As filed with the Securities and Exchange Commission on July 26, 1996
Registration No. 33-
-------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
OLYMPIC ENTERTAINMENT GROUP, INC.
(Exact Name of Registrant as specified in Charter)
Nevada 88-0271810
(State of Other Jurisdiction (I.R.S. Employer
of Incorporation) Identification No.)
2001 East Flamingo Road, Suite 100
Las Vegas, Nevada 89119
(Address of Principal Executive Office) (Zip Code)
OLYMPIC ENTERTAINMENT GROUP, INC.
1996 EMPLOYEE STOCK OPTION PLAN
---------------------------------
(Full title of the plan)
Copy to:
DOMINIC ORSATTI JOHN HOLT SMITH, ESQ.
Chairman of the Board Smith & Associates
OLYMPIC ENTERTAINMENT GROUP, INC. Eighteenth Floor
2001 East Flamingo Road, Suite 100 1901 Avenue of the Stars
Las Vegas, Nevada 89119 Los Angeles, California 90067
(702) 369-2588 (310) 277-1250
----------------------------------- -----------------------------
(Name, address and telephone
number, including area code,
of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
======================================================================================================================
Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered(1) Per Share(2) Offering Price(2) Fee
<S> <C> <C> <C> <C>
Common Stock 800,000 Shares $2.25 $1,800,000 $562.50
=======================================================================================================================
(1) 800,000 shares are being registered pursuant to the Company's 1996 Employee Stock Option Plan, as authorized by the Board of
Directors on June 18, 1996, and ratified by shareholders on June 18, 1996.
(2) Estimated based on the aggregate number of shares of Common Stock which may be purchased pursuant to the Plan described
herein in accordance with Rule 457(h) and solely for the purpose of calculating the registration fee on the basis of the
average of the bid and ask prices as reported by the National Association of Securities Dealers, Inc. in the over-the-counter
market on July 22, 1996.
---------------
The Registration Statement shall become effective upon filing in
accordance with Rule 462 under the Securities Act of 1933
</TABLE>
<PAGE>
REOFFER PROSPECTUS
OLYMPIC ENTERTAINMENT GROUP, INC.
a Nevada corporation
360,000 Shares of Common Stock
on behalf of Selling Shareholders
pursuant to the
OLYMPIC ENTERTAINMENT GROUP, INC.
1996 EMPLOYEE STOCK OPTION PLAN
The Company registered 800,000 shares of Common Stock (the "Shares) as July 26,
1996 of which 360,000 are intended to be sold on behalf of the selling
shareholders. The Company's registration statement on Form S-8 was filed on July
26, 1996 and immediately declared effective in accordance with in accordance
with Rule 462 under the Securities Act of 1933, as amended.
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A VERY HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION; NOR HAS THE COMMISSION PASSED UPON THE ADEQUACY OR ACCURACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
Underwriting Proceeds to
Price to discounts and the Selling
Public commissions Shareholders(1)(2)
Per Share $2.25 N/A $2.25
Total $1,800,000 N/A $810,000
================================================================================
(1) Calculation is based on 360,000 being reoffered and sold pursuant to this
Prospectus using the average of the bid and ask prices as reported by the
NASD, Inc. in the over-the-counter market on July 22, 1996.
(2) 800,000 shares are being registered pursuant to the Company's 1996 Employee
Stock Option Plan, as authorized by the Board of Directors on June 18,
1996, and ratified by shareholders on June 18, 1996.
The date of this Prospectus is July 26, 1996
---------------
<PAGE>
Available Information
The Company filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C. office, a Registration Statement on Form S-8
under the Securities Act of 1933, as amended, for the registration of the
securities offered hereby which was filed and declared effective on July 26,
1996. This Prospectus omits certain of the information contained in the
Registration Statement, and reference is hereby made to the Registration
Statement and exhibits and schedules relating thereto for further information
with respect to the Company and the securities to which this Prospectus relates.
Statements contained herein concerning the provisions of any document are not
necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement. Each such
statement is qualified in its entirety by such reference. Items of information
omitted from this Prospectus but contained in the Registration Statement may be
inspected without charge at the Public Reference Room of the Commission, 450
Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and copies of such
material can be obtained from the Public Reference Section of the Commission,
Washington, D.C. 20549, at prescribed rates.
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith files reports and
other information with the Securities and Exchange Commission. The reports and
other information filled by the Company can be inspected and copied at the
public reference facilities maintained by the Commission in Washington, D.C. and
at the Chicago Regional Office, Northwestern Atrium Center, 500 W. Madison
Street, Suite 1400, Chicago, Illinois 60621-2511, and the New York Regional
Office, 7 World Trade Center, New York, New York 10048. Copies of such material
can be obtained from the Public Reference Section of the Commission, Washington,
D.C. 20549, at prescribed rates.
Reports to Securityholders
The Company will furnish to shareholders (i) an annual report containing
financial information examined and reported upon by its certified public
accountants; (ii) unaudited financial statements for each of the first three
quarters of the fiscal year; and (iii) additional information concerning the
business and operations of the Company deemed appropriate by the Board of
Directors.
Incorporation by Reference
The Company will provide without charge to each person who receives a
prospectus, upon written or oral request of such person, a copy of any
information that was incorporated by reference in the prospectus and the address
and telephone number to which such a request is to be directed.
<PAGE>
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SUMMARY INFORMATION AND RISK FACTORS
================================================================================
The following is qualified in its entirety by the more detailed narrative
appearing elsewhere in this Prospectus.
The Company: OLYMPIC ENTERTAINMENT GROUP, INC., formed May 21, 1987, is a
motion picture and television production company specializing
in the distribution of non-violent and educational children's
programming. The Company has created a children's educational
division called Children's Cable Network.
The Company has created a children's educational division
called Children's Cable Network. The Company licenses regional
affiliates the right to broadcast children's educational and
non-violent programming and intends to create and acquire
educational programming and products for the Children's Cable
Network. The Children's Cable Network specializes in
non-violent educational and informational preschool
programming, special interest videos, children's classics
videos and G-rated children's motion pictures.
Pursuant to the original Articles of Incorporation, the
Company had the authority to issue an aggregate of one million
(1,000,000) common shares, par value $.01 per common share. On
August 11, 1994, an amendment to the Articles of Incorporation
increased the authorized common shares to twenty million
(20,000,000) at a par value of $.01 and authorized the
issuance of five million (5,000,000) shares of preferred stock
at a par value of $.01 per preferred share, which may be, at
the discretion of the Board of Directors, issued in
alphanumeric series with the rights and preferences designated
at the time of issuance by the Board of Directors.
Shares Currently
Class of Stock Outstanding
-------------- ----------------
Common 2,812,181
10% Convertible Preferred 106,500
Series C Preferred 32,800
Series D Preferred 98,000
The Company's executive offices of approximately 1,000 square
feet are located at 2001 East Flamingo Road, Las Vegas, Nevada
89119, and its telephone number is (702) 369-2588. The
production offices consist of approximately 4,000 square feet
located at the Burbank Production Plaza, 801 South Main
Street, Burbank, California 91506, and its telephone number is
(818) 556-6300. The Company's lease was for a term of 24
months ending May 1, 1995, at a monthly rate of $4,900 per
month with an option to renew at the same rate and terms and
conditions. The Company is currently leasing the facilities on
a month-to-month basis at the same price with an option to
extend the term.
The Company's registration statement on Form S-8 was filed and
declared effective on July 26, 1996. To date, no options have
been exercised.
Securities
Distributed: 360,000 options to be exercised into 360,000 shares of Common
Stock.
<PAGE>
Purpose of
Distribution: To raise additional capital in the future and to incentivise
management who have been granted options in the shares of
Common Stock being offered hereby.
Common Shares
Outstanding After
Distribution: 3,172,181 Common Shares.
The options are exercisable into one common share at the
purchase price of the lesser of (i) the price per share
declared by the Board on the Granting Date of the option; or
(ii) eighty percent (80%) of the per share market value on the
Granting Date. The options shall be effective during the time
the Plan is in existence for a period of ten years from the
date of issuance.
Use of
Proceeds: Any proceeds received by the Company from the subsequent
exercise of the options shall be used as working capital and
to expand operations. Additionally, this prospectus relates to
securities registered on behalf of selling securityholders and
the Company will not receive any cash or other proceeds in
connection with the subsequent sale.
Absence of
Dividends;
Dividend Policy: The Company does not currently intend to pay regular cash
dividends on its Common Stock; such policy will be reviewed by
the Company's Board of Directors from time to time in light
of, among other things, the Company's earnings and financial
position. See "Risk Factors."
THE SHARES OFFERED HEREBY ARE HIGHLY SPECULATIVE, INVOLVING A HIGH DEGREE OF
RISK AND SHOULD NOT BE PURCHASED BY PERSONS WHO CANNOT AFFORD THE LOSS OF THEIR
ENTIRE INVESTMENT. EACH PROSPECTIVE INVESTOR SHOULD CONSIDER CAREFULLY THE
BUSINESS, SECURITIES LAWS AND OTHER RISKS SUMMARIZED BELOW AND SHOULD CONSULT
HIS OR HER OWN LEGAL, TAX AND FINANCIAL ADVISORS WITH RESPECT THERETO.
PROSPECTIVE PURCHASERS SHOULD BE AWARE OF THE FOLLOWING FACTORS AND SHOULD
REVIEW CAREFULLY THE INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.
Licensing of Programming Rights
The Company's financial success and performance depends upon its ability to
obtain programs and to enter into license contracts with prospective Broadcast
Affiliate licensees for its programming. There is no assurance that the Company
can secure such programming on favorable terms or that, if the Company acquires
or licenses such rights, that distribution of the Company's programming will be
successful. While the Company's independence provides greater flexibility to
engage in the acquisition of a variety of small-scale programs and license them
to relatively small, local or community operators (affiliates), this
independence also exposes the Company to the risk of being financially unable to
secure adequate programming at an affordable cost and to enter into licensing
arrangements with Broadcast Affiliates and programming on favorable terms.
Working Capital Requirements
The successful operation of the Company depends to a substantial extent on the
Company's ability to finance the acquisition, licensing and enhancement of
educational programs for distribution. The Company's costs are negotiated and
incurred on a series-by-series basis. The Company may have to pay advance
licensing fees for rights to such programming. The Company has done extensive
research and exploration of the availability of appropriate educational or
non-violent programming for both purchase and licensing. The Company has
significant working capital requirements to meet its objectives of becoming a
network operating across the United States. There can be no assurance that the
revenues generated by licensing activities will meet the requirements of its
minimum working capital needs. Furthermore, the Company's strategy for future
growth contemplates increased working capital requirements as the Company
increases its production commitments for programs and expansion into a national
network.
<PAGE>
Industry Competition
The proposed business of the Company is very competitive. The Company will
encounter competition from many franchised cable companies which are already
offering, or will in the future offer, the same or similar services as those
proposed to be offered by the Company. Many competitors of the Company will have
greater financial resources, more experience in delivery of programming and more
acceptability of product than the Company. Management believes the Company's
present programming and programs acquired in the future in the non-violent
children's program market niche will be competitive in the current market.
Nonetheless, there can be no assurance that the Company's programming can or
will ultimately be marketed successfully or throughout the United States so as
to create a network for children's educational and non-violent programming or
that, if marketed successfully, that such programs or a network when created by
the Company will be profitable. Moreover, there can be no assurance that the
Company's programming can or will be able to compete on a technological basis
with other programming which may be available before or after the time the
Company's programming is introduced into the targeted markets. Entities with
greater established financial resources and greater technical and production
capacity than the Company are competitors in the television broadcasting, cable
and video industries. They may develop productions or products that are
competitive with or superior to the Company's products or which can be marketed
more effectively. The Company competes with all other Broadcasters of children's
programming and Producers of home videos for children. However, the number of
competitors, although it must be considered, may not be the most significant
factor. A shortage of good product has always been the great equalizer.
Presently there is the Public Broadcasting System (PBS) that is on the air
several hours per day with children's programs including "Sesame Street." On
cable television there is "The Learning Channel" and "The Family Channel" which
offer similar programming as PBS, all of which could be considered competitive,
although the Company's target audience is pre-school children and the times of
day recommended to affiliates is from 6:00 a.m. to 12:00 p.m..
Network Establishment / Development Stage Company
Although the Company has operated for several years and has purchased or
licensed over 800 half-hour programs for licensing, in relation to establishing
a nationwide network, the Company is in the development stage and its proposed
network operations are subject to all of the risks inherent in the establishment
of a new business enterprise. The likelihood of the success of the Company in
creating a nationwide network must be considered in light of the normal
complications and delays frequently encountered in connection with the formation
of a new business, employment, and the competitive environment in which the
Company will operate. It is possible that losses will continue in the future.
Therefore, there is limited operational results upon which to base an assumption
that the Company's business plan will prove successful, and there is no
assurance that the Company will be able to operate profitably. If the Company's
plans prove to be unsuccessful, stockholders may lose all or a substantial part
of their investment.
<PAGE>
Dependence on Key Personnel
The future success or failure of the Company is dependent primarily upon the
efforts of Dominic Orsatti, Chairman and Founder, Paul Cameron, Vice Chairman,
and Michael Marcovsky, President. If for any reason the services of Messrs.
Orsatti, Cameron or Marcovsky became unavailable to the Company, the Company's
future operations could be materially and adversely affected. Management intends
to develop employment contracts to guarantee the employment of key personnel
over a prescribed period of time.
Offering Price
The price of the Shares offered hereby is to be determined by the market for the
Company's Common Stock and without any consideration of such factors as the
Company's proposed Management team, market potential, present financial
condition, potential competitiveness, its current stage of business development,
and the general condition of the economy and the securities markets.
Limitations of Directors Liability - Indemnification
The Company's Articles of Incorporation provide that to the fullest extent
permitted by Nevada law, no director of the Company shall be liable to the
company or its stockholders for monetary damages for breach of fiduciary duty as
a director. The effect of this provision is to eliminate, subject to certain
exceptions, the rights of the Company and its shareholders to recover monetary
damages against a director resulting from negligent or grossly negligent
behavior.
Supportive Regulation; Legislation
The cable television industry is subject to both regulatory restrictions
implemented primarily by the Federal Communications Commission, ("FCC") and also
legislation which affects communications/broadcast industries in general. Public
Access is the term used to describe the programming opportunities available to
each and every citizen who wishes to communicate with the public via cable
television. This is made possible as a result of the Federal Cable Communication
Act of 1984 which enables individuals and groups the opportunity to use the
public, educational and government access channels operated by cable
franchisees. Under the law, cable operators are responsible for providing
equipment, facilities and training for its citizens who use these access
channels. The purpose of Public Access Television, in its most pure form is to
provide the members of the community which it serves the ability to communicate
freely, without interference and without charge, their activities, opinions and
ideas. Cable Franchisees may in no way restrict the content of message of any
program presented over the Public Access Channel. It can be said that Public
Access Television helps make the First Amendment Rights to Free Speech a reality
for United States residents in our time. It is impossible to predict with any
accuracy the potential regulatory or legislative actions which could effect
cable television. It is possible that certain restrictions could adversely
affect the business opportunities of cable television providers.
Recent Cable Television Rate Regulation
The Cable Television Act of 1992 renewed government supervision of the
franchised cable television industry which was deregulated by the Cable Act of
1984. Both Acts are amendments to the Communications Act of 1934. The Cable
Television Act of 1992 ("1992 Act") authorized the FCC to implement rate and
service regulation for certain basic cable television services and to create
regulations that will increase competition to franchised cable operators. On
April 1, 1993, the FCC announced several features of the rules it plans to
implement in connection with the 1992 Act. Most of the announced rules concern
rate regulation for franchised services as well as a temporary rate freeze and
rollback. In order to promote competition with franchised cable operators, the
FCC announced program access regulations as part of the Act. These provisions
essentially allow competitive cable operators to purchase television programming
at fair prices. Management believes that these provisions of the act may result
in lower operating costs for the Company.
<PAGE>
Possible Inability to License Broadcast Affiliates
The Company's performance depends upon its ability to obtain contracts with
prospective broadcast affiliate licensees for its programming. There is no
assurance that the Company can secure such licensing on favorable terms or that,
if the Company licenses such rights, that distribution of the Company's
programming will be successful. The Company's independence exposes the Company
to the risk of being unable to secure adequate licensing arrangements with
broadcast affiliates and programming on favorable terms. See "The Company."
Conflicts of Interest
The current officers of the Company devote all of their time to the affairs of
the Company (with the exception of Mr. Henson, Chief Financial Officer who
devotes approximately ten hours a week to the Company and Mr. Smith who devotes
less than ten hours per month as an officer of the Company but provides legal
services in his role as attorney to the Company for approximately 12 hours per
week). The remaining directors spend as much time as deemed necessary on the
corporate business affairs (estimated to be approximately 15% of their time) but
are not required nor expected to devote their entire time or efforts to the
Company's business and affairs. Some of the officers and directors of the
Company are currently principals of other businesses. As a result, conflicts of
interest may arise. The officers and directors shall use their best efforts to
resolve equitably any conflicts that might result from acting as principals for
a number of businesses, but there can be no assurance that such other activities
will not interfere with the officers' and directors' ability to discharge their
obligation herein.
Possible Inability to Acquire Programming
The Company's performance depends upon its ability to obtain programming for the
Children's Cable Network. There can be no assurance that the Company can
continue to secure its programming on favorable terms. If the Company is unable
to acquire suitable programming, fewer programs can be licensed to broadcast
affiliates, resulting in a possible decrease in revenues. The Company has
secured the options to 376 half-hour episodes of "Dusty's Treehouse," 150
half-hour episodes of "Froozles," and over 100 hours of Bill Cosby's "The
Picture Book." The Company has done extensive research and exploration of the
availability of programming for both purchase and licensing. The Company will
also license and/or purchase children's European animation programming for
re-dubbing into English. The Company has options for exclusive United States
cable broadcast rights for the programs that it licenses. In the event of the
acquisition, the Company has exclusive rights in all media nationwide.
Possible Inability to Obtain Working Capital Requirements
The successful operations of the Company depends to a substantial extent on the
Company's ability to finance the acquisition, licensing and enhancement of
educational programs for distribution. The Company's costs are negotiated and
incurred on a series-by-series basis. Additionally, the Company may have to pay
advance licensing fees for rights to foreign animation. There can be no
assurance that the Company will be able to obtain sufficient capital to fund
additional inventory, marketing or its operations. If the Company is unable to
obtain a sufficient number of affiliates to license its programming, the
Company's ability to finance and license additional programs will be limited. In
addition, there can be no assurance that the revenues generated by licensing
activities will meet the requirements of its minimum working capital needs.
<PAGE>
Effect of Future Sales of Shares and Uncertainty of Market Development
Upon completion of the distribution and the registration of options herein, the
Company will have 3,172,181 common shares outstanding. Additionally, upon the
effective date of this Registration Statement, 360,000 shares of common stock
underlying the outstanding options will become available for public sale. No
assurance can be given that the availability of such common shares for sale will
not have an adverse impact on the market price of the Company's common shares.
Management of the Company cannot predict to what extent a secondary market in
the common shares will develop and provide liquidity for holders of the common
shares.
Effect of Competition on Marketability of Company's Programming
The proposed business of the Company is very competitive. The Company will
encounter competition from many franchised cable companies which are already
offering, or will in the future offer, the same or similar services as those
proposed to be offered by the Company. Many competitors of the Company exist
which have greater financial resources and more experience in the delivery of
programming than the Company. There can be no assurance that the Company's
programming can or will ultimately be marketed successfully or that, if marketed
successfully, any program offered by the Company will be profitable. Entities
with greater established financial resources and greater technical and
production capacity than the Company are competitors in the motion picture,
television and video industries. They may develop productions or products that
are competitive with or superior to the Company's products or which can be
marketed more effectively. The Company competes with all other broadcasters of
children's programming and producers of home videos. On cable television there
are The Learning Channel and The Family Channel which offer similar programming
as PBS. The Company's Children's Cable Network intends to offer programming
Monday through Friday, 6:00 a.m. to 12:00 Noon which is potentially more air
time per week than all competitors combined. At this time, the Company is not
aware of any other companies competing for the services of its potential
broadcast affiliate licensees.
Lack of Dividends
There can be no assurance that the continued operations of the Company will
result in any revenues or will be profitable. At the present time, the Company
intends to use any earnings which may be generated to finance the growth of the
Company's business. Accordingly, while payment of dividends rests within the
discretion of the Board of Directors, the Company does not presently intend to
pay dividends and there can be no assurance that dividends will be paid in the
future. See "Dividend Policy."
FOR ALL OF THE AFORESAID REASONS AND OTHERS SET FORTH HEREIN, THESE SECURITIES
INVOLVE A HIGH DEGREE OF RISK. ANY PERSON CONSIDERING AN INVESTMENT IN THE
SECURITIES OFFERED SHOULD BE AWARE OF THESE AND OTHER FACTS SET FORTH IN THIS
PROSPECTUS. THESE SECURITIES SHOULD ONLY BE PURCHASED BY PERSONS WHO CAN AFFORD
TO ABSORB A TOTAL LOSS OF THEIR INVESTMENT IN THE COMPANY.
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USE OF PROCEEDS
================================================================================
The Proceeds of this Offering (approximately $810,000) will be used as to
acquire licenses and broadcast rights to series television programs, for working
capital and to finance future operations and growth of the business.
<PAGE>
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DETERMINATION OF OFFERING PRICE
================================================================================
The board of directors authorized a price per share calculated as of the date of
exercise equal to the lesser of (i) the price per share declared by the Board on
the Granting Date of the option; or (ii) eighty percent (80%) of the per share
Fair Market Value on the Granting Date of the Purchaser Period applicable to
such Participant.
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DILUTION
================================================================================
Dilution represents the difference between the amount per share paid by
shareholders pursuant to those certain options granted pursuant to the Company's
1996 Employee Stock Option Plan and the pro forma net tangible book value per
share by shareholders after such purchase and sale by this Prospectus. After
giving effect to and assuming the sale by the Selling Shareholders of the Common
Stock underlying such stock options, the pro forma net tangible book value of
the Company on June 30, 1996 (unaudited), would have been approximately $178,000
or $.06 per share of Common Stock. This would represent an immediate increase in
net tangible book value of $$.12 per share to existing shareholders and an
immediate dilution of $.94 per share of Common Stock to shareholders purchasing
hereby.
================================================================================
SELLING SECURITY HOLDERS
================================================================================
Officer / Director Number of Shares
------------------- ----------------
Dominic Orsatti
Chief Executive Officer 150,000
Chairman of the Board 10,000
Paul Cameron
Chief Operating Officer 60,000
Vice Chairman of the Board 10,000
John Holt Smith
Secretary 30,000
Board Member 10,000
Michael E. Marcovsky
President 30,000
David Niven, Jr.
Board Member 10,000
David Henson
Chief Financial Officer 15,000
H.C. Hernandez
Sales Manager 10,000
Patricia Moore
Production Coordinator 10,000
Nonie Brand
Affiliate Director 15,000
<PAGE>
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PLAN OF DISTRIBUTION
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Distribution of Options
After careful study and review, the Board of Directors of the Company determined
that it would be in the best interests of the Company and its shareholders to
distribute 800,000 options pursuant to the Company's 1996 Employee Stock Option
Plan. Due to the additional monies the Company may receive upon exercise of the
options, the Company believes that the distribution to its shareholders of the
options will be an advantage to the Company at such time as the Company may
require additional capital and/or make application to list its common shares on
NASDAQ.
Accordingly, after obtaining the approval of the Company's Board of Directors,
the Board of Directors of the Company adopted the Plan and agreed to grant
options to certain officers, directors and employees. The options are being
distributed by the Company and the Company will not receive any cash or other
proceeds in connection with the distribution.
Distribution of Options being Registered on Behalf of Selling Shareholders
The Company is not coordinating the sale of the selling securityholders' common
shares and will receive no proceeds from the sale of said common shares.
================================================================================
DESCRIPTION OF SECURITIES TO BE REGISTERED
================================================================================
The following statements constitute brief summaries of the Company's Articles of
Incorporation and Bylaws, as amended. Such summaries do not purport to be
complete and are qualified in their entirety by reference to the full text of
the Articles of Incorporation and Bylaws.
The Company's Articles of Incorporation authorize it to issue up to 20,000,000
Common Shares, par value $.01 per Common Share, 5,000,000 Preferred Shares, par
value $.01 per Preferred Share. There are currently outstanding, 2,812,181
Common Shares, 106,500 10% Convertible Preferred Shares, 32,800 Series C
Preferred Shares and 98,000 Series D Preferred Shares which are fully paid and
non-assessable.
Holders of Common Shares of the Company are entitled to cast one vote for each
share held at all shareholders meetings for all purposes, including the election
of directors, and to share equally on a per share basis in such dividends as may
be declared by the Board of Directors out of funds legally available therefor.
Upon liquidation or dissolution, each outstanding Common Share will be entitled
to share equally in the assets of the Company legally available for distribution
to shareholders after the payment of all debts and other liabilities. Common
Shares are not redeemable, have no conversion rights and carry no preemptive or
other rights to subscribe to or purchase additional Common Shares in the event
of a subsequent offering. All outstanding Common Shares are, and the shares
offered hereby will be when issued, fully paid and non-assessable.
<PAGE>
Cumulative Voting . The Common Shares do not have cumulative voting rights.
Dividends. There are no limitations or restrictions upon the rights of the Board
of Directors to declare dividends out of any funds legally available therefor.
The Company has not paid dividends to date and it is not anticipated that any
dividends will be paid in the foreseeable future. The Board of Directors
initially may follow a policy of retaining earning, if any, to finance the
future growth of the Company. Accordingly, future dividends, if any, will depend
upon, among other considerations, the Company's need for working capital and its
financial conditions at the time.
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INTERESTS OF NAMED EXPERTS AND COUNSEL
================================================================================
Not Applicable.
================================================================================
MATERIAL CHANGES
================================================================================
There have been no material changes in the Company's affairs which have occurred
since the end of the latest fiscal year for which certified financial statements
were included in the latest annual report to securityholders and which have not
been described in a report on From 10-QSB or Form 8-K filed under the Exchange
Act.
================================================================================
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
================================================================================
The following documents filed by the Company with the Securities and Exchange
Commission are incorporated by reference in this Registration Statement:
1. The Company's Form 10-QSB dated June 30, 1996.
2. The Company's Form 10-QSB dated March 31, 1996.
3. The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995.
4. The Company's Quarterly Report on Form 10-Q for the quarter ended September
30, 1995.
5. The Company's registration statement on Form S-1 declared effective on
June 23, 1995 and the Prospectus previously filed thereunder.
In addition, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
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 thereof from the date of filing of such
documents.
<PAGE>
================================================================================
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
================================================================================
Indemnification of Directors and Officers.
Section 78.751 of the Nevada General Corporation Law (the "Nevada GCL") permits
the Company's board of directors to indemnify any person against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with any threatened,
pending or completed actions, suit or proceeding in which such person is made a
party by reason of his being or having been a director, officer, employee or
agent of the Company, in terms sufficiently broad to permit such indemnification
under certain circumstances for liabilities (including reimbursement for
expenses incurred) arising under the Securities Act of 1933, as amended (the
"Act"). The statute provides that indemnification pursuant to its provisions is
not exclusive of other rights of indemnification to which a person may be
entitled under any by-law, agreement, vote of stockholders or disinterested
directors, or otherwise.
As permitted by Sections 78.037 and 78.751 of the Nevada GCL, the Company's
Articles of Incorporation eliminate the personal liability of a director or
officer for monetary damages to the Company and its stockholders arising from a
breach or alleged breach of the fiduciary duty of a director or officer except
for liability under Section 78.300 of the Nevada GCL or liability for any breach
of the director's duty of loyalty to the Company or its stockholders for acts or
omissions which involve intentional misconduct or a knowing violation of law.
The Company's Articles of Incorporation provide that the Company shall indemnify
its directors and officers to the fullest extent authorized by Nevada law,
including circumstances in which indemnification is otherwise discretionary
under Nevada law.
The directors and officers of the Company have a policy of insurance under which
they are insured, within limits and subject to limitations, against certain
expenses in connection with the defense of actions, suits or proceedings, and
certain liabilities which might be imposed as a result of such actions, suits or
proceedings, in which they are parties by reason of their being or having been
directors or officers.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or persons controlling the registrant pursuant
to the foregoing provisions, the Company has been informed 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.
<PAGE>
OLYMPIC ENTERTAINMENT GROUP, INC.
1996 EMPLOYEE STOCK OPTION PLAN
<PAGE>
OLYMPIC ENTERTAINMENT GROUP, INC.
1996 EMPLOYEE STOCK OPTION PLAN
ARTICLE I
NAME AND PURPOSE OF PLAN
1.1 Name of Plan. This Plan shall be known as: Olympic Entertainment Group,
Inc. 1996 Employee Stock Option Plan.
1.2 Purpose. The Olympic Entertainment Group, Inc. (the "Company") 1996
Employee Stock Option Plan (the "Plan"), by offering Employees the opportunity
to purchase Olympic Entertainment Group, Inc.'s common stock ("Stock"), is
intended to encourage participation in the ownership and economic progress of
the Company. Employees may only be granted Stock Options to purchase common
stock. Except as otherwise provided in the Plan, by reason of their employment
relationship with the Employer, all Employees, officers, directors, associates
and consultants approved, will be eligible to participate in the Plan.
1.3 Types of Options. It is intended that this Plan shall grant options to
purchase shares of the Company's common stock up to a maximum of 800,000, as set
forth in Section 3.2, as described in accordance with Section 421 of the Code,
and the provisions of this Plan shall be interpreted and applied in a manner
consistent with such intent. Therefore, the Stock Options granted under this
Plan shall be stock options as described under Section 421 of the Code and, as
such, this Plan is not qualified under Section 401(a) of the Code.
1.4 Identification of 10(a) Prospectus Materials. This document dated July
1, 1996, constitutes part of a prospectus covering securities of the Company
that have been registered under the Securities Act of 1933, as amended.
ARTICLE II
DEFINITIONS
2.1 Definitions. Where the following capitalized words and phrases appear
in either a singular or plural form in this instrument, they shall have the
respective meanings set forth below unless a different context is clearly
expressed herein.
(a) Board. The word "Board" shall mean the Board of Directors or any
committee of the Board of Directors of the Company, which shall have the
discretion to determine the timing and amount of options granted under the Plan.
Participants may request information from Paul Cameron, Vice Chairman of the
Company by writing him at 2001 East Flamingo Road, Suite 100, Las Vegas, Nevada
89119, or by calling him at (702) 369-2588.
(b) Code. The word "Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
(c) Company. The word "Company" shall mean Olympic Entertainment Group,
Inc., a Nevada corporation.
(d) Employee. The word "Employee" shall mean any person employed by the
Company who receives remuneration for personal services rendered to the Company,
including any person defined as an employee under Rule 405 of the Securities Act
of 1933, as amended.
(e) Employer. The word "Employer" shall mean the Company and any
subsidiaries of the Company.
(f) Exercise Date. The words "Exercise Date" shall mean any day of any
year during which the Plan is in existence, beginning July 1, 1996, and
continuing through June 30, 2006.
<PAGE>
(g) Fair Market Value. The words "Fair Market Value" shall mean (A)
during such time as the Stock is listed upon the New York Stock Exchange or
other exchanges or the NASDAQ/National Market System, the closing price of the
Stock on such stock exchange or exchanges or the NASDAQ/ National Market System
on the day for which such value is to be determined, or if no sale of the Stock
shall have been made on any such stock exchange or the NASDAQ/National Market
System that day, on the next preceding day on which there was a sale of such
Stock or (B) during any such time as the Stock is not listed upon an established
stock exchange or the NASDAQ/National Market System, the mean between dealer
"bid" and "ask" prices of the Stock in the over-the-counter market on the day
for which such value is to be determined, as reported by the National
Association of Securities Dealers, Inc.
(h) Granting Date. The words "Granting Date" shall mean the date that
the Board grants an option under this Plan and beginning on each applicable
Purchase Period, being July 1, 1996, and continuing through June 30, 2006, as
set forth in subparagraph (n).
(i) Option Agreement. The words "Option Agreement" shall mean an
agreement to be executed by the Participant and the Company, which shall comply
with the terms of the Plan and shall be in such form as the Board may agree upon
from time to time.
(j) Option Price. The words "Option Price" shall mean the price which
shall be paid by the Participant for any Stock purchased on or before an
applicable Exercise Date pursuant to any Stock Option granted to such
Participant; provided, such option price shall be the lesser of:
(i) The price per share declared by the Board on the Granting Date
of the option; or
(ii) Eighty percent (80%) of the per share Fair Market Value on the
Granting Date of the Purchase Period applicable to such Participant.
(k) Participant. The word "Participant" shall mean any Employee,
associate of such Employer, officer, director, consultant or advisor, who has
been granted options to purchase the Company's Common Stock as described
hereunder. The word "Participant" shall also include the legal representative of
a deceased Participant, and a Participant who, within three months prior to the
end of the applicable Purchase Period for which he is a Participant, terminates
his employment with the Employer on account of (i) retirement on or after age
55, (ii) retirement because of disability, (iii) lay off by the Employer, or
(iv) an authorized leave of absence granted by the Employer. "Disability" for
purposes of this Subsection (k) shall mean a physical or mental condition which,
in the judgment of the Board, totally and permanently prevents a Participant
from engaging in any substantial gainful employment with the Employer. A
determination that disability exists shall be based upon independent medical
evidence satisfactory to the Committee. In the event that any Employer ceases to
be a Subsidiary of the Company, the Employees of such Employer will be deemed to
have terminated employment as of such date.
(l) Plan. The word "Plan" shall mean this Olympic Entertainment Group,
Inc. 1996 Employee Stock Option Plan, any amendments thereto, and all exhibits
and documents incorporated by reference in the Form S-8 Registration Statement
filed July 26, 1996 with the United States Securities and Exchange Commission.
(m) Prospectus. The information required to be delivered to all
Participants pursuant to Section 10(a) of the Securities Act of 1933, as
amended, including this Olympic Entertainment Group, Inc. 1996 Employee Stock
Option Plan, as amended, and, additionally, all exhibits and documents
incorporated by reference in the Form S-8 Registration Statement. Upon the oral
or written request of each Participant, the Company will provide the Participant
with such documents.
(n) Purchase Period. The words "Purchase Period" shall mean any one year
period commencing on July 1 and ending on June 30 of each year during which the
Plan is in existence, as follows:
(i) "First Purchase Period" - July 1, 1996 through June 30, 1997.
(ii) "Second Purchase Period" - July 1, 1997 through June 30, 1998.
<PAGE>
(iii) "Third Purchase Period" - July 1, 1998 through June 30, 1999.
(iv) "Fourth Purchase Period" - July 1, 1999 through June 30, 2000.
(v) "Fifth Purchase Period" - July 1, 2000 through June 30, 2001.
(vi) "Sixth Purchase Period" - July 1, 2001 through June 30, 2002.
(vii) "Seventh Purchase Period" - July 1, 2002 through June 30,
2003.
(viii) "Eighth Purchase Period" - July 1, 2003 through June 30,
2004.
(ix) "Ninth Purchase Period" - July 1, 2004 through June 30, 2005.
(x) "Tenth Purchase Period" - July 1, 2005 through June 30, 2006.
(o) Stock. The word "Stock" shall mean any of the total number of shares
of common stock of the Company being authorized for issuance pursuant to the
terms of the Plan in accordance with Article IV.
(p) Stock Option. The words "Stock Option" shall mean the right of a
Participant on an applicable Exercise Date to purchase the number of shares of
Stock as provided in Article III.
(q) Subsidiary. The word "Subsidiary" shall mean any present or future
entity (including any limited partnership or limited liability company) in which
the Company owns directly or indirectly more than a fifty percent (50%) interest
and such entity does not meet the definition of "subsidiary" as defined Section
424 of the Code.
2.2 Construction. The masculine gender, where appearing in the Plan, shall
be deemed to include the feminine gender, unless the context clearly indicates
to the contrary. Any word appearing herein in the plural shall include the
singular, where appropriate, and likewise the singular shall include the plural,
unless the context clearly indicates to the contrary.
ARTICLE III
EXERCISE OF STOCK OPTION
3.1 Exercise. Any Participant may elect to exercise his Stock Option on or
before each Exercise Date with respect to the applicable Purchase Periods.
3.2 Amount of Shares of Stock. Subject to Subsection 4.2(b), the number of
shares of Stock to which a Participant shall be entitled ("Total Stock
Entitlement") upon the applicable Exercise Date shall be determined by the Board
or any committee of the Board.
3.3 Distribution. A Participant's Stock Option as determined under Section
3.2 shall be distributed to him pursuant to Section 3.4(b).
3.4 Issuance of Shares; Stock Certificates.
(a) The shares of Stock purchased by a Participant on the applicable
Exercise Date shall for all purposes, be deemed to have been issued and sold at
the close of business on such Exercise Date. Prior to that time, none of the
right or privileges of a stockholder of the Company shall exist with respect to
such shares.
(b) As soon as practicable after each Exercise Date, the Company shall
issue and deliver a certificate, registered in the Participant's name, for the
number of shares of Stock purchased.
ARTICLE IV
MAXIMUM SHARES OF STOCK AVAILABLE
4.1 Maximum Number of Shares Available to Participants. If on the Exercise
Date of any Purchase Period the Stock Options for all Participants determined
under Section 3.2 hereof exceeds the number of shares of Stock available for
issuance under the Plan, there shall be a proportionate reduction for the
ensuing applicable Purchase Period of each Participant's Stock Options in order
to eliminate such excess.
<PAGE>
4.2 Maximum Authorized. Subject to adjustment under Article VII, the
maximum number of shares of Stock which may be issued under the Plan shall not
in the aggregate exceed 800,000 shares of Stock.
4.3 Termination of Offering from the Second and Subsequent Purchaser
Periods. If in the opinion of the Board or any committee of the Board, there is
insufficient Stock available for Stock Options at any Granting Date after the
July 1, 1997 Granting Date, the Committee may terminate the offering
contemplated for any or all succeeding Purchase Periods.
ARTICLE V
ADMINISTRATION
5.1 Appointment of Committee. The Plan shall be administered by the Board
or by any committee of the Board, and consisting of not less than two members
from the Board. The members of the Committee shall serve at the pleasure of the
Board and shall be ineligible to participate under the Plan. Any member may
serve concurrently as a member of any other administrative committee of any
other plan of the Company or its affiliates entitling participants therein to
acquire stock, stock options or deferred compensation rights including stock
appreciate rights.
5.2 Committee Powers and Duties. The Committee shall have all the powers
and authorities which are reasonably appropriate and necessary to discharge its
duties under the Plan.
5.3 Committee to Make Rules and Interpret Plan. The Board or any committee
of the Board, in its sole discretion, shall have the authority, subject to the
provisions of the Plan, to establish, adopt, or revise rules and regulations
with respect to the administration of the Plan and to make all such
determinations relating to the Plan as it may deem necessary or advisable for
the administration of the Plan. The Committee's interpretation of the Plan and
all decisions and determinations by the Committee with respect to the Plan shall
be final, binding and conclusive on all parties unless otherwise determined by
the Board.
ARTICLE VI
AMENDMENT OF THE PLAN
The Board may at any time, or from time to time, amend the Plan in any
respect consistent with Section 421 of the Code, and adopt any amendment which
would materially increase the benefits accruing to Participants, materially
increase the maximum number of shares which may be issued under the Plan or
materially modify the Plan's eligibility requirements.
ARTICLE VII
RECAPITALIZATION, EFFECT OF CERTAIN TRANSACTIONS
AND RESALE RESTRICTIONS
7.1 Stock Adjustments. In the event that the shares of Stock, as presently
constituted, shall be changed into or exchanged for a different number or kind
of shares of stock or other securities of the Company or of another corporation
(whether by reason of merger, consolidation, recapitalization, reclassification,
stock split, combination of shares or otherwise), or if the number of such
shares of Stock shall be increased through the payment of a stock dividend, then
there shall be substituted for or added to each share available under and
subject to the Plan and each share theretofore appropriated or thereafter
subject or which may become subject to Stock Options under the Plan, the number
<PAGE>
and kind of shares of stock or other securities into which each outstanding
share of Stock shall be so changed or for which each such share shall be
exchanged or to which each such share shall be entitled, as the case may be, on
a fair and equivalent basis in accordance with the applicable provisions of
Section 424 of the Code; provided, in no such event will such adjustment result
in a modification of any Stock Option as defined in Section 424(h) of the Code.
In the event there shall be any other change in the number or kind of the
outstanding shares of stock, or any stock or other securities into which the
Stock shall have been changed or for which it shall have been exchanged, then if
the Board or any committee of the Board shall, in its sole discretion, determine
that such change equitably requires an adjustment in the shares available under
and subject to the Plan, or in any Stock Option theretofore granted or which may
be granted under the Plan, such adjustments shall be made in accordance with
such determination, except that no adjustment of the number of shares of Stock
available under the Plan or to which any Stock Option relates that would
otherwise be required shall be made unless and until such adjustment either by
itself or which other adjustments nor previously made would require an increase
or decrease of at least one percent in the number of shares of stock available
under the Plan or to which any Stock Option relates immediately prior to the
making of such adjustment (the "Minimum Adjustment"). Any adjustment
representing a change of less than such minimum amount shall be carried forward
and made as soon as such adjustment together with other adjustments required by
this Section 7.1 and not previously made would result in a Minimum Adjustment.
Notwithstanding the foregoing, any adjustment required by this Section 7.1 which
otherwise would not result in a Minimum Adjustment shall be made with respect to
shares of Stock relating to any Stock Option immediately prior to exercise,
payment or settlement of such Stock Option.
No fractional shares of Stock or units of other securities shall be
issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding downward to the
nearest whole share. Any adjustments under this Section 7.1 shall be made
according to the sole discretion of the Board, or any committee of the Board,
and its decision shall be binding and conclusive.
7.2 Effect of Certain Transactions. Subject to any required action by the
stockholders, if the Company shall be the surviving or resulting corporation any
merger or consolidation, any Stock Option hereunder shall pertain to and apply
to the shares of stock of the Company; but a dissolution or liquidation of the
Company or merger or consolidation in which the Company is not the surviving or
the resulting corporation shall cause the Plan and any Stock Option hereunder to
terminate upon the effective date of such dissolution, liquidation, merger or
consolidation. Provided, that for the purpose of this Section 7.2, if any
merger, consolidation or combination occurs in which the Company is not the
surviving corporation and is the result of a mere change in the identity, form
or place of organization of the Company accomplished in accordance with Section
368 of the Code, then, such event shall not cause a termination.
7.3 Resale Restrictions. Employees who receive Stock Options under this
Plan and who exercise such Options to acquire Common Stock of the Company
receive Common Stock registered under Form S-8. As such, the Employee may freely
resell such securities without restriction as long as such Employees are not
affiliates of the Company as defined in the Securities Act of 1933, as amended.
Affiliates who receive registered Common Stock may publicly reoffer and resell
the Common Stock pursuant to Rule 144 or pursuant to a registration statement on
Form S-8 by means of a separate prospectus ("Reoffer Prospectus") containing the
information required by Part I of Form S-3, and may not exceed the amount
specified in Rule 144(e).
ARTICLE VIII
MISCELLANEOUS
8.1 Notices. Any notice which a Participant files pursuant to the Plan
shall be on the form prescribed by the Board or any committee of the Board and
shall be effective when received by the Board or any committee of the Board.
<PAGE>
8.2 Application of the Funds. All funds received by the Company under the
Plan may be used for any corporate purpose.
8.3 Repurchase of Stock. The Company shall not be required to repurchase
from any Participant shares of Stock which he acquired under the Plan.
8.4 Nonassignability. Stock Options are exercisable only by the Participant
during his lifetime, or by his estate or the person who acquires the right to
exercise such Stock Option upon his death by bequest or inheritance, and are not
transferable by him other than by will or the laws of descent and distribution.
No Stock Option shall be subject in any manner to alienation, anticipation,
sale, transfer, assignment, pledge or encumbrance, except for transfer by will
or the laws of descent and distribution. Any attempt to transfer, assign,
pledge, hypothecate or otherwise dispose of, or to subject to execution,
attachment or similar process, any Stock Option contrary to the provisions
hereof, shall be void and ineffective, shall give no right to any purported
transferee, and may, at the sole discretion of the Committee, result in
forfeiture of the Stock Option involved in such attempt.
8.5 Government Regulation. The Company's obligation to sell and deliver the
Stock under the Plan is at all times subject to any and all approvals, rules and
regulations of any governmental authority required in connection with the
authorization, issuance, sale or delivery of such Stock. In addition, the rights
of Participants under the Plan who are subject to Section 16 of the Securities
Exchange Act of 1934, as amended ("Section 16"), are subject to compliance by
such Participants with the applicable provisions of Section 16 an the rules and
regulations promulgated thereunder.
8.6 Effective Date of Plan. The Plan shall become effective on July 1,
1996, if prior to that date the Plan has been approved by the holders of a
majority of the common stock of the Company present, or represented, and
entitled to vote at a meeting called for such purposes.
8.7 Termination of Plan. The Plan shall continue in effect through June 30,
2006, unless terminated pursuant to Section 7.2 or by the Board, which shall
have the right to terminate the Plan at any time.
8.8 No Obligations to Exercise Stock Option. The granting of a Stock Option
shall impose no obligation upon the Participant to exercise his Stock Option.
8.9 Right to Continued Employment. Participation in the Plan shall not give
any Participant any right to remain in the employ of the Employer. The Employer
reserves the right to terminate any Participant at any time. Further, the
adoption of this Plan shall not be deemed to give any Participant or any other
individual any right to be selected as a Participant or to be granted a Stock
Option.
8.10 Reliance on Reports. Each member of the Board and each member of a
committee of the Board shall be fully justified in relying or acting in good
faith upon any report made by the independent public accountants of the Company
and upon any report made by the independent public accountants of the Company
and upon any other information furnished in connection with the Plan by any
person or persons other than himself. In no event shall any person who is or
shall have been a member of the Committee or of the Board be liable for any
determination made or other action taken or any omission to act in reliance upon
any such report or information or for any action taken, including the furnishing
of information, or failure to act, if in good faith.
8.11 Applicable Law. This Plan shall be governed by and interpreted
accordance with the laws of the State of California.
8.12 Signature. To record the adoption of the Plan by the Board, effective
July 1, 1996, the Company has authorized its officers to affix the corporate
name hereto.
OLYMPIC ENTERTAINMENT GROUP, INC.
By /S/ JOHN HOLT SMITH
-----------------------------------------
John Holt Smith, Secretary
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10 PROSPECTUS
Item 1. Plan Information
See Olympic Entertainment Group, Inc. 1996 Employee Stock Option Plan
filed herewith.
Item 2. Company Information and Employee Plan Annual Information
Information required by Part I to be contained in the Section 10(a)
prospectus is omitted from the Registration Statement in accordance
with Rule 428 under the Securities Act of 1933 and the note to Part I
of Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated by reference in this Registration
Statement:
1. The Company's Form 10-QSB dated June 30, 1996.
2. The Company's Form 10-QSB dated March 31, 1996.
3. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995.
4. The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995.
5. The Company's Registration Statement on Form S-1 declared
effective on June 23, 1995, and the Prospectus previously filed
thereunder.
In addition, all documents subsequently filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act
of 1934, 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 thereof from the date of filing of such documents.
Item 4. Description of Securities.
The following statements constitute brief summaries of the Company's
Articles of Incorporation and Bylaws, as amended. Such summaries do not
purport to be complete and are qualified in their entirety by reference
to the full text of the Articles of Incorporation and Bylaws.
The Company's Articles of Incorporation authorize the Company to issue
up to 20,000,000 Common Shares, par value $.01 per Common Share,
5,000,000 Preferred Shares, par value $.01 per Preferred Share. There
are currently outstanding, 2,812,181 Common Shares, 106,500 10%
Convertible Preferred Shares, 32,800 Series C Preferred Shares and
98,000 Series D Preferred Shares which are fully paid and
non-assessable.
1
<PAGE>
Holders of Common Shares of the Company are entitled to cast one vote
for each share held at all shareholders meetings for all purposes,
including the election of directors, and to share equally on a per
share basis in such dividends as may be declared by the Board of
Directors out of funds legally available therefor. Upon liquidation or
dissolution, each outstanding Common Share will be entitled to share
equally in the assets of the Company legally available for distribution
to shareholders after the payment of all debts and other liabilities.
Common Shares are not redeemable, have no conversion rights and carry
no preemptive or other rights to subscribe to or purchase additional
Common Shares in the event of a subsequent offering. All outstanding
Common Shares are, and the shares offered hereby will be when issued,
fully paid and non-assessable.
Cumulative Voting. The Common Shares do not have cumulative voting
rights.
Dividends. There are no limitations or restrictions upon the rights of
the Board of Directors to declare dividends out of any funds legally
available therefor. The Company has not paid dividends to date and it
is not anticipated that any dividends will be paid in the foreseeable
future. The Board of Directors initially may follow a policy of
retaining earning, if any, to finance the future growth of the Company.
Accordingly, future dividends, if any, will depend upon, among other
considerations, the Company's need for working capital and its
financial conditions at the time.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Section 78.751 of the Nevada General Corporation Law (the "Nevada GCL")
permits the Company's board of directors to indemnify any person
against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with any threatened, pending or completed actions, suit or
proceeding in which such person is made a party by reason of his being
or having been a director, officer, employee or agent of the Company,
in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for
expenses incurred) arising under the Securities Act of 1933, as amended
(the "Act"). The statute provides that indemnification pursuant to its
provisions is not exclusive of other rights of indemnification to which
a person may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors, or otherwise.
As permitted by Sections 78.037 and 78.751 of the Nevada GCL, the
Company's Articles of Incorporation eliminate the personal liability of
a director or officer for monetary damages to the Company and its
stockholders arising from a breach or alleged breach of the fiduciary
duty of a director or officer except for liability under Section 78.300
of the Nevada GCL or liability for any breach of the director's duty of
loyalty to the Company or its stockholders for acts or omissions which
involve intentional misconduct or a knowing violation of law. The
Company's Articles of Incorporation provide that the Company shall
indemnify its directors and officers to the fullest extent authorized
by Nevada law, including circumstances in which indemnification is
otherwise discretionary under Nevada law.
The directors and officers of the Company have a policy of insurance
under which they are insured, within limits and subject to limitations,
against certain expenses in connection with the defense of actions,
suits or proceedings, and certain liabilities which might be imposed as
a result of such actions, suits or proceedings, in which they are
parties by reason of their being or having been directors or officers.
2
<PAGE>
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits
See Index to Exhibits on page 5.
Item 9. Undertakings
(a) The undersigned Company 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 reflect in the prospectus any facts or events
which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement.
2. For determining liability under the Securities Act of 1933,
treat each post-effective amendment as a new Registration
Statement of the securities offered, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering.
3. File a post-effective amendment to remove from registration
any of the securities which remain unsold at the termination
of the offering.
(b) The undersigned Company hereby further undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the Company's annual report pursuant
to Section 13(a) or 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person
of the Company 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 Company 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.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on July 26, 1996.
OLYMPIC ENTERTAINMENT GROUP, INC.
By: /S/ PAUL CAMERON
----------------------------------------
Paul Cameron
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints John Holt Smith and Paul Cameron, and each of them, his
true and lawful attorneys-in-fact and, each with full power of substitution, and
resubstitution, for him, in any and all capacities, to sign any and all
amendments, including post-effective amendments, to this Registration Statement,
and to file the same, with exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorney-in-fact, or his substitute or substitutes, may
do or cause to be done by virtue hereof.
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
date indicated:
Signature Title Date
/S/ DOMINIC ORSATTI Chairman of the Board July 26, 1996
- --------------------
Dominic Orsatti
President July ___, 1996
- ---------------------
Michael E. Marcovsky
/S/ PAUL CAMERON Vice Chairman July 26, 1996
- ---------------------
Paul Cameron
/S/ JOHN HOLT SMITH Secretary, Director July 26, 1996
- ---------------------
John Holt Smith
Director July ___, 1996
- ---------------------
Jack Rhodes
4
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Page
- --------------------------------------------------------------------------------
4 Instruments defining the rights of securityholders,
including indentures.
5 Opinion of Smith & Associates as to legality of the
securities being offered.
15 Letter on unaudited interim financial information.
(included in Exhibit 23.2)
23.1 Consent of Smith & Associates (included in Exhibit 5).
23.2 Consent of Winter, Scheifley & Associates
24 Powers of Attorney (included in Registration Statement)
5
OLYMPIC ENTERTAINMENT GROUP, INC.
STOCK OPTION
This Stock Option is granted by Olympic Entertainment Group, Inc., a Nevada
corporation (the "Company") to _________________________________, ("Optionee"),
on _________________.
W I T N E S S E T H :
WHEREAS, on or about June 18, 1996, the Company agreed to grant options to
purchase the Company's common stock and adopted the Company's 1996 Employee
Stock Option Plan (the "Plan"), a copy of which is attached hereto as Exhibit
"A." Any and all capitalized terms not defined hereunder shall have the meaning
ascribed to them in the Plan, and
WHEREAS, the Board of Directors of the Company has determined that it is in
the best interests of the Company, its employees, advisors, consultants and its
stockholders to grant options to purchase shares of the Company's common stock,
upon the terms and conditions hereinafter stated in accordance with the Plan;
NOW THEREFORE, the Company agrees as follows:
1. Option; Number of Shares. The Company hereby grants to Optionee the
right and option (the "Option") to acquire, subject to the terms and conditions
set forth herein, _______________________ shares of the Company's common stock
(the "Shares") as follows. In exercising this Stock Option, the Optionee may
exercise all or any part of the Option at the exercise price set forth in
paragraph 2 per Share.
2. Payment. Upon exercise, Optionee shall pay the Company for the Shares by
delivering to the Company, along with the exercise agreement, and Optionee's
payment to the Company of the lesser of:
(i) The price per share declared by the Board on the Granting Date of
the Option; or
(ii) Eighty percent (80%) of the per share Fair Market Value on the
Granting Date of the Purchase Period applicable to such Optionee
3. Exercise Period. This Option may be exercised in whole or in part at any
time from and after the date upon which such Option is granted as set forth
above and shall expire on June 30, 2006, the expiration date of the Stock Option
(the "Exercise Period").
4. Method of Exercise. The Option may be exercised from time to time by
written notice by the Optionee to the Company at least five (5) days prior to
the stated date of exercise:
(a) Stating the number of Shares with respect to which the Option is
being exercised;
(b) Stating the time of the delivery thereof, which shall be at least
five (5) days after the giving of such notice unless an earlier date shall have
been mutually agreed upon;
(c) Accompanied by presentment, surrender and cancellation of the
Option; and
<PAGE>
(d) Accompanied by, if requested by the Company, a letter from the
Optionee, in such form and substance as the Company may require, containing any
such representations to make the Option and the Shares of common stock
underlying the Option valid and legal.
At the time specified in exercise agreement or as soon thereafter as the
Company is reasonably able to comply, the Company shall, without transfer or
issue tax to the Optionee, deliver to the Optionee, at the main office of the
Company or such other place that shall be mutually acceptable, a certificate or
certificates for the Shares in exchange for the Option for the number of shares
being exercised by the Optionee.
Following the exercise of the Option, if the number of such shares is
less than the amount of shares granted hereby, upon surrender by Optionee of the
Option and compliance with the provisions of this paragraph 4, the Company shall
reissue to Optionee a replacement Option in the amount of the unexercised shares
which shall have the same terms and conditions of the Option; provided however,
that the Company shall not be required to issue any fractional Shares.
Notwithstanding the foregoing, the Company shall have the right to postpone the
time of delivery of the Shares for such period as may be required for it with
reasonable diligence to comply with any applicable federal, state of local law.
In the event the Company is unable to comply with any regulatory requirement
deemed necessary by counsel for the Company for lawful issuance of the
securities hereunder, the Company shall be relieved of any obligation and
liability to issue the Shares, notwithstanding that attempted exercise of the
Option. If the Optionee fails to accept delivery of all or any portion of the
Shares upon tender of delivery thereof, the Company shall have the right to
terminate the Option with respect to such Shares.
5. Non-Transferability. The Option is not assignable or transferable, and
may not be conveyed by Optionee, by operation of law or otherwise, or exercised,
in whole or in part, by any person other than Optionee, without the Company's
prior written consent.
6. Waiver of Shareholder Rights. The Optionee shall have no rights as a
stockholder with respect to any Shares subject hereto until the Optionee has
become the holder of record of such Shares and no adjustment shall be made for
dividend or distributions of rights in respect of such Shares for which the
record date is prior to the date on which the Optionee becomes holder of record.
7. Stock Splits, Etc. For all purposes herein the term "Shares" shall
include not only the Shares set forth hereunder, but also any shares resulting
therefrom following a stock split, reclassification or recharacterization, or a
merger or reorganization of the Company.
IN WITNESS WHEREOF, this Agreement is executed as of the date first set
forth hereinabove.
"The Company"
Olympic Entertainment Group, Inc.
a Nevada corporation
By
--------------------------------------------
Name
------------------------------------------
Its
-------------------------------------------
"Optionee"
------------------------------------
By
--------------------------------------------
<PAGE>
EXERCISE AGREEMENT
To: Olympic Entertainment Group, Inc. Dated:
-----------------------
The undersigned, pursuant to the provisions set forth in the attached Stock
Option hereby agrees to subscribe for and purchase ___________________________
Shares of common stock covered by such Stock Option and makes payment herewith
in full therefor at the price per share provided by such Stock Option.
"Optionee"
By:
----------------------------------
Name:
--------------------------------
SMITH & ASSOCIATES
ATTORNEYS AT LAW
1901 Avenue of the Stars
Eighteenth Floor
Los Angeles, California 90067
Telephone (310) 277-1250
Facsimile (310) 286-1816
July 26, 1996
Mr. Dominic Orsatti
Olympic Entertainment Group, Inc.
2001 East Flamingo Road, Suite 100
Las Vegas, Nevada 89119
Re: Olympic Entertainment Group, Inc.
- --------------------------------------------------------------------------------
Dear Mr. Orsatti:
We have acted as legal counsel for Olympic Entertainment Group, Inc., a
Nevada corporation (the "Company") in connection with the registration of up to
800,000 shares of common stock by means of that certain Registration Statement
on Form S-8 as amended. As legal counsel, we have made such legal and factual
examinations and inquiries as we have deemed advisable or necessary for the
purpose of rendering this opinion. In addition, we have examined originals or
copies of documents, and corporate records which we consider relevant for the
purposes of this opinion, including:
(i) the articles of incorporation, as amended and bylaws;
(ii) resolutions of the board of directors of the Company,
authorizing, among other things, the filing of the Registration
Statement, the issuance of Company stock options ("Options") and
the delivery of shares of common stock ("Common Stock")
underlying such Options;
(iii) the Company's 1996 Stock Option Plan;
(iv) theRegistration Statement on Form S-8 filed by the Company with
the U.S. Securities and Exchange Commission (the "Commission") on
July 26, 1996; and
(v) all such documents required to be delivered pursuant to the
Registration Statement.
In such examination we have assumed the genuineness of all signatures on
original documents.
<PAGE>
SMITH & ASSOCIATES
Mr. Dominic Orsatti
Olympic Entertainment Group, Inc.
July 26, 1996
Page 2
- --------------------------------------------------------------------------------
Based upon and subject to the foregoing we are of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada and has the
requisite corporate power to own and operate its properties and assets and to
carry on its business as described in the Prospectus. The Company is not in
violation of its respective articles of incorporation or bylaws or other
organizational documents, or to the best knowledge of legal counsel after
reasonable inquiry, is not in default in the performance of any material
obligation, agreement or condition contained in any bond, debenture, note or
other evidence of indebtedness.
2. All of the outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and non-assessable;
3. All legally required proceedings in connection with the filing of the
Registration Statement and the authorization and issue of the Options and the
sale of the underlying Common Stock by the Company have been taken and, except
for permits and similar authorizations required under state securities or Blue
Sky laws (as to which we do not express an opinion), all orders, consents or
other authorizations or approvals of any public board or body legally required
for the validity of the shares or of any transaction thereunder have been
obtained;
4. The Company is not in violation to our knowledge, in any material
respect of any term or provision of any material contract, agreement,
instrument, judgment or decree binding upon the Company.
5. The Options, when executed and authenticated therein and delivered to
and exercised will be legal, valid and binding obligations for the Company
enforceable in accordance with their terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, or similar laws now or
hereafter in effect affecting creditors' rights generally and gnarl principles
of equity;
6. There is no contract or other document known to us of a character
required to be described in the Prospectus or filed as an exhibit to the
Registration Statement by the Act or to the incorporated documents by the
Exchange Act that is not described or filed as required.
7. The Registration Statement has become effective under the Act, and, to
the best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or contemplated.
<PAGE>
SMITH & ASSOCIATES
Mr. Dominic Orsatti
Olympic Entertainment Group, Inc.
July 26, 1996
Page 3
- --------------------------------------------------------------------------------
8. Except as to financial statements, schedules and other financial and
statistical data included or incorporated by reference herein, as to which we do
not express any opinion, information set forth in the Registration Statement and
Prospectus, any supplements or amendments thereto comply as to form in all
material respects to the requirements in the 1933 Act and the applicable Rules
and Regulations promulgated by the Commission, the incorporated documents comply
as to form in all material respects with applicable requirements of the Exchange
Act and nothing has come to the attention of legal counsel that has caused it to
believe that the Registration Statement and the Prospectus as of this date,
contain any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
9. The shares of common stock have been duly authorized and when delivered
to the purchasers by their exercise of the options against payment therefor,
will be validly issued, fully paid and non-assessable.
This opinion is furnished to Mr. Orsatti by us as counsel for the Company
and is for the benefit of the Company only in connection with the Registration
Statement and the transactions contemplated thereby. No other use or
distribution of this opinion may be made, it may not be disclosed or quoted, in
whole or in part, and no other person or party may rely on this opinion, without
our prior written consent.
Very truly yours,
SMITH & ASSOCIATES
DAK/mf
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use in this Registration Statement on Form S-8 of our
report dated February 16, 1996, relating to the financial statements of Olympic
Entertainment, Inc. as of December 31, 1995, and the reference to our firm under
the caption "EXPERTS" in the Registration Statement.
/s/ WINTER, SCHEIFLEY & ASSOCIATES, P.C.
--------------------------------------
Winter, Scheifley & Associates, P.C.
Certified Public Accountants
July 25, 1996
Englewood, Colorado
