As filed with the Securities and Exchange Commision on July 26, 1996
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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DUTY FREE INTERNATIONAL, INC.
(Exact name of Registrant as specified in its charter)
MARYLAND 5999 52-1292246
(State or other (Primary Standard Industrial (IRS Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation of
organization)
63 COPPS HILL ROAD
RIDGEFIELD, CONNECTICUT 06877
(203) 431-6057
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
------------------------------------
ALFRED CARFORA
PRESIDENT
DUTY FREE INTERNATIONAL, INC.
63 COPPS HILL ROAD
RIDGEFIELD, CONNECTICUT 06877
(203) 431-6057
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------------
COPIES TO:
STEPHEN P. FARRELL, ESQ.
MORGAN, LEWIS & BOCKIUS LLP
101 PARK AVENUE
NEW YORK, NEW YORK 10178
(212) 309-6050
------------------------------------
Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration
Statement, as determined by the Registrant.
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [ X ]
If the securities being registered on this form are being offered
in connection with the formation of a holding company and there is
compliance with General Instruction G, check the following box. [ ]
<PAGE>
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------
Proposed
maximum Proposed
aggregate maximum
Title of each offering aggregate Amount of
class of securities Amount to be price per offering registration
to be registered registered share (1) price (1) fee (2)
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 5,000,000 $14.25 $71,250,000 $20,442
par value shares
$0.01 per share
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(1) Calculated pursuant to Rule 457(c), based upon the average of the
high and low prices for the Common Stock on the New York Stock
Exchange for July 24, 1996.
(2) A total of 840,000 shares are carried forward from the Registrant's
prior Registration Statement on Form S-4 (File No. 33-76330)
pursuant to Rule 429 under the Securities Act of 1933, and,
accordingly, the registration fee paid herewith is based upon
4,160,000 shares being newly registered by this Registration
Statement.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION, DATED JULY 26, 1996
5,000,000 Shares
DUTY FREE INTERNATIONAL, INC.
COMMON STOCK
-------------------------------
This Prospectus covers 5,000,000 shares of Common Stock, $.01 par
value, which may be offered and issued by Duty Free International, Inc.
(the "Company") from time to time in connection with the acquisition by
the Company of other businesses or properties, and which may be reserved
for issuance pursuant to, or offered and issued upon exercise or
conversion of, warrants, options, convertible securities or other
similar securities issued by the Company from time to time in connection
with any such acquisition.
It is expected that the terms of acquisitions involving the
issuance of securities covered by this Prospectus will be determined by
direct negotiations with the owners or controlling persons of the
businesses or properties to be acquired by the Company, and that the
shares of Common Stock issued will be valued at prices reasonably
related to quoted market prices either at the time the terms of an
acquisition are agreed upon or at or about the time of delivery of such
shares. No underwriting discounts or commissions will be paid, although
finders' fees may be paid from time to time with respect to specific
acquisitions. Any person receiving any such fees may be deemed to be an
underwriter within the meaning of the Securities Act of 1933, as amended
(the "Act").
The shares of Common Stock issued in connection with such
acquisitions may be resold by the recipients thereof. See "Outstanding
Securities Covered by this Prospectus" for information relating to
resales pursuant to this Prospectus of shares of Common Stock issued
under this Registration.
The Common Stock of the Company is listed for trading on the New
York Stock Exchange. On July 24, 1996 the last reported sale price for
the Common Stock on that Exchange was $14.00 per share.
All expenses of this offering will be paid by the Company. The
term "Company" refers to Duty Free International, Inc., a Maryland
corporation, and its subsidiaries, unless the context requires
otherwise. The executive offices of the Company are located at 63 Copps
Hill Road, Ridgefield, Connecticut 06877. The telephone number is
(203) 431-6057.
-------------------------------
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 July , 1996.
<PAGE>
THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE
UPON REQUEST FROM DUTY FREE INTERNATIONAL, INC., 63 COPPS HILL ROAD,
RIDGEFIELD, CONNECTICUT 06877 (TELEPHONE NUMBER (203) 431-6057)
ATTENTION: SECRETARY. IN ORDER TO ENSURE TIMELY DELIVERY OF THE
DOCUMENTS, ANY REQUEST SHOULD BE MADE BY A DATE WHICH IS FIVE DAYS PRIOR
TO THE DATE ON WHICH THE FINAL INVESTMENT DECISION MUST BE MADE. SEE
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
-------------------------------
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024
Washington, D.C. 20549 and at its Regional Offices located at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511, and 7 World Trade Center, 14th Floor, New York,
New York 10048. Copies of such material can be obtained at prescribed
rates from the Public Reference Section of the Commission, at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission
maintains an Internet web site that contains reports, proxy and
information statements and other information regarding issuers that file
electronically with the Commission, as does the Company. The address of
that site is http://www.sec.gov. In addition, such reports, proxy
statements and other information can be inspected at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York
10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
pursuant to the Exchange Act are incorporated herein by reference:
1. The Annual Report of the Company on Form 10-K for its fiscal
year ended January 28, 1996 (filed April 26, 1996);
2. The Quarterly Report of the Company on Form 10-Q for its fiscal
period ended April 28, 1996 (filed June 11, 1996);
3. All other reports filed by the Company since the end of the
fiscal year covered by the Annual Report referred to above; and
4. The description of the Company's Common Stock registered under
the Exchange Act contained in the Company's Form 8-A (filed
December 6, 1991), including any amendments or reports filed
for the purpose of updating such description.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the offering of
the Securities shall be deemed to be incorporated herein by reference.
Any statement contained herein or in a document all or a portion of
which is 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
<PAGE>
other subsequently filed document which also is or is deemed to be
incorporated by reference herein or in the Prospectus Supplement
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.
FOR FLORIDA RESIDENTS
As the largest domestic supplier of duty free merchandise to the
foreign diplomatic community in the United States, the Company's
Diplomatic and Wholesale Division supplies many of the embassies,
consulates and United Nations missions in Washington, D.C. and New York
City, including the mission of the government of Cuba to the United
Nations and its personnel. All merchandise orders require the prior
approval of the United States Treasury and State Departments. The
Company does not conduct any other business with the government of Cuba
or with any person or affiliate located in Cuba.
This information is accurate as of the date hereof. Current
information concerning the Company's business dealings with the
government of Cuba or with any person or affiliate located in Cuba may
be obtained from the Division of Securities and Investor Protection of
the Florida Department of Banking and Finance, the Capitol, Tallahassee,
Florida 32399-0350, telephone number (904) 488-9805.
THE COMPANY
Duty Free International, Inc. operates in several distinct markets
of the duty free industry in the United States and abroad. This highly
specialized industry sells merchandise such as liquor, tobacco products,
perfume and luxury gifts free of all duties and sales and excise taxes
to persons leaving the United States or travelling on international
airlines and to foreign diplomats serving in the United States. The
Company offers quality brand-name merchandise at savings generally
ranging from 20% to 60% off retail prices in the countries of its
customers' destinations.
The Company is the leading operator in the United States of duty
free stores along both the United States/Canada and the United
States/Mexico borders and is one of the leading operators of duty free
and retail stores in international airports in the United States and
Puerto Rico, and is a prime concessionaire and supplier of merchandise
to international airlines' inflight duty free shops. The Company is
also the largest supplier of duty free merchandise to foreign diplomats
in the United States and is a major supplier of merchandise to merchant
and cruise ships from ports in the Northeast United States and Miami,
Florida.
The Company, a Maryland corporation, has executive offices at 63
Copps Hill Road, Ridgefield, Connecticut 06877, and its telephone number
is (203) 431-6057.
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING
FACTORS, AS WELL AS THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS
AND IN THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE. THIS PROSPECTUS
AND SUCH DOCUMENTS CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS. ACTUAL
RESULTS COULD DIFFER MATERIALLY FROM THOSE PROJECTED IN THE FORWARD-
LOOKING STATEMENTS AS A RESULT OF ANY NUMBER OF FACTORS, INCLUDING THE
RISK FACTORS SET FORTH BELOW AND ELSEWHERE IN THIS PROSPECTUS AND IN
SUCH DOCUMENTS.
ECONOMIC CONDITIONS AND EXCHANGE RATES
The principal customers of the Company are residents of foreign
countries whose purchases of duty free merchandise may be affected by
trends in the economies of foreign countries and changes in the value of
the U.S. dollar relative to their own currencies. Any significant
increase in the value of the U.S. dollar relative to the currencies of
foreign countries, particularly Canada, Mexico and Japan, could have an
adverse impact on the number of travelers visiting the United States and
the dollar amount of duty free purchases made by them from the Company.
A significant increase in gasoline prices or a shortage of fuel may also
reduce the number of international travelers and thereby adversely
affect the Company's sales. In addition, the Company imports a
significant portion of its products from Western Europe and Canada at
prices negotiated either in U.S. dollars or foreign currencies. As a
result, the Company's costs are affected by fluctuations in the value of
the U.S. dollar in relation to major Western European and Canadian
currencies. A decrease in the purchasing power of the U.S. dollar
relative to other currencies causes a corresponding increase in the
purchase price of products. The Company enters into foreign exchange
forward contracts as a hedge against a portion of its exposure to
currency fluctuations on commitments to purchase merchandise.
COMPETITION
The Company can experience significant competition when negotiating
or bidding for new airport concession leases or renewal of existing
airport leases in those locations where the airport operating
authorities require such negotiating or bidding. Competitors bid for
the exclusive right to operate in a particular airport or, in the case
of some larger airports, in a particular airport terminal servicing one
or more airlines. The Company's lease and concession agreements for
duty free stores at the New York City airports are consistent with
airport leases in the region in that they are terminable by the lessor
upon 30 days notice, and also may be subject to re-bid at the end of the
operator's lease at which time sealed bids are submitted by prospective
operators or negotiations are undertaken with the authority. Most of
the Company's concession contracts are subject to 30 to 120 day
cancellation clauses cancelable by the Company or the airline.
Approximately four other companies operate duty free stores in the
United States along the Canadian border, most of which have historically
remained within specific areas outside of the Company's geographic
regions. A small number of regional duty free companies operate along
the Mexican border and compete with the Company. Large discount chains
that are not duty free operators, such as Price Club and Sam's Club,
compete with the Company for customers crossing the United States/Mexico
border. Approximately 15 companies operate duty free stores at airports
in the United States. The largest such company is Duty Free Shoppers
Group, Ltd., a privately held company and the largest duty free operator
<PAGE>
in the world. The Inflight Division has one major competitor which
operates international airlines' on-board duty free concessions. The
majority of international airlines operate their own on-board duty free
concessions. There are a large number of competitors offering wholesale
merchandise to international airlines. The principal competition for
diplomatic sales consists of purchases made directly from European
suppliers. There are no material competitors currently operating in the
principal ports served by the Diplomatic and Wholesale Division except
for Miami, Florida. There are significant competitors which can make
sales to the Company's passenger and merchant vessel customers when
those customers visit ports not served by the Company.
REGULATION OF THE DUTY FREE INDUSTRY
The Company's sales and gross profit margins are affected by
factors specifically related to the duty free industry. Most countries
have allowances on the import of duty free goods. Decreases in the duty
free allowances of foreign countries or stricter eligibility
requirements for duty free purchases, as well as decreases in tax and
duty rates imposed by foreign jurisdictions (particularly Canada and
Mexico) could have a negative effect on the Company's sales and gross
profit margins. Conversely, increases could have a positive effect on
the Company's sales and gross profit.
RESULTS OF OPERATIONS - SUMMARY DISCUSSION AND ANALYSIS
THE FOLLOWING SUMMARY DISCUSSION AND ANALYSIS OF THE COMPANY'S
FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE FISCAL PERIODS AND
YEARS INDICATED SHOULD BE READ IN CONJUNCTION WITH THE "MANAGEMENT
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS" AND THE FINANCIAL STATEMENTS (AND THE NOTES THERETO)
APPEARING IN THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER
ENDED APRIL 28, 1996 AND ITS ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED JANUARY 28, 1996, AS WELL AS THE "SELECTED FINANCIAL DATA"
APPEARING IN SUCH ANNUAL REPORT. THOSE QUARTERLY AND ANNUAL REPORTS ARE
INCORPORATED HEREIN BY REFERENCE.
UNAUDITED INTERIM RESULTS - FIRST QUARTER FISCAL 1997 COMPARED WITH 1996
Net earnings for the quarter ended April 28, 1996 were $2,182,000,
or $0.08 per share, an increase of $716,000 or 49% from $1,466,000, or
$0.05 per share, for the quarter ended April 30, 1995. The increase was
due primarily to a significant increase in the Southern and Northern
Border Division's net earnings. The Southern Border Division's net
earnings increased significantly from the prior year due to a 15.1%
increase in net sales and an increase in gross profit margins while
selling, general and administrative expenses were relatively the same as
the prior year. The net sales and gross profit margin increases were in
comparison to the Division's fiscal 1996 first quarter results which
were significantly affected by the Mexican peso devaluation in December
1994. The Northern Border Division's net earnings also increased
significantly from the prior year due primarily to a 9.1% increase in
comparable sales of duty free merchandise (excluding sales from two
stores purchased in July 1995), which have significantly higher gross
profit margins than retail and gas sales, while selling, general and
administrative expenses decreased by approximately $100,000 from the
prior year when the selling, general and administrative expenses of the
stores purchased in July 1995 are excluded from the current year. The
comparable duty free sales increase was due primarily to an increase in
the average amount of duty free merchandise purchased from the Division
<PAGE>
as a result of the Division's employee sales training programs and other
marketing efforts. The above was partially offset by the continued
decrease in Canadian traffic across the United States/Canada border when
compared to the prior year and a decrease in retail and gas sales.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $11,205,000 for the
quarter ended April 28, 1996. Working capital was $119,452,000 as of
April 28, 1996. The Company believes its existing funds, cash provided
by operating activities and available borrowings under its $75,000,000
bank credit facility will be sufficient to meet its current liquidity
and capital requirements.
FISCAL 1996 COMPARED WITH 1995
Net earnings were $15,996,000, or $0.59 per share, for the year
ended January 28, 1996, an increase of $1,863,000, or 13.2%, from
$14,133,000, or $0.52 per share, for the year ended January 29, 1995
before restructuring and revaluation charges. A total pre-tax charge to
earnings of $53,573,000 ($38,935,000 after tax) was taken in the year
ended January 29, 1995. This charge included $7,571,000 for
restructuring expenses and a write-down of intangible asset value of
$46,002,000 resulting from a change to a fair value method of evaluating
the recoverability of intangible assets. The increase in net earnings
from the prior year, excluding the restructuring and revaluation charges
in the prior year, reflects the successful execution of the Company's
cost containment programs as well as sales increases by the Inflight,
Airport and Northern Border Divisions.
The increases in net earnings for the Company's Inflight, Northern
Border and Airport Divisions were partially offset by a substantial
decrease in the Southern Border Division's sales and net earnings
resulting from the significant devaluation of the Mexican peso versus
the U.S. dollar in December 1994. The drop in the value of the peso
destabilized the Mexican economy and increased the costs of the
Company's products for Mexican customers. The Southern Border Division
reduced its selling, general and administrative expenses by
approximately $5,000,000 during the current year when compared to the
prior year. However, these expense reductions were more than offset by
a $41,319,000 decrease in the Southern Border Division's net sales. The
Division's sales decline was 22% in the fourth quarter of fiscal 1996
versus declines of 37%, 34% and 23% in the first three quarters of 1996
versus the same periods in fiscal 1995.
USE OF PROCEEDS
This Prospectus relates to shares of Common Stock of the Company
which may be offered and issued by the Company from time to time in
connection with the acquisition of other businesses or properties, and
upon exercise or conversion of, warrants, options, convertible
debentures or other similar instruments issued by the Company from time
to time in connection with any such acquisition. Other than the
businesses or properties acquired, there will be no proceeds to the
Company from these offerings.
OUTSTANDING SECURITIES COVERED BY THIS PROSPECTUS
This Prospectus, as appropriately amended or supplemented, may be
used from time to time by persons who have received shares of Common
Stock covered by the Registration Statement in acquisitions of
<PAGE>
businesses or properties by the Company, or their transferees, and who
wish to offer and sell such shares (such persons are herein referred to
as the "Selling Stockholder" or "Selling Stockholders") in transactions
in which they and any broker-dealer through whom such shares are sold
may be deemed to be underwriters within the meaning of the Act. The
Company intends to attempt to contract with the Selling Stockholders to
restrict the transfer or resale of all or a portion of such Shares for a
given period of time or to permit the transfer or sale thereof only with
the prior written consent of the Company. The Company may consent to
the use of this Prospectus for a limited period of time by the Selling
Shareholders, subject to limitations and conditions which may be varied
by agreement between the Company and the Selling Stockholders.
The Company will receive none of the proceeds from any such sales.
Any commissions paid or concessions allowed to any broker-dealer, and,
if any broker-dealer purchases such shares as principal, any profits
received on the resale of such shares, may be deemed to be underwriting
discounts and commissions under the Act. Printing, certain legal,
filing and other similar expenses of this offering will be paid by the
Company. Selling Stockholders will bear all other expenses of this
offering, including any brokerage fees, underwriting discounts or
commissions.
There presently are no arrangements or understandings, formal or
informal, pertaining to the distribution of the shares as described
herein. Upon the Company's being notified by a Selling Stockholder that
any material arrangement has been entered into with a broker-dealer for
the sale of shares through a block trade, special offering, exchange
distribution or secondary distribution, a supplemented Prospectus will
be filed, pursuant to Rule 424(b) under the Act, setting forth (i) the
name of each Selling Stockholder and of the participating broker-
dealer(s), (ii) the number of shares involved, (iii) the price at which
such shares were sold, (iv) the commissions paid or discounts or
concessions allowed to such broker-dealer(s), where applicable, (v) that
such broker-dealer(s) did not conduct any investigation to verify the
information set out in this Prospectus and (vi) other facts material to
the transaction.
Selling Stockholders may sell the shares being offered hereby from
time to time in transactions (which may involve crosses and block
transactions) on the New York Stock Exchange or such other securities
exchange on which the Company's Common Stock may be listed, in
negotiated transactions or otherwise, at market prices prevailing at the
time of sale or at negotiated prices. Selling Stockholders may sell
some or all of the shares in transactions involving broker-dealers, who
may act solely as agent and/or may acquire shares as principal. Broker-
dealers participating in such transactions as agent may receive
commissions from Selling Stockholders (and, if they act as agent for the
purchaser of such shares, from such purchaser), such commissions
computed in appropriate cases in accordance with the applicable rules of
the New York Stock Exchange or such other securities exchange on which
the Company's Common Stock may be listed, which commissions may be
negotiated rates where permissible under such rules. Participating
broker-dealers may agree with Selling Stockholders to sell a specified
number of shares at a stipulated price per share and, to the extent such
broker-dealer is unable to do so acting as agent for Selling
Stockholders, to purchase as principal any unsold shares at the price
required to fulfill the broker-dealer's commitment to Selling
Stockholders.
<PAGE>
In addition or alternatively, Shares may be sold by Selling
Stockholders and/or by or through other broker-dealers in special
offerings, exchange distributions or secondary distributions pursuant to
and in compliance with the governing rules of the New York Stock
Exchange or such other securities exchange on which the Company's Common
Stock may be listed, and in connection therewith, commissions in excess
of the customary commission prescribed by the rules of such securities
exchange may be paid to participating broker-dealers, or, in the case of
certain secondary distributions, a discount or concession from the
offering price may be allowed to participating broker-dealers in excess
of such customary commission. Broker-dealers who acquire shares as
principal thereafter may resell such shares from time to time in
transactions (which may involve crosses and block transactions and which
may involve sales to and through other broker-dealers, including
transactions of the nature described in the preceding two sentences) on
the New York Stock Exchange or such other securities exchange on which
the Company's Common Stock may be listed, in negotiated transactions or
otherwise, at market prices prevailing at the time of sale or at
negotiated prices, and, in connection with such resales, may pay to or
receive commissions from the purchasers of such shares.
The Company may agree to indemnify each Selling Stockholder as an
underwriter under the Act against certain liabilities, including
liabilities arising under the Act. Each Selling Stockholder may
indemnify any broker-dealer that participates in transactions involving
sales of the shares against certain liabilities, including liabilities
arising under the Act.
DESCRIPTION OF COMMON STOCK
GENERAL
The Company is authorized to issue 75,000,000 shares of the
Company's Common Stock, $.01 par value, of which 27,269,598 were issued
and outstanding as of April 26, 1996. Holders of shares of the
Company's Common Stock are entitled to one vote for each share.
Stockholders do not have preemptive rights or the right to accumulate
votes for the election of directors. The shares of the Company's Common
Stock are not subject to redemption (except as described below) nor to
any liability for further calls. The Common Stock offered hereby is
validly issued, fully paid and nonassessable. Holders of shares of the
Company's Common Stock are entitled to receive such dividends as are
declared by the Board of Directors out of funds legally available
therefor and are entitled to participate equally in the assets of the
Company available for distribution in the event of liquidation or
dissolution of the Company.
NEW YORK STOCK EXCHANGE LISTING
The Company's Common Stock is listed on the New York Stock
Exchange.
CHARTER
The Company's Articles of Incorporation (the "Charter") authorize
the classification of the Board of Directors into three classes of
substantially equal size which are elected for staggered three-year
terms, with one class being elected at each annual meeting of
stockholders. The Board of Directors has elected to be so classified.
Pursuant to the Charter, a director may be removed from office, with or
without cause, by the affirmative vote of a majority of the entire Board
<PAGE>
of Directors and may also be removed, only with cause, by the
affirmative vote of the stockholders owning a majority of the shares of
the outstanding Company Common Stock. The Company's Charter also
provides that the Company's By-Laws may be amended by the Board of
Directors. Special stockholders' meetings may be called by the
President or Chairman of the Board, or at the request of a majority of
the Board of Directors or at the request of stockholders entitled to
cast 10% of all votes entitled to be cast at such meeting. Such
provisions could be utilized, under certain circumstances, as a means of
preventing a takeover of the Company.
The Company holds certain bonds and permits necessary for the
operation of its business from the Customs Service and the Bureau of
Alcohol, Tobacco and Firearms. The Customs Service or the Bureau may
seek to revoke or refuse to grant or renew a permit or bond if either
governmental authority does not approve a person who acquires ten
percent or more of the outstanding shares of the Company's Common Stock.
The Company's Charter provides that in the event a stockholder owning
shares representing more than nine percent of the outstanding shares of
the Company's Common Stock fails to cooperate fully with the Company in
complying with reporting requirements imposed by the Customs Service or
the Bureau or when such stockholder's ownership causes these
governmental authorities to revoke or refuse to grant or renew without
material change bonds or permits necessary for the operation of the
Company's business, the Company may redeem, at fair market value or
require prompt disposal of all or any portion of, the shares of the
Company's Common Stock owned by such stockholder. All certificates for
shares of the Company's Common Stock are legended when issued to reflect
this Charter provision.
The Maryland General Corporation Law provides that a consolidation,
merger, share exchange or transfer of assets of a Maryland corporation
must be approved by the affirmative vote of two-thirds of all votes
entitled to be cast on the matter, unless the corporation's charter
permits such action by less than a two-thirds vote. The Company's
Charter provides that any action to be approved by stockholders may be
approved by the affirmative vote of a majority of all votes entitled to
be cast on the matter.
CONTROL SHARE ACQUISITIONS
The Maryland General Corporation Law also contains provisions
relating to voting restrictions on shares acquired by a person that,
when aggregated with other shares deemed to be owned by such person,
cause such person's voting power to equal or exceed 20% of the
corporation's voting stock (a "Control Share Acquisition"). In order
for a stockholder to vote shares acquired in a Control Share
Acquisition, the acquiring stockholder must receive a two-thirds vote of
approval by the stockholders of the corporation, excluding the acquiring
stockholder, the corporation's officers, and employees of the
corporation who are also directors of the corporation. This approval
must be repeated when the acquiring stockholder's voting power equals or
exceeds 33% of the corporation's voting stock and again when it equals
or exceeds 50%. The corporation has the right, unless its charter or
by-laws provide otherwise, to redeem the shares of the acquiring
stockholder at fair market value. If, prior to a Control Share
Acquisition, the stockholders of the corporation approve the voting
rights for the control shares and the acquiring stockholder is entitled
to exercise or direct the exercise of a majority of all voting power,
all stockholders of the corporation, excluding the acquiring
stockholder, have the rights of objecting stockholders under Maryland
<PAGE>
General Corporation Law. Shares acquired prior to November 4, 1986 or
under other specified circumstances are exempt from the Control Share
Acquisition provisions. A corporation may, by including a specific
provision in its charter or by-laws, exclude itself from coverage of the
Control Share Acquisition provisions; however, the Company has not
considered whether to exclude itself from such coverage. These
provisions may be used as an anti-takeover device.
BUSINESS COMBINATIONS
Under the Maryland General Corporation Law, certain stock
issuances, mergers, capital reorganizations and other transactions with
a holder of more than ten percent of the voting stock of a Maryland
corporation (an "Interested Stockholder") are prohibited for a period of
five years following the most recent date on which the Interested
Stockholder becomes an Interested Stockholder. Thereafter, the
transaction must be recommended by the Board of Directors and approved
by the affirmative vote of at least (i) 80% of the votes entitled to be
cast by the holders of outstanding voting stock of the corporation, and
(ii) two-thirds of the votes entitled to be cast by the holders of
voting stock other than voting stock held by the Interested Stockholder
or an affiliate or associate thereof unless certain value and other
standards are met or an exemption is available. However, none of the
Interested Stockholder provisions are applicable to the Company unless
its Board of Directors elects by resolution to be subject to them, which
is not currently intended.
The business combination and control share acquisition statutes and
the Charter provisions discussed above may make it more difficult and
time consuming to effect a change in control of the Company and may
reduce its vulnerability to an unsolicited proposal for a takeover. In
some circumstances, certain stockholders may consider these provisions
to be disadvantageous because takeover offers are often made at prices
above the prevailing market price of the target company's stock and
acquisitions of stock by persons attempting to acquire control may cause
the market price of the target company's stock to reach levels that are
higher than would otherwise be the case.
TRANSFER AGENT
Chemical Mellon Shareholder Services LLC, New York, New York, is
the transfer agent and registrar for the Company's Common Stock.
VALIDITY OF SECURITIES
The validity of the Securities offered will be passed upon for the
Company and the Selling Stockholders by Morgan, Lewis & Bockius LLP, New
York, New York.
EXPERTS
The consolidated financial statements and the related supplemental
schedule as of January 28, 1996 and January 29, 1995 and for each of the
years in the three-year period ended January 28, 1996, incorporated by
reference in this Prospectus from the Company's Annual Report on Form
10-K for the fiscal year ended January 28, 1996, as amended, have been
audited by KPMG Peat Marwick LLP, independent accountants, as stated in
their reports which are incorporated by reference herein. These
financial statements and supplemental schedule have been so incorporated
in reliance upon the reports of such firm given upon their authority as
experts in accounting and auditing.
<PAGE>
- ------------------------------------ -------------------------------
- ------------------------------------ -------------------------------
No person is authorized to give
any information or to make any
representations not contained or
incorporated by reference in this
Prospectus and, if given or made,
such information or representations
must not be relied upon as having 5,000,000 Shares
been authorized by the Company,
any Selling Stockholders or any DUTY FREE INTERNATIONAL, INC.
underwriter, agent or dealer.
This Prospectus does not constitute COMMON STOCK
an offer to sell or a solicitation
of an offer to buy any securities
other than the Securities in
respect of which this Prospectus is
delivered or an offer of any ----------------
securities in any jurisdiction to PROSPECTUS
any person where such an offer ----------------
would be unlawful.
TABLE OF CONTENTS Page
- ----------------- ----
Available Information 2
Incorporation of Certain
Documents by Reference 2
The Company 3
Risk Factors 3
Results of Operations - Summary 4
Use of Proceeds 5
Outstanding Securities
Covered by this Prospectus 5
Description of Common Stock 6
Validity of Securities 8
Experts 8 July , 1996
- ------------------------------------ -------------------------------
- ------------------------------------ -------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Charter provides that, to the fullest extent
permitted by Maryland law, no director or officer of the Company shall
be liable to the Company or its stockholders for monetary damages for
the breach of any duty owed by such director or officer to the Company
or to its stockholders. Maryland law does not permit the elimination of
a director's or officer's liability, and each director or officer will
be liable to the Company, to the extent that (i) it is proven that the
person actually received an improper benefit or profit in money,
property or services, or (ii) a judgment or other final adjudication
adverse to the person is entered in a proceeding based on a finding in
the proceeding that the person's action, or failure to act, was the
result of active and deliberate dishonesty and was material to the cause
of action adjudicated in the proceeding. The effect of this provision
in the Charter is to eliminate the right of the Company and its
stockholders (through stockholders' derivative suits on behalf of the
Company) to recover monetary damages against a director or officer for
the breach of any duty owed by the director or officer to the Company or
to its stockholders (including breaches resulting from negligent or
grossly negligent behavior) except in the situations described in
clauses (i) and (ii) above. These provisions will not alter the
liability of directors or officers under federal securities laws.
Section 2-418 of the Maryland General Corporation Law provides that
each corporation incorporated thereunder, such as the Company, may
indemnify any person who was or is a party or is threatened to be a
party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director, officer, employee or
agent of the corporation or serving another corporation at the request
of the corporation, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement, actually and reasonably
incurred by him 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
corporation and, with respect to a criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Lack of good
faith is not to be presumed from settlement. No indemnification is
allowed in respect to any proceeding charging improper personal benefit
to the officer or director in which such person was adjudged to be
liable on the basis that personal benefit was improperly received. To
the extent any such person succeeds on the merits or otherwise, he shall
be indemnified against expenses (including attorneys' fees). A
determination that the person to be indemnified meets the applicable
standard of conduct, if not made by a court, is made by the board of
directors by majority vote of a quorum consisting of directors not party
to such action, suit or proceeding or, if a quorum is not obtainable or
a disinterested quorum so directs, by independent legal counsel or by
the stockholders. Expenses may be paid in advance upon receipt of
undertakings to repay. A corporation may purchase indemnification
insurance.
The Company's Charter and By-Laws state, as to indemnification,
that the Company's officers and directors are entitled to
indemnification against liabilities and expenses to the full extent
permitted by Maryland law.
<PAGE>
The Company also currently maintains a directors' and officers'
liability insurance policy for the benefit of its management and
directors. The maintenance of such insurance coverage is considered
vital by the Company in attracting and retaining the services of
qualified directors and officers. The Company, however, cannot be
assured that its existing policy will be renewed upon expiration or
that, if the policy is not renewed, the Company will be able to obtain
similar insurance coverage elsewhere or that the cost thereof will not
be prohibitively expensive.
The Company has entered into a separate indemnification agreement
with Jack Africk who is a director of the Company.
ITEM 21. EXHIBITS
(a) Exhibits:
3.1 Charter of the Company (previously filed as an Exhibit to
the Company's Registration Statement on Form S-1, File
No. 33-43071)
3.2 By-Laws of the Company (previously filed as an Exhibit to the
Company's Current Report on Form 8-K dated December 27, 1993)
4.1 Specimen Stock Certificate with respect to Common Stock
(previously filed as an Exhibit to Company's Registration
Statement on Form S-1, File No. 33-43071)
5.1 Opinion of Morgan, Lewis & Bockius LLP
23.1 Consent of KPMG Peat Marwick LLP, independent accountants
23.2 Consent of Morgan, Lewis & Bockius LLP (included in
Exhibit 5.1)
24.1 Powers of Attorney (included in page II-4 of the Registration
Statement)
ITEM 22. UNDERTAKINGS.
(A) The undersigned 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;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
<PAGE>
Provided, however that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the Registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(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.
(B) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to section 13(a)
or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(C) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions
or otherwise, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or paid by a
director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
(D) The undersigned registrant hereby undertakes that:
(i) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form
of prospectus filed as part of this Registration Statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the Company pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this Registration Statement as of the time it was declared
effective.
(ii) For purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus 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.
<PAGE>
(E) (i) The undersigned registrant hereby undertakes as follows:
that prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is part
of this registration statement, by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c),
the issuer undertakes that such reoffering prospectus will
contain the information called for by the applicable
registration form with respect to reoffering by persons who
may be deemed underwriters, in addition to the information
called for by the other Items of the applicable form.
(ii) The registrant undertakes that every prospectus (i) that
is filed pursuant to paragraph (1) immediately preceding, or
(ii) that purports to meet the requirements of section
10(a)(3) of the Act and is used in connection with an offering
of securities subject to Rule 415 (230.415 of this chapter),
will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is
effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
<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-4 and has duly caused
this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Ridgefield, State
of Connecticut on the 26th day of July, 1996.
DUTY FREE INTERNATIONAL, INC.
/s/Alfred Carfora
By --------------------------
Alfred Carfora,
President and Chief
Executive Officer
Each person whose signature appears below hereby appoints each of
David H. Bernstein, John A. Couri, Alfred Carfora and Gerald F. Egan,
and each of them, each of whom may act without the joinder of the other,
as his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and
any registration statement for the same offering filed pursuant to Rule
462 under the Securities Act of 1933, and to file the same, with all
exhibits thereto and all other documents in connection therewith, with
the Commission, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing
appropriate or necessary to be done, as fully and for all intents and
purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or their
substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/Alfred Carfora President, Chief Executive July 26, 1996
- ---------------------- Officer and Director
Alfred Carfora (Principal Executive Officer)
/s/Jack Africk Director July 26, 1996
- ----------------------
Jack Africk
/s/David H. Bernstein Chairman of the Executive July 26, 1996
- ---------------------- Committee of the Board,
David H. Bernstein Director
Director July , 1996
- ----------------------
John A. Couri
<PAGE>
Director July , 1996
- ----------------------
Heribert H. Diehl
/s/Gerald F. Egan Vice President of Finance, July 26, 1996
- ---------------------- Secretary, Treasurer and
Gerald F. Egan Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/Carl Reimerdes Vice President, Director July 26, 1996
- ----------------------
Carl Reimerdes
Director July , 1996
- ----------------------
Susan H. Stackhouse
/s/Stephen M. Waters Director July 26, 1996
- ----------------------
Stephen M. Waters
<PAGE>
EXHIBIT INDEX
Exhibit Page
Number Document Number
- ------- -------- ------
3.1 Charter of the Company (previously filed as an
Exhibit to the Company's Registration Statement
on Form S-1, File No. 33-43071)
3.2 By-Laws of the Company (previously filed as an
Exhibit to the Company's Current Report on
Form 8-K dated December 27, 1993) on Form 8-K
dated January 15, 1994)
4.1 Specimen Stock Certificate with respect to
Common Stock (previously filed as an Exhibit
to Company's Registration Statement on
Form S-1, File No. 33-43071)
5.1 Opinion of Morgan, Lewis & Bockius LLP
23.1 Consent of KPMG Peat Marwick LLP, independent
accountants
23.2 Consent of Morgan, Lewis & Bockius LLP
(included in Exhibit 5.1)
24.1 Powers of Attorney (included in page II-4
of the Registration Statement)
<PAGE>
EXHIBIT 5.1
101 Park Avenue MORGAN, LEWIS
New York, NY 10178-0060 & Bockius LLP
212-309-6000 Counselors at Law
Fax: 212-309-6273
July 26, 1996
Duty Free International, Inc.
63 Copps Hill Road
Ridgefield, Connecticut 06877
Re: Registration Statement on Form S-4
----------------------------------
Gentlemen:
We have acted as counsel to Duty Free International, Inc., a
Maryland corporation (the "Company"), in connection with the filing of a
Registration Statement on Form S-4, including the exhibits thereto (the
"Registration Statement"), under the Securities Act of 1933, as amended
(the "Act"), for the registration by the Company of 5,000,000 shares
(the "Shares") of Common Stock, par value $.01 per share, which may be
issued from time to time in connection with the acquisition by the
Company of other businesses, and which may be reserved for issuance
pursuant to, or offered and issued upon exercise or conversion of,
warrants, options, convertible notes or other similar instruments
("Other Securities") issued by the Company from time to time in
connection with any such acquisition. The number of Shares being
registered includes 840,000 shares of the Company's Common Stock being
carried forward from its prior Registration Statement on Form S-4 (File
No. 33-76330) pursuant to Rule 429 under the Act.
In connection with this opinion, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of the
Registration Statement and such other documents and records as we have
deemed necessary. We have assumed that (i) the Registration Statement,
and any amendments thereto, will have become effective; and (ii) all
Shares will be issued in compliance with applicable federal and state
securities laws.
With respect to the issuance of any Shares, we have assumed that
the issuance of such Shares will have been duly authorized and, if
applicable, such Shares will have been reserved for issuance upon the
exercise or conversion of Other Securities; and we have further assumed
that the Shares will have been issued, and the certificates evidencing
the same will have been duly executed and delivered, against receipt of
the consideration approved by the Company which will be no less than the
par value thereof.
Based upon the foregoing, we are of the opinion that, upon
issuance, any Shares will be duly authorized and validly issued, fully
paid and non-assessable.
The foregoing opinion is limited to the laws of the States of
Maryland.
<PAGE>
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption
"Validity of Securities." In giving this consent, we do not admit that
we are acting within the category of persons whose consent is required
under Section 7 of the Act.
Very truly yours,
MORGAN, LEWIS & BOCKIUS LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
---------------------------------
The Board of Directors
Duty Free International, Inc.
We consent to incorporation by reference in the Registration Statement
(Form S-4) of Duty Free International, Inc. of our reports dated
February 26, 1996 with respect to the consolidated financial statements
of Duty Free International, Inc. and subsidiaries as of January 28, 1996
and January 29, 1995 and for each of the years in the three-year period
ended January 28, 1996 and related financial statement schedule which
reports appear or are incorporated by reference in the January 28, 1996
Annual Report on Form 10-K filed by Duty Free International, Inc.
We also consent to the use of our name under the caption "Experts" in
the prospectus.
KPMG PEAT MARWICK LLP
Baltimore, Maryland
Dated: July 26, 1996
