. Vacancies on the
Committee, howsoever caused, shall be filled by the Board. The Committee shall
select one of its members as Chairman, and shall hold meetings at such times and
places as the Chairman may determine. A majority of the Committee at which a
quorum is present, or acts reduced to or approved in writing by all of the
members of the Committee, shall be the valid acts of the Committee. A quorum
shall consist of two-thirds (2/3) of the members of the Committee.
Where the Committee has been created by the Board, references herein to
actions to be taken by the Board shall be deemed to refer to the Committee as
well, except where limited by this Plan or by the Board.
The Board shall have all of the enumerated powers of the Committee but
shall not be limited to such powers. No member of the Board or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any Option granted under it.
4.2 Special Provisions for Grants to Officers or Directors. Rule 16b-3
under the Securities and Exchange Act of 1934 (the "Act") provides that the
grant of a stock option to a director or officer of a company subject to the Act
will be exempt from the provisions of Section 16(b) of the Act if the conditions
set forth in said Rule are satisfied. Unless otherwise specified by the Board,
grants of Options hereunder to individuals who are officers or directors of the
Company shall be made in a manner that satisfies the conditions of said rule.
Article V. Stock Subject to the Plan
------------------------------------
5.1 Number. The total number of shares of Stock hereby made available and
reserved for issuance under the Plan shall be 90,000. The aggregate number of
shares of Stock available under this Plan shall be subject to adjustment as
provided in Section 5.33. The total number of shares of Stock may be authorized
but unissued shares of Stock, or shares acquired by purchase as directed by the
Board from time to time in its discretion, to be used for issuance upon exercise
of Options granted hereunder.
5.2 Unused Stock. If an Option shall expire or terminate for any reason
without having been exercised in full, the unpurchased shares of Stock subject
thereto shall (unless the Plan shall have terminated) become available for other
Options under the Plan.
5.3 Adjustment in Capitalization. In the event of any change in the
outstanding shares of Stock by reason of a stock dividend or split,
recapitalization reclassification or other similar corporate change, the
aggregate number of shares of Stock set forth in Section 5.1 shall be
appropriately adjusted by the Board, whose determination shall be conclusive;
provided, however, that fractional shares shall be rounded to the nearest whole
share. In any such case, the number and kind of shares that are subject to any
3
<PAGE>
Option (including any Option outstanding after termination of employment) and
the Option price per share shall be proportionately and appropriately adjusted
without any change in the aggregate Option price to be paid therefor upon
exercise of the Option.
Article VI. Duration of the Plan
--------------------------------
6.1 Duration of the Plan. The Plan shall be in effect for ten years from
the date of its approval by the Company's shareholders. Any Options outstanding
at the end of said period shall remain in effect in accordance with their terms.
The Plan shall terminate before the end of said period, if all Stock subject to
it has been purchased pursuant to the exercise of Options granted under the
Plan.
Article VII. Terms of Stock Options
-----------------------------------
7.1 Grant of Options. Subject to Section 5.1, Options may be granted to
Directors at any time and from time to time as determined by the Board. The
Board shall have complete discretion in determining the number of Options
granted to each Optionee. In making such determinations, the Board may take into
account the nature of services rendered by such Directors, their present and
potential contributions to the Company, the financial results of the Company and
such other factors as the Board in its discretion shall deem relevant. The Board
also shall determine whether an Option is to be an Incentive Stock Option or a
Nonstatutory Option.
In the case of Incentive Stock Options the total Fair Market Value
(determined at the date of grant) of shares of Stock with respect to which
incentive stock options are exercisable for the first time by the Optionee
during any calendar year under all plans of the Company under which incentive
stock options may be granted (and all such plans of any Parent Corporations and
any Subsidiary Corporations of the Company) shall not exceed $1OO,000.
(Hereinafter, this requirement is sometimes referred to as the "$100,000
Limitation.")
Nothing in this Article VII of the Plan shall be deemed to prevent the
grant of Options permitting exercise in excess of the maximums established by
the preceding paragraph where such excess amount is treated as a Nonstatutory
Option.
The Board is expressly given the authority to issue amended or replacement
Options with respect to shares of Stock subject to an Option previously granted
hereunder. An amended Option amends the terms of an Option previously granted
and thereby supersedes the previous Option. A replacement Option is similar to a
new Option granted hereunder except that it provides that it shall be forfeited
to the extent that a previously granted Option is e.exercised, or except that
its issuance is conditioned upon the termination of a previously granted Option.
7.2 No Tandem Options. Where an Option granted under this Plan is intended
to be an Incentive Stock Option, the Option shall not contain terms pursuant to
which the exercise of the Option would affect the Optionee's right to exercise
another Option, or vice versa, such that the Option intended to be an Incentive
Stock Option would be deemed a tandem stock option within the meaning of the
regulation under Section 422A of the Code.
7.3 Option Agreement: Terms and Conditions to Apply Unless Otherwise
Specified. As determined by the Board on the date of grant, each Option shall be
evidenced by an Option Agreement (the "Option Agreement") that includes the
nontransferability provisions required by Section 10.2 hereof and specifies:
whether the Option is an Incentive Stock Option or a Nonstatutory Option; the
Option price; the duration of the Option or a Nonstatutory Option; the Option
price; the duration of the Option; the number of shares of Stock to which the
4
<PAGE>
Option applies; any vesting or exercisability restrictions which the Board may
impose; in the case of an Incentive Stock Option, a provision implementing the
$100,000 Limitation; and any other terms or conditions which the Board may
impose. All such terms and conditions shall be determined by the Board at the
time of the grant of the Option.
If not otherwise specified by the Board, the following terms and conditions
shall apply to Options granted under the Plan:
(a) Term. The duration of the Option shall be ten (10) years from the date
of grant.
(b) Exercise of Option. Unless an Option is terminated as provided
hereunder, an Optionee may exercise his Option for up to, but not in excess of,
the amounts of shares subject to the Option Agreement.
All Option Agreements shall incorporate the provisions of this Plan by
reference, with certain provisions to apply depending upon whether the Option
Agreement applies to an Incentive Stock Option or to a Nonstatutory Option.
7.4 Option Price. No Incentive Stock Option granted pursuant to this Plan
shall have an Option price that is less than the Fair Market Value of Stock on
the date the Option is granted. Incentive Stock Options granted to Significant
Shareholders shall have an Option price or not less than 110 percent of the Fair
Market Value of Stock on the date of grant. The Option price for Nonstatutory
Options shall be established by the Board and shall not be less than 100 percent
of the Fair Market Value of Stock on the date of grant.
7.5 Terms of Options. Each Option shall expire at such time as the Board
shall determine when it is granted, provided, however, that no Option shall be
exercisable later than ten years from the date of its grant.
7.6 Exercise of Options. Options granted under the Plan shall be
exercisable at such times and be subject to such restrictions and conditions as
the Board shall in each instance approve, which need not be the same for all
Optionees.
7.7 Payment. Payment for all shares of Stock shall be made at the time that
an Option, or any part thereof, is exercised, and no shares shall be issued
until full payment therefor has been made. Payment shall be made (i) in cash, or
(ii) if acceptable to the Board. in Stock or in some other form; provided,
however, in the case of an Incentive Stock Option, that said other form of
payment does not prevent the Option from qualifying for treatment as an
"incentive stock option" within the meaning of the Code.
Article VIII. Written Notice. Issuance of
Stock Certificates. Stockholder Privileges
------------------------------------------
8.1 Written Notice. An Optionee wishing to exercise an Option shall give
written notice to the Company, in the form and manner prescribed by the Board.
Full payment for the shares exercised pursuant to the Option must accompany the
written notice.
8.2 Issuance of Stock Certificates. As soon as practicable after the
receipt of written notice and payment, the Company shall deliver to the Optionee
or to a nominee of the Optionee a certificate or certificates for the requisite
number of shares of Stock.
8.3 Privileges of a Stockholder An Optionee or any other person entitled to
exercise an Option under this Plan shall not have stockholder privileges with
respect to any Stock covered by the Option until the date of issuance of a stock
certificate for such stock.
5
<PAGE>
Article IX. Termination of Employment or Services
-------------------------------------------------
Except as otherwise expressly specified by the Board for Nonstatutory
Options all Options granted under this Plan shall expire six months from the
date of termination of participation on the Board by a Director.
Article X. Rights of Optionees
------------------------------
10.1 Service. Nothing in this Plan shall interfere with or limit in any way
the right of the Company or its shareholders to remove any Director pursuant to
C.R.S. Section 7-108-108 and/or C.R.S. Section 7-108-109.
10. Nontransferability. Except as otherwise specified by the Board for
Nonstatutory Options, Options granted under this Plan shall be nontransferable
by the Optionee, other than by will or the laws of descent and distribution, and
shall be exercisable during the Optionee's lifetime only by the Optionee.
Article XI. Amendment. Modification
and Termination of the Plan
---------------------------
11.1 Amendment Modification and Termination of the Plan. The Board may at
any time terminate, and from time to time may amend or modify the Plan,
provided, however, that no such action of the Board, without approval of the
stockholders. may-
(a) increase the total amount of Stock which may be purchased through
Options granted under the Plan, except as provided in Article V;
(b) change the class of individuals eligible to receive Options;
No amendment, modification or termination of the Plan shall in any manner
adversely affect any outstanding Option under the Plan without the consent of
the Optionee holding the Option.
Article XII. Acquisition. Merger and Liquidation
------------------------------------------------
12.1 Acquisition. In the event that an Acquisition occurs with respect to
the Company, the Company shall have the option, but not the obligation, to
cancel Options outstanding as of the effective date of Acquisition, whether or
not such Options are then exercisable, in return for payment to the Optionees of
an amount equal to a reasonable estimate of an amount (hereinafter the "Spread)
equal to the difference between the net amount per share payable in the
Acquisition, or as a result of the Acquisition, less the exercise price of the
Option. In estimating the Spread, appropriate adjustments to give effect to the
existence of the Options shall be made, such as deeming the Options to have been
exercised, with the Company receiving the exercise price payable thereunder; and
treating the shares receivable upon exercise of the Options as being outstanding
in determining the net amount per share. For purposes of this section, an
"Acquisition" shall mean any transaction in which substantially all of the
Company's assets are acquired or in which a controlling amount of the Company's
outstanding shares are acquired, in each case by a single person or entity or an
affiliated group of persons and/or entities. For purposes of this section a
controlling amount shall mean more than 50% of the issued and outstanding shares
of stock of the Company. The Company shall have such an option regardless of how
the Acquisition is effectuated, whether by direct purchase, through a merger or
similar corporate transaction, or otherwise. In cases where the acquisition
consists of the acquisition of assets of the Company, the net amount per share
shall be calculated on the basis of the net amount receivable with respect to
shares upon a distribution and liquidation by the Company after giving effect to
expenses and charges, including but not limited to taxes, payable by the Company
before the liquidation can be completed.
6
<PAGE>
Where the Company does nor exercise irs option under this Section l2.l. the
remaining provisions of this Article XII shall apply, to the extent applicable.
12.2 Merger or Consolidation. Subject to any required action by the
stockholders. if the Company shall be the surviving corporation in any merger or
consolidation, any Option granted hereunder shall pertain to and apply to the
securities to which a holder of the number of shares of Stock subject to the
Option would have been entitled in such merger or consolidation.
12.3 Other Transactions. A dissolution or a liquidation of the Company or a
merger and consolidation in which the Company is not the surviving corporation
shall cause every Option outstanding hereunder to terminate as of the effective
date of such dissolution liquidation, merger or consolidation. However, the
Optionee either (i) shall be offered a firm commitment whereby the resulting or
surviving corporation in a merger or consolidation will tender to the Optionee
an option (the "Substitute Option~) to purchase its shares on terms and
conditions both as to number of shares and otherwise, which will substantially
preserve to the Optionee the rights and benefits of the Option outstanding
hereunder granted by the Company, or (ii) shall have the right immediately prior
to such dissolution, liquidation, merger, or consolidation to exercise any
unexercised Options whether or not then exercisable, subject to the provisions
of this Plan. The Board shall have absolute and uncontrolled discretion to
determine whether the Optionee has been offered a firm commitment and whether
the tendered Substitute Option will substantially preserve to the Optionee the
rights and benefits of the Option outstanding hereunder. In any event, any
Substitute Option for an Incentive Stock Option shall comply with the
requirements of Code Section 425(a).
Article XIII. Securities and Registration
-----------------------------------------
13.1 Securities Registration. In the event that the Company shall deem it
necessary or desirable to register under the Securities Act of 1933, as amended,
or any other applicable statute, any Options or Stock with respect to which an
Option may be or shall have been granted or exercised, or to qualify any such
Options or Stock under the Securities Act of 1933, as amended, or any other
statute, then the Optionee shall cooperate with the Company and take such action
as is necessary to permit registration or qualification of such Options or
Stock.
Unless the Company has determined that the following representation is
unnecessary, each person exercising an Option under the Plan may be required by
the Company, as a condition to the issuance of the shares pursuant to exercise
of the Option, to make a representation in writing (a) that he is acquiring such
shares for his own account for investment and not with a view to, or for sale in
connection with, the distribution of any part thereof, (b) that before any
transfer in connection with the resale of such shares, he will obtain the
written opinion of counsel for the Company, or other counsel acceptable to the
Company, that such shares may be transferred. The Company may also require that
the certificates representing such shares contain legends reflecting the
foregoing.
Article XIV. Tax Withholding
----------------------------
14.1 Tax Withholding. Whenever shares of Stock are to be issued in
satisfaction of Options exercised under this Plan, the Company shall have the
power to require the recipient of the Stock to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements.
Article XV. Indemnification
---------------------------
15.1 Indemnification. To the extent permitted by law, each person who is or
shall have been a member of the Board shall be indemnified and held harmless by
7
<PAGE>
the Company against and from any loss, cost, liability, or expense that may be
imposed upon or reasonably incurred by him in connection with or resulting from
any claim, action, suit, or proceeding to which he may be a party or in which he
may be involved by reason of any action taken or failure to act under the Plan
and against and from any and all amounts paid by him in settlement thereof, with
the Company's approval, or paid by him in satisfaction of judgment in any such
action, suit or proceeding against him, provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before he
undertakes to handle and defend it on his own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's articles of incorporation
or bylaws, as a matter or law, or otherwise, or any power that the Company or
any Subsidiary Corporation may have to indemnify them or hold them harmless.
Article XVI. Requirements of Law
--------------------------------
16.1 Requirements of Law. The granting of Options and the issuance of
shares of Stock upon the exercise of an Option shall be subject to all
applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
16.2 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the state of Colorado.
Article XVII. Effective Date of Plan
------------------------------------
17.1 Effective Date. The Plan shall be effective as of July 21, 1995, the
date of the Plan's adoption by the Board of the Company, subject to approval by
the Company's stockholders.
Article XVIII. Compliance with Code
-----------------------------------
18. 1 Compliance with Code. Incentive Stock Options granted hereunder are
intended to qualify as "incentive stock options" under Code section 422A. If any
provision of this Plan is susceptible to more than one interpretation, such
interpretation shall be given thereto as is consistent with incentive stock
Options granted under this Plan being treated as incentive stock options under
the Code.
Article XIX. No Obligation to Exercise Option
---------------------------------------------
19.1 No Obligation to Exercise. The granting of any Option shall impose no
obligation upon the holder thereof to exercise such Option.
Dated at Westminster, Colorado July 21, 1995.
U.S. PAWN, INC.
By: /s/ Melvin Wedgle, President
----------------------------------------
Melvin Wedgle
U.S. PAWN, INC.
STOCK OPTION AGREEMENT
UNDER THE: 1995 DIRECTORS' STOCK OPTION PLAN
Between:
U.S. PAWN, INC. (the "Company") and STANLEY M. EDELSTEIN, (the "Director") dated
June 2, 1996.
The Company hereby grants to the Director an option (the "Option") to
purchase 3,000 shares of the Company's common stock under the U.S. Pawn. Inc.
1995 Directors' Stock Option Plan (the "Plan") upon the following terms and
conditions:
1. Purchase Price. The purchase price of the stock shall be $1.70 per
share, which is not less than the fair market value of the average closing bid
and ask price for the Company's common stock as reported by NASDAQ for the
trading period two weeks before and two weeks after December 28, 1995. This
Option may not be exercised for less than seventy-five shares at any time unless
the number of shares purchased is the total number of purchasable at the time
under the Option.
2. Incentive Stock Option. The Option shall be an Incentive Stock Option,
as defined in the Plan.
3. Period of Exercise. The Option will expire ten years from the date of
this Agreement. The Option may be exercised only while the Director is a member
of the Company's Board of Directors ("Board) or within six months thereafter
pursuant to Section 6.
Where the Director holds (whether under this Option alone or under this
Option in conjunction with other stock options) stock options upon shares of the
Company's common stock having an aggregate fair market value (determined at the
time of grant of each option) exceeding $100,000, the $100,000 Limitation set
forth in Section 4 below may impose additional limitations upon the
exercisability of this Option and any other stock options granted to the
Director. Such limitations are in addition to and not in lieu of, the
limitations set forth in this Section 3.
4. $100 000 Limitation. Notwithstanding an~thing to the contrary contained
herein, the total fair market value (determined as of the date of grant of an
option) of shares of stock with respect to which this Option (and any other
stock options granted by the Company) shall become exercisable for the first
time during any calendar year shall not exceed $100,000. (Hereinafter this
limitation is sometimes referred to as the "$100,000 Limitation.") If in any
calendar year shares of stock having a fair market value of more than $100,000
first would become exercisable, but for the limitations of this section, this
Option shall be exercisable in such calendar year only for shares having a fair
mark,et value not exceeding $100,000. (Hereinafter, shares with respect to which
this Option is not exercisable in a calendar year due to the $100,000 Limitation
are referred to as "Excess Shares.")
This Option shall become exercisable with respect to Excess Shares from a
calendar year in the next succeeding calendar year (subject to any other
usp\EDE I DSO. DOC
<PAGE>
restrictions on exercise which may be contained herein), provided that the
$100.000 Limitation shall also be applied to such succeeding calendar year.
Subject TO the term or this Option, such carryovers of Excess Shares shall be
made to succeeding calendar years, including carryovers of any Excess Shares
from previous calendar years, without limitation.
If as of the date of this Agreement the Director already holds stock
options granted by the Company (hereinafter any such stock options are referred
to as "Prior Options"), and the fair market value (determined as the date of
grant of each option) of the shares subject to this Option and the Prior Options
held by the Director is such that the $100.000 Limitation must be imposed, the
$100,000 Limitation shall be applied as follows unless a special provision is
made. If no special provision is made. the $100,000 Limitation shall be applied
by giving priority to options which first become exercisable during a calendar
year under the Prior Options. Thus, in applying the $100,000 Limitation under
this Option the fair market value (determined as of the date of grant) of the
shares of stock with respect to which options first become exercisable under the
Prior Options during the calendar year shall first be determined. Only the
balance remaining for the calendar year of the $100,000 Limitation, if any, may
be exercisable under this Option for the calendar year, with any excess to be
carried over as provided in the preceding paragraph, but with such carryover
also to be subject to the provisions of this paragraph.
Director acknowledges that it is possible that he may be granted incentive
stock options by the Company after the date of this Agreement. (Hereinafter such
options are referred to as "Subsequent Options.") If the exercise price of a
Subsequent Option is less than the exercise price of this Option, and if
permitted under the regulations and decisions applicable to the $100,000
Limitation, Director agrees that the Company may reduce the number of shares of
stock for which this Option is exercisable in specified calendar years, so that
all or part of the $100,000 Limitation for said calendar years may be applied to
such Subsequent Option. permitting earlier exercise of such Subsequent Option
than would otherwise be possible. Where such reductions are made, Director
agrees to enter into any appropriate documentation to implement such reductions.
Director further acknowledges that, as provided in the Plan, in certain
circumstances connected with a dissolution or liquidation of the Company, or a
merger, consolidation or other form of reorganization in which the Company is
not the surviving corporation, the imposition of the 5100,000 Limitation may
result in the termination of all or part of this Option or other stock options.
5. 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
Director only him.
6. Termination of Directorship. In the event that the Director's
participation on the Board terminates for any reason, the Option may be
exercised by the Director within six months after the date of such termination.
7. Investment Representation; Legend. The Director 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,
2
<PAGE>
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. The Company will issue and deliver certificates
representing the number of shares purchased under the Option. registered in the
name of the Director 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 Director
hereunder, the Company is authorized to withhold appropriate amounts from
amounts payable to Director, or may require Director to remit to the Company am
amount equal to such appropriate amounts.
10. Incorporation of Plan. This Agreement is made pursuant to the
provisions of the Plan, which is incorporated by reference herein. Terms used
herein shall have the meaning employed in the Plan, unless the context clearly
requires otherwise. In the event of a conflict between the provisions of the
Plan and the provisions of this Agreement, the provisions of the Plan shall
govern.
ACCEPTED: U.S. PAWN, INC.
/s/ Stanley M. Edelstein /s/ Melvin Wedgle
- ------------------------------- --------------------------------
Stanley M. Edelstein, Director Melvin Wedgle, President
3
<PAGE>
U.S. PAWN, INC.
NOTICE OF E,EXERCISE OF STOCK OPTION ISSUED
UNDER THE 1995 DIRECTORS' STOCK OPTION PL\N
To: Compensation Committee
U.S. Pawn, Inc.
7215 Lowell Boulevard
Westminster, CO 80030
I hereby exercise my Option dated June 22, 1996 to
purchase......................................... shares of no par value common
stock of the Company at the option exercise price of $1.70 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:
----------------------------
EXHIBIT 5
April 18, 1997
U.S. Pawn, Inc.
7215 Lowell Boulevard
Westminster, Colorado 80030
Re: Opinion and Consent
1995 Directors' Stock Option Plan
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 up to
90,000 shares of no par value Common Stock (the "Option Shares"), of the Company
issuable upon exercise of options granted under the Company's 1995 Directors'
Stock Option Plan (the "Plan").
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 Plan 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 February 13, 1997, 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.
Denver, Colorado
April 18, 1997
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