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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 8, 1997
REGISTRATION NO. 333-
------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
--------------------------
GRUBB & ELLIS COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 94-1424307
(State or other jurisdiction of 2215 Sanders Road (I.R.S. Employer
incorporation or organization) Fourth Floor Identification Number)
Northbrook, Illinois 60062
(Address of principal executive offices)
--------------------
Stock Appreciation Rights
issued pursuant to
the Employment Agreement
dated as of May 20, 1992
by and between Grubb & Ellis Company
and Alvin L. Swanson, Jr., as amended.
(Full title of the plan)
--------------------
Robert J. Walner
Senior Vice President and General Counsel
Grubb & Ellis Company
2215 Sanders Road
Fourth Floor
Northbrook, Illinois 60062
(847) 753-9010
(Name, address and telephone number, including area code, of agent for service)
Copies to:
Scott R. Haber, Esq.
Latham & Watkins
505 Montgomery Street, Suite 1900
San Francisco, CA 94111-2586
(415) 391-0600
--------------------
Calculation of Registration Fee
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
Proposed
Proposed Maximum
Title of Amount Maximum Aggregate Amount of
Securities to to be Offering Price Offering Registration
be Registered Registered Per Share (1) Price (1) Fee (1)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 36,345 $9.00 $327,105 $100
$0.01 par value
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated for the purpose of calculating the registration fee pursuant to
pursuant to Rule 457(c) (the average ($9.00) of the high ($9.25) and low
($8.75) prices for the Company's Common Stock quoted on the New York Stock
Exchange, Inc. on April 2, 1997).
Total Pages 17
Exhibit Index on Page II-7
<PAGE>
The reoffer prospectus which is filed as a part of this Registration
Statement has been prepared in accordance with the requirements of Form S-3, and
pursuant to General Instruction C of Form S-8 may be used for reoffers or
resales of the Shares that have been acquired by the Selling Shareholder
identified herein.
PROSPECTUS
GRUBB & ELLIS COMPANY
36,345 Shares of Common Stock
(par value, $.01 per share)
This Prospectus of Grubb & Ellis Company, a Delaware corporation (the
"Registrant" or the "Company"), relates to the offer and sale of 36,345 shares
of common stock, par value $.01 per share (the "Common Stock"), reserved for
issuance pursuant to the Employment Agreement dated as of May 20, 1992 by and
between the Registrant and Alvin L. Swanson, Jr. (the "Selling Stockholder") as
amended (the "Employment Agreement"), which may be offered hereby from time to
time by the Selling Stockholder for his own benefit. The Company will receive
no part of the proceeds of sales made hereunder. All expenses of registration
incurred in connection with this offering are being borne by the Company, but
all selling and other expenses incurred by the Selling Stockholder will be borne
by such Selling Stockholder. None of the shares offered pursuant to this
Prospectus have been registered prior to the filing of the Registration
Statement of which this Prospectus is a part.
All or a portion of the shares of Common Stock offered hereby may be
offered for sale, from time to time, on the New York Stock Exchange (the "NYSE")
or otherwise, at prices and terms then obtainable. All brokers' commissions,
concessions or discounts will be paid by the Selling Stockholder. The Selling
Stockholder and any broker executing selling orders on behalf of the Selling
Stockholder may be deemed to be an "underwriter" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act"), in which event
commissions received by such broker may be deemed to be underwriting commissions
under the Securities Act.
The Common Stock of the Company is listed on the NYSE under the symbol
"GBE." On April 2, 1997, the last reported sale price of the Company's Common
Stock on the NYSE was $9.125.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DISCUSSION OF CERTAIN RISKS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SECURITIES
OFFERED HEREBY.
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 SUCH STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is April 8, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (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 can be inspected and copied at the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices at Seven World Trade Center, 13th
Floor, New York, New York 10048 and Northwest Atrium Center, 500 Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can also be
obtained at prescribed rates from the Public Reference Section of the Commission
at its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a World Wide Web site at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. In
addition, the Company's Common Stock is listed on the NYSE and similar
information concerning the Company can be inspected and copied at the offices of
the NYSE, 20 Broad Street, New York, New York 10005.
This Prospectus does not contain all of the information set forth in the
Registration Statement of which this Prospectus is a part and which the Company
has filed with the Commission. For further information with respect to the
Company and the securities offered hereby, reference is made to the Registration
Statement, including the exhibits filed as a part thereof and otherwise
incorporated by reference therein, copies of which can be inspected at, or
obtained at prescribed rates from, the Public Reference Section of the
Commission at the address set forth above. Additional updating information with
respect to the Company may be provided in the future by means of appendices or
supplements to this Prospectus.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company with the
Commission and are incorporated herein by reference: (i) the Company's Annual
Report on Form 10-K for the fiscal year ended June 30, 1996, (ii) all reports
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act since
June 30, 1996, but prior to the filing of this Prospectus as follows:
(a) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1996;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal
quarter ended September 30, 1996;
(c) The Registrant's Current Reports on Form 8-K filed with the
Commission on February 4, 1997, December 20, 1996, December 9, 1996 and
November 5, 1996; and
(iii) all reports filed pursuant to Sections 13(a), 13(c), 14 and 15(d) after
the filing of this Prospectus and before the filing of a post-effective
amendment which indicates that all securities offered in connection with this
Prospectus have been sold or which deregisters all securities then remaining
unsold, and (iv) the description of the Company's Common Stock contained in the
Company's Form 8-A, effective April 15, 1981, except that authorized shares of
capital stock and Common Stock have been increased to 26,000,000 and 25,000,000,
respectively, shall be deemed to be incorporated by reference in this Prospectus
and to be part hereof from the date of filing such documents (such documents and
the documents, enumerated above, being hereinafter referred to as "Incorporated
Documents").
Any statement contained in an Incorporated Document or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
or in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein, modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus. All information
appearing in this Prospectus is qualified in its entirety by the information and
financial statements (including notes thereto) appearing in the documents
incorporated herein by reference, except to the extent set forth in the
immediately preceding statement.
The Company hereby undertakes to provide without charge to each person to
whom a copy of this Prospectus is delivered, upon written or oral request of
such person, a copy of any and all of the information that has been or may be
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents).
Requests should be directed to Grubb & Ellis Company, 2215 Sanders Road, Fourth
Floor, Northbrook, Illinois 60062, telephone number (847) 753-9010.
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THE COMPANY
The Company was incorporated in the State of Delaware in 1980. The Company
is a commercial real estate information and services company that provides
services to real estate owners/investors and tenants including commercial
brokerage and property and facilities management. Additionally, the Company
provides mortgage brokerage, appraisal, consultation and asset management
services.
The Company's principal executive offices are located at 2215 Sanders Road,
Northbrook, Illinois 60062, and its telephone number is (847) 753-9010.
RISK FACTORS
PROSPECTIVE INVESTORS IN THE COMMON STOCK SHOULD CONSIDER CAREFULLY
THE FOLLOWING FACTORS IN ADDITION TO THE OTHER INFORMATION CONTAINED IN THIS
PROSPECTUS. INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS CONTAINS "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995, WHICH CAN BE IDENTIFIED BY THE
USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY," "WILL," "PLANS," "EXPECTS,"
"ANTICIPATES," "ESTIMATES," "SHOULD" OR "CONTINUE" OR THE NEGATIVE THEREOF OR
OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY. THE MATTERS SET FORTH BELOW
CONSTITUTE CAUTIONARY STATEMENTS IDENTIFYING IMPORTANT FACTORS WITH RESPECT TO
SUCH FORWARD-LOOKING STATEMENTS, INCLUDING CERTAIN RISKS AND UNCERTAINTIES, THAT
COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTEMPLATED BY ANY
SUCH FORWARD-LOOKING STATEMENTS. THESE FACTORS MAY BE UPDATED FROM TIME TO TIME
IN DOCUMENTS FILED WITH THE COMMISSION AND INCORPORATED BY REFERENCE IN THIS
PROSPECTUS.
REAL ESTATE RECESSION
A real estate recession, economic slowdown, rising interest rates or
declining demand for real estate in one or more markets will adversely affect
the Company's business. Such a recession or other economic conditions could
place severe negative pressures on both the volume of transactions and prices
or lease terms for real estate. Declines in the volume of transactions and
prices for real estate could adversely and materially affect the Company's
revenues from brokerage commissions and property management fees, operating
results, cash flow and financial condition and could require the Company to
discontinue certain of its operations or sell assets.
Over the past two years, the Company increased its Institutional
Service Group ("ISG") and Corporate Service Group ("CSG") capabilities. The
objective of these groups is to provide a single source of value-added
services for multi-market real estate owners and investors, all delivered
through a single point of contact. ISG services insurance companies, pension
fund advisors, real estate investment trusts, syndicators and other portfolio
buyers by assisting with the acquisition, sale, financing or recapitalization
of real estate assets. In the last year, the Company also created an
affiliate program which is designed to expand its brokerage and property
management services to currently unsecure markets. CSG services certain
Fortune 500 firms that outsource all or a portion of their real estate
planning and implementation activities. To the extent that the Company's
cash requirements are not met by operating cash flow, due to adverse economic
conditions or other unfavorable events, the Company may find it necessary to
curtail its expansion activities, including with respect to its ISG, CSG and
affiliate capabilities, to further reduce expense levels, seek refinancing,
or undertake other actions as may be appropriate. As a result there can be
no assurance as to the Company's ability to implement successfully its
expansion programs.
HIGHLY COMPETITIVE INDUSTRY
The Company competes in a variety of service disciplines within the
commercial real estate industry. Each of these business areas is highly
competitive on a national as well as local level. The Company faces competition
not only from other real estate service providers, but also from institutional
lenders, insurance companies and investment advisory, mortgage banking,
accounting and appraisal firms. Some of the Company's principal competitors in
certain of these business areas are better established and have substantially
more experience than the Company. In general, in each of the Company's
businesses there can be no assurance that the Company
4
<PAGE>
will be able to continue to compete effectively or that it will be able to
maintain current commission or fee levels or margins or that it will not
encounter increased competition which could limit the Company's ability to
maintain or increase its market share.
ENVIRONMENTAL CONCERNS
Numerous laws and regulations have been enacted which regulate
exposure to potentially hazardous materials often found in and around buildings.
Some of these laws and regulations directly and indirectly impact the commercial
real estate market by imposing additional costs and liability on owners,
operators and sellers as well as lenders. Such laws and regulations tend to
discourage sales and leasing activities and mortgage lending with respect to
some properties, and may therefore adversely affect the Company. In addition,
any failure of the Company to disclose environmental issues may subject the
Company to liability to a buyer or lessee of property or to a purchaser of a
mortgage loan.
SEASONALITY
The Company has typically experienced its lowest quarterly revenue in
the quarter ending March 31 of each year with higher and more consistent revenue
in the quarters ending June 30 and September 30. The quarter ending December 31
has historically provided the highest quarterly level of revenue due to
increased activity caused by the desire of clients to complete transactions by
calendar year-end. As a consequence of the seasonality of revenues and the
relatively constant level of quarterly expenses, the Company's quarterly
operating results have fluctuated, with a substantial portion of the Company's
operating income being realized in the quarter ending December 31. Although the
Company has had net income during its last two fiscal years, the Company
incurred substantial losses prior to that time, and there can be no assurance
that the Company will be profitable on a quarterly or annual basis in the
future.
CONTROLLING STOCKHOLDERS
Warburg, Pincus Investors, L.P. ("Warburg") currently holds
approximately 47% of the outstanding Common Stock of the Company, and
approximately 49% on a fully diluted basis assuming the exercise of warrants.
Warburg, through ownership of Common Stock and Board representation, is able
to substantially influence the management of the day-to-day operations and
affairs of the Company. Currently three of the Board's ten members have been
nominated by Warburg and thus have certain interests that are in addition to
and may conflict with those of holders of Common Stock. In the event that
Warburg gains control of more than 50% of the outstanding voting power of the
Company, Warburg will have the power to elect a majority of its Directors
(subject to its obligations under certain agreements with other stockholders)
and to approve any action requiring stockholder approval, assuming compliance
with applicable Delaware law and the Company's Certificate of Incorporation,
including approval of certain corporate transactions, including a merger or
the sale of all or substantially all of the Company's assets.
ABSENCE OF DIVIDENDS
The Company does not anticipate paying any cash dividends in the
foreseeable future. The Company's revolving credit agreement with PNC Bank,
N.A. entered into in March 1997, contains provisions that prohibit payment of
cash dividends or distributions on the Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE
A total of 1,685,899 shares of Common Stock are issuable upon the
exercise of outstanding warrants. The Company also has stock option,
purchase and other plans covering up to 1,686,490 shares of Common Stock.
Options to purchase 1,563,280 shares of Common Stock under the stock option
plans were outstanding as of March 31, 1997. If exercised, these warrants
and options, along with the issuance of shares under other Company plans,
would result in the issuance of a substantial number of shares of Common
Stock, thereby diluting the proportionate equity interests of the holders of
the Common Stock. In addition, the Company has entered into certain
registration rights agreements with Warburg, Joe F. Hanuaer, C. Michael
Kojaian, Mike Kojaian, Kenneth J. Kojaian and Archon Group, L.P. a Delaware
limited partnership and a majority-owned subsidiary of the international
investment bank Goldman, Sachs & Co. (collectively, the "Registration Rights
Holders"), granting to each of the Registration Rights Holders certain demand
and "piggyback" registration rights. No prediction can be made as to the
effect, if any, that future sales of shares, or the availability of shares
for future sales, will have on the market
5
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price of the Common Stock prevailing from time to time. Sales of substantial
amounts of Common Stock (including shares issued upon the exercise of
warrants or options or sales pursuant to any exercise of demand or piggyback
registration right), or the perception that such sales could occur, could
adversely affect prevailing market prices for the Common Stock.
CONTINUED LISTING CRITERIA
The Company currently and for some time has not met certain criteria
for the continued listing of the Common Stock on the NYSE. Although the NYSE
has informed the Company that it is closely monitoring the Company's
continued listing status, it has not notified the Company of any plans to
delist the Common Stock. The Company's Common Stock is also listed on the
Pacific Stock Exchange. In the event of delisting by the NYSE, the Company
will use its best efforts to have its Common Stock continue to be traded on
the Pacific Stock Exchange and/or in another exchange or market, such as the
over-the-counter market. However, the delisting of the Common Stock by the
NYSE could have an adverse impact on the market price and liquidity of the
Common Stock.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the shares
offered hereby. All of the proceeds will be received by the Selling
Stockholder. See "Selling Stockholder."
SELLING STOCKHOLDER
Mr. Alvin L. Swanson, Jr., the Selling Stockholder, acquired all of the
shares registered hereunder in connection with the exercise of the stock
appreciation rights granted to the Selling Stockholder under the Employment
Agreement. Mr. Swanson is offering 36,345 shares of Common Stock by this
Prospectus and will own approximately 400 shares of Common Stock after the sale
of the shares being offered hereby. All of the 36,345 shares of Common Stock
offered by this Prospectus are being offered for the account of the Selling
Stockholder.
PLAN OF DISTRIBUTION
The Selling Stockholder or his pledgees, donees, transferees or other
successors in interest may sell shares of Common Stock in any of the following
ways: (i) through dealers; (ii) through agents; or (iii) directly to one or more
purchasers. The distribution of the shares of Common Stock may be effected from
time to time in one or more transactions (which may involve crosses or block
transactions) (A) on the NYSE (or on such other national stock exchanges on
which the shares of Common Stock may be traded from time to time) in
transactions which may include special offerings, exchange distributions and/or
secondary distributions pursuant to and in accordance with the rules of such
exchanges, (B) in the over-the-counter market, or (C) in transactions other than
on such exchanges or in the over-the-counter market, or a combination of such
transactions. Any such transaction may be effected at market prices prevailing
at the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices. The transferors may effect such
transactions by selling shares of Common Stock to or through broker-dealers, and
such broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the transferors and/or commissions from
purchasers of shares of Common Stock for whom they may act as agent. The
transferors and any broker-dealers or agents that participate in the
distribution of shares of Common Stock by them might be deemed to be
underwriters, and any discounts, commissions or concessions received by any such
broker-dealers or agents might be deemed to be underwriting discounts and
commissions, under the Securities Act.
Under the securities laws of certain states, the Common Stock may be sold
in such states only through registered or licensed brokers or dealers. In
addition, in certain states, the Common Stock may not be sold unless the Common
Stock has been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.
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The Company has informed the Selling Stockholder that (i) the
antimanipulation provisions of Regulation M under the Exchange Act may apply to
purchase and sales of the Common Stock by the Selling Stockholder, and that
there are restrictions on market-making activities by persons engaged in the
distribution of the Common Stock, (ii) if a particular offer of Common Stock is
to be made on terms constituting a material change from the information set
forth above with respect to the Plan of Distribution, then to the extent
required, a Prospectus Supplement must be distributed setting forth such terms
and related information as required, and (iii) that the number of shares that
may be sold pursuant to this Prospectus and the manner of such sales would be
limited by Rule 144 under the Securities Act to the extent such Selling
Stockholder is an "affiliate" of the Company as defined in such Rule, and (iv)
pursuant to Instruction C.2(b) of Form S-8 of the Commission, the number of
shares that may be reoffered or resold by the Selling Stockholder (and any other
person with whom he is acting in concert for the purpose of selling securities
of the Company) pursuant to this Prospectus during any three-month period may
not exceed the amount specified in Rule 144(e) under the Securities Act.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article X of the Registrant's Restated Certificate of Incorporation
provides that the Registrant shall, to the fullest extent permitted by
applicable law, including, without limitation, the Delaware General Corporation
Law, as amended from time to time (the "Delaware Law"), indemnify each director
and officer, present or former, of the Registrant whom it may indemnify pursuant
to such applicable law, including certain liabilities under the Securities Act.
Section 145 of the Delaware Law authorizes a corporation to indemnify its
directors and officers in terms sufficiently broad to permit such
indemnification (including reimbursement of expenses incurred) under certain
circumstances for liabilities under the Securities Act.
Section 145 of the Delaware Law provides that in the case of any action
other than one by or in the right of the corporation, a corporation may
indemnify any person who was or is a party, or is threatened to be made a party
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation in such capacity on behalf of another corporation or
enterprise, against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interest of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
Section 145 of the Delaware Law provides that in the case of an action by
or in the right of a corporation to procure a judgment in its favor, a
corporation may indemnify any person who was or is a party, or is threatened to
be made a party to any action or suit by reason of the fact that such person is
or was a director, officer, employee or agent of the corporation, or is was
serving at the request of the corporation in such capacity on behalf of another
corporation or enterprise, against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted under standards similar to those set forth in
the preceding paragraph, except that no indemnification may be made in respect
of any action or claim as to which such person shall have been adjudged to be
liable to the corporation, unless a court determines that such person is fairly
and reasonably entitled to indemnification.
In addition, Article X of the Registrant's Restated Certificate of
Incorporation provides that a director of the Registrant shall not be liable to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Registrant or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) in respect of certain unlawful dividend payments or
stock redemptions or repurchases, and (iv) for any transaction from which the
director derives an improper personal benefit. The effect of the provision of
the Company's Restated Certificate of Incorporation is to eliminate the rights
of the Company and its stockholders (through stockholders' derivative suits on
behalf of the Company) to recover monetary damages against a director for breach
of the fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) through (iv) above. This provision does not limit
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or eliminate the rights of the Company or any stockholder to seek nonmonetary
relief such as an injunction or rescission in the event of a breach of a
director's duty of care. Furthermore, Section 7.01 of the Company's Bylaws
provides that the Company shall indemnify, in addition to its directors and
officers, employees and agents against losses incurred by any such person by
reason of the fact that such person was acting in such capacity to the fullest
extent authorized by Delaware Law.
The Registrant has entered into indemnification agreements with each of its
directors and executive officers, which also provide indemnification against
certain liabilities, including certain liabilities under the Securities Act.
The Registrant currently maintains directors' and officers' liability insurance
in the form of a policy which provides for coverage of liabilities up to a
maximum amount of $7.5 million per policy year (subject to certain minimum
initial payments by the Registrant). The policy insures directors and officers
for liabilities incurred in connection with or on behalf of the Registrant,
except for losses incurred on account of certain specified liabilities.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, or persons controlling the Registrant
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act is therefore unenforceable.
LEGAL MATTERS
The validity of the issuance of the shares of Common Stock described herein
has been passed upon for the Registrant by Carol Vanairsdale, Vice President and
Assistant General Counsel for the Registrant.
EXPERTS
The Company's consolidated financial statements and the related
supplemental schedules, incorporated herein by reference to the Company's Annual
Report on Form 10-K, have been audited by Ernst & Young LLP, independent
auditors, as stated in their reports incorporated herein by reference and have
been so incorporated by reference in reliance upon such reports given upon the
authority of that firm as experts in accounting and auditing.
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING DESCRIBED HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE SELLING STOCKHOLDER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, OR A SOLICITATION OF AN OFFER TO BUY, NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES BY ANY PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH
PERSON TO MAKE SUCH OFFER, SOLICITATION OR SALE. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF.
------------------------------------------
36,345 SHARES
GRUBB & ELLIS COMPANY
COMMON STOCK
------------------------------------------
PROSPECTUS
------------------------------------------
APRIL 8, 1997
------------------------------------------
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Commission are incorporated herein
by reference:
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended June 30, 1996;
(b) The Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended December 31, 1996;
(c) The Registrant's Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1996;
(d) The Registrant's Current Reports on Form 8-K filed with the
Commission on February 4, 1997, December 20, 1996, December 9, 1996 and
November 5, 1996; and
(e) The description of Common Stock contained in the
Registrant's Form 8-A Registration Statement used to register the Common
Stock and filed with the Commission which was declared effective by the
Commission on April 15, 1981, except that authorized shares of capital
stock and Common Stock have been increased to 26,000,000 and 25,000,000,
respectively.
In addition to the foregoing documents, all documents subsequently filed by
the Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Common Stock described herein
has been passed upon for the Registrant by Carol Vanairsdale, Vice President and
Assistant General Counsel for the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article X of the Registrant's Restated Certificate of Incorporation
provides that the Registrant shall, to the fullest extent permitted by
applicable law, including, without limitation, the Delaware General Corporation
Law, as amended from time to time (the "Delaware Law"), indemnify each director
and officer, present or former, of the Registrant whom it may indemnify pursuant
to such applicable law, including certain liabilities under the Securities Act
of 1933, as amended (the "Securities Act"). Section 145 of the Delaware Law
authorizes a corporation to indemnify its directors and officers in terms
sufficiently broad to permit such indemnification (including reimbursement of
expenses incurred) under certain circumstances for liabilities under the
Securities Act.
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<PAGE>
Section 145 of the Delaware Law provides that in the case of any action
other than one by or in the right of the corporation, a corporation may
indemnify any person who was or is a party, or is threatened to be made a party
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation in such capacity on behalf of another corporation or
enterprise, against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interest of the corporation and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
Section 145 of the Delaware Law provides that in the case of an action by
or in the right of a corporation to procure a judgment in its favor, a
corporation may indemnify any person who was or is a party, or is threatened to
be made a party to any action or suit by reason of the fact that such person is
or was a director, officer, employee or agent of the corporation, or is was
serving at the request of the corporation in such capacity on behalf of another
corporation or enterprise, against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted under standards similar to those set forth in
the preceding paragraph, except that no indemnification may be made in respect
of any action or claim as to which such person shall have been adjudged to be
liable to the corporation, unless a court determines that such person is fairly
and reasonably entitled to indemnification.
In addition, Article X of the Registrant's Restated Certificate of
Incorporation provides that a director of the Registrant shall not be liable to
the Company or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Registrant or its stockholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) in respect of certain unlawful dividend payments or
stock redemptions or repurchases, and (iv) for any transaction from which the
director derives an improper personal benefit. The effect of the provision of
the Company's Restated Certificate of Incorporation is to eliminate the rights
of the Company and its stockholders (through stockholders' derivative suits on
behalf of the Company) to recover monetary damages against a director for breach
of the fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) through (iv) above. This provision does not limit or eliminate the
rights of the Company or any stockholder to seek nonmonetary relief such as an
injunction or rescission in the event of a breach of a director's duty of care.
Furthermore, Section 7.01 of the Company's Bylaws provides that the Company
shall indemnify, in addition to its directors and officers, employees and agents
against losses incurred by any such person by reason of the fact that such
person was acting in such capacity to the fullest extent authorized by Delaware
Law.
The Registrant has entered into indemnification agreements with each of its
directors and executive officers, which also provide indemnification against
certain liabilities, including certain liabilities under the Securities Act.
The Registrant currently maintains directors' and officers' liability insurance
in the form of a policy which provides for coverage of liabilities up to a
maximum amount of $7.5 million per policy year (subject to certain minimum
initial payments by the Registrant). The policy insures directors and officers
for liabilities incurred in connection with or on behalf of the Registrant,
except for losses incurred on account of certain specified liabilities.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
The shares to be offered or sold are 36,345 shares of Common Stock issued
by the Company upon exercise of stock appreciation rights granted pursuant to
the Employment Agreement, where the Selling Stockholder, at that time, was
the Company's Chief Executive Officer. Such shares were issued by the
Company pursuant to an exemption from registration under Section 4(2) of the
Securities Act.
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<PAGE>
ITEM 8. EXHIBITS.
4.1(1) Restated Certificate of Incorporation of the Registrant.
4.2(2) Bylaws of the Registrant.
4.3(3) Employment Agreement dated as of May 20, 1992 by and between the
Registrant and Alvin L. Swanson, Jr., as amended.
4.4(4) First Amendment to Employment Agreement dated as of May 20, 1992
by and between the Registrant and Alvin L. Swanson, Jr.
4.5(5) Second Amendment to Employment Agreement dated as of February 24,
1993 by and between the Registrant and Alvin L. Swanson, Jr.
4.6(6) Certificate of Retirement with respect to 130,233 shares of
Junior Convertible Preferred Stock of the Registrant.
4.7(7) Certificate of Retirement with respect to 8,894 shares of Series
A Senior Convertible Preferred Stock, 128,266 shares of Series B
Senior Convertible Preferred Stock, and 19,767 shares of Junior
Convertible Preferred Stock of the Registrant.
5.1 Opinion of Carol Vanairsdale, Vice President and Assistant
General Counsel of the Registrant.
23.1 Consent of Counsel (included in Exhibit 5).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included on page 5 of this Registration
Statement).
- ---------------
(1) Filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 and incorporated herein by reference.
(2) Filed as Exhibit 3.2 to the Company's Quarterly Report on From 10-Q for the
fiscal quarter ended September 30, 1996 and incorporated herein by
reference.
(3) Filed as Exhibit 10.29 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 and incorporated herein by reference.
(4) Filed as Exhibit 10.30 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 and incorporated herein by reference.
(5) Filed as Exhibit 10.31 to the Company's Quarterly Report on Form 10-Q dated
May 15, 1993 and incorporated herein by reference.
(6) Filed as Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended December 31, 1996 and incorporated herein by
reference.
(7) Filed as Exhibit 3.4 to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended December 31, 1996 and incorporated herein by
reference.
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;
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<PAGE>
(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;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(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 15(d) of the Exchange Act
that are incorporated by reference in the 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 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 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 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.
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<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 San Francisco, State of California on this 7th day
of April 1997.
GRUBB & ELLIS COMPANY
By: /s/ CAROL VANAIRSDALE
----------------------------
Carol Vanairsdale
Vice President and Assistant General
Counsel
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint Robert J. Walner and Carol
Vanairsdale with full power of substitution and full power to act without the
other, his true and lawful attorney-in-fact and agent to act for him in his
name, place and stead, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to this Registration Statement on Form
S-8, and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises in order to effectuate the same as fully, to all
intents and purposes, as they or he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, 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 indicated on April 7, 1997.
Signature Title
--------- -----
/s/ NEIL R. YOUNG President, Chief Executive Officer and Director -
- -------------------------- (Principal Executive Officer)
Neil R. Young
/s/ BRIAN PARKER
- -------------------------- Senior Vice President and Chief Financial Officer
Brian Parker (PrincipalFinancial Officer and Accounting
Officer)
/s/ JOE F. HANAUER
- -------------------------- Chairman of the Board and Director
Joe F. Hanauer
/s/ R. DAVID ANACKER Director
- --------------------------
R. David Anacker
/s/ REUBEN S. LEIBOWITZ Director
- --------------------------
Reuben S. Leibowitz
/s/ JOHN D. SANTOLERI Director
- --------------------------
John D. Santoleri
/s/ LAWRENCE S. BACOW Director
- --------------------------
Lawrence S. Bacow
/s/ SIDNEY LAPIDUS Director
- --------------------------
Sidney Lapidus
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<PAGE>
/s/ C. MICHAEL KOJAIAN Director
- --------------------------
C. Michael Kojaian
/s/ TODD WILLIAMS Director
- --------------------------
Todd Williams
/s/ ROBERT J. MCLAUGHLIN Director
- --------------------------
Robert J. McLaughlin
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<PAGE>
INDEX TO EXHIBITS
Exhibit Page
- ------- ----
4.1(1) Restated Certificate of Incorporation of the Registrant.
4.2(2) Bylaws of the Registrant.
4.3(3) Employment Agreement dated as of May 20, 1992 by and between the
Registrant and Alvin L. Swanson, Jr., as amended.
4.4(4) First Amendment to Employment Agreement dated as of May 20, 1992
by and between the Registrant and Alvin L. Swanson, Jr.
4.5(5) Second Amendment to Employment Agreement dated as of February 24,
1993 by and between the Registrant and Alvin L. Swanson, Jr.
4.6(6) Certificate of Retirement with respect to 130,233 shares of
Junior Convertible Preferred Stock of the Registrant.
4.7(7) Certificate of Retirement with respect to 8,894 shares of Series
A Senior Convertible Preferred Stock, 128,266 shares of Series B
Senior Convertible Preferred Stock, and 19,767 shares of Junior
Convertible Preferred Stock of the Registrant.
5.1 Opinion of Carol Vanairsdale, Vice President and Assistant
General Counsel of the Registrant.
23.1 Consent of Counsel (included in Exhibit 5).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included on page 5 of this Registration
Statement).
- ---------------
(1) Filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1994 and incorporated herein by reference.
(2) Filed as Exhibit 3.2 to the Company's Quarterly Report on From 10-Q for the
fiscal quarter ended September 30, 1996 and incorporated herein by
reference.
(3) Filed as Exhibit 10.29 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 and incorporated herein by reference.
(4) Filed as Exhibit 10.30 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 and incorporated herein by reference.
(5) Filed as Exhibit 10.31 to the Company's Quarterly Report on Form 10-Q dated
May 15, 1993 and incorporated herein by reference.
(6) Filed as Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended December 31, 1996 and incorporated herein by
reference.
(7) Filed as Exhibit 3.4 to the Company's Quarterly Report on Form 10-Q for the
fiscal quarter ended December 31, 1996 and incorporated herein by
reference.
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<PAGE>
EXHIBIT 5.1
April 8, 1997
Securities and Exchange Commission
450 Fifth Street, N.W.
Judiciary Plaza
Washington, D.C. 20549
Re: Grubb & Ellis Company
36,345 SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE
Ladies/Gentlemen:
The undersigned is Vice President and Assistant General Counsel of Grubb &
Ellis Company (the "Company"). This legal opinion is being provided in
connection with the registration under the Securities Act of 1933, as amended,
of an aggregate of 36,345 shares of common stock, par value $0.01 per share, of
the Company (the "Shares") issuable under the employment agreement dated as of
May 20, 1992 between Alvin L. Swanson, Jr. and the Company, as amended (the
"Agreement"), on Form S-8 filed with the Securities and Exchange Commission by
the Company on April 8, 1997.
In connection with this opinion, the undersigned is familiar with the
corporate proceedings taken by the Company in connection with the issuance of
the Shares, and has made such other examinations of law and fact as considered
necessary in order to form a basis for the opinion hereafter expressed.
Based on the foregoing, the undersigned is of the opinion that the Shares
have been duly authorized, and are validly issued, fully paid and
non-assessable.
The undersigned is opining herein as to the effect on the subject
transaction only of the General Corporation Law of the State of Delaware and the
internal laws of the State of California, and expresses no opinion with respect
to the applicability thereto, or the effect thereon, of the laws of any other
jurisdiction or, in the case of Delaware, any other laws or as to any matters of
municipal law or the laws of any other local agencies within any state.
The undersigned consents to the filing of this opinion as an exhibit to the
Registration Statement.
Sincerely,
/s/ Carol M. Vanairsdale
Carol M. Vanairsdale
Assistant General Counsel
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm in the Registration Statement (Form
S-8) pertaining to the Stock Appreciation Rights issued pursuant to the
Employment Agreement dated as of May 20, 1992 by and between Grubb & Ellis
Company and Alvin L. Swanson, Jr., as amended, and to the incorporation by
reference therein of our report dated August 15, 1996, with respect to the
consolidated financial statements of Grubb & Ellis Company and Subsidiaries
included in the Annual Report (Form 10-K) for the year ended June 30, 1996
filed with the Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
San Francisco, California
April 8, 1997
