As filed with the Securities and Exchange Commission on August 26, 1997
Registration No. ___-_____
========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-----------------------
E-Z SERVE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 75-2168773
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2550 North Loop West, Suite 600 77092
Houston, Texas (Zip Code)
(Address of Principal Executive Offices)
E-Z SERVE CORPORATION
1991 STOCK OPTION PLAN
(Full title of the Plan)
John T. Miller
Senior Vice President, Chief Financial Officer and Secretary
E-Z Serve Corporation
2550 North Loop West, Suite 600
Houston, Texas 77092
(Name and address of agent for service)
(713) 684-4300
(Telephone number, including area code, of agent for service)
---------------------------
With copies to:
Bracewell & Patterson, L.L.P.
711 Louisiana, Suite 2900
Houston, Texas 77002
Attention: John L. Keffer
---------------------------
Exhibit index located on page 11
CALCULATION OF REGISTRATION FEE
========================================================================
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of Securities Amount to be price per offering registration
to be registered registered (1) unit (2) price (2) fee
- - -----------------------------------------------------------------------
Common Stock, 1,000,000 $.8995 $899,500 $272.58
$.01 par value shares
- - -----------------------------------------------------------------------
(1) This Registration Statement shall also include any additional
shares of Common Stock issuable pursuant to the antidilution
provisions of the Plan.
(2) Estimated, pursuant to Rule 457(h), solely for the purpose of
calculating the registration fee as follows:
(i) the filing fee for the 652,000 shares not presently under
option was calculated by reference to the average of the
high and low sales prices as reported on the American Stock
Exchange on August 22, 1997, which was $.8125 per share,
for a total maximum offering price for such 652,000 shares
of $529,750.
(ii) the filing fee for the 348,000 shares presently under option
was calculated by reference to the average price per share
at which each share under option is exercisable, $1.0625, for
a total maximum offering price for such 348,000 shares
of $369,750.
<PAGE> 1
EXPLANATORY NOTE
Pursuant to Instruction E to Form S-8, the contents of the Registration
Statements on Form S-8 (Registration Nos. 33-48625 and 33-77772) of E-Z
Serve Corporation (the "Company") are incorporated herein by reference.
There is no information required in this registration statement that is
not in the registration statements referenced above. This registration
statement is filed solely to register additional securities of the same
class as the securities registered pursuant to the effective
registration statements referenced above relating to an employee benefit
plan.
The Reoffer Prospectus which is filed as a part of this Registration
Statement has been prepared in accordance with the requirements of Part
I of Form S-3 and may be used for reoffers or resales of certain shares
of Common Stock of the Company defined as "control securities" under
Instruction C to Form S-8 acquired by "affiliates" (as such term is
defined in Rule 405 of the General Rules and Regulations under the
Securities Act of 1933, as amended) pursuant to the exercise of options
under the Plan.
<PAGE> 2
REOFFER PROSPECTUS
- - ------------------
E-Z SERVE CORPORATION
1,755,000 SHARES OF COMMON STOCK
This Reoffer Prospectus (the "Prospectus") is being used in connection
with the offering by certain selling stockholders (the "Selling
Stockholders") of E-Z Serve Corporation (the "Company") who may be
deemed "affiliates" of the Company (as such term is defined in Section
405 of the General Rules and Regulations under the Securities Act of
1933, as amended (the "Securities Act")), of shares of common stock, par
value $.01 per share (the "Common Stock"), of the Company, which may be
acquired by them and are available to be resold by them pursuant to the
Company's 1991 Stock Option Plan (the "Plan").
The Selling Stockholders may offer to sell the Common Stock covered by
this Prospectus, from time to time, in one or more transactions, at
prices and upon terms then obtainable on the American Stock Exchange, in
negotiated transactions, in a combination of any such methods of sale,
or otherwise.
The Company will not receive any of the proceeds from the sale of the
Common Stock. All expenses of registration incurred in connection with
this offering are being borne by the Company, but all brokerage
commissions and other expenses incurred by individual Selling
Stockholders will be borne by such Selling Stockholders.
The Common Stock is listed on the American Stock Exchange under the
trading symbol "EZS" and closed on August 22, 1997 at a price of $.8125
per share.
FOR INFORMATION CONCERNING THE RISK FACTORS, SEE THE "RISK FACTORS"
SECTION AT PAGE 3.
---------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
---------------------
The date of this Reoffer Prospectus is August 26, 1997.
<PAGE> 3
TABLE OF CONTENTS
Page
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . 4
AVAILABLE INFORMATION. . . . . . . . . . . . . . . . . . . . . 6
INCORPORATION OF CERTAIN DOCUMENTS . . . . . . . . . . . . . . 6
GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . 7
SELLING STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . 8
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . 9
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 9
EXPERTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
<PAGE> 4
RISK FACTORS
Prospective investors should consider carefully the following risk
factors in addition to the other information contained in this
Prospectus in evaluating an investment in the Common Stock.
Highly Competitive Industry
The convenience store industry is highly competitive. The
performance of individual stores can be affected by changes in traffic
patterns and the type, number and location of competing stores. The
Company presently competes with other convenience stores, service
stations of large integrated gasoline companies, supermarkets,
neighborhood grocery stores, independent gasoline service stations, fast
food stores and other similar retail outlets, some of which are well-
recognized national or regional retail chains. Some of the Company's
competitors are larger and have greater financial resources than the
Company. Key competitive factors include site location, name
recognition, customer service, customer loyalty, promotions, pricing,
product mix and presentation and advertising. In addition, factors such
as increased labor and benefit costs and a shortage in the availability
of experienced management and hourly employees may adversely affect the
results of the Company's stores.
Dependence on Motor Fuel and Tobacco Sales
Motor fuel sales are very price competitive. Motor fuel profit
margins have a significant impact on the Company's earnings, as motor
fuel revenues accounted for approximately 62% of the Company's total
revenues and approximately 34% of gross profit in fiscal 1996 and 59%
and 29%, respectively, in the six months ended June 29, 1997. Motor
fuel profit margins are often influenced by factors beyond the Company's
control, such as volatility in the wholesale market, and are continually
influenced by world events as well as competition in each local market
area. The inherent volatility of motor fuel profit margins will affect
the Company's results of operations.
Tobacco sales accounted for approximately 9% of the Company's total
revenues and approximately 12% of gross profit in fiscal 1996 and
approximately 8% of the Company's total revenues and approximately 10%
of gross profit in the six months ended June 29, 1997. National and
local campaigns to discourage smoking in the United States and
litigation against the tobacco industry and the proposed settlement may
have a material, adverse impact on tobacco sales and there can be no
assurance that past sales levels can be maintained.
Environmental Compliance
As of June 29, 1997, the Company operated approximately 1,998
underground storage tanks ("USTs") that are used for storage of
gasoline. The ownership and operation of USTs is subject to federal,
state and local laws and regulations relating to maintenance, handling,
disposal, upgrading and remediation. Federal regulations require that
all USTs be upgraded to meet certain standards by December 22, 1998, and
some state regulatory programs may have more stringent timetables for
UST upgrading. As of June 29, 1997, the Company was in complete
compliance with leak detection standards and 70% completed with tank
upgrade requirements. The Company estimates that the total future cost
of performing remediation on contaminated sites will be approximately
<PAGE> 5
$24,289,000, of which approximately $22,394,000 is expected to be
reimbursed by state trust funds. Also, the Company anticipates
incurring approximately $560,000 for the costs of removing USTs at
abandoned locations. During 1995, the Company entered into an agreement
with an environmental consulting firm whereby the consulting firm
assumes responsibility for the cleanup of contaminated sites at
approximately 80% of the Company's locations. Under this agreement
("Direct Bill Agreement"), the consulting firm remediates the sites at
its cost and files for reimbursement from the state. On April 22, 1997,
the Company entered into a new agreement with Environmental Corporation
of America ("ECA") whereby ECA replaced the previous environmental
consulting firm at all existing contaminated sites with the exception of
approximately 25 sites in Florida. Under this new agreement, ECA
remediates the sites at its cost and files for reimbursement from the
applicable state. The Company incurs no cash costs for these sites,
other than the cost of the deductible and the cost to remediate any
locations deemed non-qualified for reimbursement by the state. The
agreement imposes no liability on the Company in the event that payments
from the state trust funds are delayed or denied.
With the Direct Bill Agreement, assuming full reimbursement by the
states to the consulting firm, the future cash cost to the Company for
remediating contaminated sites decreases to approximately $1,900,000.
At June 29, 1997, for work largely completed prior to the Direct Bill
Agreement, the Company had completed the necessary remediation and has
reimbursement claims totaling approximately $451,000 with the various
states in which it operates.
The assumptions underlying the cost estimates may not prove
accurate, and unanticipated events and circumstances that would affect
such costs may occur. Therefore, the actual cost of complying with
environmental regulations may vary substantially.
Government Regulation
The Company is subject to numerous federal, state and local laws,
regulations and ordinances. In addition, various federal, state and
local legislative and regulatory proposals are made from time to time
to, among other things, increase the minimum wage payable to employees
and increase taxes on or other costs associated with the retail sale of
certain products, such as tobacco products and alcoholic beverages.
Changes to such laws, regulations, ordinances or associated enforcement
policies may adversely affect the Company's performance by increasing
the Company's cost or affecting its sales of certain products.
Dependence on Key Management
The Company's success will continue to depend to a significant
extent on the Company's executive officers identified herein and other
key management personnel. The Company has not entered into employment
agreements with its executive officers except for Ms. Callahan-Guion.
There can be no assurance that the Company will be able to retain its
executive officers and key personnel or attract additional qualified
management in the future. In addition, future acquisitions by the
Company may require the Company to expand its current management, and
the success of the Company's operations may depend, in part, on the
Company's ability to fill newly created management positions with
qualified persons.
<PAGE> 6
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act"), and in accordance
therewith, files reports and other information with the Securities and
Exchange Commission (the "Commission"). The Company has furnished and
intends to furnish reports to its stockholders, which will include
financial statements audited by its independent accountants, and such
other reports as it may determine to furnish or as required by law,
including Sections 13 and 15(d) of the Exchange Act. Reports, proxy
statements and other information can be inspected and copied at the
public reference facilities maintained by the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following regional offices of the Commission: Seven World Trade Center,
13th Floor, New York, New York 10048 and 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such material can also be
obtained from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. In addition, such material can be inspected at the
offices of the American Stock Exchange, at 86 Trinity Place, New York,
New York 10006. The Commission maintains a website that contains
reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. The
address of such site is http://www.sec.gov.
The Company has filed a registration statement, (the "Registration
Statement"), on Form S-8 with respect to the Common Stock offered hereby
with the Commission under the Securities Act. This Prospectus, which
constitutes part of the Registration Statement, does not contain all the
information set forth in the Registration Statement, certain items of
which are contained in schedules and exhibits to the Registration
Statement as permitted by the rules and regulations of the Commission.
Statements contained in this Prospectus as to the contents of any
agreement, instrument or other documents referred to are not necessarily
complete. With respect to each such agreement, instrument or other
document filed as an exhibit to the Registration Statement, reference is
made to the exhibit for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following materials previously filed by the Company with the
Commission pursuant to the Exchange Act, are incorporated herein by
reference:
1. Quarterly Report on Form 10-Q for the fiscal quarter ended
June 29, 1997.
2. Quarterly Report on Form 10-Q for the fiscal quarter ended
March 30, 1997.
3. Current Report on Form 8-K dated January 27, 1997.
4. Annual Report on Form 10-K for the fiscal year ended
December 29, 1996.
<PAGE> 7
5. Registration Statement on Form 8-A, as filed with the Commission
March 12, 1991.
All documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date
of this Prospectus and prior to the termination of the offering of the
Common Stock, shall be deemed to be incorporated herein by reference and
to be a part hereof from the date of filing of such documents.
Any statement contained in this Prospectus, in a supplement to this
Prospectus or in a document incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any subsequently
filed supplement to this Prospectus or in any document that is or is
deemed to be incorporated by referenced herein modifies or supersedes
such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
Upon written or oral request to the Company, the Company will
provide a copy of each document incorporated by reference in this
Prospectus without charge to each person to whom a copy of this
Prospectus is delivered. Such copies may be obtained from the principal
executive offices of the Company located at 2550 North Loop West, Suite
600, Houston, Texas 77092; telephone number: (713) 684-4300; telecopy
number: (713) 684-4367; attention: John T. Miller, Senior Vice
President, Chief Financial Officer and Secretary.
GENERAL
E-Z Serve Corporation, through its wholly-owned subsidiary, E-Z
Serve Convenience Stores, Inc., operates and franchises convenience
stores, mini marts, and gas marts primarily under the names E-Z Serve,
Majik Market and Taylor Food Mart. The Company also retails motor fuels
at some of its convenience stores under its proprietary brand name E-Z
Serve and a number of major brands such as Citgo, Conoco, Texaco and
Chevron. In addition to marketing motor fuels, company operated
convenience stores are engaged in retail merchandising of traditional
grocery and non-grocery lines associated with such stores.
E-Z Serve Corporation is incorporated in Delaware and maintains its
principal corporate offices at 2550 North Loop West, Suite 600, Houston,
Texas 77092; its telephone number is (713) 684-4300 Unless the context
indicates otherwise, the term "the Company" as used herein should be
understood to include subsidiaries of E-Z Serve Corporation and
predecessor corporations.
USE OF PROCEEDS
All of the shares of Common Stock offered hereby are being offered
by the Selling Stockholders. The Company will not receive any proceeds
from sales of Common Stock by the Selling Stockholders.
<PAGE> 8
SELLING STOCKHOLDERS
The following table sets forth: (i) the name and position of each of
the Selling Stockholders as of the date of this Prospectus; (ii) the
number of shares of Common Stock owned by each Selling Stockholder as of
August 26, 1997; (iii) the number of shares of Common Stock covered by
this Prospectus; and (iv) the amount and percentage of Common Stock to
be owned by each Selling Stockholder after completion of this offering,
assuming the sale of all shares of Common Stock covered by this
Prospectus.
Shares Shares of Common
of Common Stock Owned
Stock After the Offering
as of Pursuant to the Plan
August 26, Shares ---------------------
Name and Position 1997 (1) Offered Number Percentage
- - ----------------------- ----------- --------- --------- ----------
Neil H. McLaurin 3,451,000 750,000 751,000 1.0%
Chairman of the Board
and Chief Executive
Officer
Kathleen Callahan-Guion 2,000,000 500,000 500,000 *
President and
Chief Operating Officer
John T. Miller 1,575,500 375,000 375,500 *
Senior Vice President,
Chief Financial Officer
and Secretary
Harold E. Lambert 200,000 50,000 50,000 *
Vice President and
Assistant Secretary
Donald D. Beane 81,250 80,000 81,250 *
Director
- - -----------------------
* Less than 1%.
(1) Includes shares of Common Stock underlying options granted to the
Selling Stockholders under the Plan and the Company's Amended and
Restated 1994 Stock Option Plan, whether or not exercisable as of,
or within sixty days of August 26, 1997.
The preceding table reflects all Selling Stockholders who are
eligible to reoffer and resell Common Stock, whether or not they have a
present intent to do so. There is no assurance that any of the Selling
Stockholders will sell any or all of the Common Stock offered by them
hereunder. The inclusion in the foregoing table of the individuals
named therein shall not be deemed to be an admission that any such
individuals are "affiliates" of the Company.
The Prospectus may be amended or supplemented from time to time to
add or delete Selling Stockholders.
<PAGE> 9
PLAN OF DISTRIBUTION
The shares of Common Stock being sold by the Selling Stockholders
are for their own accounts. The Company will not receive any of the
proceeds from such sales of the Common Stock.
The distribution of the Common Stock by the Selling Stockholders may
be effected from time to time, in one or more transactions, at prices
and upon terms then obtainable on the American Stock Exchange, at prices
related to the prevailing market prices, at negotiated prices or
otherwise. In the event that one or more brokers or dealers sells
Common Stock, it may do so by purchasing Common Stock as principal or by
selling the Common Stock as agent. If sales are made through brokers or
dealers, commissions and fees will be paid accordingly by the Selling
Stockholders.
LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon
for the Company by Bracewell & Patterson, L.L. P., Houston, Texas.
EXPERTS
The financial statements of the Company as of December 29, 1996 and
December 31, 1995 and for the fifty-two week period ended December 29,
1996, the fifty-three week period ended December 31, 1995 and the fifty-
two week period ended December 25, 1994, have been incorporated by
reference herein and in the registration statement in reliance upon the
report of KPMG Peat Marwick LLP, independent certified public
accountants, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, E-Z
Serve Corporation certifies that it has reasonable grounds to believe
that it meets all 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 Houston, State of
Texas, on August 26, 1997.
E-Z SERVE CORPORATION
By: /s/ Neil H. McLaurin
----------------------------
Neil H. McLaurin
Chairman of the Board
and Chief Executive Officer
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/ Neil H. McLaurin Director, Chairman of August 26, 1997
- - -------------------- the Board and
Neil H. McLaurin Chief Executive Officer
/s/ John T. Miller Senior Vice President, August 26, 1997
- - -------------------- Chief Financial Officer
John T. Miller and Secretary
/s/ Donald D. Beane Director August 26, 1997
- - --------------------
Donald D. Beane
/s/ John M. Sallay Director August 26, 1997
- - --------------------
John M. Sallay
/s/ John R. Schoemer Director August 26, 1997
- - --------------------
John R. Schoemer
/s/ Larry J. Taylor Director August 26, 1997
- - --------------------
Larry J. Taylor
/s/ Paul Thompson, III Director August 26, 1997
- - ----------------------
Paul Thompson, III
<PAGE> 11
EXHIBIT INDEX
Exhibit
Number Description of Exhibit
- - ------- ----------------------
*5 Opinion of Bracewell & Patterson, L.L.P. regarding the
legality of the shares of Common Stock covered by this
Registration Statement.
*23.1 Consent of Bracewell & Patterson, L.L.P. (included in
their opinion filed as Exhibit 5 to this Registration
Statement).
*23.2 Consent of KPMG Peat Marwick, independent accountants to
the Company.
99.1 1991 Stock Option Plan of E-Z Serve Corporation, as
amended - incorporated by reference from Exhibit 4.1
of the Company's Annual Report on Form 10-K for the
fiscal year ended December 29, 1996.
- - --------------------
* filed herewith
<PAGE> 12
EXHIBIT 5
August 26, 1997
E-Z Serve Corporation
2550 North Loop West, Suite 600
Houston, Texas 77092
Gentlemen:
We have acted as counsel to E-Z Serve Corporation, a Delaware
corporation (the "Company"), in connection with the proposed issuance by
the Company of up to an additional 1,000,000 shares (the "Shares") of
Common Stock, $.01 par value per share, upon the exercise of options
granted to employees and directors of the Company pursuant to the terms
of the Company's Amended and Restated 1994 Stock Option Plan (the
"Plan"). The Company has filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as
amended, a Registration Statement on Form S-8 for the Shares (the
"Registration Statement").
We have examined originals or copies of (i) the Amended and Restated
Certificate of Incorporation of the Company, (ii) the Bylaws of the
Company, as amended, (iii) the Plan, (iv) certain resolutions of the
Board of Directors of the Company, and (v) such other documents and
records as we have deemed necessary and relevant for purposes hereof.
In addition, we have relied on certificates of officers of the Company
and certificates and telegrams of public officials as to certain matters
of fact relating to this opinion and have made such investigations of
law as we have deemed necessary and relevant as a basis hereof.
We have assumed the genuineness of all signatures, the authenticity of
all documents, certificates and records submitted to us as originals,
the conformity to original documents, certificates and records of all
documents, certificates and records submitted to us as copies, and the
truthfulness of all statements of fact contained therein.
Based upon the foregoing and subject to the limitations and assumptions
set forth herein and having due regard for such legal considerations as
we deem relevant, we are of the opinion that:
1. The Company is duly incorporated, validly existing and in good
standing under the laws of the State of Delaware.
2. The Shares have been duly and validly authorized and when issued and
paid for in accordance with the terms of the Plan, for a
consideration at least equal to the par value thereof, will be
validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5 to the Registration Statement and to the use of our name
therein.
Very truly yours,
Bracewell & Patterson, L.L.P.
<PAGE> 13
EXHIBIT 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to incorporation by reference in the Registration Statement
(No. 333-48625) on Form S-8 of E-Z Serve Corporation and in the related
Prospectus of our report dated March 27, 1997 with respect to the
consolidated balance sheets of E-Z Serve Corporation and subsidiaries as
of December 29, 1996 and December 31, 1995, and the related consolidated
statements of operations, stockholders' equity, and cash flows and
related schedules for the fifty-two week period ended December 29, 1996,
the fifty-three week period ended December 31, 1995 and the fifty-two
week period ended December 25, 1994, which report appears in the Form
10-K of E-Z Serve Corporation dated December 29, 1996.
We consent to the reference to our firm under the heading "Experts" in
the Prospectus.
KPMG Peat Marwick
August 26, 1997
