As filed with the U.S. Securities and Exchange Commission on November 7, 1997.
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Famous Sam's Group, Inc.
- --------------------------------------------------------------------------------
Exact name of registrant as specified in its charter)
Nevada 88-0361701
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation or organization (IRS
employer identification no.)
1999 Broadway, Ste. 3235, Denver, Colorado 80202
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices, including ZIP Code)
1997 Employee Incentive Plan
- --------------------------------------------------------------------------------
(Full title of the plan)
Mark S. Pierce, 1999 Broadway, Ste. 3235, Denver, Colorado 80202
- --------------------------------------------------------------------------------
(Name and address of agent for service)
(303) 292-2992
- --------------------------------------------------------------------------------
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================================================================
Title of Securities Amount Proposed Maximum Proposed Maximum Amount of
to be Registered to be Registered Offering Price per Aggregate Offering Registration
Share Price Fee
======================================================================================================================
<S> <C> <C> <C> <C>
$.001 par Value 820,000 shares $.54287 per share $445,156 $134.90
Common Stock
TOTALS 820,000 shares $445,156 $134.90
======================================================================================================================
Total No. of Pages: 19; Exhibit Index on Page No.: 9
1
</TABLE>
<PAGE>
PROSPECTUS
FAMOUS SAM'S GROUP, INC.
1999 Broadway, Ste. 3235, Denver, Colorado 80202
(303) 292-2992
(820,000 SHARES OF COMMON STOCK)
This Prospectus relates to the offer and sale by Famous Sam's Group, Inc., a
Nevada corporation (the "Company"), of up to 820,000 shares of its common stock
(the "Common Stock") to employees, advisors and consultants (collectively, the
"Consultants") pursuant to option agreements ("Options") entered into between
the Company and the Consultants. The Company is registering hereunder and
subsequently issuing to the Consultants upon fulfillment of their agreed upon
services, and at their election, 820,000 shares of Common Stock.
Options may be or become subject to restrictions on transfer, and until any
imposed restrictions lapse, are subject to forfeiture by the holder upon the
occurrence of certain events. Options and Common Stock which are subject to
forfeiture will be held in escrow by the Company until such time as the imposed
restrictions lapse. (See "General Information - Restrictions on Resales.")
Sales of Options and the underlying Common Stock by "affiliates," as defined in
"Rule 144" under the Securities Act of 1933, as amended (the "Securities Act"),
may not be made without compliance with the registration and prospectus delivery
requirements of the Securities Act, or an exemption therefrom, such as that
provided by Rule 144. The sale of shares by participants who are not affiliates
may be effected without compliance these requirements. Affiliates may also be
subject to Section 16(b) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). If so, such participants must comply with the provisions of
this section as well. (See "General Information- Restrictions on Resales.")
This Prospectus is part of a Registration Statement which was filed and became
effective under the Securities Act, and does not contain all of the information
set forth in the Registration Statement, certain portions of which have been
omitted pursuant to the rules and regulations promulgated by the U.S. Securities
and Exchange Commission (the "Commission") under the Securities Act. The
statements in this Prospectus as to the contents of any contracts or other
documents filed as an exhibit to either the Registration Statement or other
filings by the Company with the Commission are qualified in their entirety by
reference thereto.
A copy of any document or part thereof incorporated by reference in this
Prospectus but not delivered herewith will be furnished without charge upon
written or oral request. Requests should be addressed to: Director of Investor's
Relations, Famous Sam's: 1999 Broadway, Ste. 3235, Denver, Colorado 80202.
The Company is subject to the reporting requirements of the Exchange Act and in
accordance therewith files reports and other information with the Commission.
These reports, as well as the proxy statements, information statements and other
information filed by the Company under the Exchange Act may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. Copies may be obtained at the
prescribed rates. In addition, the Common Stock is quoted on the "bulletin
board" maintained by the National Association of Securities Dealers, Inc.
("NASD"); thus, copies of these reports, proxy statements, information
statements and other information may also be examined at the offices of the NASD
at 1735 K St., N.W., Washington, D.C. 20549.
No person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, and, if given or
made, such other information or representation must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer or
a solicitation by anyone in any state in which such is not authorized or in
which the person making such is not qualified or to any person to whom it is
unlawful to make an offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstance, create any implication that there has not been a change in the
affairs of the Company since the date hereof.
2
<PAGE>
Table of Contents
Page
General Information
The Company...................................................... 4
Purposes......................................................... 4
Common Stock..................................................... 4
The Consultants.................................................. 4
No Restrictions on Transfer...................................... 4
Tax Treatment to the Consultants................................. 4
Tax Treatment to the Company..................................... 4
Restrictions on Resales.......................................... 4
Documents Incorporated by Reference and Additional Information........ 4
Interests of Named Experts and Counsel................................ 5
Indemnification....................................................... 5
Information not Required in Prospectus................................ 6
Item 3. Incorporation of Documents by Reference............. 6
Item 4. Description of Securities........................... 6
Item 5. Interests of Named Experts and Counsel.............. 6
Item 6. Indemnification of Directors and Officers........... 6
Item 7. Exemption from Registration Claimed................. 6
Item 8. Exhibits............................................ 6
Item 9. Undertakings........................................ 7
3
<PAGE>
General Information
The Company: The Company has its principal executive offices at 1999 Broadway,
Ste. 3235, Denver, Colorado 80202;
(303) 292-2992.
Purposes: The Common Stock will be issued by the Company pursuant to agreements
entered into between the Consultants and the Company and approved by the Board
of Directors of the Company (the "Board of Directors"). The agreements are
intended to provide a method whereby the Company may be stimulated by the
personal involvement of the Consultants in the Company's future prosperity;
thereby advancing the interests of the Company and all of its shareholders.
Copies of the agreements have been filed as exhibits to the Registration
Statement.
Common Stock: The board has authorized the issuance and delivery of up to
820,000 shares of Common Stock to the Consultants upon and subsequent to
effectiveness of the Registration Statement, but only in the event the
Consultants perform their agreed upon services in full and elect to exercise
their options to take these shares valued at their market in exchange for the
fair value of the services rendered.
The Consultants: The Consultants have provided their expertise and advice to the
Company on a non-exclusive basis for the purpose of promoting the interests of
the Company.
No Restrictions on Transfer: The Consultants will become the record and
beneficial owners of the shares of Common Stock upon issuance and delivery and
are entitled to all of the rights of ownership, including the right to vote any
shares awarded and to receive ordinary cash dividends on the Common Stock.
Tax Treatment to the Consultants: The Common Stock is not qualified under
Section 401(a) of the Internal Revenue Code. The Consultants, therefore, will be
deemed for federal income tax purposes to recognize ordinary income during the
taxable year in which the first of the following events occurs: (a) the shares
become freely transferable or (b) the shares cease to be subject to a
substantial risk of forfeiture. Accordingly, the Consultants will receive
compensation taxable at ordinary rates equal to the fair market value of the
shares on the date of receipt. The Consultants are urged to consult their tax
advisor on this matter. Further, if any recipient is an "affiliate," Section
16(b) of the Exchange Act is applicable and will affect the issue of taxation.
A recipient of securities hereunder, however, may elect to include in his income
for the taxable year in which securities are received the fair market value
thereof on the date received. If this election is made, the subsequent lapsing
of the substantial risk of forfeiture and such other restrictions, if any, will
not result in any income to the recipient.
Tax Treatment to the Company: The amount of income recognized by any recipient
hereunder in accordance with the foregoing discussion will be an expense
deductible by the Company for federal income tax purposes in the taxable year of
the Company during which the recipient recognizes income.
Restrictions on Resales: In the event that an affiliate of the Company acquires
shares of Common Stock hereunder, the affiliate will be subject to Section 16(b)
of the Exchange Act. This would mean that the affiliate could not sell any
shares acquired hereunder for a period of at least six (6) months thereafter.
Further, in the event that any affiliate acquiring shares hereunder has sold any
shares of Common Stock in the previous six months preceding the receipt of
shares hereunder, any so called "profit," as computed under Section 16(b) of the
Exchange Act, would be required to be disgorged from the recipient by the
Company. Shares of Common Stock acquired hereunder by other than affiliates are
not subject to Section 16(b) of the Exchange Act.
Documents Incorporated by Reference and Additional Information
The Company hereby incorporates by reference (i) its annual report on Form
10-KSB for the year ended December 31, 1996, filed pursuant to the Exchange Act,
(ii) any and all Forms 10-QSB filed under the Exchange Act subsequent to any
filed Form 10-KSB, as well as all other reports filed under the Exchange Act,
and the Company's Form 8-A or Form 10 filing, as the case may be, and (iii) its
annual report, if any, to shareholders delivered pursuant to Rule 14a-3 of the
Exchange Act.
4
<PAGE>
In addition, all further documents filed by the Company pursuant to Sections 13,
14, or 15(d) of the Exchange Act prior to the termination of this offering are
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing.
A copy of any document or part thereof incorporated by reference in the
Registration Statement but not delivered with this Prospectus will be furnished
without charge upon written or oral request. Requests should be addressed to:
Director of Investor Relations, Famous Sam's Group, Inc., 1999 Broadway, Ste.
3235, Denver, Colorado 80202: (303) 292-2992.
Interests of Named Experts and Counsel
Mark S. Pierce, Esq., assisted in the preparation of this Prospectus and the
Registration Statement and has given an opinion on the validity of the
securities covered thereby. Mr. Pierce is a party to one of the consulting
agreements and, it is anticipated, will receive shares registered hereunder
pursuant to the terms and conditions of the agreement.
Indemnification
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers, or persons controlling the Company, the
Company has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
5
<PAGE>
Part I
Information Not Required in Prospectus
Item 3. Incorporation of Documents by Reference.
Registrant hereby states that (i) all documents set forth in (a) through (c)
below are incorporated by reference in this registration statement, and (ii) all
documents subsequently filed by registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934, as amended, prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this registration statement and to
be a part hereof from the date of filing of such documents. (a) Registrant's
latest annual report, whether or not filed pursuant to Sections 13(a) or 15(d)
of the Exchange Act; (b) All other reports filed pursuant to Sections 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by the
registrant documents referred to in (a), above; (c) The latest prospectus filed
pursuant to Rule 424(b) under the Securities Act or the effective Form 10
registering registrant's equity under the Exchange Act; and (d) The description
of the securities offered hereby as set forth in the Form 10 filed by registrant
under the Exchange Act, as well as any and all amendments thereto.
Item 4. Description of Securities.
Not Applicable to this registrant.
Item 5. Interests of Named Experts and Counsel.
Mr. Pierce is an officer or a director of registrant, and he has been granted an
option to acquire up to 385,000 shares of common stock of registrant, all of
which are being registered hereunder. These shares aggregate approximately 7.7%
of the total number of shares outstanding under this class. Mr. Pierce presently
owns 100,000 shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
The only article, statute, charter provision, bylaw, contract, or other
arrangement under which any controlling person, director or officer of
registrant is insured or indemnified in any manner against any liability which
they may incur in their capacity as such is the Nevada Business Corporation
Code, as enacted and in effect upon adoption of the registrant's articles of
incorporation and bylaws, both of which mirror this statute. The provisions of
this code generally provide that registrant may, but is not obligated to,
indemnify against liability an individual made a party to a lawsuit because they
were previously or are currently a director or officer of registrant, if such
person acted in good faith and reasonably believed their actions were in the
best interests of registrant. Registrant may not indemnify such persons if they
are found liable to registrant in a shareholders' derivative suit or are found
liable for receiving an improper personal benefit. Registrant is required to
indemnify such persons if they are ultimately successful in the suit. Pending a
final determination, registrant may advance funds to these persons, but only if
provision is made for return of the funds advanced in the event such persons are
subsequently found to not be entitled to indemnification as set forth above. The
general effect of this statute is to make indemnification available to the
officers and directors of registrant regarding actions taken in their official
capacity, unless they are found liable to registrant for their actions, they
received an improper benefit therefrom, or they did not act in good faith while
reasonably believing their actions were in the best interests of registrant.
Indemnification under this section would include actions of the officers and
directors of registrant taken in connection with this offering.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The following exhibits are filed as part of this registration statement pursuant
to Item 601 of Regulation S-K and are specifically incorporated herein by this
reference:
6
<PAGE>
Exhibit No./Title
1. Not Required.
2. Not Required.
3. Not Required.
4. Not Applicable.
5. Opinion of Mark S. Pierce regarding the legality of the securities
registered.
6. Not Required.
7. Not Required.
8. Not Required.
9. Not Required.
10 (a) Employment and Option Agreement with Mark S. Pierce.
(b) Consulting and Option Agreement with Charles Tatnall.
11. Not Required.
12. Not Required.
13. Not Required.
14. Not Required.
15. Not Applicable.
16. Not Required.
17. Not Required.
18. Not Required.
19. Not Required.
20. Not Required.
21. Not Required.
22. Not Required.
23 Consent of Mark S. Pierce, special counsel to Registrant, to the use of his
opinion with respect to the legality of the securities being registered hereby
and to the references to him in the Prospectus filed as a part hereof.
24. Not Required.
25. Not Applicable.
26. Not Applicable.
27. Not Applicable.
28. Not Required.
99. Not Required.
Item 9. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of registrant
pursuant to the foregoing provisions, or otherwise, registrant 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. In the event that a claim for indemnification
against such liabilities (other that the payment by registrant of expenses
incurred or paid by a director, officer or controlling person of 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, 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 is against public policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
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: (i) include any prospectus required by Section 10(a)(3) of the Securities
Act; (ii) 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, represents a
fundamental change in the information set forth in the registration statement;
and (iii) 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, including,
but not limited to, any addition or deletion of a managing underwriter. (2)
That, for the purpose of determining any liability under the Securities Act,
each post-effective amendment to the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof. (3) To remove from
7
<PAGE>
registration by means of a post-effective amendment any of the securities being
registered which remain unsold at the termination of the offering. (4) 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.
Registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of registrant's annual report
pursuant to Sections 13(a) or 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned in the City of Denver, State of Colorado, on the 5th
day of November, 1997.
Famous Sam's Group, Inc.
(Registrant)
By: /s/ Mark S. Pierce
--------------------------------
Chief Executive Officer
By: /s/ Mark S. Pierce
---------------------------------
Chief Financial and Accounting
Officer and Treasurer
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.
/s/ Mark S. Pierce
- ------------------------------
Director
Date: November 5, 1997
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstance, create an implication that there has not been a change in the
affairs of the Company since the date hereof.
8
<PAGE>
FORM S-8 REGISTRATION STATEMENT
EXHIBIT INDEX
The following Exhibits are filed as part of this registration statement pursuant
to Item 601 of Regulation S-K and are specifically incorporated herein by this
reference:
Exhibit Number
in Registration Statement Description
- ------------------------- -----------
5. Opinion of Counsel
10.1. Employment and Option Agreement with Mark S. Pierce.
10.2. Consulting and Option Agreement with Charles Tatnall.
23. Consent to Use of Opinion
9
EXHIBIT 5
Opinion of Counsel
10
<PAGE>
MARK S. PIERCE
- --------------------------------------------------------------------------------
November 5, 1997
Famous Sam's Group, Inc.
1999 Broadway, Ste. 3235
Denver, Colorado 80202
RE: Registration on Form S-8
Gentlemen:
As special securities counsel for Famous Sam's Group, Inc. (the "Company"), I am
furnishing this opinion to you in compliance with the referenced matter, and am
familiar with the Company's articles of incorporation and its corporate powers,
franchises and other rights under which it carries on its business. I am also
familiar with the Company's Bylaws, minute book and other corporate records. For
the purpose of the opinions expressed below, I have examined, among other
things, the registration statement on Form S-8 to be filed in regards of the
above offering (the "Registration Statement"), and have supervised proceedings
taken in connection with the authorization, execution and delivery by the
Company of the Registration Statement and, as contemplated thereby, the
authorization and issuance of the shares of common stock to be issued
thereunder. In arriving at the opinions set forth below, I have examined and
relied upon originals or copies, certified or otherwise identified to my
satisfaction, of all such corporate records and all such other instruments,
documents and certificates of public officials, officers and representatives of
the Company and of other persons and have made such investigations of law as I
have considered necessary or appropriate as a basis for my opinions. Moreover, I
have with your approval relied as to factual matters stated therein on the
certificates of public officials, and I have assumed, but not independently
verified, that the signatures on all documents which I have examined are genuine
and that the persons signing such had the capacity to do so. This opinion
further expressly assumes that the shares covered by the Registration Statement
will be issued in conformity with the terms and conditions applicable thereto.
Based upon and subject to the forgoing, I am of the opinion that the issuance
and sale of the stock in this offering have been duly and validly authorized and
upon delivery to the shareholders in accordance with the terms and conditions of
the exhibits to the Form S-8 will have been duly authorized, validly issued,
fully paid for and nonassessable.
I am admitted to practice before the Bar of the State of Colorado only. I am not
admitted to practice in any other jurisdiction in which the Company may own
property or transact business. My opinions herein are with respect to federal
law only and, to the extent my opinions are derived from laws of other
jurisdictions, are based upon an examination of relevant authorities and are
believed to be correct, but I have not directly obtained legal opinions as to
such matters from attorneys licensed in such other jurisdictions. My opinions
are qualified to the extent that the enforcement of rights and remedies are
subject to bankruptcy, insolvency and other laws of general application
affecting the rights and remedies of creditors and security holders and to the
extent that the availability of the remedy of specific enforcement or of
injunctive relieve is subject to the discretion of the court before which any
proceeding thereof may be brought.
This opinion is furnished by me to you as counsel for the Company and it is
solely for your benefit. This opinion is not to be used, circulated, quoted or
otherwise referred to for any other purpose, other than as set forth in my
consent to the use of the same in the Form S-8.
Very truly yours,
/s/ Mark S. Pierce
Mark S. Pierce
- --------------------------------------------------------------------------------
1999 Broadway, Suite 3235
Denver, Colorado 80202
(303) 292-2992 (Tel.); (303) 292-2882 (FAX)
- --------------------------------------------------------------------------------
11
EXHIBITS 10.1
Contracts
12
<PAGE>
EMPLOYMENT AND OPTION AGREEMENT
This Employment and Option Agreement is made and entered into to be effective as
of the date upon which services were first rendered in accordance herewith and
is by and between Mark S. Pierce ("Employee") and Famous Sam's Group, Inc.
("Client"). Employee is willing and able to provide various valuable services
for and on behalf of Client in connection with the business of Client. Client
desires to retain Employee as an executive officer on behalf of Client and
Employee desires to be retained in that capacity upon the terms and conditions
hereinafter set forth. In consideration of the foregoing premises, the mutual
promises and agreements hereinafter set forth, and such other and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Client and Employee agree as follows:
1. Services. Client hereby retains Employee as a director and an executive
officer and Employee hereby accepts and agrees to such retention. Employee shall
render to Client services of such nature as are necessary to provide for the
strategic direction and day to day management of the Company. It is not intended
that the performance of the services described herein shall be accomplished
exclusively by Employee; therefor, Employee may engage persons as subcontractors
to assist in the discharge of the responsibilities hereunder; however, any such
further employment shall be at the cost and expense of Employee.
2. Time, Place and Manner of Performance. Employee shall render his services at
reasonable and convenient times and places. Except as aforesaid, the time, place
and manner of performance of the services hereunder, including the amount of
time to be allocated by Employee to any specific service, shall be determined in
the sole discretion of Employee.
3. Term of Agreement. This agreement shall begin when Employee first began
rendering services for Client, and shall terminate when the services have been
fully rendered hereunder or when a change in control of Client shall have
occurred.
4. Compensation. Upon termination of this agreement, Client shall pay Employee a
fee in the amount of $10,000 per month. At the option of Employee, Employee may
elect to take all or any portion of this amount in shares of the free trading
common stock of Client registered under a Form S-8 filed in accordance with the
terms and conditions set forth under the Securities Act of 1933, as amended. The
parties have agreed that the fair market value of this stock, after considering
the financial condition of Client, as well as the lack of a trading market for
the stock, is $.03125 per share.
This option is not transferrable by Employee.
5. Expenses. Client shall reimburse Employee on demand for all expenses and
other disbursements, including, but not limited to, travel, entertainment,
mailing, printing and postage, incurred by Employee, or any of his
subcontractors, on behalf of Client in connection with the performance of the
consulting services pursuant to this agreement. Expenses and disbursements in
excess of $100 shall have Client's prior approval. These expenses shall be paid
in cash, or, at the option of Employee, in shares of Client's common stock
registered under Form S-8. If this non-transferrable option is exercised, said
shares shall be issued at the fair market value therefor, which Client and
Employee agree will be the closing inside bid price therefor on the date of
payment.
6. Work Product. It is agreed that, prior to public distribution, all
information and materials produced for Client shall be property of Employee,
free and clear of all claims thereto by Client, and Client shall retain no claim
of authorship therein.
13
<PAGE>
7. Disclosure of Information. Employee recognizes and acknowledges that Employee
has and will have access to certain confidential information of Client and its
affiliates that are valuable, special and unique assets and property of Client
and such affiliates. Employee will not, during or after the term of this
agreement, disclose, without the prior written consent or authorization of
Client, any such information to any person, except to authorized representatives
of Employee or its affiliates for purposes of the services to be rendered under
this agreement, for any reason or purpose whatsoever. In this regard, Client
agrees that such authorization or consent to disclosure may be conditioned upon
the disclosure being made pursuant to a secrecy agreement, protective order,
provision of statute, rule, regulation or procedure under which the
confidentiality of the information is maintained in the hands of the person to
whom the information is to be disclosed or in compliance with the terms of a
judicial order or administrative process.
8. Conflict of Interest. Employee shall be free to perform services for other
persons during the term of this agreement. Employee will notify Client of the
performance of consulting services for any other person which would conflict
with the obligations of this agreement. Upon receiving such notice, Client may
terminate this agreement or consent to Employee's outside consulting services.
Failure to terminate this agreement shall constitute Client's ongoing consent to
Employee's outside consulting activities.
14
<PAGE>
9. Miscellaneous Provisions. (a) Notices. Any notices required or permitted to
be given under this agreement shall be sufficient if in writing and delivered or
sent by registered or certified mail to the principle office of each party. (b)
Waiver of Breach. Any waiver by a party of a breach of any provision of this
agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by the waiving party. (c) Assignment. This agreement and
the rights and obligations of the parties hereunder are not assignable by either
party. (d) Applicable Law. It is the intention of the parties hereto that this
Agreement and the performance hereunder and all suits and special proceedings
hereunder be construed in accordance with and under and pursuant to the laws of
the State of Nevada and that in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with or by reason
of this agreement, the laws of the State of Nevada shall be applicable and shall
govern to the exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding may be instituted. (e)
Severability. All agreements and covenants contained herein are severable, and
in the event any of them shall be held to be invalid by any competent court, the
agreement shall be interpreted as if such invalid agreements or covenants were
not contained herein. (f) Entire Agreement. This Agreement constitutes and
embodies the entire understanding and agreement of the parties and supersedes
and replaces all prior understandings, agreements and negotiations between the
parties. (g) Counterparts. This agreement may be executed in counterparts, each
of which shall be deemed an original, but both of which taken together shall
constitute but one and the same document.
IN WITNESS WHEREOF, the parties hereto have entered into this agreement
effective as of the day and year first above written.
EMPLOYEE: CLIENT: FAMOUS SAM'S GROUP, INC.
/s/ Mark S. Pierce /s/ Mark S. Pierce
- ------------------------- ------------------------------
Mark S. Pierce Mark S. Pierce, President
15
CONSULTING AND OPTION AGREEMENT
This Consulting and Option Agreement is made and entered into to be effective as
of the date upon which services were first rendered in accordance herewith and
is by and between Charles Tatnall ("Consultant") and Famous Sam's Group, Inc.
("Client"). A. Consultant is willing and able to provide various valuable
services for and on behalf of Client in connection with the business of Client.
B. Client desires to retain Consultant as an independent contractor on behalf of
Client and Consultant desires to be retained in that capacity upon the terms and
conditions hereinafter set forth. In consideration of the foregoing premises,
the mutual promises and agreements hereinafter set forth, and such other and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Client and Consultant agree as follows:
1. Consulting Services. Client hereby retains Consultant as an independent
contractor to Client and Consultant hereby accepts and agrees to such retention.
Consultant shall render to Client services of an advisory or consultative nature
in order to provide for such financial restructuring as is necessary to once
again make Client a viable public entity, and such other and further services to
Client of this nature as it may deem reasonable and necessary from time to time.
It is the intention of the parties that Consultant will gather all
publicly-available information relating to Client and confer with officers and
directors of Client in an effort to consolidate the information obtained for
purposes of discharging the obligations which have been imposed upon Consultant
under this agreement. It is intended that Consultant will use and distribute
this information concerning Client to persons and other parties outside of
Client who Consultant determines, in the sole discretion of Consultant, are
entitled to this information for purposes of Consultant performing in accordance
with the terms and conditions of this agreement. It is not intended that the
performance of the consulting services described herein shall be accomplished
exclusively by Consultant; therefor, Consultant may engage persons as
subcontractors to assist in the discharge of the responsibilities hereunder;
however, any such further employment shall be at the cost and expense of
Consultant.
2. Time, Place and Manner of Performance. Consultant shall be available for
advice and counsel to the officers and directors of Client at such reasonable
and convenient times and places as may be mutually agreed upon. Except as
aforesaid, the time, place and manner of performance of the services hereunder,
including the amount of time to be allocated by Consultant to any specific
service, shall be determined in the sole discretion of Consultant.
3. Term of Agreement. This agreement shall begin when Consultant first began
rendering services for Client, and shall terminate when the services have been
fully rendered hereunder or when a change in control of Client shall have
occurred.
4. Compensation. Upon termination of this agreement, Client shall pay to
Consultant a fee of $2,500 per month, or, in lieu thereof and at the option of
Consultant, grant Consultant an option to acquire up to 362,500 shares of common
stock of Client per month for services rendered. In the event that Consultant
exercises his option in this regards, which may be exercised as to all or any
portion of is fee, Client shall provide to Consultant free trading common stock
of Client registered under a Form S-8 filed in accordance with the terms and
conditions set forth under the Securities Act of 1933, as amended. The parties
have agreed that the fair market value of this stock, after considering the
financial condition of Client, as well as the lack of a trading market for the
stock, is $.175 per share in addition to the $2,500 per month accrued as a
consulting fee.
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5. Expenses. Client shall reimburse Consultant on demand for all expenses and
other disbursements, including, but not limited to, travel, entertainment,
mailing, printing and postage, incurred by Consultant, or any of its
subcontractors, on behalf of Client in connection with the performance of the
consulting services pursuant to this agreement. Expenses and disbursements in
excess of $100 shall have Client's prior approval. These expenses shall be paid
in cash, or, at the option of Consultant, in shares of Client's common stock
registered under Form S-8. If this non-transferrable option is exercised, said
shares shall be issued at the fair market value therefor, which Client and
Consultant agree will be the closing inside bid price therefor on the date of
payment.
6. Work Product. It is agreed that, prior to public distribution, all
information and materials produced for Client shall be property of Consultant,
free and clear of all claims thereto by Client, and Client shall retain no claim
of authorship therein.
7. Disclosure of Information. Consultant recognizes and acknowledges that
Consultant has and will have access to certain confidential information of
Client and its affiliates that are valuable, special and unique assets and
property of Client and such affiliates. Consultant will not, during or after the
term of this agreement, disclose, without the prior written consent or
authorization of Client, any such information to any person, except to
authorized representatives of Consultant or its affiliates for purposes of the
services to be rendered under this agreement, for any reason or purpose
whatsoever. In this regard, Client agrees that such authorization or consent to
disclosure may be conditioned upon the disclosure being made pursuant to a
secrecy agreement, protective order, provision of statute, rule, regulation or
procedure under which the confidentiality of the information is maintained in
the hands of the person to whom the information is to be disclosed or in
compliance with the terms of a judicial order or administrative process.
8. Nature of Relationship. It is understood and acknowledged by the parties that
Consultant is being retained by Client in an independent capacity, and that in
this connection, Consultant hereby agrees, except as otherwise provided herein,
or unless Client shall have otherwise consented, not to enter into any agreement
or incur any obligation on behalf of Client.
9. Conflict of Interest. Consultant shall be free to perform services for other
persons during the term of this agreement. Consultant will notify Client of the
performance of consulting services for any other person which would conflict
with the obligations of this agreement. Upon receiving such notice, Client may
terminate this agreement or consent to Consultant's outside consulting services.
Failure to terminate this agreement shall constitute Client's ongoing consent to
Consultant's outside consulting activities.
10. Indemnification for Securities Law Violations. Client agrees to indemnify
and hold harmless Consultant and each officer, director or controlling person of
Consultant against any losses, claims, damages, liabilities and /or expenses
(including any legal or other expenses reasonably incurred in investigating or
defending any act or claim in respect thereof) to which Consultant or such
officer, director or controlling person may become subject under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
because of actions of Client or its agent(s).
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11. Miscellaneous Provisions. (a) Notices. Any notices required or permitted to
be given under this agreement shall be sufficient if in writing and delivered or
sent by registered or certified mail to the principle office of each party. (b)
Waiver of Breach. Any waiver by a party of a breach of any provision of this
agreement by the other party shall not operate or be construed as a waiver of
any subsequent breach by the waiving party. (c) Assignment. This agreement and
the rights and obligations of the parties hereunder are not assignable by either
party. (d) Applicable Law. It is the intention of the parties hereto that this
Agreement and the performance hereunder and all suits and special proceedings
hereunder be construed in accordance with and under and pursuant to the laws of
the State of Nevada and that in any action, special proceeding or other
proceeding that may be brought arising out of, in connection with or by reason
of this agreement, the laws of the State of Nevada shall be applicable and shall
govern to the exclusion of the law of any other forum, without regard to the
jurisdiction in which any action or special proceeding may be instituted. (e)
Severability. All agreements and covenants contained herein are severable, and
in the event any of them shall be held to be invalid by any competent court, the
agreement shall be interpreted as if such invalid agreements or covenants were
not contained herein. (f) Entire Agreement. This Agreement constitutes and
embodies the entire understanding and agreement of the parties and supersedes
and replaces all prior understandings, agreements and negotiations between the
parties. (g) Counterparts. This agreement may be executed in counterparts, each
of which shall be deemed an original, but both of which taken together shall
constitute but one and the same document.
IN WITNESS WHEREOF, the parties hereto have entered into this agreement
effective as of the day and year first above written.
CONSULTANT: CLIENT: FAMOUS SAM'S GROUP, INC
/s/ Charles Tatnall /s/ Mark S. Pierce
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Charles Tatnall Mark S. Pierce, President
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EXHIBIT 23
Consent to Use of Opinion
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MARK S. PIERCE
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November 5, 1997
Board of Directors
1999 Broadway, Ste. 3235
Denver, CO 80202
RE: Registration on Form S-8
Gentlemen:
Please allow this letter to serve as my consent to the filing of, and reference
in the prospectus to, my opinion in the registration statement under the
referenced matter.
If you have any questions with regards to the above matter, please call the
undersigned at the Denver address.
Sincerely,
/s/ Mark S. Pierce
Mark S. Pierce
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1999 Broadway, Suite 3250
Denver, Colorado 80202
(303) 292-2992 (Tel.); (303) 292-2882 (FAX)
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