<PAGE>
As filed with the Securities and Exchange Commission on August 9, 2000
Registration No. 333-_____
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
-----------------------
PAPER WAREHOUSE, INC.
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1612534
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7630 EXCELSIOR BOULEVARD
MINNEAPOLIS, MINNESOTA 55426
(Address of Principal Executive Offices) (Zip Code)
-----------------------
PAPER WAREHOUSE, INC.
AMENDED AND RESTATED
1998 EMPLOYEE STOCK PURCHASE PLAN
(Full title of the plan)
-----------------------
YALE T. DOLGINOW
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PAPER WAREHOUSE, INC.
7630 EXCELSIOR BOULEVARD
MINNEAPOLIS, MN 55426
(952) 936-1000
(Name, address and telephone number,
including area code, of agent for service)
--------------------
CALCULATION OF REGISTRATION FEE
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<CAPTION>
===================================================================================================================
PROPOSED
TITLE OF SECURITIES TO AMOUNT TO BE PROPOSED MAXIMUM MAXIMUM AMOUNT OF
BE REGISTERED REGISTERED (1) OFFERING PRICE PER UNIT (2) AGGREGATE REGISTRATION
OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock, $.01
par value per share 9,246 $ 1.30 $12,020 $3.17
===================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended, this Registration Statement also covers an indeterminate number of
additional shares that may be offered and sold as a result of anti-dilution
provisions described in the Amended and Restated 1998 Employee Stock
Purchase Plan.
(2) Estimated pursuant to Rule 457(h) under the Securities Act solely for the
purpose of calculating the amount of the registration fee, on the basis of
the average between the high and low reported sales prices of the
Registrant's common stock on January 31, 2000 as reported by the Nasdaq
National Market.
<PAGE>
EXPLANATORY NOTE
This registration statement was prepared in accordance with Form S-8
and Part I of Form S-3, and is registering 9,246 shares of common stock which
have been issued under our Amended and Restated 1998 Employee Stock Purchase
Plan. In accordance with the Note to Part I of Form S-8, the information
specified by Part I of Form S-8 has been omitted from this registration
statement. Pursuant to General Instruction C to Form S-8, this reoffer
prospectus may be used for reofferings and resales of shares of our common stock
acquired by employees, former employees and some transferees of these employees.
Upon your written or oral request to us, we will provide you, at no
charge, a copy of each document we incorporate by reference in Item 3 of Part II
of this registration statement (which documents are incorporated by reference in
the Section 10(a) prospectus as set forth in Form S-8), the other documents
required to be delivered to eligible employees under Rule 428(b) under the
Securities Act, and additional information about the Plan. Any and all requests
should be directed to our executive offices located at 7630 Excelsior Boulevard,
Minneapolis, Minnesota 55426, telephone number (952) 936-1000, Attention: Chief
Financial Officer.
<PAGE>
RESALE PROSPECTUS
[LOGO]
9,246 SHARES
COMMON STOCK
-----------------------
- This reoffer prospectus relates to the reoffer and resale of 9,246
shares of our common stock which may be sold from time to time by the
selling shareholders, as provided on page 11 of this reoffer
prospectus.
- These shares were issued under our Amended and Restated 1998 Employee
Stock Purchase Plan.
- We will not receive any proceeds from any sale of the shares offered
by this prospectus. The prices at which these selling shareholders may
sell their shares will be determined by the prevailing market price
for our common stock or in negotiated transactions.
- Our common stock is currently quoted on the Nasdaq SmallCap Market
under the symbol "PWHS."
- On August 4, 2000, the closing price of a share of our common stock on
the Nasdaq SmallCap Market was $xxx.
-----------------------
INVESTING IN OUR COMMON STOCK INVOLVES RISK. SEE "RISK FACTORS" STARTING ON PAGE
4.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------------------
THE DATE OF THIS REOFFER PROSPECTUS IS AUGUST 9, 2000.
<PAGE>
TABLE OF CONTENTS
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Page No.
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Where You Can Find More Information ....................................................................2
Incorporation of Documents by Reference.................................................................2
Paper Warehouse.........................................................................................3
Risk Factors............................................................................................4
Cautionary Statement About Forward-Looking Statements...................................................10
Use of Proceeds.........................................................................................11
Selling Shareholders....................................................................................11
Plan of Distribution....................................................................................12
Legal Matters...........................................................................................14
Experts.................................................................................................14
Disclosure of SEC Position on Indemnification for Securities Act Liabilities............................14
</TABLE>
------------------------------
You should rely only on the information contained or incorporated by
reference in this reoffer prospectus. We have not authorized anyone to provide
you with any information different from that contained in this reoffer
prospectus. Neither the delivery of this reoffer prospectus nor the sale of
common stock means that the information contained in this reoffer prospectus is
correct after the date of this reoffer prospectus. The selling shareholders are
offering to sell and seeking offers to buy, shares of common stock only in
jurisdictions where offers and sales are permitted. This reoffer prospectus is
not an offer to sell or a solicitation of an offer to buy shares of our common
stock in any circumstances under which the offer or solicitation is unlawful.
IN THIS PROSPECTUS, "PAPER WAREHOUSE," "THE COMPANY," "WE," "US" AND
"OUR" REFER TO PAPER WAREHOUSE, INC. AND OUR SUBSIDIARIES, UNLESS THE CONTEXT
SPECIFICALLY INDICATES OTHERWISE.
PAPER WAREHOUSE-Registered Trademark- PARTY UNIVERSE-Registered
Trademark- AND PARTYSMART-Registered Trademark- ARE REGISTERED TRADEMARKS OF
OURS.
OUR FISCAL YEAR ENDS ON THE FRIDAY CLOSEST TO JANUARY 31ST.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other documents with the SEC. The Exchange Act file number for our SEC filings
is 0-23389. Our SEC filings made electronically through the SEC's EDGAR system
are available to the public at the SEC's web site at http://www.sec.gov. You may
also read and copy any document we file with the SEC at the SEC's Public
Reference Rooms located at:
Judiciary Plaza Citicorp Center 7 World Trade Center
450 Fifth Street, N.W. 500 West Madison Street Suite 1300
Washington, D.C. 20549 Chicago, Illinois 60621 New York, New York 10048
Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the Public Reference Room.
We have filed with the SEC a registration statement on Form S-8 with
respect to the securities offered by this reoffer prospectus. This prospectus,
which constitutes part of the registration statement, does not contain all of
the information set forth in the registration statement and the attached
exhibits and schedules. You may refer to the registration statement, its
exhibits and schedules for further information with respect to Paper Warehouse
and the securities offered by this reoffer prospectus. You may obtain copies of
the registration statement, its exhibits and schedule in the above captioned
locations.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" into this reoffer
prospectus the information contained in the documents we file with them, which
means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is considered to be
part of this reoffer prospectus, and later information that we file with the SEC
will update and supersede this information. We are incorporating by reference
the following documents:
- our Annual Report on Form 10-K for the fiscal year ended January
28, 2000, including the portions incorporated by reference from
our proxy statement in connection with our 2000 annual meeting of
shareholders;
- all other reports filed under Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by our
Annual Report on Form 10-K, including our Quarterly Report on Form
10-Q for the quarter ended April 28, 2000; and
- the description of our common stock contained in our Registration
Statement on Form 8-A, including any subsequent amendments or
reports filed for the purpose of updating such description.
We are also incorporating by reference the information contained in our
future filings we make with the SEC under Sections 13(a), 13(c), 14, or 15(d) of
the Securities Exchange Act of 1934 after the date of this reoffer prospectus
and before the termination of the offering covered by this reoffer prospectus.
This information will be considered a part of this reoffer prospectus from the
date the document is filed and will supplement or amend the information
contained in this reoffer prospectus.
You may request a copy of these filings, at no cost, by writing to 7630
Excelsior Boulevard, Minneapolis, Minnesota 55426, Attention: Chief Financial
Officer or by telephone at (952) 936-1000.
2
<PAGE>
PAPER WAREHOUSE
Paper Warehouse is a growing chain of retail stores specializing in
party supplies and paper goods. As of July 28, 2000, we had 146 stores,
including 99 company-owned stores and 47 franchise stores. These stores are
conveniently located in major retail trade areas to provide customers with easy
access. We operate these stores under the names PAPER WAREHOUSE and PARTY
UNIVERSE and operate a web site under the name PARTYSMART.COM. Our eight
principal markets are:
- Minneapolis/St. Paul, MN - Kansas City, MO and KS - Denver, CO
- Oklahoma City/Tulsa, OK - Des Moines, IA - Seattle, WA
- Tucson, AZ - Omaha, NE
We offer an extensive selection of party supplies and paper goods, at
everyday low prices, for a wide variety of celebratory occasions, everyday uses
and seasonal events, including:
<TABLE>
<CAPTION>
CELEBRATORY OCCASIONS AND EVERYDAY USES SEASONAL EVENTS
<S> <C> <C>
- birthdays
- weddings - Valentine's Day - Halloween
- baby showers - Easter - Christmas
- graduations - Fourth of July - Hanukkah
- other family and religious celebrations - Thanksgiving - New Year's
</TABLE>
Through our 8,500 square foot superstore prototype, we offer a
comprehensive selection of over 19,000 different products, offering customers
the convenience of one-stop shopping for all of their party supplies and paper
goods needs. Our merchandise is organized by party themes. The prominent
signage, wide aisles, knowledgeable staff and depth of product offerings allow
customers to coordinate various merchandise offerings for all party occasions.
We believe that our extensive product selection and high in-stock positions
stimulate customers to purchase additional products.
The first Paper Warehouse store opened in Minneapolis, Minnesota in
1983. We purchased the business, consisting of three stores located in the
Minneapolis/St. Paul metropolitan area in 1986, and incorporated it in Minnesota
in 1987.
Our principal executive offices are located at 7630 Excelsior
Boulevard, Minneapolis, Minnesota 55426. Our telephone number is (952) 936-1000.
Our web site address is WWW.PAPERWAREHOUSE.COM. Our web site and the information
contained on that site, or connected to that site, are not incorporated into and
do not constitute a part of this reoffer prospectus.
For additional information about our company, our business, our
financial condition and information about our executive officers and directors,
we urge you to read our 1999 Annual Report on Form 10-K.
3
<PAGE>
RISK FACTORS
THE SHARES OF OUR COMMON STOCK BEING OFFERED FOR RESALE BY THE SELLING
SHAREHOLDERS ARE HIGHLY SPECULATIVE IN NATURE, INVOLVE A HIGH DEGREE OF RISK AND
SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE SUM
INVESTED IN THE COMMON STOCK. IN ADDITION TO OTHER MATTERS IDENTIFIED OR
DESCRIBED BY US FROM TIME TO TIME IN FILINGS WITH THE SEC, THERE ARE SEVERAL
IMPORTANT FACTORS THAT COULD CAUSE OUR FUTURE RESULTS TO DIFFER MATERIALLY FROM
HISTORICAL RESULTS OR TRENDS, RESULTS ANTICIPATED OR PLANNED BY US, OR RESULTS
THAT ARE REFLECTED FROM TIME TO TIME IN ANY FORWARD-LOOKING STATEMENT THAT MAY
BE MADE BY US OR ON OUR BEHALF. BEFORE PURCHASING ANY OF THE SHARES OF COMMON
STOCK, YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING FACTORS RELATING TO OUR
BUSINESS AND PROSPECTS. IF THE FOLLOWING RISKS ACTUALLY OCCUR, THE TRADING PRICE
OF OUR COMMON STOCK COULD DECLINE AND YOU MAY LOSE ALL OR PART OF YOUR
INVESTMENT.
RISKS RELATING TO OUR BUSINESS
WE HAVE EXPERIENCED LOSSES AND MAY NOT BE PROFITABLE.
We incurred a net loss of approximately $985,000 for the fiscal quarter
ended April 28, 2000. We incurred a net loss of $4.4 million for fiscal 1999, a
net loss of $521,000 for fiscal 1998 and a pro forma net loss of $207,000 for
fiscal 1997. Excluding the first quarter loss in fiscal 2000 which was due to
the seasonality of the business and the $4.0 million pre-tax repositioning
charge recorded in fiscal 1999, we attribute these losses principally to:
- an immature store basis stemming from the opening of 27
company-owned stores during fiscal 1998, 10 of which were
franchise stores that were purchased, and 8 stores during fiscal
1999;
- increases in competition among party supplies and paper goods
retailers in our geographic markets;
- increases in store labor expenses due to the rise in the average
hourly wage rates and the additional staff needed to support our
growth;
- increases in general and administrative expenses necessary to
support our store base and to continue to build our
infrastructure;
- increases in interest expense related to our fiscal 1999 issuance
of $4.0 million convertible subordinated debt in addition to the
amortization of deferred financing costs related to fiscal 1999
financing activities;
- operational and start-up costs of our e-commerce business of
approximately $1.4 million, excluding the impairment charge;
- increases in the amortization expense related to goodwill from our
purchases of franchise stores; and
- expenses associated with a canceled acquisition and repayment of
debt in fiscal 1997.
We cannot assure you that we will generate sufficient revenues, or
control operating expenses, to achieve or sustain profitability in future years.
If we are unable to achieve profitability in the near future,
4
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we may not be able to realize our deferred tax assets of approximately $3.4
million at January 28, 2000, and we may be required to reserve for a portion of,
or write off, these assets.
WE MAY NOT HAVE SUFFICIENT OPERATING CAPITAL AVAILABLE TO OPERATE OUR
BUSINESS.
As a result of the continuing liquidity needs of our business and
borrowing limits and the possibility of continuing operating losses in our
business, it is possible that we may not have available to us adequate liquidity
to meet all of the operating cash needs of our business.
WE MAY NOT BE ABLE TO PROFITABLY GROW OUR BUSINESS.
In order to profitably grow our business we need to increase sales in
our existing markets and open stores in new markets. Opening additional
company-owned stores in existing markets could reduce sales from our stores
located in or near those markets and stores opened in new markets may not be
profitable. In addition, the opening of additional stores could put additional
strain on our existing store base to leverage the new stores' fixed cost
structure.
WE MAY NOT BE ABLE TO EFFECTIVELY EXECUTE OUR LONG-TERM GROWTH
STRATEGY.
Our long-term growth strategy requires effective planning and
management. Once a new geographic market is identified, we must obtain suitable
store sites on acceptable terms. Also, the competitive and merchandising
challenges we face in new geographic markets may be different from the
challenges we face in our existing geographic markets. We may have to adapt to
regional tastes and customs and compete against established and familiar local
businesses with innovative or unique techniques for marketing party supplies and
paper goods. Entering new markets may also place significant demands on our
management, financial controls, operations and information systems. This may
cause us to incur higher costs relating to marketing and operations. Expansion
will require an increase in our personnel, particularly store managers and sales
associates, to operate our new stores.
OUR PLANS TO REMODEL AND RELOCATE STORES MAY REDUCE PROFITABILITY.
During fiscal 2000, we plan to remodel and relocate several stores.
Through July 28, 2000 we remodeled 2 stores and relocated 3 existing stores.
This plan is subject to several risks, including:
- the loss of sales during the remodeling or relocation period;
- cost overruns of the remodeling or relocation; and
- failure to achieve increased sales after the remodeling or
relocation.
We remodel our stores periodically to maintain a fresh look for the
customer, standardize store layout and fixtures, and improve merchandise
presentation. Remodeling may be as simple as repainting or creating new signage
to as extensive as conducting a total makeover. We relocate a store when it is
too small and there is no room to expand at the existing location or when a
store is not performing in its present location and a better location is
available.
WE MAY NEED TO RAISE ADDITIONAL CAPITAL TO FUND OUR OPERATIONS AND
SUPPORT OUR LONG-TERM GROWTH STRATEGY.
We believe that the combination of the cash flow from operations and
available borrowing capacity under our $15.0 million, multi-year revolving
credit facility, will be adequate to handle our cash
5
<PAGE>
requirements through fiscal 2000. We may, however, need to raise additional
capital in the future to fund our operations and support our long-term growth.
Financial difficulties of our competitors and our recent losses may affect our
ability to obtain financing. In addition, additional financing may not be
available, or may not be available on favorable terms. If adequate funds are not
available or are not available on acceptable terms, we may be unable to develop
or enhance our products and services, implement our long-term growth strategy,
take advantage of future opportunities or respond in a timely manner to
competitive pressures.
OUR ANNUAL RESULTS ARE DEPENDENT ON SECOND AND FOURTH QUARTERS.
We generate a significant portion of our operating income in our second
and fourth fiscal quarters because of the seasonality of our revenues and
promotional expenses. Any factor that negatively affects our revenues or
increases our operating expenses during the second and fourth fiscal quarters
could negatively affect our annual results of operations. As a result of the
seasonality of our revenues, we incurred a loss in the first quarter of fiscal
2000 and expect to incur a net loss for the first quarter of each fiscal year in
the foreseeable future. Although we typically realize strong sales during the
third quarter, due to increased promotional activities, we have historically
experienced reduced operating income for this quarter.
COMPETITION MAY REDUCE OUR REVENUES AND OPERATING INCOME.
Increased competition by existing or future competitors may reduce our
sales and cause us to incur a loss. As a result of competition from other
specialty party supplies and paper goods retailers, we have experienced reduced
sales growth in our existing stores and incurred additional marketing and
promotional expenses. Our stores compete with a variety of smaller and larger
retailers, including:
- specialty party supplies and paper goods retailers, including
other party superstores;
- card shops and designated departments in mass merchandisers;
- discount retailers;
- toy stores;
- drug stores;
- supermarkets;
- department stores; and
- other Internet retailers.
Many of our competitors have substantially greater financial and
personnel resources than we do. Some of our competitors have been, or may be,
funded by certain members of the vendor community. We may also encounter
additional competition from new entrants in the future in our existing markets.
OUR BUSINESS DEPENDS ON CONTINUED GOOD RELATIONS WITH OUR SUPPLIERS.
Our failure to maintain good relationships with our principal suppliers
or the loss of our principal suppliers would hurt our business. In fiscal 1999,
our largest supplier accounted for approximately 17% of our purchases and our
five largest suppliers represented approximately 51% of our purchases. Many of
6
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our principal suppliers currently provide us with incentives like volume
purchasing allowances and trade discounts. If our suppliers were to reduce or
discontinue these incentives, prices from our suppliers would increase and our
profitability would be reduced. We do not have long-term contracts with any of
our suppliers, and any supplier could discontinue selling to us at any time.
WE NEED TO ATTRACT AND RETAIN QUALITY EMPLOYEES.
Our success depends on attracting and retaining a large and growing
number of quality employees, including key employees. Many of our employees are
in entry level or part-time positions with historically high rates of turnover.
Our ability to meet our labor needs while controlling costs is subject to
external factors, such as unemployment levels, minimum wage legislation and
changing demographics.
A FAILURE IN EXECUTING OUR FRANCHISE PROGRAM MAY REDUCE OUR
PROFITABILITY.
Our continued growth and success depends in part upon our ability to
attract, contract with and retain qualified franchisees. It also depends upon
the ability of those franchisees to operate their stores successfully and
promote and develop the Paper Warehouse store concept. Through July 28, 2000 one
new franchise store has opened. For the remainder of fiscal 2000, we plan to
establish approximately xxx new franchise stores. Although we have established
criteria to evaluate prospective franchisees, and our franchise agreements
include certain operating standards, each franchisee operates his/her store
independently. Various laws limit our ability to influence the day-to-day
operations of our franchise stores. We cannot assure you that franchisees will
be able to operate Paper Warehouse stores successfully and in a manner
consistent with our concepts and standards. As a result, our franchisees may
operate their stores in a manner that reduces the gross revenues of these
stores, and therefore reduces our franchise revenues.
Paper Warehouse, as a franchisor, is subject to both regulation by the
Federal Trade Commission and state laws regulating the offer and sale of
franchises. These regulations limit our ability to terminate or refuse to renew
franchises. Our franchisees are also subject to labor laws, including minimum
wage requirements, overtime, working and safety conditions and citizenship
requirements. Our failure to obtain or maintain approvals to sell franchises, or
a franchisee's violation of any labor law, could cause us to lose or reduce our
franchise revenues.
A CHANGE IN CONSUMER PREFERENCES COULD NEGATIVELY AFFECT OUR BUSINESS.
If consumer demand for single-use, disposable party goods were to
diminish, the party supplies and paper goods industry and our revenues would be
negatively affected. For example, if cost increases in raw materials such as
paper, plastic, cardboard or petroleum were to cause our prices to increase
significantly, consumers might decide to forgo the convenience associated with
single-use, disposable products and use standard dinnerware and flatware.
Similarly, changes in consumer preferences away from disposable products and in
favor of reusable products for environmental or other reasons could reduce the
demand for our products.
REGIONAL RISKS MAY AFFECT OUR BUSINESS.
Because our operations are located principally in eight metropolitan
areas, we are subject to certain regional risks, such as the economy, weather
conditions, natural disasters and government regulations. If any region in which
we operate stores were to suffer an economic downturn or other adverse regional
risks were to occur, our sales and profitability could decline and our ability
to implement our growth strategy would be hindered.
7
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OUR INTERNET STRATEGY IS NOT LIKELY TO BE PROFITABLE.
Although we have scaled-back the extent of, and minimized our financial
exposure to, our e-commerce venture, operation of the web site still requires
management's ongoing attention and the dedication of our merchandising,
accounting and information systems departments. In addition, although we have
made attempts to minimize the financial impact of the web store, there are still
incremental costs to operate the site. Our web site is not likely to generate
any profits and we are not likely to recapture the money invested in our
Internet strategy.
OUR FORMER STATUS AS AN S-CORPORATION COULD EXPOSE US TO LIABILITY.
From February 1993 to November 1997, we were treated as an
S-corporation under the Internal Revenue Code. In connection with the completion
of our initial public offering, we converted to a C-corporation. If the IRS or
any state taxing authority were to challenge our prior S-corporation status, we
could be liable to pay corporate taxes on our income, at the effective corporate
tax rate, for all or a part of the period we were an S-corporation, plus
interest and possibly penalties.
WE NEED TO ANTICIPATE AND RESPOND TO MERCHANDISING TRENDS.
Our success depends in part on our ability to anticipate and respond in
a timely manner to changing merchandise trends and consumer demands. We make
merchandising decisions well in advance of the seasons during which we will sell
the merchandise. As a result, if we fail to identify and respond quickly to
emerging trends, consumer acceptance of the merchandise in our stores could
diminish and we may experience a reduction in revenues. We sell certain licensed
products that are in great demand for short time periods, making it difficult to
project our inventory needs for these products. Significantly greater or
less-than-projected product demand, particularly for our juvenile licensed
products, could lead to one or more of the following:
- lost sales due to insufficient inventory;
- higher carrying costs associated with slower turning inventory;
and
- reduced or eliminated margins due to mark downs on excess
inventory.
OUR INDEBTEDNESS COULD NEGATIVELY AFFECT OUR FINANCIAL POSITION.
As of April 28, 2000, we had approximately $16.0 million of borrowings
outstanding, which includes amounts outstanding under our revolving line of
credit, capital leases, our mortgage and our subordinated debt. We may incur
additional indebtedness, and realize increased interest expense, in the future.
Our level of indebtedness could:
- impair our ability to obtain additional financing;
- cause a substantial portion of our cash flow from operations to be
spent on principal and interest payments;
- affect our ability to fund our operations;
- make us more vulnerable to industry downturns and competitive
pressures;
- prevent us from making interest and principal payments on our debt
obligations; and
8
<PAGE>
- prevent us from meeting certain financial tests contained in our
debt obligations, which could lead to a default on those
obligations.
OUR COMPANY IS CONTROLLED BY OUR MANAGEMENT.
As of July 28, 2000, Yale T. Dolginow, our Chairman of the Board,
President and Chief Executive Officer, owned or had the right to vote and
control the disposition of 41.3% of our outstanding common stock. Accordingly,
Yale T. Dolginow may have the ability to elect our directors and determine the
outcome of other corporate actions requiring shareholder approval. This control
could have the effect of delaying, deferring or preventing a change in control
of our company.
9
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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This prospectus and the documents to which we refer you and incorporate
herein by reference contain forward-looking statements regarding our business
and prospects, such as projections of future performance, statements of
management's plans and objectives, forecasts of market trends, and other matters
that are forward-looking statements within the meaning of Sections 27A of the
Securities Act of 1933 and Section 21E of the Securities Act of 1934. In
addition, from time to time, we or our representatives may make forward-looking
statements orally or in writing. We base these forward-looking statements on our
expectations and projections about future events, which we derive from the
information currently available to us.
Statements containing the words or phrases "will likely result," "are
expected to," "will continue," "is anticipated," "estimates," "projects,"
"believes," "expects," "anticipates," "intends," "target," "goal," "plans,"
"objective," "should" or similar expressions identify forward-looking
statements, which may appear in this prospectus and in documents, reports,
filings with the Securities and Exchange Commission, news releases, written or
oral presentations made by our officers or other representatives to analysts,
shareholders, investors, news organizations and others, and discussions with our
management and other company representatives. For these statements, we claim the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995.
Our future results, including results related to forward-looking
statements, involve a number of risks and uncertainties. No assurance can be
given that the results reflected in any forward-looking statements will be
achieved. Any forward-looking statements made by us or on our behalf speak only
as of the date on which this statement is made. Our forward-looking statements
are based upon assumptions that are sometimes based upon estimates, data,
communications and other information from suppliers, government agencies and
other sources that may be subject to revision. We do not undertake any
obligation to update or keep current either any forward-looking statement to
reflect events or circumstances arising after the date of such statement, or the
important factors that could cause our future results to differ materially from
historical results or trends, results anticipated or planned by us, or which are
reflected from time to time in any forward-looking statement which may be made
by us or on our behalf.
In addition to other matters identified or described by us from time to
time in filings with the SEC, there are several important factors that could
cause our future results to differ materially from historical results or trends,
results anticipated or planned by us, or results that are reflected from time to
time in any forward-looking statement that may be made by us or on our behalf.
Some of these important factors we listed under the heading "Risk Factors."
10
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USE OF PROCEEDS
We will not receive any proceeds from the sale of shares that may be
sold pursuant to this reoffer prospectus for the respective accounts of the
selling shareholders. All of such proceeds, net of brokerage commissions, if
any, will be received by the selling shareholders. For more information about
our selling shareholders, see "Selling Shareholders" and "Plan of Distribution."
SELLING SHAREHOLDERS
This reoffer prospectus relates to reoffers and resales of 9,246
shares of our common stock issued in the aggregate to our present [and former]
employees under our Amended and Restated 1998 Employee Stock Purchase Plan. No
estimate can be given as to the amount of shares that will be held by the
selling shareholders after completion of this offering because the selling
shareholders may resell all, some or none of such shares of our common stock
from time to time, and because there currently are no agreements, arrangements
or understandings with respect to the resale of any of these shares. This
reoffer prospectus covers, and may be used by, unnamed non-affiliate selling
shareholders who individually hold less than 1,000 shares of common stock issued
under the Amended and Restated 1998 Employee Stock Purchase Plan. An employee
who is not an executive officer or director of Paper Warehouse generally will
not be deemed to be an "affiliate" of Paper Warehouse. Our executive officers
and directors hold none of the shares covered by this reoffer prospectus.
PLAN OF DISTRIBUTION
We are registering the resale of 9,246 shares of our common stock on
behalf of certain selling shareholders. We issued all of the shares in
connection with our purchases under our Amended and Restated 1998 Employee Stock
Purchase Plan. We will not receive any proceeds from this offering.
The selling shareholders or pledgees, donees, transferees, assigns or
other successors-in-interest selling shares received from a named selling
shareholder as a gift, partnership distribution or other non-sale-related
transfer after the date of this reoffer prospectus may sell any or all of their
shares from time to time on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. All of such persons are
"selling shareholders" as that term is used in this reoffer prospectus. These
sales may be at fixed or negotiated prices. The selling shareholders may effect
such transactions by selling the shares in one or more, or a combination, of the
following:
- a block trade in which the broker-dealer so engaged will attempt
to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by such
broker-dealer for its account pursuant to this reoffer prospectus;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
- privately negotiated transactions;
- broker-dealers may agree with the selling shareholder to sell a
specified number of the shares at a stipulated price per share;
and
11
<PAGE>
- any other method permitted under applicable law.
In addition, any securities covered by this reoffer prospectus which
qualify for sale pursuant to Rule 144 of the Securities Act may be sold under
Rule 144 rather than pursuant to this reoffer prospectus.
To the extent required, this prospectus may be amended or supplemented
from time to time in the manner discussed below to describe a specific plan of
distribution. In effecting sales, broker-dealers engaged by the selling
shareholders may arrange for other broker-dealers to participate in the resales.
The selling shareholders may also enter into the hedging transactions
similar to the following with broker-dealers in connection with distributions of
the shares:
- short sales against the box in the course of hedging the positions
they assume with selling shareholders;
- sell shares short and redeliver the shares to close out such short
positions;
- options, puts, calls or other transactions with broker-dealers
which require the delivery to the broker-dealer of the shares, and
the broker-dealer then reselling or otherwise transferring such
shares pursuant to this reoffer prospectus;
- loan or pledge the shares to a broker-dealer; and
- the broker-dealer may sell the shares so loaned, or upon a default
the broker-dealer may sell the pledged shares pursuant to this
reoffer prospectus.
Broker-dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling shareholders. Broker-dealers
or agents may also receive compensation from the purchasers of the shares for
whom they act as agents or to whom they sell as principals, or both.
Compensation as to a particular broker-dealer might be in excess of customary
commissions and will be in amounts to be negotiated in connection with the sale.
Broker-dealers or agents and any other participating broker-dealers or the
selling shareholders may be deemed to be "underwriters" within the meaning of
Section 2(11) of the Securities Act in connection with sales of the shares.
Accordingly, any such commission, discount or concession received by them and
any profit on the resale of the shares purchased by them may be deemed to be
underwriting discounts or commissions under the Securities Act. The selling
shareholders have advised Paper Warehouse that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities. There is no underwriter
or coordinating broker acting in connection with the proposed sale of shares by
selling shareholders.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the shares may not simultaneously engage
in market making activities with respect to our common stock for a period of two
business days prior to the commencement of such distribution. In addition, each
selling shareholder will be subject to applicable provisions of the Exchange Act
and the associated rules and regulations under the Exchange Act, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the selling shareholders.
12
<PAGE>
Because selling shareholders may be deemed to be "underwriters" within the
meaning of Section 2(11) of the Securities Act, the selling shareholders will be
subject to the prospectus delivery requirements of the Securities Act. We will
make copies of this reoffer prospectus available to the selling shareholders and
have informed them of the need for delivery of copies of this reoffer prospectus
to purchasers at or prior to the time of any sale of the shares. Such delivery
may include delivery through the facilities of the Nasdaq SmallCap Market
pursuant to Rule 153 under the Securities Act.
We will file a supplement to this reoffer prospectus, if required,
pursuant to Rule 424(b) under the Securities Act upon being notified by a
selling shareholder 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 or a purchase by a broker or
dealer. Such supplement will disclose:
- the name of each such selling shareholder and of the participating
broker-dealer(s);
- the number of shares involved;
- the price at which such shares were sold;
- the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable;
- that such broker-dealer(s) did not conduct any investigation to
verify the information set out or incorporated by reference in
this prospectus; and
- other facts material to the transaction.
We will bear all costs, expenses and fees in connection with the
registration of the shares. The selling shareholders will bear all commissions
and discounts, if any, attributable to the sales of the shares. The selling
shareholders may agree to indemnify any broker-dealer or agent that participates
in transactions involving sales of the shares against certain liabilities,
including liabilities arising under the Securities Act.
LEGAL MATTERS
Oppenheimer Wolff & Donnelly LLP, Minneapolis, Minnesota, will pass
upon certain legal matters in connection with this offering for us.
EXPERTS
The consolidated financial statements of Paper Warehouse, Inc. as of
January 28, 2000 and for the year ended January 28, 2000, have been
incorporated by reference in this reoffer prospectus in the Registration
Statement in reliance upon the report of Grant Thornton LLP, independent
auditors, and upon the authority of said firm as experts in accounting and
auditing.
The consolidated financial statements of Paper Warehouse, Inc. as of
January 29, 1999, and for each of the years in the two-year period ended
January 29, 1999 have been incorporated by reference in this reoffer
prospectus in the Registration Statement in reliance upon the report of KPMG
LLP, independent certified public accountants, incorporated by reference
herein, and upon the authority of said firm as experts in accounting and
auditing.
13
<PAGE>
DISCLOSURE OF SEC POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the registrant has been
informed that in the opinion of the SEC such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
14
<PAGE>
9,246 SHARES
PAPER WAREHOUSE, INC.
COMMON STOCK
--------------------
REOFFER PROSPECTUS
--------------------
--------------------
AUGUST 9, 2000
--------------------
15
<PAGE>
PART II
INFORMATION NOT REQUIRED
IN THE PROSPECTUS
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Paper Warehouse, Inc. (File No.
0-23389) with the SEC are incorporated by reference in this Registration
Statement:
(1) Our latest Annual Report on Form 10-K for the fiscal year ended
January 28, 2000, including the portions incorporated by reference from our
proxy statement in connection with our 2000 annual meeting of shareholders;
(2) All other reports filed by us pursuant to Sections 13(a) or 15(d)
of the Securities Exchange Act of 1934 since January 28, 2000, including our
quarterly report on Form 10-Q for the quarter ended April 28, 2000; and
(3) The description of our common stock contained in our Registration
Statement on Form 8-A filed with the Commission on November 18, 1997 under the
Exchange Act, including any amendments or reports filed for the purpose of
updating such description.
All documents filed by us with the Commission pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered pursuant to this Registration
Statement have been sold or that deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference in this Registration
Statement and to be a part hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the securities that may be offered under the Paper
Warehouse, Inc. Amended and Restated 1998 Employee Stock Purchase Plan will be
passed upon for Paper Warehouse by Oppenheimer Wolff & Donnelly LLP,
Minneapolis, Minnesota.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Paper Warehouse's Articles of Incorporation limit the liability of its
directors to the fullest extent permitted by the Minnesota Business Corporation
Act. Specifically, directors of Paper Warehouse will not be personally liable
for monetary damages for breach of fiduciary duty as directors, except liability
for (i) any breach of the duty of loyalty to Paper Warehouse or its
shareholders, (ii) acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) dividends or other
distributions of corporate assets that are in contravention of certain statutory
or contractual restrictions, (iv) violations of certain Minnesota securities
laws, or (v) any transaction from which the director derives an improper
personal benefit. Liability under federal securities law is not limited by Paper
Warehouse's Articles of Incorporation.
16
<PAGE>
Minnesota Statutes, Section 302A.521 provides that a Minnesota business
corporation shall indemnify any director, officer, employee or agent of the
corporation made or threatened to be made a party to a proceeding, by reason of
the former or present official capacity of the person, against judgments,
penalties, fines, settlements and reasonable expenses incurred by the person in
connection with the proceeding if certain statutory standards are met.
"Proceeding" means a threatened, pending or completed civil, criminal,
administrative, arbitration or investigative proceeding, including one by or in
the right of the corporation. Section 302A.521 contains detailed terms regarding
such right of indemnification and reference is made thereto for a complete
statement of such indemnification rights. Paper Warehouse's Articles of
Incorporation and Bylaws also require Paper Warehouse to provide indemnification
to the fullest extent of the Minnesota indemnification statute.
Paper Warehouse also maintains a directors and officers insurance
policy pursuant to which directors and officers of Paper Warehouse are insured
against liability for certain actions in their capacity as directors and
officers.
ITEM 7. EXEMPTIONS FROM REGISTRATION CLAIMED.
Any restricted securities to be offered or resold pursuant to this
registration statement were issued pursuant to an exemption under Section 4(2)
of the Securities Act, as a non-public offering of securities.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. IDENTIFICATION OF EXHIBIT
----------- -------------------------
<S> <C>
5.1 Opinion of Oppenheimer Wolff & Donnelly LLP (filed herewith).
23.1 Consent of Grant Thornton LLP (filed herewith).
23.2 Consent of KPMG LLP (filed herewith).
23.3 Consent of Oppenheimer Wolff & Donnelly LLP (included in Exhibit 5.1).
24.1 Power of Attorney (included on page 20 of this Registration Statement).
</TABLE>
---------------------------------
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;
(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 hereof) 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
17
<PAGE>
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) under the
Securities Act if, in the aggregate, the changes
in volume and price represent no more than a 20%
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 the Registration Statement or any
material change to such information in this
Registration Statement.
PROVIDED, HOWEVER, that 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 Section 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.
(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
Section 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.
18
<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 Minneapolis, State of Minnesota, on August 9, 2000.
PAPER WAREHOUSE, INC.
By:
---------------------------------------------
Yale T. Dolginow
President and Chief Executive Officer
(principal executive officer)
By:
---------------------------------------------
Cheryl W. Newell
Vice President and Chief Financial Officer
(principal financial officer)
By:
---------------------------------------------
Diana G. Purcel
Controller
(principal accounting officer)
19
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Yale
T. Dolginow and Cheryl W. Newell, and each of them, his or her true and lawful
attorney-in-fact and agent with full powers of substitution and resubstitution,
for and in his or her name, place and stead, in any and all capacities, to sign
any or all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite or 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 thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on August 9, 2000 by the following
persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
---------------------------------- President and Chief Executive Officer
Yale T. Dolginow and Director, Chairman of the Board
----------------------------------
Diane C. Dolginow Secretary and Director
----------------------------------
Arthur H. Cobb Director
----------------------------------
Marvin W. Goldstein Director
----------------------------------
Martin A. Mayer Director
----------------------------------
Jeffrey S. Halpern Director
----------------------------------
Richard W. Perkins Director
----------------------------------
Cheryl W. Newell Vice President and Chief Financial Officer
----------------------------------
Diana G. Purcel Controller
</TABLE>
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
NO. ITEM METHOD OF FILING
--- ---- ----------------
<S> <C> <C>
5.1 Opinion of Oppenheimer Wolff & Donnelly LLP............Filed herewith.
23.1 Consent of Grant Thornton LLP..........................Filed herewith
23.2 Consent of KPMG LLP....................................Filed herewith.
23.3 Consent of Oppenheimer Wolff & Donnelly LLP............Included in Exhibit 5.1.
24.1 Power of Attorney......................................Included on page 20 of this Registration
Statement.
</TABLE>
