As filed with the Securities and Exchange Commission on August 24, 1998
Registration No. ______________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-2
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------------------
THE BARBERS, HAIRSTYLING FOR MEN & WOMEN, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-0945858
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
300 Industrial Boulevard N.E.
Minneapolis, Minnesota 55413
(612) 331-8500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
-----------------------
J. Brent Hanson
The Barbers, Hairstyling for Men & Women, Inc.
300 Industrial Boulevard N.E.
Minneapolis, MN 55413
(612) 331-8500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------------
<PAGE>
Approximate date of commencement of proposed sale of the securities to
the public: From time to time after the effective date of the registration
statement.
If the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [x]
If the Registrant elects to deliver its latest annual report to
security holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this form, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities act, check the following box and list the Securities
act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of each class
of securities to Amount to Proposed offering Proposed aggregate Amount of
be registered be registered price per unit (1) offering price (1) registration fee
<S> <C> <C> <C> <C>
Common Stock 100,000 $7.25 725,000 $213.88
Total 100,000 $7.25 725,000 $213.88
</TABLE>
- -----------------------
(1) Estimated solely for purpose of computing the registration fee pursuant to
Rule 457 under the Securities Act of 1933, as amended.
THE BARBERS, HAIRSTYLING FOR MEN & WOMEN, INC.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Form S-2 Item Number and Description Caption of Location
- ------------------------------------ -------------------
<S> <C>
Item 1. Forepart of Registration Statement and Outside Front Front of the Registration
Cover Page of Prospectus Statement
Item 2. Inside Front and Outside Back Cover Pages of Prospectus Inside Front Cover Page
Item 3. Summary Information, Risk Factors and Ratio of Earnings Outside Front Cover
to Fixed Charges
Item 4. Use of Proceeds Prospectus Summary; Use of Proceeds
Item 5. Determination of Offering Price Not applicable
Item 6. Dilution Not applicable
Item 7. Selling Security Holders Not applicable
Item 8. Plan of Distribution Outside Front Cover Page;
Plan of Distribution
Item 9. Description of Securities To Be Registered Prospectus Summary;
Description of Securities
Item 10. Interests of Named Experts and Counsel Not applicable
Item 11. Information with Respect to Registrant Outside Front Cover Page;
Summary Information
Item 12. Incorporation of Certain Information by Reference Available Information;
Incorporation of Certain
Information by Reference
Item 13. Disclosure of Commission Position on Indemnification Indemnification
for Securities Act Liabilities
</TABLE>
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED AUGUST 24, 1998
THE BARBERS, HAIRSTYLING FOR MEN & WOMEN, INC.
--------------------------
PROSPECTUS
--------------------------
100,000 Shares of Common Stock
The shares offered hereby by The Barbers, Hairstyling for Men & Women,
Inc. (the "Company") are 100,000 shares of common stock of the Company (the
"Shares") issuable pursuant to the Company's Designer Salon Programs. The
Company's common stock is traded on, and the Shares will be listed on, the
Nasdaq National Market System.
INVESTORS SHOULD CAREFULLY CONSIDER THE FACTORS SET FORTH UNDER THE
CAPTION "CERTAIN RISK FACTORS," BEGINNING ON PAGE 6 HEREOF.
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.
----------------------
Underwriting
Price to Discounts and
Public (1) and Commission Proceeds to Company
Per Share $0 None None
Total $0 None None
- -----------------------
(1) Pursuant to the Company's Designer Salon Programs, shares of the Company's
common stock are issued to any franchisee of the Company who exceeds a level
of purchases of beauty products set by the Company and who meets other
compliance criteria designated by the Company. See "Plan of Distribution."
<PAGE>
--------------------
The Shares are offered on a continuous basis directly by the Company.
No commissions or remuneration will be paid in connection with the offering of
the Shares contemplated hereby. The Company is obligated to pay the expenses of
this offering, which are estimated to be $22,000. Inquiries should be directed
to the principal administrative offices of The Barbers, Hairstyling for Men &
Women, Inc., as follows:
The Barbers, Hairstyling for Men & Women, Inc.
Chief Financial Officer
300 Industrial Boulevard N.E.
Minneapolis, MN 55413
(612) 331-8500
The date of this Prospectus is August __, 1998
<PAGE>
TABLE OF CONTENTS
AVAILABLE INFORMATION 1
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 1
PROSPECTUS SUMMARY 3
CERTAIN RISK FACTORS 6
USE OF PROCEEDS 7
LEGAL MATTERS 8
DESCRIPTION OF SECURITIES 8
PLAN OF DISTRIBUTION 9
EXPERTS 10
INDEMNIFICATION 10
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). In accordance
therewith, the Company is required to file reports and other information with
the Securities and Exchange Commission (the "SEC"). Reports, proxy statements
and other information filed by the Company as well as the Registration
Statement, including the exhibits thereto, can be inspected and copied at the
public reference facilities maintained by the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the SEC at
75 Park Place, New York, New York 10007 and Northwestern Atrium Center, 500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661. The SEC also maintains a
Web site that contains reports, proxy and information statements and other
information regarding registrants, like the Company, that file electronically
with the SEC (site address http://www.sec.gov).
This Prospectus constitutes part of a registration statement on Form
S-2 (the "Registration Statement") filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"). This Prospectus does not contain all the
information set forth in the Registration Statement. For further information
with respect to the Company and the Shares offered hereby, reference is made to
the Registration Statement. This Prospectus incorporates certain information by
reference to the Company's current Annual Report on Form 10-KSB, Annual Report
to Shareholders and most recent Quarterly Report on Form 10-QSB, which will be
delivered with each Prospectus. Prospective investors should refer to such
documents for a complete description of the Company's business, results of
operations and financial condition, as well as other information highly relevant
to an investment in the securities offered hereby. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is made to the exhibit for a more complete description of the document
or matter involved, and each such statement shall be deemed qualified in its
entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents filed by the company with the Commission
pursuant to the Exchange Act are incorporated by reference into this Prospectus:
(i) the Company's Annual Report on Form 10-KSB for the year ended September 25,
1997 and The Barbers, Hairstyling for Men & Women, Inc., 1997 Annual Report to
Shareholders; (ii) the Company's Quarterly Report on Form 10-QSB for the Quarter
ended December 25, 1997; (iii) the Company's Quarterly Report on Form 10-QSB for
the Quarter ended March 26, 1998; (iv) the Company's Quarterly Report on Form
10-QSB for the Quarter ended June 25, 1998; and (v) the Company's Current report
on Form 8-K filed on December 15, 1997.
<PAGE>
Any statement contained 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 other subsequently filed
document which also is 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
Prospectus.
The Company will provide, without charge, to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the oral or written
request of such person, a copy (without exhibits, unless such exhibits are
specifically incorporated by reference into the information that this Prospectus
incorporates) of any and all information that has been incorporated by reference
in this Prospectus. Written or telephone requests for such information should be
directed to The Barbers, Hairstyling for Men & Women, Inc., 300 Industrial
Boulevard N.E., Minneapolis, MN 55413, Attn: J. Brent Hanson, (612) 331-8500.
<PAGE>
- --------------------------------------------------------------------------------
PROSPECTUS SUMMARY
The following is a summary only and should be read in light of the more
detailed financial and other information incorporated by reference into this
Prospectus. The Company's current Annual Report on Form 10-KSB, Annual Report to
Shareholders and most recent Quarterly Report on Form 10-QSB will be delivered
with each Prospectus. Except as otherwise indicated, all financial information
is presented on the basis of generally accepted accounting principles.
Prospective investors are urged to read this Prospectus, and the documents
incorporated by reference herein, in their entirety. See "Certain Risk Factors"
beginning on page 6 of this Prospectus for a discussion of certain factors that
should be considered by prospective investors in the Shares offered hereby.
This Prospectus and all documents incorporated by reference contain
various "forward-looking statements" that reflect the Company's current views
with respect to future events and financial performance. These forward-looking
statements are subject to certain risks and uncertainties, including but not
limited to those identified below, which could cause actual results to differ
materially from historical results or those anticipated whether as a result of
new information, future events or otherwise. The words "believe," "expect,"
"anticipate" and similar expressions identify forward-looking statements. The
following factors, in addition to those set forth under the heading "Certain
Risk Factors", could cause actual results to differ materially from historical
results or those anticipated: (1) Increased competition from other hair salon
chains in the consumer marketplace could negatively impact sales volume at both
franchised and company-owned salons. This would reduce royalty revenue from
franchised locations and reduce company-owned salons' revenue and profits. (2)
Increased competition for sites for new salons from other retail concepts,
including other hair salons, could impede the Company's ability to meet its
growth objectives. (3) The Company's near-term growth plans in Wal-Mart
Supercenters could be affected by changes in Wal-Mart's marketing or business
plans. (4) The inability to find qualified franchisees for new locations or the
inability of franchisees to finance the construction of new salons could also
prevent the Company from meeting its growth objectives. (5) Although the Company
presently has no reason to believe it will occur, major beauty product vendors
could cancel their distribution agreements with the Company. This would cause
reductions in the sale of beauty products and the loss of those corresponding
margins. (6) Litigation to protect trademarks or enforce franchise agreements is
extremely expensive, even if the Company is victorious, and may have a material
adverse effect on the Company's results of operations in any particular period.
Due to factors noted above and elsewhere in this annual report, the
Company's future earnings and Common Stock price may be subject to volatility.
Any shortfall in revenue or earnings from the levels anticipated could have a
significant effect on the trading price of the Company's Common Stock in any
given period.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
THE COMPANY--GENERAL
The Barbers, Hairstyling for Men & Women, Inc. (the "Company") is
engaged in the business of franchising three different hair care salon concepts
which provide hair care services and products for men, women and children. The
Company also owns and operates 23 salons in the United States. The Company
implements its retail concepts through nationwide franchise systems that the
Company supports with a comprehensive package of centralized services. The
Company primarily earns revenue through its franchise operations from franchise
initial fees, franchise royalties and sales of beauty products, salon equipment
and consumer appliances.
Although the Company currently does business under the names "Cost
Cutters Family Hair Care(R)" ("Cost Cutters"), "City Looks Salons
International(R)" ("City Looks"), "We Care Hair(R)" ("We Care Hair"), "The
Barbers(R)", "The Barbers, Hairstyling for Men & Women(R)", "The Hair
Performers(R)", and "Family Haircut Stores(R)", it sells only Cost Cutters, City
Looks, and We Care Hair franchises. Each type of franchise is specifically
tailored to satisfy a particular market niche. Cost Cutters franchises provide
value-priced hair care services to their customers. Cost Cutters franchises
target price sensitive customers. City Looks franchises provide full service,
high-fashion hair care as well as various personal grooming and spa services,
including facials, manicures, massages and tanning facilities to customers. City
Looks franchises target customers who place a premium on full service. We Care
Hair franchises provide hair care services, tanning, nail care and waxing
services targeted at adults aged 18 to 40.
The Company's principal executive offices are located at 300 Industrial
Boulevard Northeast, Minneapolis, Minnesota 55413. Its telephone number is (612)
331-8500.
THE COMPANY--HISTORY
After the Company was incorporated under the laws of Minnesota on
October 1, 1968, it quickly established a chain of company-owned, full service
hairstyling businesses throughout the United States under the name "The Barbers,
Hairstyling for Men". In 1970, the Company began selling franchises for the
operation of hairstyling businesses doing business under the names "The Barbers"
and "The Barbers, Hairstyling for Men & Women". Recognizing the need to update
the market focus and decor of the salons, the Company began selling franchises
for the operation of hairstyling businesses under the name "City Looks(R) By The
Barbers" in 1987, and the Company began to convert the existing "The Barbers"
locations to this business format. This trade name was later revised to "City
Looks(R) Salons" in 1991 and to "City Looks Salons International(R)" in 1993,
although some salons continue to operate under the older names.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
The Company began selling franchises for the operation of hairstyling
businesses doing business under the name "Cost Cutters Family Hair Care(R)" in
1982. In 1986, the Company decided to focus principally on doing business as a
franchisor and reduced its number of company-owned stores in the United States
from 69 in 1986 to 3 in 1994. Since then, the Company has capitalized on the
opportunity of developing the Cost Cutters chain within major mass
merchandisers. As part of this business strategy, the Company has built over 20
new company-owned stores since 1995. Most of these new stores are located within
Wal-Mart Supercenters.
On January 25, 1997, the Company, through its subsidiary WCH, Inc.,
acquired substantially all of the franchise assets (trademarks, franchise
agreements and certain other assets) of We Care Hair Development, Inc. ("WCHD").
WCHD originated the "We Care Hair(R)" concept in 1990. The Company began
offering We Care Hair franchises in June 1997.
THE OFFERING
Securities: 100,000 shares of Common Stock.
Designer Salon Program: The offering is being made pursuant to the Company's
Designer Salon Program. The Company has implemented a
"Designer Salon Program" for each of its franchise
systems (collectively the "Designer Salon Programs").
The objective of the Designer Salon Programs is to
encourage franchisees to purchase beauty products
through the Company.
In addition to receiving other benefits, if the
franchisee exceeds a level of purchases of beauty
products set annually by the Company and meets other
compliance criteria designated by the Company, the
franchisee earns a rebate which is paid in shares of
the Company's common stock. The amount of shares
earned is equal to the rebate amount divided by the
current fair market value of the Company's common
stock at the end of the Company's fiscal year. No
additional consideration is required from the
franchisee to purchase the shares of common stock.
Use of Proceeds: None
- --------------------------------------------------------------------------------
<PAGE>
CERTAIN RISK FACTORS
PROSPECTIVE PARTICIPANTS SHOULD CONSIDER CAREFULLY, IN ADDITION TO THE
OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, THE FOLLOWING FACTORS BEFORE
PARTICIPATING IN THE DESIGNER SALON PROGRAM.
COMPETITION
The haircare industry, in which the Company operates, is highly
competitive, with limited barriers to entry. In every locality in which the
Company operates, there are competitors offering similar services and products.
In many cases, the Company faces one or more competitors within malls in which
is operates, including companies operating salons as departments within
department stores, salon chains, independently owned salons, and salons
operating under franchises from other franchising companies. Any increased
competition from these competitors could negatively impact sales volume at both
franchised and Company-owned salons. In turn, this would reduce royalty revenue
from franchised locations and reduce Company-owned salons' revenue and profits.
COMPETITION FOR SITES
The Company's ability to meet its growth objectives is dependent upon
its ability to obtain retail sites for new salons to be used as Company-owned
salons and for its franchisees to obtain sites to open new franchises. The
Company faces intense competition for these retail sites from other companies
operating in the haircare industry and from retailers operating in other
industries. The Company believes that site selection is a key element to the
success of its Company-owned stores and its franchisees. In order to obtain
space in desirable locations, the Company and its franchisees must be
competitive as to rent, term and other customary tenant obligations. Competition
for retail sites for new salons could impede the Company's ability to meet its
growth objectives.
WAL-MART GROWTH
At Wal-Mart Supercenters the Company's growth plans anticipate opening
a substantial number of new Cost-Cutters Salons within Wal-Mart Supercenters.
The Company has not entered into any written agreements with respect to new
salon openings. The Company's growth plans could be adversely effected in the
event Wal-Mart changes it marketing or business plans.
DEPENDENCE ON FRANCHISEES
The continued growth of the Company is, in part, dependent upon its
ability to retain qualified franchisees and to attract new franchisees. Although
the Company has established criteria to evaluate prospective franchisees, there
can be no assurance that the
<PAGE>
Company's existing or future franchisees will have the business abilities or
access to financial resources necessary to open new locations or that they will
successfully develop and operate these salons in a manner consistent with the
Company's standards. The ability of the Company to find qualified franchisees
for new locations or the inability of these franchisees to finance the
construction of new salons could prevent the Company from meeting its growth
objectives.
DEPENDENCE ON SUPPLIERS
The Company is dependent upon its relationship with its suppliers to
sell the Company's beauty products, salon equipment, and consumer appliances
which the Company, in turn, sells to its customers through Company-owned stores
and sells to franchisees. Although the Company presently has no reason to
believe that it will occur, if major beauty product suppliers cancel their
distribution agreements with the Company, this would cause a reduction in the
sale of beauty products and the loss of those corresponding margins.
COST OF PROTECTION OF TRADEMARKS AND FRANCHISE AGREEMENT ENFORCEMENT
The Company holds numerous trademarks and service marks registered on
the principal register of The United States Patent & Trademark Office and
registered in several foreign countries. The Company believes that its
trademarks and service marks have significant value and are important to the
marketing of its franchises. The Company enters into a franchise agreement with
each franchisee, which sets forth the terms of the Company's business
relationship with the franchisee. Franchisees are granted rights to use the
franchisor's service marks and must operate their businesses in accordance with
the systems, specifications, standards and format developed by the franchisor.
Historically, the Company has expended considerable resources to protect these
trademarks and service marks and to enforce its franchise agreements. Litigation
to protect trademarks and service marks or to enforce franchise agreements is
extremely expensive, even if the Company is victorious, it may have a material
adverse affect on the Company's results of operations in any particular period.
CONTROL BY PRINCIPAL OWNER
Florence F. Francis, the Company's principal shareholder, owns
approximately 58% of the outstanding common stock. As a result, Ms. Francis has
the ability to elect the Company's entire Board of Directors and control the
affairs of the Company, including all fundamental corporate transactions such as
mergers, consolidations and sale of substantially all the Company's assets.
USE OF PROCEEDS
The Company will receive no proceeds from the issuance of the Shares.
<PAGE>
LEGAL MATTERS
The legality of the securities covered by this Prospectus has been
passed upon by Gray, Plant, Mooty, Mooty & Bennett, P.A., Minneapolis,
Minnesota, counsel to the Company.
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 7,500,000
shares of capital stock, $.10 par value per share. As of June 1, 1998, a total
of 3,945,302 shares of Common Stock are issued and outstanding. In addition, the
Board of Directors is authorized to divide the shares of the Company's
authorized capital stock into classes and series, with such designations, voting
rights, and other rights and preferences, and subject to the restrictions, that
the Board of Directors of the Company may from time to time establish. As of
June 1, 1998, the Board of Directors has not authorized or established any such
class or series of capital stock. Such shares of capital stock could be issued
to deter or prevent a hostile takeover of the Company even though such a
transaction was favored by the holders of a requisite number of then outstanding
Common Stock. The Board of Directors has no present intention to authorize or
issue any shares of such capital stock to deter or prevent such a transaction
and is not currently aware of any attempt to takeover the Company.
COMMON STOCK. All outstanding shares of Common Stock are duly
authorized, validly issued, fully paid and nonassessable. Holders of Common
Stock are entitled to receive dividends, when, as and if declared by the Board
of Directors, out of funds legally available therefor and to share ratably in
the net assets of the Company upon liquidation. Holders of Common Stock do not
have preemptive or other rights to subscribe for additional shares, nor are
there any redemption or sinking fund provisions associated with the Common
Stock.
Holders of Common Stock are entitled to one vote per share on all
matters requiring a vote of shareholders. The Common Stock does not have
cumulative voting rights in electing directors.
MINNESOTA BUSINESS CORPORATION ACT. Section 302A.671 of the Minnesota
Business Corporation Act applies, with certain exceptions, to any acquisition of
voting stock of the Company (from a person other than the Company, and other
than in connection with certain mergers and exchanges to which the Company is a
party) resulting in the beneficial ownership of 20 percent or more of the voting
stock then outstanding. Section 302A.671 of the Minnesota Business Corporation
Act requires approval of any such acquisitions by a majority vote of the
shareholders of the Company prior to its consummation. In general, shares
acquired in the absence of such approval are
<PAGE>
denied voting rights and are redeemable at their then fair market value by the
Company within 30 days after the acquiring person has failed to give a timely
information statement to the Company or the date the shareholders voted not to
grant voting rights to the acquiring person's shares.
Section 302A.673 of the Minnesota Business Corporation Act generally
prohibits any business combination by the Company, of any subsidiary of the
Company, with any shareholder which purchases ten percent or more of the
Company's voting shares (an "interested shareholder") within four years
following such interested shareholder's share acquisition date, unless the
business combination is approved by a committee of all of the disinterested
members of the Board of Directors of the Company before the interested
shareholder's share acquisition date.
TRANSFER AGENT. The transfer agent and registrar for the Company's
Common Stock is Norwest Bank Minnesota, N.A., 161 North Concord Exchange, South
St. Paul, Minnesota 55075-0738 and its telephone number is (612) 450-4000.
PLAN OF DISTRIBUTION
This offering of Common Stock is not underwritten. The Common Stock is
being issued by the Company for its own account and no commissions or
remuneration will be paid for any activities in connection with the issuance of
the Common Stock contemplated hereby.
The offering is being made pursuant to the Company's Designer Salon
Program. The Company has implemented the Designer Salon Program for each of its
franchise systems. The objective of the each of the Designer Salon Programs is
to encourage franchisees to purchase beauty products through the Company.
In addition to receiving other benefits, if the franchisee exceeds a
level of purchases of beauty products set by the Company and meets other
compliance criteria designated by the Company, the franchisee earns a rebate
which is paid in shares of the Company's common stock. The amount of shares
earned is equal to the rebate amount divided by the current fair market value of
the Company's common stock at the end of the Company's fiscal year. No
additional consideration is required from the franchisee to purchase the shares
of common stock.
<PAGE>
EXPERTS
The consolidated financial statements of The Barbers, Hairstyling for
Men & Women, Inc., incorporated by reference in The Barbers, Hairstyling for Men
& Women, Inc. Annual Report (Form 10-KSB) for the year ended September 25, 1997,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon incorporated by reference therein and incorporated herein
by reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
INDEMNIFICATION
The Company's Amended and Restated Bylaws, dated January 21, 1993,
require the Company to indemnify and hold harmless the officers and directors of
the Company who are made a party to any suit or proceeding or who are threatened
to be made party to any suit or proceeding to the full extent permitted by
Minnesota law. The right includes the right to be paid all expenses incurred in
defending an action in advance of its final disposition if an officer or
director (a) delivers a written affirmation that the criteria for
indemnification set forth in the Minnesota Business Corporation Act has been
satisfied, (b) is determined to be eligible for indemnification pursuant to the
Minnesota Business Corporation Act or the Company's bylaws and (c) delivers to
the Company a promise to repay all amounts so advanced if it is determined in
the future that the officer or director was not entitled to indemnification.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Securities Act") may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, or
otherwise, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable.
-----------------------
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, and if given or
made, such information or representations must not be relied upon as having been
authorized. This Prospectus does not constitute an offer to sell or the
solicitation of an offer to buy any securities other than the Shares to which it
relates or an offer to or solicitation of any person in any jurisdiction in
which such offer or solicitation is unlawful. Neither the delivery of this
Prospectus nor any sale made hereunder shall under any circumstances imply that
information contained herein is correct at any time subsequent to its date. The
Company will comply with its obligations under applicable securities laws to
file and deliver any necessary supplement to this Prospectus.
<PAGE>
PART II
Information Not Required in Prospectus
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are additional estimated (other than the Securities and
Exchange Commission filing fee) expenses of the offering described in the
Prospectus:
Printing $ 3,000
Accounting fees $ 3,000
Legal fees $ 15,000
Securities and Exchange Commission filing fees $ 213.88
Miscellaneous $ 786.12
--------
Total $ 22,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
LIMITATION OF LIABILITY AND INDEMNIFICATION. The Company's Articles of
Incorporation, as amended, limit the liability of directors in their capacity as
directors of the Company and officers to the full extent permitted by Minnesota
law. They provide that a director will not be liable to the Company or its
shareholders for monetary damages for breach of fiduciary duty as a director,
except for liability (a) for any breach of the director's duty of loyalty to the
corporation or its shareholders, (b) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (c) for
dividends, stock repurchases and other distributions made in violation of
Minnesota law or for violations of the Minnesota securities laws, (d) for any
transaction from which the director derived an improper personal benefit, or (e)
for any act or omission occurring prior to the effective date of the provision
in the Company's Articles of Incorporation, as amended. These provisions do not
affect the availability of equitable remedies, such as an action to enjoin or
rescind a transaction involving a breach of fiduciary duty, although, as a
practical matter, equitable relief may not be available. The above provisions
also do not limit liability of the directors for violations of, or relieve them
from the necessity of complying with, the federal securities laws.
The Company's Amended and Restated Bylaws, dated January 21, 1993,
require the Company to indemnify and hold harmless the officers and directors of
the Company who are made a party to any suit or proceeding or who are threatened
to be made party to any suit or proceeding to the full extent permitted by
Minnesota law. The right includes the right to be paid all expenses incurred in
defending an action in advance of its final disposition if an officer or
director (a) delivers a written affirmation that the criteria for
indemnification set forth in the Minnesota Business Corporation Act has been
satisfied, (b) is determined to be eligible for indemnification pursuant to the
Minnesota Business Corporation Act or the Company's bylaws and (c) delivers to
the Company a promise to
<PAGE>
repay all amounts so advanced if it is determined in the future that the officer
or director was not entitled to indemnification.
ITEM 16. EXHIBITS
Exhibit
Number Description
3.1 Articles of Incorporation, dated September 30, 1968 (1)
3.2 Amended and Restated By-laws, dated January 21, 1993 (1)
4.1 Specimen of Common Stock (1)
5.1 Opinion of Gray, Plant, Mooty, Mooty & Bennett, as to the validity
of the securities being registered hereby*
10.1 Form of Cost Cutters Family Hair Care Franchise Agreement (11)
10.2 Form of Cost Cutters Family Hair Care Development Agreement (11)
10.3 Form of City Looks Salons International Franchise Agreement (11)
10.4 Form of City Looks Salons International Development Agreement (11)
10.5 Form of We Care Hair Franchise Agreement (11)
10.6 Form of We Care Hair Development Agreement (11)
10.7 1990 Stock Option Plan For Directors, as Amended and Restated on
June 23, 1994 (1)
10.8 Resolutions amending the 1990 stock option Plan For Directors
adopted December 1, 1994 (3)
10.9 Amendment to 1990 Stock Option Plan for Directors adopted
September 21, 1995 (6)
10.10 1990 Stock Option Plan For Key Employees, as Amended and Restated
on June 23, 1994 (1)
10.11 Resolutions amending the 1990 Stock Option Plan For Key Employees
adopted December 1, 1994 (3)
10.12 Amendment to 1990 Stock Option Plan for Key Employees adopted
September 21, 1995 (6)
10.13 Employment Agreement between Frederick A. Huggins, Jr. and The
Barbers, Hairstyling for Men & Women, Inc., dated effective April
2, 1990 (1)
10.14 Addendum to Employment Agreement between Frederick A. Huggins, Jr.
and The Barbers, Hairstyling for Men & Women, Inc., dated
effective January 1993 (1)
10.15 Employment Agreement between Frederick A. Huggins, Jr. and The
Barbers, Hairstyling for Men & Women, Inc., effective October 1,
1994 (3)
10.16 Amendment to Employment Agreement between Frederick A. Huggins,
Jr. and The Barbers, Hairstyling for Men & Women, Inc., effective
February 6, 1996 (7)
10.17 Common Stock Purchase Warrant of Frederick A. Huggins, Jr. dated
April 2, 1990 (1)
<PAGE>
10.18 Common Stock Purchase Warrant of Frederick A. Huggins, Jr. dated
October 13, 1994 (3)
10.19 Amendment to Common Stock Purchase Warrants of Frederick A.
Huggins, Jr. dated September 21, 1995 (6)
10.20 Employment Agreement between Florence F. Francis and The Barbers,
Hairstyling for Men & Women, Inc. effective October 1, 1994 (3)
10.21 Common Stock Purchase Warrant of Florence F. Francis dated October
13, 1994 (3)
10.22 Amendment to Common Stock Purchase Warrant of Florence F. Francis
dated September 21, 1995 (6)
10.23 Salary Continuation Agreement between Patricia D. Kessler and The
Barbers, Hairstyling for Men & Women, Inc., dated effective
February 9, 1988 (1)
10.24 Employment Agreement between John A. Fox and The Barbers,
Hairstyling for Men & Women, Inc. effective October 1, 1997 (10)
10.25 The Barbers, Hairstyling for Men & Women, Inc. Incentive
Compensation Plan (3)
10.26 The Barbers Hairstyling for Men & Women, Inc. Deferred
Compensation Plan as adopted august 17, 1995 (5)
10.27 Special Termination Allowance dated September 21, 1995 (7)
10.28 Term Loan and Credit Agreement between The Barbers, Hairstyling
for Men & Women, Inc. and Norwest Bank Minnesota, N.A. (2)
10.29 Amendments to term Loan and Credit Agreement between The Barbers,
Hairstyling for Men & Women, Inc. and Norwest Bank Minnesota, N.A.
(4)
10.30 Amendments to Term Loan and Credit Agreement between The Barbers,
Hairstyling for Men & Women, Inc. and Norwest Bank Minnesota, N.A.
(8)
10.31 Term Loan and Credit Agreement between The Barbers, Hairstyling
for Men & Women, Inc. and Norwest Bank Minnesota, N.A. dated
January 22, 1997 (9)
10.32 Revolving Note between The Barbers, Hairstyling for Men & Women,
Inc. and Norwest Bank Minnesota, N.A. dated January 22, 1997 (9)
10.33 Term Note A between The Barbers, Hairstyling for Men & Women, Inc.
and Norwest Bank Minnesota, N.A. dated January 22, 1997 (9)
10.34 Term Note B between The Barbers, Hairstyling for Men & Women, Inc.
and Norwest Bank Minnesota, N.A. dated January 22, 1997 (9)
10.35 Arbitration Agreement between The Barbers, Hairstyling for Men &
Women, Inc. and Norwest Bank Minnesota, N.A. dated January 22,
1997 (9)
13.1 Annual Report on Form 10-KSB for the year ended September 25,
1997 (10)
13.2 Quarterly Report on Form 10-QSB for the quarter ended December 25,
1997 (11)
13.3 Quarterly Report on Form 10-QSB for the quarter ended March 26,
1998 (12)
13.4 Quarterly Report on Form 10-QSB for the quarter ended June 25,
1998 (13)
<PAGE>
23.1 Consent of Independent Auditors*
23.2 Consent of Gray, Plant, Mooty, Mooty & Bennett (included in the
opinion filed as exhibit 5.1)
24.1 Power of Attorney (included on signature page)
- ------------------
* Filed herewith.
(1) Incorporated by reference to the registrant's registration statement on
Form 10-SB dated June 28, 1994.
(2) Incorporated by reference to Amendment No. 1 to the registrant's
registration statement on Form 10-SB dated August 5, 1994.
(3) Incorporated by reference to the registrant's Annual Report on Form
10-KSB for the year ended September 29, 1994.
(4) Incorporated by reference to the registrant's quarterly report on Form
10-QSB for the quarter ended March 30, 1995.
(5) Incorporated by reference to the registrant's Annual Report on Form
10-KSB for the year ended September 28, 1995.
(6) Incorporated by reference to the registrant's registration statement on
Form S-8 dated October 13, 1995.
(7) Incorporated by reference to the registrant's quarterly report on Form
10-QSB for the quarter ended December 28, 1995.
(8) Incorporated by reference to the registrant's quarterly report on Form
10-QSB for the quarter ended March 28, 1996.
(9) Incorporated by reference to the registrant's quarterly report on Form
10-QSB for the quarter ended December 26, 1996.
(10) Incorporated by reference to the registrant's Annual Report on Form
10-KSB for the year ended September 25, 1997.
(11) Incorporated by reference to the registrant's quarterly report on Form
10-QSB for the quarter ended December 25, 1997.
(12) Incorporated by reference to the registrant's quarterly report on Form
10-QSB for the quarter ended March 26, 1997.
(13) Incorporated by reference to the registrant's quarterly report on Form
10-QSB for the quarter ended June 25, 1998.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
<PAGE>
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<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-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Minneapolis, State of Minnesota, on this 13th day of
August, 1998.
THE BARBERS, HAIRSTYLING FOR
MEN & WOMEN, INC.
/s/ Frederick A. Huggins, Jr.
-------------------------------------
By: Frederick A. Huggins, Jr.
President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Frederick A. Huggins, Jr. and J. Brent
Hanson and each of them signing singly, his true and lawful attorney-in-fact and
agent, with full power of substitution and resubstitution, for him and in his
name place and stead, in any and all capacities, to sign any and all amendments
to this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite or necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and Power of Attorney have been signed by the following
persons in the capacities and on August 13, 1998.
Signature Title
- --------- -----
/s/ Florence F. Francis Chairman of the Board
- -----------------------
Florence F. Francis
/s/ Frederick A. Huggins, Jr. President, Chief Executive Officer and a
- ----------------------------- Director
Frederick A. Huggins, Jr.
<PAGE>
/s/ J. Brent Hanson Chief Financial Officer and Chief
- ------------------- Accounting Officer
J. Brent Hanson
/s/ Marcia J. Bystrom Director
- ---------------------
Marcia J. Bystrom
/s/ David E. Emerson Director
- --------------------
David E. Emerson
/s/ Susan F. Goldstein Director
- -----------------------------
Susan F. Goldstein
/s/ Richard H. King Director
- -------------------
Richard H. King
/s/ James L. Reisner Director
- --------------------
James L. Reisner
/s/ James R. Fiffe Director
- ------------------
James R. Fiffe
[Letterhead of Gray, Plant, Mooty, Mooty & Bennett, P.A.]
EXHIBIT 5.1
JOSEPH T. KINNING
612 343-2896
August 24, 1998
The Barbers, Hairstyling for Men & Women, Inc.
300 Industrial Boulevard N.E.
Minneapolis, MN 55413
RE: FORM S-2 REGISTRATION STATEMENT
Ladies/Gentlemen:
This opinion is furnished in connection with the registration, pursuant
to the Securities Act of 1933, as amended, of a 100,000 shares of common stock
(the "Shares") of The Barbers, Hairstyling for Men & Women, Inc. (the
"Company"), issuable in connection with the Company's Designer Salon Programs.
We have acted as counsel to the Company in connection with the
preparation of the Form S-2 Registration Statement (the "Registration
Statement"). We have examined the Articles of Incorporation, as amended, the
Bylaws of the Company, such records of proceedings of the Company as we deemed
material and such other certificates, records and documents as we considered
necessary for the purposes of this opinion.
Based on the foregoing, we are of the opinion that the Shares will be,
when issued, legally issued, fully paid and non-assessable securities of the
Company. We understand that this opinion is to be issued in connection with the
Registration Statement. We consent to a filing of a copy of this opinion with
the Registration Statement.
Very truly yours,
GRAY, PLANT, MOOTY,
MOOTY & BENNETT, P.A.
By /s/ Joseph T. Kinning
--------------------------------
Joseph T. Kinning
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-2) and related Prospectus of The Barbers,
Hairstyling for Men & Women, Inc. for the registration of 100,000 shares of its
common stock and to the incorporation by reference therein of our report dated
October 31, 1997, with respect to the consolidated financial statements of The
Barbers, Hairstyling for Men & Women, Inc. included in its Annual Report (Form
10-KSB) for the year ended September 25, 1997, filed with the Securities and
Exchange Commission.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
August 17, 1998
