SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
-----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
POORE BROTHERS, INC.
--------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation or Organization)
86-0786101
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(IRS Employer Identification Number)
2664 South Litchfield Road
Goodyear, Arizona 85338
-----------------------
(Address and zip code of principal executive offices)
POORE BROTHERS, INC. 1995 STOCK OPTION PLAN
NON-QUALIFIED STOCK OPTION AGREEMENTS
-------------------------------------
(Full Title of the Plan)
Eric J. Kufel
President and Chief Executive Officer
Poore Brothers, Inc.
2664 South Litchfield Road
Goodyear, Arizona 85338
-----------------------
(Name and Address of Agent For Service)
(602) 925-0731
--------------
(Telephone Number, Including Area Code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
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===========================================================================================================
Proposed Proposed
Maximum Maximum Amount Of
Title Of Securities To Be Amount To Be Offering Price Aggregate Registration
Registered Registered (1)(7) Per Share Offering Price Fee(6)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 566,664(2) $2.688(3) $1,523,192.83(3) $461.57
$0.01 per share
Common Stock, par value 1,753,336(4) $2.013947(5) $3,531,125(5) $1,070.04
$0.01 per share
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(1) Includes 1,528,000 shares of common stock, par value $.01 per share (the
"Common Stock"), of Poore Brothers, Inc. (the "Registrant") offered
pursuant to the reoffer prospectus filed herewith (the "Reoffer
Prospectus"). Of the shares of Common Stock being registered hereunder, (i)
1,500,000 shares are reserved for issuance upon the exercise of stock
options granted or available for future grant under the Poore Brothers,
Inc. 1995 Stock Option Plan (the "Plan") (See Note (7) below), and (ii)
820,000 shares are reserved for issuance pursuant to stock options granted
to certain affiliates of the Registrant pursuant to Non-Qualified Stock
Option Agreements (the "Non-Plan Stock Option Agreements"). Pursuant to
Rule 416 of the Securities Act of 1933, as amended (the "Securities Act"),
this Registration Statement also covers such number of additional shares of
Common Stock as may become available for issuance pursuant to the Plan or
the Non-Plan Stock Option Agreements in the event of certain changes in
outstanding shares, including reorganizations, recapitalizations, stock
splits, stock dividends, reverse stock splits and similar transactions.
<PAGE>
(2) Includes shares of Common Stock reserved for issuance upon the exercise of
options granted under the Plan that remained available for grant under the
Plan on the date of filing of this Registration Statement (see Note (7)
below.)
(3) Estimated solely for the purpose of calculating the registration fee. The
registration fee has been calculated in accordance with Rule 457(h) of the
Securities Act based on the average of the bid and ask prices of the Common
Stock on April 23, 1997, which was $2.688.
(4) Includes 933,336 shares of Common Stock underlying stock options
outstanding under the Plan and 820,000 shares of Common Stock underlying
stock options outstanding pursuant to the Non-Plan Stock Option Agreements.
(5) The registration fee has been calculated in accordance with Rule 457(h) of
the Securities Act based on the aggregate exercise price of $3,531,125, the
aggregate price at which the stock options may be exercised, which averages
$2.014 per share.
(6) The registration fee for the securities registered hereby has been
calculated pursuant to Rule 457(h) and Section 6(b) under the Securities
Act.
(7) At present, the Plan provides for the issuance of a maximum of 1,000,000
shares of Common Stock upon the exercise of options granted pursuant to the
Plan. On March 24, 1997, the Registrant's Board of Directors approved an
amendment to the Plan that would increase the maximum number of shares
issuable upon exercise of options granted under the Plan from 1,000,000 to
1,500,000. The amendment to the Plan is subject to stockholder approval and
will be voted upon by the Registrant's stockholders at the Registrant's
1997 annual meeting of stockholders.
EXPLANATORY NOTE
The documents containing the information specified in Part I of Form
S-8 will be sent or given to employees of the Registrant as specified in Rule
428(b)(1) under the Securities Act. Such documents are not filed with the
Securities and Exchange Commission (the "Commission") either as part of this
Registration Statement or as prospectuses or prospectus supplements pursuant to
Rule 424 under the Securities Act.
As provided in Instruction C to Form S-8, any prospectus that is to be
used for reoffers and resales of restricted securities issued under an employee
benefit plan of the Registrant must be filed as part of a Registration Statement
on Form S-8. Accordingly, this Registration Statement contains a Reoffer
Prospectus that is to be used by affiliates of the Registrant who were granted
stock options by the Registrant prior to the date hereof, with respect to
reoffers and resales of shares of Common Stock acquired after the date hereof
pursuant to the exercise of such stock options.
ii
<PAGE>
REOFFER PROSPECTUS
1,528,000 Shares
POORE BROTHERS, INC.
Common Stock
(Par Value $.01 per Share)
This Prospectus relates to the offer from time to time by the
stockholders named herein under the section "Selling Stockholders"
(collectively, the "Selling Stockholders") of up to 1,528,000 shares (the
"Shares") of common stock, par value $.01 per share (the "Common Stock"), of
Poore Brothers, Inc. (the "Company"). The Shares registered hereby include (i)
708,000 shares of Common Stock issuable upon the exercise of stock options
granted to certain affiliates of the Company under the Poore Brothers, Inc. 1995
Stock Option Plan (the "Plan"), and (ii) 820,000 shares of Common Stock issuable
upon the exercise of stock options granted to certain affiliates of the Company
pursuant to Non-Qualified Stock Option Agreements entered into by and between
the Company and such persons (such stock options referred to in (i) and (ii)
being hereinafter referred to collectively as the "Options").
The Company has been advised by the Selling Stockholders that they may
sell from time to time all or a portion of the Shares offered hereby through
customary brokerage channels, either through broker-dealers acting as agents or
brokers for the seller, or through broker-dealers acting as principals, who may
then resell the shares on the Nasdaq SmallCap Market ("Nasdaq SmallCap"), or at
private sale or otherwise, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices, or by a
combination of such methods. The Selling Stockholders may effect such
transactions by selling the shares to or through broker-dealers. Such
broker-dealers may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or the purchasers of the shares
for whom they may act as agent, which compensation may be in excess of customary
commissions. In connection with such sales, the Selling Stockholders and any
participating brokers may be deemed to be "underwriters" of the Shares being
offered hereby within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"). The Company will not receive any proceeds from the sale of
the Shares being offered hereby.
The proceeds received by the Company upon exercise of the Options will
be approximately $3,216,954, assuming that all of the Options are exercised.
However, there can be no assurance as to the number of Options, if any, that
will be exercised.
The Common Stock is listed on the Nasdaq SmallCap under the symbol
"POOR." The last closing sale price per share of the Common Stock on the Nasdaq
SmallCap on April 23, 1997 was $2.563.
The address of the principal executive offices of the Company is 2664
South Litchfield Road, Goodyear, Arizona 85338, and its telephone number at that
address is (602) 925-0731.
THE SHARES OFFERED HEREBY ARE SUBJECT TO CERTAIN RISKS WHICH SHOULD BE
CAREFULLY CONSIDERED BY POTENTIAL INVESTORS.
SEE "RISK FACTORS."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is April 29, 1997.
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCE OR
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE HEREUNDER WILL UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE COMPANY'S AFFAIRS
SINCE THE DATE OF THIS PROSPECTUS OR THAT THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
Pursuant to the Securities Act, the Company has filed with the
Securities and Exchange Commission (the "Commission") a Registration Statement
on Form S-8 (together with all amendments and exhibits thereto, the
"Registration Statement") of which this Prospectus is a part. This Prospectus
does not contain all the information set forth in the Registration Statement, to
which reference is hereby made for further information. Statements made in this
Prospectus as to the contents of any contract, agreement or other document
referred to are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration Statement,
reference is hereby made to the exhibit for a more complete description of the
matter involved, and each such statement shall be deemed qualified in its
entirety by such reference.
The Company is subject to the requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith is
required to file reports and other information with the Commission. Reports and
other information filed by the Company may be inspected and copied at the public
reference facilities of the Commission at its principal office located at 450
Fifth Street, N.W., Washington, D.C. 20549. Any interested party may obtain
copies of all or any portion of such materials at prescribed rates from the
Public Reference Section of the Commission at its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission maintains a Web site that
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the Commission. The address of
the Commission's Web site is: http://www.sec.gov.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents which have been filed by the Company with the
Commission are incorporated into this Prospectus by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1996;
(b) The Company's Proxy Statement dated April 29, 1997, concerning its
Annual Meeting of Stockholders to be held on June 12, 1997;
(c) The description of the Company's Common Stock contained in Amendment
No. 3 to the Registrant's Registration Statement on Form SB-2 filed
with the Commission on December 5, 1996 pursuant to the Securities Act
(Registration No. 333-5594-LA), including any amendment or report filed
for the purpose of updating such description;
(d) The Company's Current Report on Form 8-K dated January 10, 1997,
regarding the consummation of the sale by the Company of 337,500 shares
of Common Stock to Paradise Valley Securities, Inc., the
2
<PAGE>
underwriter of the initial public offering of the Company's Common
Stock (the "Underwriter"), pursuant to its over-allotment option;
(e) The Company's Current Report on Form 8-K dated January 31, 1997,
regarding the appointment of Eric J. Kufel as the Company's President
and Chief Executive Officer and the election of Mr. Kufel to the
Company's Board of Directors; and
(f) All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since December 31, 1996.
All documents filed by the Company after the date of this Prospectus
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the sale of all of the securities offered hereunder or the de-registration of
all such securities then remaining unsold, shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner of any of the Common Stock, to whom a copy of this Prospectus
has been delivered, upon the written or oral request of such person, a copy of
any and all of the documents referred to above which have been or may be
incorporated by reference in this Prospectus. Requests for such copies of any
document should be directed to:
Poore Brothers, Inc.
2664 South Litchfield Road
Goodyear, Arizona 85338
Attention: Secretary
Telephone number: (602) 925-0731
FORWARD LOOKING STATEMENTS
WHEN USED IN THIS PROSPECTUS AND IN FILINGS BY THE COMPANY WITH THE SECURITIES
AND EXCHANGE COMMISSION, THE WORDS OR PHRASES "WILL LIKELY RESULT," "THE COMPANY
EXPECTS," "WILL CONTINUE," "IS ANTICIPATED," "ESTIMATED," "PROJECT," OR
"OUTLOOK," OR SIMILAR WORDS OR EXPRESSIONS, ARE INTENDED TO IDENTIFY
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED. THE COMPANY WISHES TO CAUTION READERS NOT TO PLACE
UNDUE RELIANCE ON ANY SUCH FORWARD-LOOKING STATEMENTS, EACH OF WHICH SPEAK ONLY
AS OF THE DATE MADE. SUCH STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND
UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
HISTORICAL EARNINGS AND THOSE PRESENTLY ANTICIPATED OR PROJECTED. SEE "RISK
FACTORS." IN LIGHT OF SUCH RISKS AND UNCERTAINTIES, THERE CAN BE NO ASSURANCE
THAT FORWARD-LOOKING INFORMATION CONTAINED IN THIS FORM S-8 WILL, IN FACT,
TRANSPIRE OR PROVE TO BE ACCURATE. THE COMPANY HAS NO OBLIGATION TO PUBLICLY
RELEASE THE RESULT OF ANY REVISIONS WHICH MAY BE MADE TO ANY FORWARD-LOOKING
STATEMENTS TO REFLECT ANTICIPATED OR UNANTICIPATED EVENTS OR CIRCUMSTANCES
OCCURRING AFTER THE DATE OF SUCH STATEMENTS.
3
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THE OFFERING
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The Offering..................................................... The Selling Stockholders are offering, from time to
time, up to (i) 708,000 shares of Common Stock
issuable to Selling Stockholders who are affiliates
of the Company upon the exercise of Options granted
to such persons under the Plan, and (ii) 820,000
shares of Common Stock issuable to Selling
Stockholders who are affiliates of the Company upon
the exercise of Options granted to such persons
pursuant to Non-Qualified Stock Option Agreements
entered into by and between the Company and such
persons.
Common Stock Outstanding as of April 23, 1997.................... 6,986,324 shares
Use of Proceeds.................................................. The Company will not receive any of the net proceeds
from the sale of the Common Stock offered hereby.
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4
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THE COMPANY
The Company is engaged in the production, marketing and distribution of
salty snack food products that are sold primarily throughout the southern and
western United States. The Company has three distinct lines of business: it
manufactures and sells its own brand of potato chips under the Poore Brothers
logo; it manufactures private label potato chips for grocery store chains; and
it distributes food products that are manufactured by others. For the year ended
December 31, 1996, revenues totaled $17,219,641. Approximately 57% of such sales
were attributable to the Company's Poore BrothersTM brand potato chips;
approximately 38% of such sales were attributable to the distribution by the
Company of food products manufactured by other companies; and approximately 5%
of such sales were attributable to potato chips produced by the Company for sale
under the private labels of customers.
Poore BrothersTM brand potato chips consist of two primary types,
regular and low-fat. The Poore BrothersTM brand regular potato chips, which are
produced with a batch frying process that the Company believes enhances
crispness and flavor, are currently offered in eleven flavors: Original, Salt &
Vinegar, Au Gratin, Barbecue, Cajun, Dill Pickle, Grilled Steak & Onion, Hot
Mustard, Jalapeno, No Salt and Parmesan & Garlic. The Poore BrothersTM brand of
low-fat potato chips, which were introduced in June 1996, are produced using
batch frying and then processed to remove most of the cooking oil while
retaining the taste of frying. The low-fat potato chips are currently available
in five flavors: Original, No Salt, Au Gratin, Salt & Vinegar and Barbecue. The
Company also manufactures potato chips for sale on a private label basis using
modified cooking methods. The Company currently has two Arizona grocery chains
as private label customers.
The Company, a Delaware corporation, was organized in February 1995 and
has four operating subsidiaries, all acquired on May 31, 1995: two manufacturing
companies, Poore Brothers Arizona, Inc. and Poore Brothers Southeast, Inc. ("PB
Southeast"); and two distribution companies, Poore Brothers Distributing, Inc.
and Poore Brothers of Texas, Inc. In December 1996, the Company completed an
initial public offering of its Common Stock.
The Company's executive offices are located at 2664 South Litchfield
Road, Goodyear, Arizona 85338, and its telephone number is (602) 925-0731.
RISK FACTORS
Brief Operating History; Significant Losses to Date; Accumulated
Deficit. Although certain of the Company's subsidiaries have operated for
several years, the Company as a whole has a relatively brief operating history.
The Company has had significant operating losses to date and has never made a
profit. The Company incurred losses of $691,678 and $1,194,910 for the years
ended December 31, 1996 and 1995, respectively. At December 31, 1996, the
Company had an accumulated deficit of $2,427,836.
Even if the Company is successful in expanding the production and
distribution of its products and in increasing revenues, it may be expected to
incur substantial additional expenses, including advertising and promotional
costs and "slotting" expenses (i.e., the costs of obtaining shelf space in
certain stores). Accordingly, the Company may incur additional losses in the
future as a result of the implementation of the Company's business strategy,
even if revenues increase significantly. There can be no assurance that the
Company's business strategy will prove successful or that the Company will ever
become profitable.
Possible Need for Additional Financing. Continued expansion of the
Company's business may result in requirements for funds in excess of cash flow
generated from operations and its existing financial resources. Accordingly, the
Company may require future debt or equity financing to meet its business
requirements. There can be no assurance that such financing will be available
or, if available, on terms attractive to the Company.
5
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Competition. The market for salty snack foods, such as those sold by
the Company, primarily potato chips, tortilla chips, popcorn and pretzels, is
large and intensely competitive. Competitive factors in the salty snack food
industry include product quality and taste, brand awareness among consumers,
access to supermarket shelf space, price, advertising and promotion, variety of
snacks offered, nutritional content, product packaging and package design. The
Company competes in that market principally on the basis of product quality and
taste.
The snack food industry is primarily dominated by Frito-Lay, Inc.,
which has substantially greater financial and other resources than the Company
and sells brands that are more widely recognized than are the Company's
products. Numerous other companies that are actual or potential competitors of
the Company, many with greater financial and other resources (including more
employees and more extensive facilities) than the Company, offer products
similar to those of the Company. Local or regional markets often have
significant smaller competitors, many of whom offer batch fried or low-fat
products similar to those of the Company. Expansion of Company operations into
new markets has and will continue to encounter significant competition from
national, regional and local competitors that may be greater than that
encountered by the Company in its existing markets. While the Company believes
that its products and method of operations will enable it to compete
successfully, there can be no assurance of its ability to do so.
Promotional and Shelf Space Costs. Successful marketing of food
products generally depends upon obtaining adequate retail shelf space for
product display, particularly in supermarkets. Frequently, food manufacturers
and distributors, such as the Company, incur additional costs in order to obtain
additional shelf space. Whether or not the Company incurs such costs in a
particular market is dependent upon a number of factors, including existing
demand for the Company's products, relative availability of shelf space and
general competitive conditions. There can be no assurance that the Company will
not incur significant shelf space or other promotional costs as a necessary
condition of entering into competition in particular markets or stores. Such
costs may materially affect the Company's financial performance.
Status of Private Label Products. In 1996, the Company entered into
agreements with two Arizona grocery chains for the manufacture and distribution
by the Company of their respective private label potato chips. The Company
manufactures potato chips for these customers in various types and flavors as
specified by them. The Company's private label potato chips are currently
produced using batch frying. In order to meet potential demand for these
products, and to more closely emulate standard cooking processes for this
category of private label products, the Company acquired continuous line cooking
equipment which is currently being installed at a new facility in Goodyear,
Arizona being constructed by the Company. The new facility, which is anticipated
to be completed by July 1, 1997, will replace the Company's existing facility in
Goodyear, Arizona. Until the new equipment is operational, there can be no
assurance that private label products cooked via batch frying will continue to
meet customer specifications, or that once operational, the Company will obtain
sufficient business to recoup the costs related to the purchase and installation
of such equipment. Failure to meet customer specifications could result in
cancellation of an agreement.
Status of Low-Fat Products. In June 1996, the Company began producing
low-fat potato chips using a patented oil extraction process pursuant to an
agreement (the "Great Snaxx Agreement") between the Company and Great Snaxx of
AZ. L.L.C. ("Great Snaxx"). Great Snaxx has granted the Company rights in the
states of Arizona, California, Nevada and New Mexico, to market low-fat potato
chips produced using this process. The Company is dependent upon the resources
of Great Snaxx as Great Snaxx has the sole right, under the Great Snaxx
Agreement, to apply the oil extraction process to products manufactured by the
Company.
The Great Snaxx Agreement expires on September 19, 2006. In addition,
the Company may lose its rights to market low-fat potato chips produced under
the Great Snaxx Agreement if certain minimum fees are not paid to Great Snaxx.
The Company is not currently producing in sufficient quantities to meet these
minimum fee requirements. In addition, Great Snaxx has certain rights to
terminate the agreement. The termination by Great Snaxx of the Great Snaxx
Agreement or the failure by Great Snaxx to perform its obligations under the
Great Snaxx Agreement for any reason could have a material adverse effect on the
Company's ability to produce low-fat potato chips. In the case of such a
termination or failure, the Company would consider producing low-fat
6
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potato chips using an alternative production method, such as baking or the use
of alternative cooking oils. There can be no assurance, however, that the
Company would be successful in utilizing such alternative production methods or
that low-fat potato chips produced by the Company will be accepted in the
marketplace.
Non-Compliance with Financial Covenants. At December 31, 1996, the
Company had outstanding 9% Convertible Debentures due July 1, 2002 (the "9%
Convertible Debentures") in the principal amount of $2,299,591. The Company was
not in compliance with a required interest coverage ratio of 1:1 that the
Company is required to maintain while the 9% Convertible Debentures are
outstanding. However, the holders of the 9% Convertible Debentures have granted
the Company a waiver effective through September 30, 1997. After that time, the
Company will be required to be in compliance with the following financial
ratios, so long as the 9% Convertible Debentures remain outstanding: working
capital of at least $1,000,000; minimum shareholders equity (net worth) that
will be calculated based upon the earnings of the Company and the consideration
received by the Company from issuances of securities by the Company; an interest
coverage ratio of at least 1.5:1; and a current ratio at the end of any fiscal
quarter of at least 1.1:1. Management believes that the fulfillment of the
Company's plans and objectives will enable the Company to attain a sufficient
level of profitability to be in compliance with the financial ratios; however,
there can be no assurance that the Company will attain any such profitability,
be in compliance with the financial ratios upon the expiration of the waivers or
be able to obtain an extension or renewal of the waivers. Any acceleration under
the 9% Convertible Debentures prior to their maturity on July 1, 2002 could have
a material adverse effect upon the Company.
Lack of Proprietary Manufacturing Methods. The taste and quality of
Poore BrothersTM products is largely due to two elements of its manufacturing
process: the Company's use of batch frying and its use of distinctive seasonings
to produce a variety of flavors. The Company does not have exclusive rights to
the use of either element; consequently, competitors may incorporate such
elements into their own processes. While management believes that the successful
use of batch frying involves certain techniques and methods used by the Company
that may not be readily available to or known by other manufacturers, there can
be no assurance that competitors will not develop the same or similar techniques
or methods.
Legal Proceeding. In June 1996, a lawsuit was commenced in an Arizona
state court against two Directors of the Company, Mark S. Howells and Jeffrey J.
Puglisi, and PB Southeast which alleges, among other things, that the plaintiff,
James Gossett, had an oral agreement with Mr. Howells to receive up to a 49%
ownership interest in PB Southeast, that PB Southeast and Messrs. Howells and
Puglisi breached fiduciary duties and other obligations to Mr. Gossett and that
Mr. Gossett is entitled to exchange such alleged stock interest for shares in
the Company. Mr. Gossett further alleges that PB Southeast and Messrs. Howells
and Puglisi failed to honor the terms of an alleged distribution agreement
between Poore Brothers Foods, Inc. and an entity associated with Mr. Gossett.
The complaint seeks unspecified amounts of damages, fees and costs. In February
1997, plaintiffs filed pleadings indicating that they are seeking $3,000,000 in
damages; plaintiffs may not be limited by this damage amount at trial.
Management of the Company believes that the lawsuit has no merit and that the
Company has defenses thereto. There can be no assurance, however, of an outcome
that will be favorable to the Company or, if unfavorable, that such outcome will
not have a material adverse effect on the Company. The Company has agreed to
indemnify the two Directors named in the lawsuit.
USE OF PROCEEDS
The proceeds received by the Company upon the exercise of Options by
the Selling Stockholders will be approximately $3,216,954. However, there can be
no assurance as to the number of Options, if any, which will be exercised. The
Company anticipates that the net proceeds of Option exercises, if any, will be
allocated to working capital and general corporate purposes, which will be
applied, to the extent necessary, to the Company's operations. Any and all of
the Shares which may be sold pursuant to this Prospectus will be sold by the
Selling Stockholders for their own accounts. The Company will receive none of
the proceeds from the sale of the Shares.
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SELLING STOCKHOLDERS
Except as provided below, the following table sets forth with respect
to each Selling Stockholder: (i) the name of such Selling Stockholder, (ii) such
Selling Stockholder's position or other material relationship with the Company;
(iii) the number of shares of Common Stock beneficially owned by such Selling
Stockholder at April 23, 1997, (iv) the number of shares of Common Stock to be
offered for sale pursuant to this Prospectus by such Selling Stockholder, (v)
the number of shares of Common Stock to be beneficially owned by such Selling
Stockholder after the sale of all shares to be offered pursuant to this
Prospectus, and (vi) the percentage of outstanding shares of Common Stock to be
beneficially owned by such Selling Stockholder after the sale of all shares to
be offered pursuant to this Prospectus.
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<CAPTION>
Shares Shares Percentage of
Beneficially Beneficially Common Stock
Owned Prior Owned After Beneficially
Position with Company to the Offering Sale of All Owned After
or Other Material Pursuant to Number of Shares Shares Sale of All
Name Relationship this Prospectus Offered Offered(1) Shares Offered(1)
---- ------------ --------------- ------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Jeffrey J. Puglisi(2) Director 810,001(11) 385,000(16)(17) 425,001 5.0%
Mark S. Howells(3) Chairman of the Board of
Directors 748,137(12) 385,000(16)(17) 363,137 4.3
David J. Brennan(4) Director 330,000(13) 130,000(17) 200,000 2.4
Parris H. Holmes, Jr.(5) Director 423,500(14) 50,000(16)(17) 373,500 4.4
Eric J. Kufel(6) President, Chief 300,000(15) 300,000(15) 0 0
Executive Officer and
Director
Thomas W. Freeze(7) Vice President, Chief 125,000(15) 125,000(15) 0 0
Financial Officer,
Treasurer and Secretary
Scott D. Fullmer(8) Vice President - Sales 75,000(15) 75,000(15) 0 0
and Marketing
Glen E. Flook(9) Vice President - 75,000(15) 75,000(15) 0 0
Manufacturing
Wendell T. Jones(10) Director of Sales - 3,000(15) 3,000(15) 0 0
Arizona and California
</TABLE>
- -------------------
(1) The ownership and ownership percentage as to each Selling Stockholder
listed above reflects as outstanding all shares of Common Stock deemed
beneficially owned by such Selling Stockholder pursuant to Rule 13d-3 under
the Exchange Act.
(2) Mr. Puglisi has served as a Director of the Company since March 1995. From
March 1996 to August 1996, Mr. Puglisi also served as Vice Chairman of the
Company. For the period from August 1995 to March 1996, Mr. Puglisi served
as Chief Executive Officer of the Company. For the period from March 1995
to August 1995, Mr. Puglisi served as Executive Vice President, Chief
Operating Officer, Secretary and Treasurer of the Company. He also served
as President, Chief Executive Officer and a Director of PB
8
<PAGE>
Southeast, from August 1994 to August 1995. Since 1988, Mr. Puglisi has
also served as Senior Vice President of Arizona Securities Group, Inc., a
registered securities broker-dealer that acted as placement agent for
private placement transactions consummated by the Company in May 1995 and
March 1996. Arizona Securities Group, Inc. received aggregate sales
commissions of $166,875 in connection with these transactions.
(3) Mr. Howells has served as Chairman of the Board of the Company since March
1995. For the period from March 1995 to August 1995, Mr. Howells also
served as President and Chief Executive Officer of the Company. He has
served as the Chairman of PB Southeast since its inception in May 1993 and
served as its President and Chief Executive Officer from May 1993 to August
1994. Since 1988, Mr. Howells has also been the President and Chairman of
Arizona Securities Group, Inc., a registered securities broker-dealer that
acted as placement agent for private placement transactions consummated by
the Company in May 1995 and March 1996. Arizona Securities Group, Inc.
received aggregate sales commissions of $166,875 in connection with these
transactions.
(4) Mr. Brennan has served as a Director of the Company since March 1996. For
the period from March 1996 to February 1997, Mr. Brennan also served as
President and Chief Executive Officer of the Company.
(5) Mr. Holmes has served as a Director of the Company since March 1995. On
January 23, 1995, PB Southeast entered into an agreement with Mr. Holmes
pursuant to which PB Southeast borrowed $140,000 from Mr. Holmes, evidenced
by three 7% promissory notes with an aggregate principal amount of
$140,000. The loan was repaid by the Company on June 1, 1995. In connection
with the loan, in 1995 Mr. Holmes purchased the equivalent of 420,000
shares of Common Stock for $280. In 1995, Mr. Holmes provided consulting
services to the Company at a cost of $35,000.
(6) Mr. Kufel has served as President and Chief Executive Officer of the
Company since February 1997.
(7) Mr. Freeze has served as Vice President, Chief Financial Officer, Treasurer
and Secretary of the Company since April 1997.
(8) Mr. Fullmer has served as Vice President - Sales and Marketing of the
Company since February 1997.
(9) Mr. Flook has served as Vice President - Manufacturing of the Company since
March 1997.
(10) Mr. Jones has been the Director of Sales - Arizona and California since
February 1997. Previously, Mr. Jones was National Sales Manager for the
Company from January 1996 to February 1997.
(11) Includes 385,000 shares of Common Stock that Mr. Puglisi has the right to
acquire upon the exercise of stock options that are exercisable within 60
days and were granted to Mr. Puglisi pursuant to Non-Qualified Stock Option
Agreements.
(12) Excludes 40,000 shares of Common Stock held of record by trusts with
Jeannie L. Howells, the former wife of Mr. Howells, for the benefit of Mr.
Howells' children. Includes 385,000 shares of Common Stock that Mr. Howells
has the right to acquire upon the exercise of stock options that are
exercisable within 60 days and were granted to Mr. Puglisi pursuant to
Non-Qualified Stock Option Agreements.
(13) Includes 130,000 shares of Common Stock that Mr. Brennan has the right to
acquire upon the exercise of stock options granted pursuant to the Stock
Option Plan which are exercisable within 60 days.
(14) Includes 15,500 shares held for the benefit of a minor child of Mr. Holmes
and 24,000 shares held by his spouse for which shares Mr. Holmes may be
deemed to be the "beneficial owner" for purposes of Rule 13d-3 under the
Exchange Act. Includes 50,000 shares of Common Stock that Mr. Holmes has
the right to acquire upon the exercise of stock options that are
exercisable within 60 days and were granted to Mr. Holmes pursuant to a
Non-Qualified Stock Option Agreement.
(15) Consists of shares of Common Stock issuable upon the exercise of Options
granted to named person pursuant to the Plan.
(16) Consists of shares of Common Stock issuable upon the exercise of Options
granted to named person pursuant to Non-Qualified Stock Option
Agreement(s).
(17) Messrs. Puglisi, Howells and Holmes have entered into agreements with the
Company, dated December 4, 1996, pursuant to which they agreed not to
exercise any of their respective Options prior to December 6, 1997. Mr.
Brennan has entered into an agreement with the Company, dated December 4,
1996, pursuant to which he agreed not to exercise Options to purchase
30,000 shares of Common Stock prior to December 6, 1997. Messrs. Puglisi,
Howells, Holmes and Brennan have also entered into agreements with the
9
<PAGE>
Underwriter pursuant to which they agreed not to sell, prior to June 6,
1997, any shares of Common Stock owned by them without the prior written
consent of the Underwriter.
PLAN OF DISTRIBUTION
The Shares offered hereby may be sold from time to time directly to
purchasers by the Selling Stockholders. Alternatively, the Selling Stockholders
may from time to time offer their Shares through brokers, dealers or agents who
may receive compensation in the form of underwriting discounts, commissions or
concessions from the Selling Stockholders and/or the purchasers of the Common
Stock for whom they may act as agent. The Selling Stockholders and any brokers,
dealers or agents that participate in the distribution of the Common Stock
offered hereby may be deemed to be brokers, and any profit on the sale of the
Common Stock offered hereby by them and any discounts, commissions or
concessions received by any such brokers, dealers and agents may be deemed to be
underwriting discounts and commissions under the Securities Act.
The Shares offered hereby may be sold from time to time in one or more
transactions by block trading, in negotiated transactions, through the writing
of options on such shares, or a combination of such methods of sale, at fixed
offering prices which may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated prices
or by a combination of such methods.
The Selling Stockholders are not restricted as to the price or prices
at which they may sell their Shares. Sales of such shares at less than the
market price may depress the market price of the Common Stock. The amount of
Common Stock to be offered and sold by each Selling Stockholder pursuant to this
Prospectus, and any other person with whom each Selling Stockholder is acting in
concert for the purposes of selling Common Stock, is limited by Rule 144(e)
under the Securities Act.
The Company will pay substantially all of the expenses incident to the
offering and sale of the Common Stock offered hereby to the public other than
commissions and discounts of brokers, dealers or agents.
In order to comply with certain state securities laws, if applicable,
the shares of Common Stock offered hereby will be sold in such jurisdictions
only through registered or licensed brokers or dealers. In addition, in certain
states, the Common Stock offered hereby may not be sold unless it has been
registered or qualifies for sale in such state or an exemption from registration
or qualification is available and is complied with.
There can be no assurance that any of the Selling Stockholders will
sell any or all of the shares of Common Stock offered by them hereunder.
LEGAL MATTERS
Certain legal matters with respect to the shares of Common Stock
offered hereby will be passed upon for the Company by Cobb & Eisenberg LLC,
Westport, Connecticut 06881.
EXPERTS
The financial statements of the Company as of December 31, 1995 and
1996 and for the two years in the period ended December 31, 1996 included in the
Company's Annual Report on Form 10-KSB and incorporated by
10
<PAGE>
reference in this Prospectus have been included herein in reliance upon the
report of Coopers & Lybrand L.L.P., independent accountants, given on authority
of that firm as experts in accounting and auditing.
11
<PAGE>
======================================= =======================================
No dealer, salesperson or any other
person has been authorized to give any
information or to make any 1,528,000 Shares
representations other than those
contained in this Prospectus in
connection with the offer made by this
Prospectus and, if given or made, such POORE BROTHERS, INC.
information or representations must not
be relied upon as having been
authorized by the Company or any of the
Selling Stockholders. This Prospectus
does not constitute an offer to sell or [LOGO]
the solicitation of any offer to buy
any security other than the shares of
Common Stock offered by this
Prospectus, nor does it constitute an
offer to buy the shares of Common Stock
by anyone in any jurisdiction in which
such offer or solicitation is not
authorized, or in which the person
making such offer or solicitation is
not qualified to do so, or to any
person to whom it is unlawful to make
such offer or solicitation. Neither the
delivery of this Prospectus nor any
sale made hereunder shall, under any
circumstances create any implication
that the information contained herein
is correct as of any time subsequent to
the date hereof.
--------------------
Common Stock
TABLE OF CONTENTS
Page
----
Available Information................2
Documents Incorporated By Reference..2
Forward Looking Statements...........3 ---------------
The Offering.........................4 PROSPECTUS
The Company..........................5 ---------------
Risk Factors.........................5
Use of Proceeds......................7
Selling Stockholders.................8
Plan of Distribution.................10
Legal Matters........................10
Experts..............................11
April 29, 1997
12
======================================= =======================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The following documents which have heretofore been filed by the
Registrant with the Commission pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), or the Securities Act are incorporated by
reference herein and shall be deemed to be a part hereof:
(a) The Registrant's Annual Report on Form 10-KSB for the Registrant's
fiscal year ended December 31, 1996;
(b) The Registrant's Proxy Statement dated April 29, 1997, concerning
its Annual Meeting of Stockholders to be held on June 12, 1997;
(c) The Registrant's Current Report on Form 8-K dated January 10,
1997, regarding the consummation of the sale by the Registrant of
337,500 shares of Common Stock to Paradise Valley Securities,
Inc., the underwriter of the initial public offering of the
Registrant's Common Stock, pursuant to its over-allotment option;
(d) The Registrant's Current Report on Form 8-K dated January 31,
1997, regarding the appointment of Eric J. Kufel as the
Registrant's President and Chief Executive Officer and the
election of Mr. Kufel to the Registrant's Board of Directors; and
(e) The description of the Registrant's Common Stock contained in
Amendment No. 3 to the Registrant's Registration Statement on Form
SB-2 filed with the Commission on December 5, 1996 pursuant to the
Securities Act (Registration No. 333-5594-LA), including any
amendment or report filed for the purpose of updating such
description.
All documents filed by the Registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to the filing of a
post-effective amendment to this Registration Statement 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 made a part hereof from their respective dates of
filing (such documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents"); provided, however, that the documents
enumerated above or subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act in each year during which the
offering made by this Registration Statement is in effect prior to the filing
with the Commission of the Registrant's Annual Report on Form 10-KSB covering
such year shall not be Incorporated Documents or be incorporated by reference in
this Registration Statement or be a part hereof from and after the filing of
such Annual Report on Form 10-KSB.
Any statement contained in an Incorporated Document shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not Applicable.
iii
<PAGE>
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers.
The Certificate of Incorporation of the Registrant provides that no
director shall have any personal liability to the Registrant or its stockholders
for any monetary damages for breach of fiduciary duty as a director, except that
the Certificate of Incorporation does not eliminate or limit the liability of a
director (i) for any breach of such director's duty of loyalty to the Registrant
or its stockholders, (ii) for acts of omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law or (iv) for any transaction
from which such director derived an improper personal benefit.
The By-Laws of the Registrant provide that:
(a) The Registrant shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Registrant) by
reason of the fact that he is or was a director, officer, employee or agent of
the Registrant, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Registrant, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Registrant, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) The Registrant shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Registrant to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the Registrant, or is or was serving at the
request of the Registrant as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Registrant and except that no indemnification shall be
made in respect to any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Registrant unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery of the State of Delaware or such other court shall deem
proper.
(c) To the extent that a director, officer, employee or agent
of the Registrant has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Subsections (a) and (b) above, or
in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
(d) Any indemnification under Subsections (a) and (b) above
(unless ordered by a court) shall be made by the Registrant only as authorized
in the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Subsections (a) and (b). Such
determination shall be made (1) by the Board of Directors by a majority vote of
a quorum consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such quorum is not
iv
<PAGE>
obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.
(e) Expenses incurred in defending a civil or criminal action,
suit or proceeding shall be paid by the Registrant in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of the director, officer, employee or agent to repay such amount if
it shall be ultimately determined that he is not entitled to be indemnified by
the Registrant as authorized in this Section.
(f) The indemnification provided by this Section shall be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled by any By-Law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(g) The Registrant is authorized, according to the discretion
of the Board of Directors, to purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Registrant,
or is or was serving at the request of the Registrant as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or not the
Registrant must indemnify him against such liability under the provisions of
this Section.
(h) For purposes of these provisions, references to "the
Registrant" shall include, in addition to the Registrant, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had the power and authority to indemnify its directors, officers and
employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under these provisions with respect
to the resulting corporation as he would have with respect to such constituent
corporation if its separate existence had continued.
Each of David Brennan, Eric Kufel, Thomas Freeze, Scott Fullmer and
Glen Flook has entered into an employment agreement with the Registrant which
provides, in part, that the Registrant, each of its subsidiaries and affiliated
entities shall indemnify and hold him harmless and defend him for, from and
against all claims, liabilities, obligations, fines, penalties and other matters
and all costs and expenses relating thereto that the Registrant and/or such
subsidiary or affiliated entity is permitted by applicable law. Messrs. Brennan
and Kufel are Directors of the Registrant. Messrs. Kufel, Freeze, Fullmer and
Flook are officers of the Registrant.
The Registrant has agreed to indemnify Mark Howells and Jeffrey
Puglisi, Directors of the Registrant, in connection with a lawsuit brought
against Poore Brothers Southeast, Inc., a subsidiary of the Company ("PB
Southeast"), and each of Messrs. Howells and Puglisi, by James Gossett. In
addition, the Registrant has agreed to indemnify Mr. Howells with respect to his
guarantee of a loan obtained by PB Southeast from the State of Tennessee in
connection with the construction of the Registrant's LaVergne, Tennessee
facility.
Item 7. Exemption from Registration Claimed
Not applicable.
v
<PAGE>
Item 8. Exhibits
Exhibit Description
- ------- -----------
4.1 Specimen Certificate for shares of Common Stock (incorporated by
reference to Exhibit 4.1 to Amendment No. 1 to the Registrant's
Registration Statement on Form SB-2 filed with the Commission on
November 8, 1996 (Registration No. 333-5594-LA)).
4.2 Poore Brothers, Inc. 1995 Stock Option Plan (incorporated by
reference to Exhibit 10.64 to Amendment No. 1 to the Registrant's
Registration Statement on Form SB-2 filed with the Commission on
November 8, 1996 (Registration No. 333-5594-LA)).
4.3 Form of Stock Option Agreement.
4.4 Non-Qualified Stock Option Agreement dated August 1, 1995, by and
between the Registrant and Mark S. Howells (incorporated by
reference to Exhibit 10.6 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on September 20,
1996 (Registration No. 333-5594-LA)).
4.5 Non-Qualified Stock Option Agreement dated August 1, 1995, by and
between the Registrant and Mark S. Howells (incorporated by
reference to Exhibit 10.7 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on September 20,
1996 (Registration No. 333-5594-LA)).
4.6 Non-Qualified Stock Option Agreement dated August 31, 1995, by and
between the Registrant and Mark S. Howells (incorporated by
reference to Exhibit 10.8 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on September 20,
1996 (Registration No. 333-5594-LA)).
4.7 Non-Qualified Stock Option Agreement dated February 29, 1996, by
and between the Registrant and Mark S. Howells (incorporated by
reference to Exhibit 10.9 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on September 20,
1996 (Registration No. 333-5594-LA)).
4.8 Non-Qualified Stock Option Agreement dated August 1, 1995, by and
between the Registrant and Jeffrey J. Puglisi (incorporated by
reference to Exhibit 10.10 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on September 20,
1996 (Registration No. 333-5594-LA)).
4.9 Non-Qualified Stock Option Agreement dated August 1, 1995, by and
between the Registrant and Jeffrey J. Puglisi (incorporated by
reference to Exhibit 10.11 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on September 20,
1996 (Registration No. 333-5594-LA)).
4.10 Non-Qualified Stock Option Agreement dated August 31, 1995, by and
between the Registrant and Jeffrey J. Puglisi (incorporated by
reference to Exhibit 10.12 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on September 20,
1996 (Registration No. 333-5594-LA))
4.11 Non-Qualified Stock Option Agreement dated February 29, 1996, by
and between the Registrant and Jeffrey J. Puglisi (incorporated by
reference to Exhibit 10.13 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on September 20,
1996 (Registration No. 333-5594-LA)).
4.12 Non-Qualified Stock Option Agreement dated August 1, 1995, by and
between the Registrant and Parris H. Holmes, Jr. (incorporated by
reference to Exhibit 10.14 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on September 20,
1996 (Registration No. 333-5594-LA)).
4.13 Letter Agreement dated November 5, 1996 amending Non-Qualified
Stock Option Agreement dated February 29, 1996, by and between the
Registrant and Mark S. Howells (incorporated by reference to
Exhibit 10.67 to Amendment No. 1 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on November 8,
1996 (Registration No. 333-5594-LA)).
4.14 Letter Agreement dated November 5, 1996 amending Non-Qualified
Stock Option Agreement dated February 29, 1996, by and between the
Registrant and Jeffrey J. Puglisi (incorporated by reference to
Exhibit 10.68 to Amendment No. 1 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on November 8,
1996 (Registration No. 333-5594-LA)).
4.15 Non-Qualified Stock Option Agreement dated as of October 22, 1996,
by and between the Registrant and Mark S. Howells (incorporated by
reference to Exhibit 10.69 to Amendment No. 1 to the Registrant's
Registration Statement on Form SB-2 filed with the Commission on
November 8, 1996 (Registration No. 333-5594-LA)).
vi
<PAGE>
4.16 Non-Qualified Stock Option Agreement dated as of October 22, 1996,
by and between the Registrant and Jeffrey J. Puglisi (incorporated
by reference to Exhibit 10.70 to Amendment No. 1 to the
Registrant's Registration Statement on Form SB-2 filed with the
Commission on November 8, 1996 (Registration No. 333-5594-LA)).
4.17 Stock Option Agreement dated October 22, 1996, by and between the
Registrant and David J. Brennan (incorporated by reference to
Exhibit 10.72 to Amendment No. 1 to the Registrant's Registration
Statement on Form SB-2 filed with the Commission on November 8,
1996 (Registration No. 333-5594-LA)).
4.18 Letter Agreement dated December 4, 1996, by and between the
Registrant and Jeffrey J. Puglisi, relating to stock options
(incorporated by reference to Exhibit 10.77 to Amendment No. 3 to
the Registrant's Registration Statement on Form SB-2 filed with the
Commission on December 5, 1996 (Registration No. 333-5594-LA)).
4.19 Letter Agreement dated December 4, 1996, by and between the
Registrant and Mark S. Howells, relating to stock options
(incorporated by reference to Exhibit 10.78 to Amendment No. 3 to
the Registrant's Registration Statement on Form SB-2 filed with the
Commission on December 5, 1996 (Registration No. 333-5594-LA)).
4.20 Letter Agreement dated December 4, 1996, by and between the
Registrant and Parris H. Holmes, Jr., relating to stock options
(incorporated by reference to Exhibit 10.79 to Amendment No. 3 to
the Registrant's Registration Statement on Form SB-2 filed with the
Commission on December 5, 1996 (Registration No. 333-5594-LA)).
4.21 Letter Agreement dated December 4, 1996, by and between the
Registrant and David J. Brennan, relating to stock options
(incorporated by reference to Exhibit 10.80 to Amendment No. 3 to
the Registrant's Registration Statement on Form SB-2 filed with the
Commission on December 5, 1996 (Registration No. 333-5594-LA)).
5 Opinion of Cobb & Eisenberg LLC
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Cobb & Eisenberg LLC (included in Exhibit 5).
24 Power of Attorney (contained on signature page hereof).
vii
<PAGE>
Item 9. Undertakings.
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which it offers or sells securities,
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 which, individually
or together, represent a fundamental change in the information in
this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than a 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in
the effective Registration Statement;
(iii) Include any additional or changed material information on the
plan of distribution
; provided, however, that the undertakings set forth in paragraphs (1)(a)(i) and
(1)(a)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
(b) For the purpose of determining liability under the Securities Act,
to 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 thereof.
(c) To file a post-effective amendment to remove from registration any
of the securities being registered that remain unsold at the termination of the
offering.
(2) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the 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 than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
viii
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Goodyear, State of Arizona, on this 29th day of
April, 1997.
POORE BROTHERS, INC.
By: /s/ Eric J. Kufel
-------------------------------------
Eric J. Kufel
President and Chief Executive Officer
ix
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Eric J. Kufel his true and lawful
attorney-in-fact, to act for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-8 to be filed pursuant to
the Securities Act of 1933 in connection with the registration of shares of
Common Stock, par value $.01 per share, of Poore Brothers, Inc., and to file the
same with all exhibits thereto, and all documents in connection therewith, with
the Securities and Exchange Commission, granting said attorney-in-fact and agent
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he or she might or could do in person, hereby ratifying
and confirming all that said attorney-in-fact and agent or his or her substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Eric J. Kufel President, Chief Executive April 29, 1997
- --------------------------------------- Officer and Director
Eric J. Kufel (Principal Executive Officer)
/s/ Thomas W. Freeze Vice President, Chief Financial April 29, 1997
- --------------------------------------- Officer, Treasurer and Secretary
Thomas W. Freeze (Principal Financial Officer and
Principal Accounting Officer)
/s/ Mark S. Howells Chairman of the Board of Directors April 29, 1997
- ---------------------------------------
Mark S. Howells
/s/ Jeffrey J. Puglisi Director April 29, 1997
- ---------------------------------------
Jeffrey J. Puglisi
/s/ David J. Brennan Director April 29, 1997
- ---------------------------------------
David J. Brennan
/s/ Parris H. Holmes, Jr. Director April 29, 1997
- ---------------------------------------
Parris H. Holmes, Jr.
/s/ Robert C. Pearson Director April 29, 1997
- ---------------------------------------
Robert C. Pearson
</TABLE>
x
<PAGE>
Index to Exhibits
-----------------
Exhibit
Number Exhibit
- ------ -------
4.3 Form of Stock Option Agreement
5 Opinion of Cobb & Eisenberg LLC
23.1 Consent of Coopers & Lybrand L.L.P.
EXHIBIT 4.3 - FORM OF STOCK OPTION AGREEMENT
STOCK OPTION
AGREEMENT
POORE BROTHERS, INC., a Delaware corporation (the "Company"),
hereby grants to _________________ (the "Optionee") an option to purchase a
total of _________ shares of common stock, par value $.01 per share, of the
Company (the "Common Stock") at a price of $___________ per share.
1. Nature of the Option. This option is intended to be an
"Incentive Stock Option" as defined in and subject to the limitations of Section
422A of the Internal Revenue Code of 1986 and has been granted under the
Company's 1995 Stock Option Plan, as amended (the "Plan").
2. Exercise of Option.
a) This option may be exercised by delivery of written notice
to the Company stating the number of shares of Common Stock with respect to
which the option is being exercised, making such representations, warranties and
agreements with respect to such shares of Common Stock as may be required by the
Company, and accompanied by full payment of the purchase price therefor. Payment
may be made in cash, by check, by delivery of shares of Common Stock or in such
other form or combination of forms as shall be acceptable to the Company,
provided that any loan or guaranty by the Company of the purchase price may only
be made if the Company's Board of Directors determines that such loan or
guaranty is reasonably expected to benefit the Company. This option shall not be
exercisable as to fewer than ________ shares of Common Stock, or the remaining
shares of Common Stock covered by this option if fewer than _______.
b) This option shall vest and become exercisable after each of
the first three annual anniversary dates of this Agreement as follows:
Year one ________ shares
Year two ________ shares
Year three ________ shares
3. Termination. This option shall expire ________ (the
"Expiration Date") unless earlier terminated in accordance with the provisions
hereof.
4. Early Termination.
a) In the event that the Optionee's employment is
terminated for cause, the option granted hereunder shall lapse to the extent
unexercised immediately upon the giving of the notice of such termination. For
purposes of this paragraph, "for cause" shall mean incompetence, gross
negligence, insubordination, conviction of a felony or willful misconduct by the
Optionee as determined in good faith by the Board of Directors of the Company, a
Committee of the Board of Directors with the authority to make such a
determination or the Board of Directors of the subsidiary of the Company at
which Optionee is employed.
b) In the event of the death of the Optionee, the
Optionee's estate shall have the privilege of exercising the option granted
hereunder not theretofore exercised by the Optionee, to the extent that the
Optionee was entitled to exercise such rights on the date of the Optionee's
death; but in such event, the period of time within which the purchase or
exercise may be made shall be the earlier of (i) 180 days next succeeding the
death of the Optionee or (ii) the Expiration Date.
<PAGE>
c) In the event of termination of employment with the
Company or its subsidiaries by the Optionee for any reason other than for cause
or death, the Optionee shall have the right to exercise the option granted
hereunder, to the extent that the Optionee was entitled to exercise such option
on the date of such termination, during the period ending 60 days following such
termination date.
5. Adjustment Provisions.
a) If the Company shall at any time change the number
of issued shares of Common Stock without new consideration of the Company (such
as by stock dividend, stock split, recapitalization, reorganization, exchange of
shares, liquidation, combination or other change in corporate structure
affecting the Common Stock), the number of shares of Common Stock covered by
this option and the purchase price shall be adjusted so that the net value of
this option shall not be changed.
b) In the case of any sale of assets, merger,
consolidation, combination or other corporate reorganization or restructuring of
the Company with or into another corporation which results in the outstanding
common stock being converted into or exchanged for different securities, cash or
other property, or any combination thereof (an "Acquisition"), the Optionee
shall have the right thereafter and during the term of this option, to receive
upon exercise thereof in whole or in part the Acquisition Consideration (as
defined below) receivable upon the Acquisition by a holder of the number of
shares of Common Stock which might have been obtained upon exercise of this
option or portion hereof, as the case may be, immediately prior to the
Acquisition. The term "Acquisition Consideration" shall mean the kind and amount
of securities, cash or other property or any combination thereof receivable in
respect of one share of Common Stock upon consummation of an Acquisition.
6. Assignment or Transfer. This option may not be assigned or
transferred and shall be exercisable only by the Optionee during the Optionee's
lifetime.
7. Agreement to Serve. The Optionee agrees that, during the
course of any employment by the Company, he will devote such time, energy and
skill to the service of the Company as may reasonably be necessary to carry out
his duties as an employee. The Optionee further agrees that during the course of
his service as a director of the Company, he will devote such time, energy and
skill to the service of the Company as may reasonably be necessary to carry out
his obligations as a director. Notwithstanding the foregoing, this option is not
a contract of employment and the terms of any employment of the Optionee shall
not be enlarged or otherwise affected hereby except to the extent specifically
so provided herein.
8. Reserved Shares. The Company has duly reserved for issuance
a number of authorized but unissued shares adequate to fulfill its obligations
under this agreement. During the term of this agreement, the Company shall take
such action as may be necessary to maintain at all times an adequate number of
shares reserved for issuance or treasury shares to fulfill its obligations
hereunder.
9. Legends. The certificates evidencing shares of Common Stock
purchased pursuant to this option shall bear any legends deemed necessary by the
Company.
10. Compliance with Law. This option shall not be exercised,
and no shares of Common Stock shall be issued in respect hereof, unless in
compliance with federal and applicable state securities laws. The Optionee
hereby agrees to execute such documents as the Company may reasonably request to
assure the availability to the Company of an exemption from the registration
requirements of the Securities Act or any state securities or blue sky laws.
11. Representations of the Optionee. As a condition to the
exercise of this option, the Optionee will deliver to the Company such signed
representations, warranties and agreements as may be necessary, in the opinion
of counsel satisfactory to the Company, for compliance with applicable federal
and state securities laws.
ii
<PAGE>
12. Resale. The Optionee's ability to transfer shares of
Common Stock purchased pursuant to this option or securities acquired in lieu
thereof or in exchange therefor may be restricted under federal or state
securities laws. The Optionee shall not resell or offer for resale such shares
of Common Stock or securities unless they have been registered or qualified for
resale under all applicable federal and state securities laws or an exemption
from such registration or qualification is available in the opinion of counsel
satisfactory to the Company.
13. Notice. All notices or other communications desired to be
given hereunder shall be in writing and shall be deemed to have been duly given
upon receipt, if personally delivered, or on the third business day following
mailing by United States first class mail, postage prepaid, and addressed as
follows:
If to the Company:
Poore Brothers, Inc.
2664 South Litchfield Road
Goodyear, AZ 85338
Attention: Chief Financial Officer
If to the Optionee:
-----------------
or to such other address as either party shall give to the other in the manner
set forth above.
14. Withholding. If the exercise of any rights granted in this
agreement or the disposition of shares following exercise of such rights results
in the Optionee's realization of income which for federal, state or local income
tax purposes is, in the opinion of the Company, subject to withholding of tax,
the Optionee will pay to the Company an amount equal to such withholding tax (or
the Company may withhold such amount from any salary due the Optionee) prior to
delivery of certificates evidencing the shares of Common Stock purchased.
15. Governing Law. This agreement shall be governed and
construed in accordance with the laws of the State of Delaware (regardless of
the law that might otherwise govern under applicable Delaware principles of
conflicts of laws).
16. Miscellaneous. References herein to a date on or as of
which an expiration, termination or lapse shall occur shall be deemed to refer
to 11:59 P.M., Phoenix, Arizona time, on such date.
iii
<PAGE>
IN WITNESS WHEREOF, the Company and the Optionee have executed
this Incentive Stock Option Agreement effective as of the _____ day of
____________, 1997.
THE COMPANY: THE OPTIONEE:
POORE BROTHERS, INC. By:
-----------------------------
By:
-----------------------------
Its:
-----------------------------
iv
EXHIBIT 5 - OPINION OF COBB & EISENBERG LLC
April 29, 1997
Poore Brothers, Inc.
2664 South Litchfield Road
Goodyear, Arizona 85338
Re: Registration Statement on Form S-8 of
Poore Brothers, Inc.
--------------------
Dear Sirs:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by Poore Brothers, Inc., a Delaware corporation (the
"Company"), with the Securities and Exchange Commission under the Securities Act
of 1933, as amended (the "Securities Act"), relating to the registration under
the Securities Act of shares of the Company's common stock, par value $.01 per
share (the "Common Stock"). The following securities are being registered
pursuant to the Registration Statement: (i) 1,500,000 shares of Common Stock
(the "Plan Shares") reserved for issuance upon the exercise of stock options
granted or available for future grant under the Poore Brothers, Inc. 1995 Stock
Option Plan (the "Plan") and (ii) 820,000 shares of Common Stock reserved for
issuance pursuant to stock options granted to certain affiliates of the Company
pursuant to Non-Qualified Stock Option Agreements (the "Non-Plan Shares" and,
together with the Plan Shares, the "Shares").
In connection with this opinion, we have examined copies of (i) the
Certificate of Incorporation, as amended to date, and the By-laws of the Company
and (ii) certain resolutions of the Board of Directors of the Company including,
without limitation, resolutions relating to (A) the Registration Statement and
(B) an amendment to the Plan which has been approved by the Board of Directors,
subject to stockholder approval, pursuant to which the number of shares of
Common Stock reserved for issuance under the Plan would be increased by 500,000,
from 1,000,000 to 1,500,000 (the "Plan Amendment"). We have also examined
originals, photostatic or certified copies of such records of the Company,
certificates of officers of the Company and of public officials and such other
documents as we have deemed relevant and necessary as the basis for the opinion
set forth below. In such examinations, we have assumed the completion of all
requisite corporate actions and authorizations (including, without limitation,
those relating to the approval by the Company's Board of Directors of the Plan
Amendment) prior to the effectiveness of the Registration Statement, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all copies submitted to us
as certified, conformed or photostatic copies, and the authenticity of all
originals of such copies. We have also examined and relied upon representations,
statements or certificates of public officials and officers and representatives
of the Company and others.
Based upon the foregoing, and subject to the approval of the Plan
Amendment by the Company's stockholders, we are of the opinion that the Shares
have been validly authorized for issuance and sale and will, when duly issued
and sold as contemplated by the Registration Statement, be validly issued,
fully-paid and non-assessable.
The foregoing opinion is limited to the Federal laws of the United
States and the laws of the State of Delaware, and we express no opinion as to
the effect of the laws of any other jurisdiction.
<PAGE>
We consent to the filing of this opinion with the Securities and
Exchange Commission as Exhibit 5 to the Registration Statement and to the
reference to our firm under the caption "Legal Matters" in the Prospectus
constituting a part of the Registration Statement.
Very truly yours,
/s/ Cobb & Eisenberg LLC
EXHIBIT 23.1 - CONSENT OF COOPERS & LYBRAND L.L.P.
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement on
Form S-8 of our report dated March 4, 1997, on our audits of the consolidated
financial statements of Poore Brothers, Inc. and Subsidiaries. We also consent
to the reference to our firm under the caption "Experts."
COOPERS & LYBRAND L.L.P.
Phoenix, Arizona
April 28, 1997
