<PAGE> 1
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential For Use of
the Commission Only (as
Permitted by Rule 14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Materials Pursuant to Rule 14a-11(c) or Rule 14a-12
PORTSMOUTH SQUARE, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
- -------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- -------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
- -------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------
(5) Total Fee Paid:
- -------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
- -------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- -------------------------------------------------------------------------
(3) Filing Party:
- -------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------
<PAGE> 2
PORTSMOUTH SQUARE, INC.
Street Address: 2251 SAN DIEGO AVENUE, SUITE A-151
SAN DIEGO, CALIFORNIA 92110
Mailing Address: P.O. Box 80037
San Diego, CA 92138-0037
Telephone: (619) 298-7201
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 6, 1997
TO THE SHAREHOLDERS OF
PORTSMOUTH SQUARE, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Portsmouth
Square, Inc. ("Portsmouth" or the "Company") will be held on May 6, 1997 at
2:00 P.M. at The Westgate Hotel located at 1055 Second Avenue, San Diego,
California 92101 for the purpose of considering and acting on the following:
1. The election of five Directors to serve until the next Annual
Meeting or until successors have been duly elected and qualified.
2. To ratify the appointment of Ernst & Young LLP as independent
auditors for the Company for the year ending December 31, 1997; and
3. To transact such other business as may properly come before the
Meeting, or any adjournment or adjournments thereof.
March 12, 1997 is the record date for determining which Shareholders are
entitled to notice of and to vote at the Annual Meeting or any adjournments
thereof.
Your proxy is important to us whether you own a few or many shares. Please
complete, sign, date and promptly return the enclosed proxy in the self-
addressed, postage-paid envelope provided. Return the proxy even if you plan
to attend the meeting. You may always revoke your proxy and vote in person.
Dated: April 9, 1997
By Order of the Board of Directors,
William J. Nance
Secretary
<PAGE> 3
PORTSMOUTH SQUARE, INC.
Street Address: 2251 San Diego Avenue-Suite A-151
San Diego, California 92110-2926
Mailing Address: P.O. Box 80037
San Diego, California 92138-0037
Telephone: (619) 298-7201
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PROXY STATEMENT
---------------
ANNUAL MEETING OF SHAREHOLDERS
May 6, 1997
The Board of Directors of Portsmouth Square, Inc. (the "Company" or
"Portsmouth") is soliciting proxies in the form enclosed with this statement
in connection with the Annual Meeting of Shareholders to be held May 6, 1997
or at any adjournment or adjournments thereof.
This Proxy Statement and the accompanying Proxy are first being sent to
Shareholders on or about April 11, 1997. Only shareholders of record at the
close of business on March 12, 1997 are entitled to notice of, and to vote at,
the Annual Meeting.
If you give us a proxy, you can revoke it at any time before it is used. To
revoke it, you may file a written notice revoking it with the Secretary of the
Company, execute a proxy with a later date or attend the meeting and vote in
person.
You may vote at the Annual Meeting only shares that you owned of record on
March 12, 1997. There were 750,000 shares of stock outstanding on that date.
A majority, or 375,001, of those shares will constitute a quorum for the
transaction of business at this meeting. Each share is entitled to one vote
on each matter to be presented at the meeting. Unless cumulative voting is
elected as described under "Election of Directors" below, the affirmative vote
of the holders of the majority of the shares of the Company's stock present or
represented at the meeting and entitled to vote is required to elect directors
and ratify or approve the other item being voted on at this time.
In addition to mailing this material to shareholders, the Company has asked
banks and brokers to forward copies to persons for whom they sold stock of the
Company and to request authority for execution of the proxies. The Company
will reimburse the banks and brokers for their reasonable out-of-pocket
expenses in doing so. Officers of the Company may, without being additionally
compensated, solicit proxies by mail, telephone, telegram or personal
contact. All proxy-soliciting expenses will be paid by the Company. The
Company does not expect to employ anyone else to assist in the solicitation of
proxies.
<PAGE> 4
PROPOSAL 1
ELECTION OF DIRECTORS
The Company's Board of Directors presently consists of five directors. We
propose to elect five directors, each to hold office until we have the next
Annual Meeting and until his or her successor is elected and qualified. The
Board of Directors has nominated John V. Winfield, Jerold R. Babin, Janice
Braly-Nelsen, Josef A. Grunwald and William J. Nance. The person named in the
enclosed form of proxy will vote it for the election of the nominees listed
below unless you instruct him otherwise, or a nominee is unwilling to serve.
The Board of Directors has no reason to believe that any nominee will be
unavailable. However, in that event, the proxy may vote for another candidate
or candidates nominated by the Board of Directors.
The California Corporations Code, as applicable to the Company, provides that
a shareholder may cumulate votes if a shareholder gives notice, prior to the
voting, of an intention to cumulate votes. If such a notice is given, every
shareholder may cumulate votes. Cumulating votes means that you can take the
total number of votes you have for all directors and distribute them among one
or more nominees as you see fit. For example, assume you have 100 shares. We
have five directors so you have a total of 5 x 100 = 500 votes. You could
give all 500 votes to one person or 250 votes to each of two nominees, or 100
votes to each of five nominees. You can use this power only under the
circumstances described herein. If cumulative voting is elected, the enclosed
form of proxy gives the proxy discretion to cumulate votes so that he can
elect the maximum possible number of the nominees identified below.
Any shareholder executing the enclosed form of proxy may withhold authority to
vote for any one or more nominees by so indicating in the manner described in
the form of proxy. However, the number of votes authorized by the form of
proxy will not be affected and the named proxies could probably offset any
such action by using cumulative voting if they thought it necessary. Under
the California Corporations Code any shareholder or any person who claims to
have been denied the right to vote may apply to a state superior court for a
determination of the validity of any election or appointment of any director.
<PAGE> 5
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information with respect to the
Directors and Executive Officers of the Company. There is no relationship by
blood, marriage or adoption among the Directors and Officers. All Directors
serve one-year terms with their terms expiring at the Annual Meeting. All
Officers of the Company are elected or appointed by the Board of Directors and
hold office until the Annual Meeting or until replaced at the discretion of
the Board.
<TABLE>
<CAPTION>
Shares of
Common Stock
Beneficially
Present Owned on Percent
Position Director March 12, of
Name Age With the Company Since 1997 Class (1)
- -------------- --- ----------------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C>
John V. Winfield (2) 50 Chairman of the Board, 1996 0(5) 0.00
President and Chief
Executive Officer
Jerold R. Babin (3) 64 Director 1996 48,345 6.45
Janice Braly-Nelsen 65 Director 1993 0(5) 0.00
Josef A. Grunwald 48 Director 1996 0 0.00
William J. Nance 53 Director, 1996 0(5) 0.00
Vice-President and
Secretary
L. Scott Shields 45 Treasurer and N/A 0 0.00
Chief Financial
Officer
Santa Fe Financial 480,757 64.10
Corporation (5)
All of the above as a group(6) 527,102 70.55
- ------------------------------
</TABLE>
(1) Based on 750,000 common shares issued and outstanding.
(2) John V. Winfield is the sole beneficial owner of 24,700 shares of
Portsmouth's majority owner Santa Fe Financial Corporation. The InterGroup
Corporation is the beneficial owner of 229,700 shares of Santa Fe. As the
President and Chairman of the Board of InterGroup, Mr. Winfield has voting
and dispositive power over a total of 254,700 shares of Santa Fe which
represents 39.87% of the outstanding shares.
(3) Jerold R. Babin claims sole voting power over the 48,345 shares identified
herein, of which he has sole dispositive power over 9,667 shares held in
his retirement account. He claims shared dispositive power with his wife
over 38,478 shares which they hold as trustees of a family trust.
(4) Janice Braly-Nelsen holds 25,448 shares of Santa Fe Financial Corporation
as trustee of a family trust. She claims sole voting and dispositive
power over those shares which represent 3.99% of Santa Fe's outstanding
shares.
(5) Santa Fe Financial Corporation is the record and beneficial owner of
480,757 of the common shares of Portsmouth. As directors of Santa Fe,
Messrs. Winfield, Nance and Mrs. Braly-Nelsen have the power to direct
the vote of the shares of Portsmouth owned by Santa Fe.
(6) As a group, the directors of Portsmouth owned a total of 280,148 shares of
Santa Fe's common stock as of March 12, 1997, which represents 43.86%
of the outstanding shares.
<PAGE> 6
BUSINESS EXPERIENCE:
The principal occupation and business experience during the last five years
for each of the Directors and Executive Officers of the Company are as
follows:
JOHN V. WINFIELD - Mr. Winfield was first elected to the Board in May of 1996
and currently serves as the Company's Chairman of the Board, President and
Chief Executive Officer. Mr. Winfield is also Chairman of the Board,
President and Chief Executive Officer of Portsmouth's parent company Santa Fe
Financial Corporation, having held those positions since April 1996. Mr.
Winfield is Chairman of the Board, President and Chief Executive Officer of
The InterGroup Corporation, a public company, and has held those positions
since 1987. InterGroup is Santa Fe's largest shareholder. Mr. Winfield is
also a Director of Pacific Gateway Properties, Inc. and Orckit Communications,
Inc., both public companies.
JEROLD R. BABIN - Mr. Babin was appointed as a Director of the Company on
February 1996. Mr. Babin has been a retail securities broker for the past
37 years. From 1989 to present, he has worked for Prudential Securities,
where he currently holds the title of First Vice-President.
JANICE BRALY-NELSEN - Mrs. Braly-Nelsen has served as a Director of the
Company since July 1993. She is also a Director of Santa Fe Financial
Corporation, having served in that position since August 2, 1993. Prior to
that, Mrs. Braly-Nelsen was Chief Financial Officer of California Meter
Service for 32 years until August 1990, when she became its President, a
position she held until sale of business in June 1991.
JOSEF A. GRUNWALD - Mr. Grunwald was elected as a Director of the Company in
May 1996. Mr Grunwald is an industrial, commercial and residential real estate
developer. He serves as Chairman of PDG N.V. (Belgium), a hotel management
company, and President of I.B.E. Services S.A. (Belgium), an international
trading company. Mr. Grunwald is also a Director of The InterGroup
Corporation, a public company, having held that position since 1987.
WILLIAM J. NANCE - Mr. Nance was first elected to the Board in May 1996 and
has also served as the Company's Vice-President and Secretary since that time.
Mr. Nance is also a Director and Vice-President of Santa Fe Financial
Corporation. He is the President and CEO of Century Plaza Printers, Inc.,
a company he founded in 1979. He has also served as a consultant in the
acquisition and disposition of multi-family and commercial real estate.
Mr. Nance is a Certified Public Accountant and, from 1970 to 1976, was
employed by Kenneth Leventhol & Company where he was a Senior Accountant
specializing in the area of REITS and restructuring of real estate companies,
mergers and acquisitions, and all phases of real estate development and
financing. Mr. Nance is a Director and the Treasurer of The InterGroup
Corporation, a public company, and has held such positions since 1984.
L. SCOTT SHIELDS - Mr. Shields is the Treasurer and Chief Financial Officer of
the Company having held those positions since January 1994. He also serves as
Secretary, Treasurer and Chief Financial Officer of Santa Fe Financial
Corporation, having been appointed to that position in May 1994. Mr. Shields
is a Certified Public Accountant with 14 years experience with Ernst & Young
LLP and was the partner in charge of tax planning and preparation for Santa Fe
and Portsmouth from 1985 to 1991. Since 1991, he has been actively engaged in
developing his own tax and accounting practice.
<PAGE> 7
BOARD MEETINGS
For the fiscal year ended December 31, 1996, the Board of Directors held seven
regularly scheduled meetings, with no incumbent director attending (whether in
person, telephonically or by written consent) fewer than 75 percent of the
meetings held during the period for which he or she has been a director.
STANDING COMMITTEES
As a small business issuer, the Board of Directors has not established any
standing audit, nominating or compensation committees.
EXECUTIVE COMPENSATION
As a small business issuer, Portsmouth has no compensation committee.
Executive officer compensation is set by disinterested members of the Board of
Directors. Set forth below is a summary compensation table concerning
compensation of the chief executive officer ("CEO"), and any qualifying
executive officer, for the last three completed fiscal years.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Other Annual (1)
Name and Principal Position Year Salary Bonus Compensation
- --------------------------- ---- ------ ----- ----------------
<S> <C> <C> <C> <C>
JOHN V. WINFIELD (2) 1996 0 0 $4,500
Chairman, President and
Chief Executive Officer
R. N. GOULD (3) 1996 $ 8,000 0 $3,000
Chairman, President and 1995 $24,000 0 $6,000
Chief Executive Officer 1994 $24,000 0 $6,000
- ---------------------------
</TABLE>
(1) Amounts shown reflect regular Directors fees.
(2) Mr. Winfield became the Company's Chairman, President and Chief Executive
Officer in May 1996. Prior to that time, Mr. Winfield received no
compensation from the Company.
(3) Mr. Gould resigned from the Company in May 1996.
Portsmouth has no stock option plan or stock appreciation rights for its
executive officers. The Company has no pension or long-term incentive plans.
There are no employment contracts between Portsmouth and any executive
officer, nor are there any termination-of-employment or change-in-control
arrangements.
DIRECTOR COMPENSATION
The bylaws of Portsmouth permit directors to be paid a fixed sum for
attendance at each meeting of the Board or a stated salary as director. Each
director is paid a fee of $1,500 per quarter for a total annual compensation
of $6,000. This policy has been in effect since July 1, 1985.
<PAGE> 8
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Directors, executive officers and each beneficial owner of more than ten
percent of the Common Stock of the Company are required by Section 16(a) of
the Securities Exchange Act of 1934 to file reports periodically disclosing
their transactions in the Company's securities. Based on a review of such
reports, no reporting person failed to file required reports on a timely basis
during fiscal year 1995.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected the firm of Ernst & Young LLP,
independent certified public accountants, as the Company's auditors for the
current fiscal year and recommends to shareholders that they vote for the
ratification of this selection. Ernst & Young LLP has served as the Company's
auditors since December 1980. A representative of Ernst & Young LLP is
expected to be present at the Annual Meeting to make a statement, if desired,
and to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF THE AUDITORS.
PRINCIPAL HOLDERS OF EQUITY SECURITIES
<TABLE>
<CAPTION>
The following table shows, as of March 12, 1997, the Common Stock owned by
every person owning of record (other than securities depositories), or known
by the Company to own beneficially, more than 5% of the outstanding shares.
Any voting securities beneficially owned by directors and director nominees
are also disclosed under Proposal 1 - Election of Directors herein.
Name Shares of Common Stock Percent of Class (1)
---- ---------------------- -------------------
<S> <C> <C>
Santa Fe Financial Corporation 480,757(2) 64.10
2251 San Diego Avenue
Suite A-151
San Diego, CA 92110-2926
Jerold R. Babin 48,345(3) 6.45
4 Embarcadero Center
Suite 2400
San Francisco, CA 94111-4131
- -------------------------------
</TABLE>
(1) Based on 750,000 shares issued and outstanding.
(2) Santa Fe is the record and beneficial owner of 480,757 shares. The
President and Chairman of the Board of Santa Fe votes these shares.
(3) Jerold R. Babin claims sole voting power over the 48,345 shares identified
herein, of which he has sole dispositive power over 9,667 held in his
retirement account. He claims shared dipositive power with his wife over
the 38,478 shares which they hold as trustees of a family trust.
As of March 12, 1997, there were 750,000 shares of the Company's Common Stock
issued and outstanding, which were held by approximately 332 shareholders of
record.
<PAGE> 9
OTHER BUSINESS
We do not know of any other business to be presented to the meeting.
However, if any other matters are properly raised, the person named in the
accompanying proxy intends to vote in accordance with his judgment on such
matters.
SHAREHOLDER PROPOSALS
If you want a proposal for the next Annual Meeting of Shareholders, which
is scheduled for May 5, 1998, to be included in the Company's Proxy Statement
for that meeting, it must be received by the Company at its principal office
mailing address, P.O. Box 80037, San Diego, California 92138-0037, prior to
December 1, 1997. You must also comply with all legal requirements for the
inclusion of such proposals.
FORM 10-K and ANNUAL REPORT
A copy of the Company's Form 10-K for the Year Ended December 31, 1996 will be
furnished free of charge, upon request, to any shareholder. A copy of the
Company's Annual Report is being sent to the shareholders with this Proxy
Statement. The Annual Report is not to be considered part of this soliciting
material.
By Order of the Board of Directors
PORTSMOUTH SQUARE, INC.
William J. Nance
Secretary
Dated: San Diego, California
April 9, 1997
<PAGE> 10
PROXY PROXY
PORTSMOUTH SQUARE, INC.
P.O. BOX 80037 * SAN DIEGO, CA 92138-0037
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints William J. Nance and John V. Winfield as
Proxies, each with the full power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares
of common stock of common stock of Portsmouth Square, Inc. held of record by
the undersigned on March 12, 1997, at the Annual Meeting of Shareholders to be
held on May 6, 1997 or any adjournment thereof.
1. ELECTION OF DIRECTORS:
JANICE BRALY-NELSEN, JOHN V. WINFIELD, WILLIAM J. NANCE,
JEROLD R. BABIN, JOSEF A. GRUNWALD
CHECK ONE
[ ] IN FAVOR of all [ ] WITHHOLD authority for
nominees listed above all nominees listed above
(except as marked to the
contrary below)
(TO WITHHOLD AUTHORITY TO VOTE FOR ANY NOMINEE(S) WRITE THAT NOMINEE'S NAME
IN THE SPACE PROVIDED)
--------------------------------------
NOTE: YOU ARE DEEMED TO VOTE FOR THE ELECTION OF ANY NOMINEE FOR WHOM YOU
FAIL TO WITHHOLD SUCH AUTHORITY
2. To ratify the appointment of Ernst & Young LLP as the independent
auditors for the Company for the year ending December 31, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE> 11
This proxy when properly executed will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this proxy will be
voted for the election of some or all of the persons named in the accompanying
Proxy Statement who were nominated by the Board of Directors of Portsmouth
Square, Inc. and in favor of Proposal 2. In the election of directors, should
cumulative voting be in effect, as explained in the Proxy Statement, said
proxies shall have the discretion and authority to distribute the votes
represented by this proxy in such proportions as they shall see fit among the
nominees named in the Proxy Statement.
Please sign exactly as your name or names appear. When shares are held by
joint tenants, both should sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give your full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Dated: _______________, 1997
____________________________
Signature
____________________________
Signature if held jointly
Please mark, sign, date and
return the proxy card promptly
using the enclosed envelope.
