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As filed with the Securities and Exchange Commission on October 21, 1997
Registration No. _________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PRICESMART, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0628530
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
4649 MORENA BOULEVARD
SAN DIEGO, CALIFORNIA 92117
(619) 581-4530
(Address of principal executive offices, including zip code,
and telephone number)
THE 1997 STOCK OPTION PLAN OF PRICESMART, INC.
(Full title of the plans)
Copies to:
ROBERT E. PRICE SCOTT N. WOLFE, ESQ.
CHAIRMAN, PRESIDENT AND LATHAM & WATKINS
CHIEF EXECUTIVE OFFICER 701 "B" STREET
PRICESMART, INC. SAN DIEGO, CALIFORNIA 92101
4649 MORENA BOULEVARD (619) 236-1234
SAN DIEGO, CALIFORNIA 92117
(619) 581-4530
(Name, address, including zip code,
and telephone number,including area
code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
========================================================================================================================
Amount Proposed Maximum Proposed Maximum Amount of
Title of Securities to be Offering Price Aggregate Offering Registration
to be Registered Registered(1) Per Share Price Fee
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 par value . . . . 700,000 (2) $9,385,513.77 $2,844.10
========================================================================================================================
</TABLE>
(1) A maximum of 700,000 shares of common stock were reserved for issuance
under The 1997 Stock Option Plan of PriceSmart, Inc. (the "Plan"). All
shares reserved for issuance under the Plan are being registered hereunder.
(2) This estimate is made pursuant to Rule 457(h) solely for purposes of
calculating the registration fee, and is determined according to the
following offering price information: (i) under the Plan 297,811 shares of
common stock are subject to outstanding options with an exercise price of
$8.59 per share, 237,100 shares of common stock are subject to outstanding
options with an exercise price of $17.88 per share, 18,456 shares of common
stock are subject to outstanding options with an exercise price of $9.06
per share, 7,862 shares of common stock are subject to outstanding options
with an exercise price of $10.68 per share, 7,862 shares of common stock
are subject to outstanding options with an exercise price of $9.16 per
share, 5,557 shares of common stock are subject to outstanding options with
an exercise price of $9.49 per share, 4,261 shares of common stock are
subject to outstanding options with an exercise price of $11.64 per share,
2,832 shares of common stock are subject to outstanding options with an
exercise price of $11.88 per share, 2,409 shares of common stock are
subject to outstanding options with an exercise price of $14.69 per share
and the remaining 115,850 shares of common stock are reserved for issuance
upon exercise of options to be granted in the future. Pursuant to Rule
457(h), for all shares of common stock being registered hereunder with an
exercise price which cannot be presently determined (115,850 shares of
common stock under the Plan), the Proposed Maximum Offering Price Per Share
is $18.07 per share of common stock, which is based on the average of
the high and low prices for the Company's common stock as reported on the
Nasdaq National Market on October 17, 1997.
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Page 1 of 11
Exhibit Index on Page 8
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PART I
ITEM 1. PLAN INFORMATION.
Not required to be filed with this Registration Statement.
ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.
Not required to be filed with this Registration Statement.
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange Commission
(the "Commission") by PriceSmart, Inc., a Delaware corporation (the
"Company"), are hereby incorporated by reference in this Registration
Statement:
(a) The Registration Statement on Form 10 filed pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act") on July 3, 1997,
as amended by Amendment No. 1 to Form 10 filed on August 1, 1997 and
Amendment No. 2 to Form 10 filed on August 13, 1997 (the "Registration
Statement on Form 10");
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the effective date of the Registration Statement on
Form 10; and
(c) The description of the Company's common stock, par value $.0001 per
share (the "Common Stock"), contained in the Registration Statement on
Form 10, including any amendment or report filed for the purpose of
updating such description.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date this Registration
Statement is filed with the Commission and 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 of it from the respective dates 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 Registration Statement 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 Registration
Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
2
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ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Articles Eighth and Ninth of the Amended and Restated Certificate of
Incorporation of the Company (the "Company Certificate") and Article VIII of
the Amended and Restated Bylaws of Company (the "Company Bylaws," with
Articles Eighth and Ninth of the Company Certificate an Aricle VIII of the
Company Bylaws hereinafter referred to as the "Director Liability and
Indemnification Provisions") limit the personal liability of the Company's
directors to the Company or its stockholders for monetary damages for breach
of fiduciary duty.
The Director Liability and Indemnification Provisions define and clarify
the rights of certain individuals, including the Company's directors and
officers, to indemnification by the Company in the event of personal
liability or expenses incurred by them as a result of certain litigation
against them. Such provisions are consistent with Section 102(b)(7) of the
General Corporation Law of the State of Delaware (the "DGCL"), which is
designed, among other things, to encourage qualified individuals to serve as
directors of Delaware corporations by permitting Delaware corporations to
include in their articles or certificates of incorporation a provision
limiting or eliminating directors' liability for monetary damages and with
other existing DGCL provisions permitting indemnification of certain
individuals, including directors and officers. The limitations of liability
in the Director Liability and Indemnification Provisions may not affect
claims arising under the federal securities laws.
In performing their duties, directors of a Delaware corporation are
obligated as fiduciaries to exercise their business judgment and act in what
they reasonably determine in good faith, after appropriate consideration, to
be the best interests of the corporation and its stockholders. Decisions
made on that basis are protected by the "business judgment rule." The
business judgment rule is designed to protect directors from personal
liability to the corporation or its stockholders when business decisions are
subsequently challenged. However, the expense of defending lawsuits, the
frequency with which unwarranted litigation is brought against directors and
the inevitable uncertainties with respect to the outcome of applying the
business judgment rule to particular facts and circumstances mean that, as a
practical matter, directors and officers of a corporation rely on indemnity
from, and insurance procured by, the corporation they serve as a financial
backstop in the event of such expenses or unforeseen liability. The Delaware
legislature has recognized that adequate insurance and indemnity provisions
are often a condition of an individual's willingness to serve as director of
a Delaware corporation. The DGCL has for some time specifically permitted
corporations to provide indemnity and procure insurance for its directors and
officers.
Set forth below is a description of the Director Liability and
Indemnification Provisions. Such description is intended as a summary only
and is qualified in its entirety by reference to the Company Certificate and
the Company Bylaws.
ELIMINATION OF LIABILITY IN CERTAIN CIRCUMSTANCES. Article Ninth of the
Company Certificate protects directors against monetary damages for breaches
of their fiduciary duty of care, except as set forth below. Under the DGCL,
absent Article Ninth directors could generally be held liable for gross
negligence for decisions made in the performance of their duty of care but
not for simple negligence. Article Ninth eliminates director liability for
negligence in the performance of their duties, including gross
3
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negligence. Directors remain liable for breaches of their duty of loyalty to
the Company and its stockholders, as well as acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law
and transactions from which a director derives improper personal benefit.
Article Ninth does not eliminate director liability under Section 174 of the
DGCL, which makes directors personally liable for unlawful dividends or
unlawful stock repurchases or redemptions and expressly sets forth a
negligence standard with respect to such liability.
While Article Ninth provides directors with protection from awards of
monetary damages for breaches of the duty of care, it does not eliminate the
directors' duty of care. Accordingly, Article Ninth will have no effect on
the availability of equitable remedies such as an injunction or rescission
based upon a director's breach of the duty of care. The provisions of
Article Ninth which eliminate liability as described above will apply to
officers of the Company only if they are directors of the Company and are
acting in their capacity as directors, and will not apply to officers of the
Company who are not directors. The elimination of liability of directors for
monetary damages in the circumstances described above may deter persons from
bringing third-party or derivative actions against directors to the extent
such actions seek monetary damages.
INDEMNIFICATION AND INSURANCE. Under Section 145 of the DGCL, directors
and officers as well as other employees and individuals may be indemnified
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation--a "derivative action")
if they acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the Company, and with respect to any
criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard of care is applicable in the case
of derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement
of such an action, and the DGCL requires court approval before there can be
any indemnification where the person seeking indemnification has been found
liable to the Company.
Article VIII of the Company Bylaws provides that all directors and
officers of the Company are entitled to indemnification as set forth in the
Company Certificate.
Article Eighth of the Company Certificate provides that each person who
was or is made a party to, or is involved in any action, suit or proceeding
by reason of the fact that he is or was a director, officer of employee of
the Company will be indemnified by the Company against all expenses and
liabilities, including counsel fees, 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 Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. Article Eighth also provides that the right of indemnification
shall be in addition to and not exclusive of all other right to which such
director, officer or employee may be entitled.
Policies of insurance may be obtained and maintained by the Company under
which its directors and officers will be insured against certain expenses in
connection with the defense of, and certain liabilities which might be
imposed as a result of, actions, suits or proceedings to which they are
parties by reason of being or having been such directors or officers.
4
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ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index on page 8 hereof.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this Registration Statement (or
the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information
set forth in 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 and 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
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
PROVIDED, HOWEVER, that the undertakings set forth in paragraphs (a)(1)(i) and
(a)(1)(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 or 15(d) of the Exchange Act that are incorporated by reference in this
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
5
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(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this 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 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.
6
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SIGNATURES
Pursuant to the requirements of the Securities Act, 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 San Diego, State of California, on October 21,
1997.
PriceSmart, Inc.
By: /s/ ROBERT E. PRICE
-----------------------------------------
Robert E. Price
Chairman, President and Chief Executive
Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on
the dates indicated. Each person whose signature appears below authorizes
Robert E. Price and Karen J. Ratcliff, and either of them, with full power of
substitution and resubstitution, his/her true and lawful attorneys-in-fact,
for him/her in any and all capacities, to sign any 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 Commission.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ ROBERT E. PRICE
- ------------------------- Chairman, President and Chief October 21, 1997
Robert E. Price Executive Officer (principal
executive officer)
/s/ KAREN J. RATCLIFF
- ------------------------- Chief Financial Officer October 21, 1997
Karen J. Ratcliff (principal financial officer)
/s/ DANIEL L. BROCKMAN
- ------------------------- Senior Vice President--Finance October 21, 1997
Daniel L. Brockman and Chief Accounting Officer
(principal accounting officer)
/s/ THEODORE WALLACE
- ------------------------- Executive Vice President and October 21, 1997
Theodore Wallace Chief Operating Officer
/s/ KATHERINE L. HENSLEY
- ------------------------- Director October 21, 1997
Katherine L. Hensley
/s/ LEON C. JANKS
- ------------------------- Director October 21, 1997
Leon C. Janks
/s/ LAWRENCE B. KRAUSE
- ------------------------- Director October 21, 1997
Lawrence B. Krause
/s/ GILBERT A. PARTIDA
- ------------------------- Director October 21, 1997
Gilbert A. Partida
7
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EXHIBIT INDEX
EXHIBIT PAGE
- ------- ----
4.1 The 1997 Stock Option Plan of PriceSmart, Inc. (the "Plan"). --
(Incorporated by reference to Exhibit 10.1 to the Company's
Registration Statement on Form 10 filed with the Commission.)
5.1 Opinion of Latham & Watkins. 9
23.1 Consent of Ernst & Young LLP. 11
23.2 Consent of Latham & Watkins (included in Exhibit 5.1 hereto). --
24.1 Power of Attorney (included on signature page hereto). --
8
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EXHIBIT 5.1
[LETTERHEAD OF LATHAM & WATKINS]
October 21, 1997
PriceSmart, Inc.
4649 Morena Boulevard
San Diego, California 92117
Re: Form S-8 Registration Statement;
700,000 Shares of Common Stock
-------------------------------
Ladies and Gentlemen:
In connection with the registration by PriceSmart, Inc., a Delaware
corporation (the "Company"), of 700,000 shares of common stock, par value
$.0001 per share (the "Shares"), of the Company to be issued pursuant to The
1997 Stock Option Plan of PriceSmart, Inc. (the "Plan") under the Securities
Act of 1933, as amended (the "Act"), on a Registration Statement on Form S-8
filed with the Securities and Exchange Commission on October 21, 1997 (as
amended from time to time, the "Registration Statement"), you have requested
our opinion with respect to the matters set forth below.
In our capacity as your counsel in connection with such
registration, we are familiar with the proceedings taken and proposed to be
taken by the Company in connection with the authorization, issuance and sale
of the Shares, and for the purposes of this opinion, have assumed such
proceedings will be timely completed in the manner presently proposed. In
addition, we have made such legal and factual examinations and inquiries,
including an examination of originals or copies certified or otherwise
identified to our satisfaction of such documents, corporate records and
instruments, as we have deemed necessary or appropriate for purposes of this
opinion.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals,
and the conformity to authentic original documents of all documents submitted
to us as copies.
<PAGE>
PriceSmart, Inc.
October 21, 1997
Page 2
We are opining herein as to the effect on the subject transaction
only of the General Corporation Law of the State of Delaware, and we express
no opinion with respect to the applicability thereto, or the effect thereon,
of the laws of any other jurisdiction or any other laws, or as to any matters
of municipal law or the laws of any other local agencies within the state.
Subject to the foregoing, it is our opinion that as of the date
hereof the Shares have been duly authorized, and, upon the issuance of and
payment for the Shares in accordance with the terms set forth in the Plan,
the Shares will be validly issued, fully paid and nonassessable.
We consent to your filing this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ LATHAM & WATKINS
--------------------
Latham & Watkins
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1997 Stock Option Plan of PriceSmart, Inc. of
our report dated July 2, 1997, with respect to the financial statements and
schedule included in the Information Statement on Form 10 dated August 15,
1997, filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
---------------------
ERNST & YOUNG LLP
San Diego, California
October 20, 1997
