<TABLE>
<S> <C> <C>
As filed with the Securities and Exchange Commission on September 2, 1998
Registration No. _________
====================================================================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Price Enterprises, Inc.
(Exact name of registrant as specified in its charter)
Maryland 33-0628740
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
4649 Morena Blvd.
San Diego, California 92117
(415) 581-4530
(Address of principal executive offices, including zip code, and telephone number)
The Price Enterprises 1995 Combined Stock Grant and Stock Option Plan, As Amended
The Price Enterprises Directors' 1995 Stock Option Plan, As Amended
(Full title of the plans)
JACK MCGRORY Copies to:
President and Chief Executive Officer SCOTT N. WOLFE, ESQ.
Price Enterprises, Inc. Latham & Watkins
4649 Morena Blvd. 701 "B" Street, Suite 2100
San Diego, California 92117 San Diego, California 92101
(415) 581-4530 (619) 236-1234
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Amount Proposed Maximum Proposed Maximum Amount of
Title of Securities to be Offering Price Aggregate Offering Registration
to be Registered Registered Per Share Price Fee
====================================================================================================================================
<S> <C> <C> <C> <C>
8 3/4% Series A Cumulative Redeemable 672,867(1) (2) $11,451,908.00 (2) $3,379.00
Preferred Stock, $.0001 par value
====================================================================================================================================
(1) A maximum of 611,435 shares of 8 3/4% Series A Cumulative Redeemable Preferred Stock, $.0001 par value per share (the "Series A
Preferred Stock"), have been reserved for issuance upon exercise of options outstanding under The Price Enterprises 1995
Combined Stock Grant and Stock Option Plan, as amended (the "1995 Plan"). A maximum of 61,432 shares of Series A Preferred
Stock have been reserved for issuance upon exercise of outstanding options under The Price Enterprises Directors' 1995 Stock
Option Plan, as amended (the "Directors' Plan"; and together with the 1995 Plan, the "Plans"). All shares of Series A Preferred
Stock reserved for issuance under the Plans are being registered hereunder. The shares of the Company's common stock, $.0001
par value per share (the "Common Stock") reserved for issuance under the Plans already has been registered under the Securities
Act of 1933, as amended (the "Act").
(2) This estimate is made pursuant to Rule 457(h) solely for purposes of calculating the registration fee, and is determined
according to the following offering price information: (i) under the 1995 Plan 74,204 shares of Series A Preferred Stock are
subject to outstanding options with an aggregate exercise price of $9.10 for one share of Common Stock and one share of Series
A Preferred Stock, 21,849 shares of Series A Preferred Stock are subject to outstanding options with an aggregate exercise
price of $9.61 for one share of Common Stock and one share of Series A Preferred Stock, 2,595 shares of Series A Preferred
Stock are subject to outstanding options with an aggregate exercise price of $10.06 for one share of Common Stock and one share
of Series A Preferred Stock, 3,708 shares of Series A Preferred Stock are subject to outstanding options with an aggregate
exercise price of $10.07 for one share of Common Stock and one share of Series A Preferred Stock, 6,250 shares of Series A
Preferred Stock are subject to outstanding options with an aggregate exercise price of $17.94 for one share of Common Stock and
one share of Series A Preferred Stock, 184,500 shares of Series A Preferred Stock are subject to outstanding options with an
aggregate exercise price of $18.75 for one share of Common Stock and one share of Series A Preferred Stock, 268,329 shares of
Series A Preferred Stock are subject to outstanding options with an aggregate exercise price of $18.96 for one share of Common
Stock and one share of Series A Preferred Stock, and 50,000 shares of Series A Preferred Stock are subject to outstanding
options with an aggregate exercise price of $19.88 for one share of Common Stock and one share of Series A Preferred Stock; and
(ii) under the Directors' Plan 39,074 shares of Series A Preferred Stock are subject to outstanding options with an aggregate
exercise price of $11.33 for one share of Common Stock and one share of Series A Preferred Stock, 12,358 shares of Series A
Preferred Stock are subject to outstanding options with an aggregate exercise price of $17.90 for one share of Common Stock and
one share of Series A Preferred Stock, and 10,000 shares of Series A Preferred Stock are subject to outstanding options with an
aggregate exercise price of $18.63 for one share of Common Stock and one share of Series A Preferred Stock.
====================================================================================================================================
</TABLE>
<PAGE>
Part I
Item 1. Plan Information.
Not required to be filed with this Registration Statement.
Item 2. Registrant Information and Employee Plan Annual Information.
Not required to be filed with this Registration Statement.
Part II
Item 3. Incorporation of Documents by Reference.
The following documents previously filed with the Securities and Exchange
Commission (the "Commission") by Price Enterprises, Inc., a Maryland corporation
(the "Company"), are hereby incorporated by reference in this Registration
Statement:
(a) The Transition Report on Form 10-K filed pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act") on March 27,
1998 (the "Annual Report on Form 10-K");
(b) The Quarterly Reports on Form 10-Q filed pursuant to the Exchange Act
on May 14, 1998 and August 12, 1998;
(c) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the effective date of the Annual Report on Form
10-K; and
(d) The description of the Company's Series A Preferred Stock, contained
in the Registration Statement on Form 8-A, filed with the Commission
on August 7, 1998.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date this Registration Statement is
filed with the Commission and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or which deregisters
all securities then remaining unsold shall be deemed to be incorporated by
reference in this Registration Statement and to be a part of it from the
respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein or in any other subsequently
filed document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Registration Statement.
2
<PAGE>
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Company's charter and Bylaws require the Company to indemnify its
directors, officers and certain other parties to the fullest extent permitted
from time to time by Maryland law. The Maryland General Corporation Law permits
a corporation to indemnify its directors, officers and certain other parties
against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by them in connection with any proceeding to which they may be
made a party by reason of their service to or at the request of the corporation,
unless it is established that the act or omission of the indemnified party was
material to the matter giving rise to the proceedings and (i) was committed in
bad faith or was the result of active and deliberate dishonesty, (ii) the
indemnified party actually received an improper personal benefit, or (iii) in
the case of any criminal proceeding the indemnified party had reasonable cause
to believe that the act or omission was unlawful. Indemnification may be made
against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by the director or officer in connection with the proceeding;
provided, however, that if the proceeding is one by or in the right of the
corporation, indemnification may not be made with respect to any proceeding in
which the director or officer has been adjudged to be liable to the corporation.
In addition, a director or officer may not be indemnified with respect to any
proceeding charging improper personal benefit to the director or officer in
which the director or officer was adjudged to be liable on the basis that
personal benefit was improperly received. The termination of any proceeding by
conviction, or upon a plea of nolo contendere or its equivalent, or an entry of
any order of probation prior to judgment, creates a rebuttal presumption that
the director or officer did not meet the requisite standard of conduct required
for indemnification to be permitted. It is the position of the Commission that
indemnification of directors and officers for liabilities arising under the
Securities Act is against public policy as expressed in the Securities Act and
is therefore unenforceable.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The Exhibit Index immediately preceding the exhibits is incorporated herein
by reference.
Item 9. Undertakings.
(a) The undersigned Company hereby undertakes:
3
<PAGE>
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that the undertakings set forth in paragraphs (a)(1)(i)
and (a)(1)(ii) above do not apply if the Registration Statement is on Form
S-3, Form S-8 or Form F-3, and 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 Company pursuant
to Section 13 or 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Commission such indemnification is
4
<PAGE>
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 Company of expenses incurred or paid
by a director, officer or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Company will, unless in the opinion of its counsel the matter has been settled
by controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Company certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8 and has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of San Diego, State of California, on August 26, 1998.
Price Enterprises, Inc.
By: /s/ JACK McGRORY
-------------------------------------
Jack McGrory
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Jack McGrory his true and lawful
attorney-in-fact, acting alone, with full power of substitution and
resubstitution for him and in his name, place and stead, in any and all
capacities to sign any and all amendments including post-effective amendments
and any registration statement filed pursuant to Rule 462(b) under the
Securities Act to this registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Commission, hereby ratifying and confirming all that said attorney-in-fact or
his substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ JACK McGRORY President, Chief Executive Officer and August 26, 1998
- ------------------------------------- Director (Principal Executive Officer)
Jack McGrory
/s/ ROBERT E. PRICE Chairman of the Board of Directors August 26, 1998
- -------------------------------------
Robert E. Price
/s/ PAUL A. PETERSON Vice Chairman of the Board of Directors August 26, 1998
- -------------------------------------
Paul A. Peterson
/s/ GARY NIELSON Executive Vice President and Chief August 26, 1998
- ------------------------------------- Financial Officer (Principal Financial
Gary Nielson Officer and Principal Accounting Officer)
/s/ JAMES F. CAHILL Director August 26, 1998
- -------------------------------------
James F. Cahill
/s/ ANNE L. EVANS Director August 26, 1998
- -------------------------------------
Anne L. Evans
/s/ MURRAY L. GALISON Director August 26, 1998
- -------------------------------------
Murray L. Galinson
</TABLE>
6
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
- ------- ----
4.1 The Price Enterprises 1995 Combined Stock Grant and Stock Option
Plan.(1)
4.2 First Amendment to The Price Enterprises 1995 Combined Stock
Grant and Stock Option Plan.
4.3 The Price Enterprises Directors' 1995 Stock Option Plan.(2)
4.4 First Amendment to The Price Enterprises Directors' 1995 Stock
Option Plan.(3)
4.5 Second Amendment to The Price Enterprises Directors' 1995 Stock
Option Plan.
4.6 Form of Amended and Restated Non-Qualified Stock Option Agreement
under the 1995 Plan.
4.7 Form of Amended and Restated Non-Qualified Stock Option Agreement
under the Directors' Plan.
5.1 Opinion of Piper & Marbury LLP.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Piper & Marbury LLP (included in Exhibit 5.1 hereto).
24.1 Power of Attorney (included on signature page hereto).
(1) Incorporated herein by reference to Exhibit 10.23 to Registration Statement
on Form 10 of Price Enterprises, Inc. filed with the Commission on December
13, 1994 (File No. 0-20449).
(2) Incorporated herein by reference to Exhibit 10.24 to Registration Statement
on Form 10 of Price Enterprises, Inc. filed with the Commission on December
13, 1994 (File No. 0-20449).
(3) Incorporated herein by reference to Exhibit 4.7 to Transition Report on
Form 10-K of Price Enterprises, Inc. filed with the Commission on March 27,
1998.
7
FIRST AMENDMENT TO THE PRICE ENTERPRISES 1995
COMBINED STOCK GRANT AND STOCK OPTION PLAN
Price Enterprises, Inc., a Maryland corporation (the "Company"), by
resolution of its Board of Directors (the "Board"), adopted The Price
Enterprises 1995 Combined Stock Grant and Stock Option Plan (the "Plan") for the
purpose of attracting and retaining employees of ability and experience and to
furnish such personnel maximum incentive to improve operations and increase
profits of the Company. The Plan provides for grants of shares of the Company's
Common Stock, par value $.0001 per share ("Common Stock"), and options to
purchase shares of Common Stock.
In order to provide for appropriate adjustments to options and the Plan in
the event of changes in the Company's capital structure, the Board hereby adopts
this First Amendment to the Plan, effective as of August 17, 1998. This First
Amendment, together with the Plan, constitute the Plan in its entirety.
Section 6 of the Plan shall be replaced in its entirety with the following:
"6. Adjustments.
The number of shares of Common Stock subject to grants to employees
under the Stock Plan and the number of shares of Common Stock (or other
securities or property) subject to options granted under the Stock Plan
shall be adjusted as follows:
(a) in the event that the Authorized Committee determines that any
dividend or other distribution (whether in the form of cash, Common Stock,
other securities, or other property), recapitalization, reclassification,
stock split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, liquidation, dissolution, or
sale, transfer, exchange or other disposition of all or substantially all
of the assets of the Company, or exchange of Common Stock or other
securities of the Company, issuance of warrants or other rights to purchase
Common Stock or other securities of the Company, or other similar corporate
transaction or event, in the Authorized Committee's sole discretion,
affects the Common Stock such that an adjustment is determined by the
Authorized Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Stock Plan or with respect to an option, then the
Authorized Committee shall, in such manner as it may deem equitable, adjust
any or all of
(i) the number and kind of shares of Common Stock (or other
securities or property) with respect to which options may be granted
or awarded (including, but not limited to, adjustments of the
limitation in Section 2 on the maximum number and kind of shares which
may be issued under the Stock Plan),
(ii) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding options, and
(iii) the exercise price with respect to any option.
<PAGE>
(b) notwithstanding the foregoing provisions of this Paragraph 6, upon
the dissolution of the Company, or upon any merger or consolidation of the
Company:
(i) the surviving corporation (whether the Company or otherwise)
shall agree to exchange options to purchase its shares of stock for
options granted under the Stock Plan, on terms fairly reflecting the
terms of the merger or consolidation; or
(ii) all vesting schedules, repurchase rights and obligations,
and other terms and conditions applicable to shares of Common Stock
granted under the Stock Plan shall be eliminated, and all options
granted under the Stock Plan shall terminate and thereupon become null
and void; provided, however, that the optionee shall have the right,
immediately prior to such dissolution, merger or consolidation, to
exercise any such option without regard to any otherwise applicable
restriction as to time of exercise, other than expiration of the
Option Period (as defined below); or
(iii) the Authorized Committee shall make such other
arrangements, which may include termination of outstanding options
against payment therefor, as the Board or Authorized Committee may at
the time deem fair and equitable in its discretion."
2
<PAGE>
Executed at San Diego, California this 14th day of July, 1998.
PRICE ENTERPRISES, INC.
By: /s/JACK McGRORY
----------------
Title: President and Chief Executive Officer
-------------------------------------
Date:
---------------------------
3
SECOND AMENDMENT TO THE PRICE ENTERPRISES
DIRECTORS' 1995 STOCK OPTION PLAN
Price Enterprises, Inc., a Maryland corporation (the "Company"), by
resolution of its Board of Directors (the "Board"), adopted The Price
Enterprises Directors' 1995 Stock Option Plan (the "Plan") for the benefit of
the members of its Board who are not employees of the Company or any of its
subsidiaries at the time they receive grants of options to purchase shares of
the Company's Common Stock, par value $.0001 per share ("Common Stock")
thereunder.
In order to provide for the grant of shares of Common Stock to certain
eligible directors under the Plan, the Board adopted a First Amendment to the
Plan, effective as of October 1, 1997.
In order to provide for appropriate adjustments to options and the Plan in
the event of changes in the Company's capital structure, the Board hereby adopts
this Second Amendment to the Plan, effective as of August 17, 1998. This Second
Amendment, together with the First Amendment and the Plan, constitute the Plan
in its entirety.
Section 7 of the Plan shall be replaced in its entirety with the following:
"7. Adjustments.
In the event that the Committee determines that any dividend or other
distribution (whether in the form of cash, Common Stock, other securities,
or other property), recapitalization, reclassification, stock split,
reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, repurchase, liquidation, dissolution, or sale,
transfer, exchange or other disposition of all or substantially all of the
assets of the Company, or exchange of Common Stock or other securities of
the Company, issuance of warrants or other rights to purchase Common Stock
or other securities of the Company, or other similar corporate transaction
or event, in the Committee's sole discretion, affects the Common Stock such
that an adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan or with respect to an
option, then the Committee shall, in such manner as it may deem equitable,
adjust any or all of
(a) the number and kind of shares of Common Stock (or other
securities or property) with respect to which options may be granted
or awarded (including, but not limited to, adjustments of the
limitation in Section 2 on the maximum number and kind of shares which
may be issued under the Plan),
(b) the number and kind of shares of Common Stock (or other
securities or property) subject to outstanding options, and
(c) the exercise price with respect to any option."
<PAGE>
Executed at San Diego, California this 14th day of July, 1998.
PRICE ENTERPRISES, INC.
By: /s/JACK McGRORY
----------------
Title: President and Chief Executive Officer
-------------------------------------
Date:
---------------------------
2
THE PRICE ENTERPRISES 1995 COMBINED
STOCK GRANT AND STOCK OPTION PLAN
AMENDED AND RESTATED NON-QUALIFIED
STOCK OPTION AGREEMENT
This Amended and Restated Agreement is between Price Enterprises, Inc., a
Maryland corporation (the "Company"), and ____________________________ (the
"Optionee"), and is made as of August 17, 1998.
Recitals
A) The Company and the Optionee are parties to a Price Enterprises, Inc.
Non-qualified Stock Option Agreement (the "Option Agreement") (Grant # ______)
granted _________________________ (the "Grant Date").
B) Pursuant to the Option Agreement, the Optionee was granted an option to
purchase ___________ shares of Price Enterprises, Inc. common stock par value
$.0001 (the "Common Stock"), which currently represents the right (when vested)
to purchase ______________________ shares of Common Stock at a price of
$__________ per share (the "Exercise Price"). Each portion of the option
representing the right to purchase one share of Common Stock shall be referred
to below as an "Unexercised Option."
C) The Company distributed 8 3/4% Series A Cumulative Redeemable Preferred
Stock (the "Series A Preferred Stock") to its shareholders on August 17, 1998
(the "Distribution").
D) As a result of the Distribution, the option granted pursuant to the
Option Agreement is to be adjusted as follows: one share of Series A Preferred
Stock will be issued upon the issuance of each share of Common Stock issued upon
exercise of the option.
E) This Amendment and Restatement reflects on those stock options which
have not been exercised by the Optionee as of August 17, 1998.
NOW, THEREFORE, the Option Agreement is amended and restated in its
entirety as follows:
1. Grant of Option
Pursuant to The Price Enterprises 1995 Combined Stock Grant and Stock
Option Plan, as amended (the "Plan"), the Company hereby amends and restates the
grant to the Optionee, as of the date of grant set forth above, as follows: for
each of the Unexercised Options exercised at the Exercise Price the Company will
issue one share of Common Stock and one share of Series A Preferred Stock,
together the "Option Shares," upon the terms and conditions hereinafter stated
(the "Option"), to all of which the Optionee, by the acceptance hereof, assents.
It is intended that the Option shall not constitute an Incentive Stock Option
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. Option Period
The Option shall expire at the close of business on the first day following
the sixth (6th) anniversary of the Date of Grant (the "Option Period").
The Option shall become exercisable to purchase twenty percent (20%) of the
Option Shares (with Common Stock and Series A Preferred Stock vesting in equal
amounts) on each anniversary of the Date of Grant, commencing on the first (1st)
anniversary of the Date of Grant. The Option shall not be exercisable with
respect to fractional Option Shares. Each Unexercised Option represents the
option to purchase one share of Common Stock and one share of Series A Preferred
Stock together, and shall not be exercisable with respect to either Common Stock
or Series A Preferred Stock, individually. The Option shall vest as follows:
<PAGE>
Vested Shares Vested Shares of
Vesting Date of Common Stock Series A Preferred Stock
------------ --------------- ------------------------
----------- ----------- -----------
----------- ----------- -----------
----------- ----------- -----------
----------- ----------- -----------
----------- ----------- -----------
Total:
----------- -----------
3. Effect of Termination of Employment or Death of Optionee
(a) If the Optionee ceases to be an officer or employee of the Company for
any reason other than death or termination for cause, or remains an
employee of the Company but ceases to be employed in a position in which
employees are eligible to receive options, as determined in the sole
judgment of the Authorized Committee (as such term is defined in the Plan),
the Optionee may exercise the Option as set forth in this Agreement only
for a period of ninety (90) days after such cessation (but not beyond the
Option Period); provided, however, if such cessation is due to the
Optionee's disability (within the meaning of Section 22(e)(3) of the Code),
the Optionee may exercise the Option as set forth in this Agreement only
for a period of twelve (12) months after such cessation (but not beyond the
Option Period). Any exercise of the Option after such cessation may be only
to the extent of the full number of Option Shares the Optionee was entitled
to purchase under the Option on the date of such cessation, plus a portion
of the additional number of Option Shares, if any, the Optionee would have
become entitled to purchase on the next anniversary of the Date of Grant
following such cessation, such portion to be determined by multiplying such
additional number of Option Shares by a fraction, the numerator of which
shall be the number of days from the anniversary of the Date of Grant
preceding such cessation to the date of cessation, and the denominator of
which shall be 365. Such portion shall be rounded, if necessary, to the
nearest whole share.
(b) If the Optionee dies while an officer or employee of the Company, the
Option will continue in effect and may be exercised as set forth in this
Agreement for a period of twelve (12) months from the date of the
Optionee's death (but not beyond the Option Period) by the executor or
administrator of the Optionee's estate, or by a designated beneficiary or
beneficiaries pursuant to a Beneficiary Designation Form in a form approved
by the Company, which Beneficiary Designation Form has been properly filed
with the Company prior to the Optionee's death, or in the event there is no
such executor or administrator (or the person holding such position has
been discharged), or any such designated beneficiary, then by the person or
persons to whom the Optionee's rights under the Option shall pass by will
or the laws of descent and distribution. Any exercise of the Option after
such death may be only to the extent of the full number of Option Shares
the Optionee was entitled to purchase under the Option on the date of
death, plus a portion of the additional number of Option Shares, if any,
the Optionee would have become entitled to purchase on the next anniversary
of the Date of Grant following such death, such portion to be determined by
multiplying such additional number of Option Shares by a fraction, the
numerator of which shall be the number of days from the anniversary of the
Date of Grant preceding such death to the date of death, and the
denominator of which shall be 365. Such portion shall be rounded, if
necessary, to the nearest whole share.
2
<PAGE>
(c) If the termination of the Optionee's position as an officer or employee
of the Company is for cause (as determined in the sole judgment of the
Authorized Committee), the Option shall thereupon be canceled and the
Optionee shall have no right to exercise any part of the Option after such
termination.
4. Manner of Exercise
The option shall be exercised by giving written notice using the form
prescribed from time to time by the Company. Payment must be made in full in:
(a) Cash, or
(b) In the discretion of the Authorized Committee, by delivering Common
Stock or Series A Preferred Stock of the Company already owned by the
Optionee, or
(c) In the discretion of the Authorized Committee, a combination of cash,
Common Stock and/or Series A Preferred Stock already owned by the
Optionee.
For purposes of exercising the Option, Common Stock or Series A Preferred
Stock delivered to the Company in payment of the exercise price shall be valued
at the publicly reported price for the last sale of the Common Stock or Series A
Preferred Stock, or the average of the publicly reported closing bid and asked
prices of the Common Stock or Series A Preferred Stock, as applicable, on the
last business day preceding the date upon which the Company receives written
notice of exercise, or, if there are no publicly reported prices of the
Company's Common Stock or Series A Preferred Stock, at the fair market value of
the Common Stock or Series A Preferred Stock, as determined in good faith by the
Authorized Committee.
5. Withholding
Prior to the delivery of any Option Shares purchased upon exercise of the
Option, the Company shall determine the amount of the federal and state income
tax, if any, required to be withheld under applicable law and shall collect from
the Optionee the amount of any such tax to the extent not previously withheld.
6. Adjustments
The Authorized Committee shall make adjustments with respect to the number
of Option Shares subject to the Option in accordance with the provisions of
Section 6 of the Plan.
7. Non-transferability of Option
The Option shall not be transferable except to the executor or
administrator of the Optionee's estate or to the Optionee's heirs or devisees,
and shall be exercisable during the Optionee's lifetime only by the Optionee.
The Option may, however, be surrendered to the Company for cancellation for such
consideration and upon such terms as may be mutually agreed upon by the Company
and the holder of the Option.
3
<PAGE>
8. Other Provisions
(a) The holder of the Option shall not be entitled to any rights of a
stockholder of the Company with respect to any Option Shares until such
Option Shares have been paid for in full and issued upon exercise of the
Option.
(b) Nothing in the Plan or in the Option shall be deemed to interfere with
or limit in any way the right of the Company to terminate the Optionee's
employment at any time, nor confer the Optionee any right to continue in
the employ of the Company.
(c) The Option shall not be affected by an authorized leave of absence so
long as the Optionee continues to be an officer or employee of the Company.
(d) This Agreement shall be governed by and construed in accordance with
the laws of the State of Maryland.
(e) As a material part of this Agreement, the Optionee and the Company
agree that in the event of any dispute between the Optionee and the
Company, the dispute shall be resolved by binding arbitration in San Diego,
California, under the Commercial Rules of the American Arbitration
Association.
(f) Upon exercise of the rights granted under this Agreement, the Optionee
agrees that the Optionee will not transfer any shares acquired hereunder so
as to result in a distribution in violation of the applicable federal and
state securities laws.
9. Incorporation of Plan by Reference
The Option is subject to all of the terms and provisions of the Plan, a
copy of which is available upon request, as the same may be amended from time to
time, and such terms and provisions are hereby incorporated herein and made a
part hereof as if set forth at length herein.
10. Consent to Amendment and Adjustment
The Optionee hereby consents to the equitable adjustments made to the
Option (as indicated in this Amended and Restated Agreement) to reflect the
Company's pro rata distribution of Series A Preferred Stock and the effects of
such distribution on the Common Stock.
PRICE ENTERPRISES, INC.,
a Maryland corporation
By _____________________________
Jack McGrory
President and CEO
________________________________
Optionee Signature
________________________________
Date of Signature
4
THE PRICE ENTERPRISES DIRECTORS' 1995 STOCK OPTION PLAN
AMENDED AND RESTATED NON-QUALIFIED
STOCK OPTION AGREEMENT
This Amended and Restated Agreement is between Price Enterprises, Inc., a
Maryland corporation (the "Company"), and _________________________ (the
"Optionee"), and is made as of August 17, 1998.
RECITALS
A) The Company and the Optionee are parties to a Price Enterprises, Inc.
Non-qualified Stock Option Agreement (the "Option Agreement") (Grant # ______)
granted _________________________ (the "Grant Date").
B) Pursuant to the Option Agreement, the Optionee was granted an option to
purchase ___________ shares of Price Enterprises, Inc. common stock par value
$.0001 (the "Common Stock"), which currently represents the right (when vested)
to purchase ______________________ shares of Common Stock at a price of
$__________ per share (the "Exercise Price"). Each portion of the option
representing the right to purchase one share of Common Stock shall be referred
to below as an "Unexercised Option."
C) The Company distributed 8 3/4% Series A Cumulative Redeemable Preferred
Stock (the "Series A Preferred Stock") to its shareholders on August 17, 1998
(the "Distribution").
D) As a result of the Distribution, the option granted pursuant to the
Option Agreement is to be adjusted as follows: one share of Series A Preferred
Stock will be issued upon the issuance of each share of Common Stock issued upon
exercise of the option.
E) This Amendment and Restatement reflects on those stock options which
have not been exercised by the Optionee as of August 17, 1998.
NOW, THEREFORE, the Option Agreement is amended and restated in its
entirety as follows:
1. Grant of Option
Pursuant to The Price Enterprises Directors' 1995 Stock Option Plan, as
amended (the "Plan"), the Company hereby amends and restates the grant to the
Optionee, as of the date of grant set forth above, as follows: for each of the
Unexercised Options exercised at the Exercise Price the Company will issue one
share of Common Stock and one share of Series A Preferred Stock, together the
"Option Shares," upon the terms and conditions hereinafter stated (the
"Option"), to all of which the Optionee, by the acceptance hereof, assents. It
is intended that the Option shall not constitute an Incentive Stock Option under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").
2. Option Period
The Option shall expire at the close of business on the first day following
the sixth (6th) anniversary of the Date of Grant (the "Option Period").
The Option shall become exercisable to purchase twenty percent (20%) of the
Option Shares (with Common Stock and Series A Preferred Stock vesting in equal
amounts) on each anniversary of the Date of Grant, commencing on the first (1st)
anniversary of the Date of Grant. The Option shall not be exercisable with
respect to fractional Option Shares. Each Unexercised Option represents the
option to purchase one share of Common Stock and one share of Series A Preferred
Stock together, and shall not be exercisable with respect to either Common Stock
or Series A Preferred Stock, individually. The Option shall vest as follows:
<PAGE>
Vested Shares Vested Shares of
Vesting Date of Common Stock Series A Preferred Stock
- ------------ --------------- ------------------------
- ----------- ----------- --------------
- ----------- ----------- --------------
- ----------- ----------- --------------
- ----------- ----------- --------------
- ----------- ----------- --------------
Total:
----------- --------------
3. Effect of Termination of Directorship
When the Optionee ceases to be a director of the Company, whether because
of death, resignation, removal, expiration of his or her term of office or any
other reason, the Option shall terminate ninety (90) days after the date the
Optionee ceases to be a director of the Company and may thereafter no longer be
exercised; except that (i) upon the Optionee's death his or her legal
representative(s) or the person(s) entitled to do so under the Optionee's last
will and testament or under applicable intestate laws shall have the right to
exercise the Option within one (1) year after the date of death (but not beyond
the Option Period), but only for the number of shares as to which the Optionee
was entitled to exercise the Option on the date of his or her death and (ii)
upon the Optionee's ceasing to be a director by reason of disability he or she
(or his or her guardian) shall have the right to exercise the Option within one
(1) year after the date the Optionee ceased to be a director (but not beyond the
Option Period), but only for the number of shares as to which the Optionee was
entitled to exercise the Option on the date of his or her ceasing to be a
director.
1. Manner of Exercise
The Option shall be exercised by giving written notice using the form
prescribed from time to time by the Company. Payment must be made in full in:
(a) Cash, or
(b) In the discretion of the Committee (as such term is defined in the
Plan), by delivering Common Stock or Series A Preferred Stock of the
Company already owned by the Optionee, or
(c) In the discretion of the Committee, a combination of cash, Common Stock
and/or Series A Preferred Stock already owned by the Optionee.
For purposes of exercising the Option, Common Stock or Series A Preferred Stock
delivered to the Company in payment of the exercise price shall be valued at the
publicly reported price for the last sale of the Common Stock or Series A
Preferred Stock, or the average of the publicly reported closing bid and asked
prices of the Common Stock or Series A Preferred Stock, as applicable, on the
last business day preceding the date upon which the Company receives written
notice of exercise, or, if there are no publicly reported prices of the
Company's Common Stock or Series A Preferred Stock, at the fair market value of
the Common Stock or Series A Preferred Stock, as determined in good faith by the
Board.
<PAGE>
5. Withholding
Prior to the delivery of any Option Shares purchased upon exercise of the
Option, the Company shall determine the amount of the federal and state income
tax, if any, required to be withheld under applicable law and shall collect from
the Optionee the amount of any such tax to the extent not previously withheld.
6. Adjustments
The number of Option Shares subject to the Option shall be adjusted in
accordance with Section 7 of the Plan.
7. Limitation on Exercisability
Notwithstanding any other provision herein, the Option may not be exercised
prior to approval of the Plan by the Company's stockholders having a majority of
the voting power of the outstanding stock; nor prior to the admission of the
shares of Common Stock or Series A Preferred Stock issuable on exercise of the
Option to listing on notice of issuance on any stock exchange on which shares of
the same class are then listed; nor unless and until, in the opinion of counsel
for the Company, such securities may be issued and delivered without causing the
Company to be in violation of or incur any liability under any federal, state or
other securities law, any requirement of any securities exchange listing
agreement to which the Company may be a party, or any other requirement of law
or of any regulatory body having jurisdiction over the Company.
8. Non-transferability of Option
The Option shall not be transferable by the Optionee other than by will or
the laws of descent and distribution, may not be pledged or hypothecated, and
shall be exercisable during the Optionee's lifetime only by the Optionee or by
his or her guardian or legal representative.
9. Other Provisions
(a) In consideration of the granting of the Option, the Optionee agrees to
remain as a director of the Company for a period of at least one (1)
year after the Date of Grant. Nothing in the Plan or in this
Agreement, however, confers upon the Optionee any right to continue as
a director of the Company or interferes with or restricts in any way
the rights of the Company or the Company's stockholders, which are
hereby expressly reserved, to remove the Optionee at any time for any
reason whatsoever, with or without cause, to the extent permitted by
the Company's bylaws and applicable law.
(b) The holder of the Option shall not be entitled to any rights of a
stockholder of the Company with respect to any Option Shares until
such Option Shares have been paid for in full and issued upon exercise
of the Option.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of Maryland.
(d) As a material part of this Agreement, the Optionee and the Company
agree that in the event of any dispute between the Optionee and the
Company, the dispute shall be resolved by binding arbitration in San
Diego, California, under the Commercial Rules of the American
Arbitration Association.
(e) Upon exercise of the rights granted under this Agreement, the Optionee
agrees that the Optionee will not transfer any shares acquired
hereunder so as to result in a distribution in violation of the
applicable federal and state securities laws.
<PAGE>
10. Incorporation of Plan by Reference
The Option is subject to all of the terms and provisions of the Plan, a
copy of which is available upon request, as the same may be amended from time to
time, and such terms and provisions are hereby incorporated herein and made a
part hereof as if set forth at length herein.
11. Consent to Amendment and Adjustment
The Optionee hereby consents to the equitable adjustments made to the
Option (as indicated in this amended and restated Agreement) to reflect the
Company's pro rata distribution of Series A Preferred Stock and the effects of
such distribution on the Common Stock.
PRICE ENTERPRISES, INC.,
a Maryland corporation
By ________________________________
Jack McGrory
President and CEO
_____________________________________
Director Signature
_____________________________________
Date of Signature
_____________________________________
Director Social Security Number
EXHIBIT 5.1
[LETTERHEAD OF PIPER & MARBURY L.L.P.]
August 31, 1998
Price Enterprises, Inc.
4649 Morena Boulevard
San Diego, California 92117
Ladies and Gentlemen:
We have acted as Maryland Counsel to Price Enterprises, Inc., a Maryland
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended (the "Act"), pursuant to a Registration
Statement on Form S-8 of the Company (the "Registration Statement") filed with
the Securities and Exchange Commission (the "Commission"), of up to 672,867
shares of 8 3/4% Series A Cumulative Redeemable Preferred Stock, par value
$.0001 per share, of the Company (the "Shares") to be issued pursuant to The
Price Enterprises 1995 Combined Stock Grant and Stock Option Plan, as amended,
and The Price Enterprises Directors' 1995 Stock Option Plan, as amended
(hereinafter, collectively, the "Plans").
In our capacity as Maryland counsel to the Company, we have examined the
Registration Statement, the Charter and By-Laws of the Company as in effect on
the date hereof, minutes of the proceedings of the Company's Board of Directors
authorizing, inter alia, the issuance of the Shares (the "Board Resolutions"),
and such other documents as we have considered necessary. We have also examined
an Officer's Certificate of the Company dated the date hereof (the
"Certificate"). In such examination, we have assumed, without independent
investigation, the genuineness of all signatures, the legal capacity of all
individuals who have executed any of the aforesaid documents, the authenticity
of all documents submitted to us as originals, the conformity with originals of
all documents submitted to us as copies (and the authenticity of the originals
of such copies), and the accuracy and completeness of all public records
reviewed by us as to factual matters we have relied on the Certificate.
<PAGE>
Piper & Marbury L.L.P.
Price Enterprises, Inc.
August 31, 1998
Page 2
Based upon the foregoing and having regard for such legal considerations as
we deem relevant, we are of the opinion and so advise you that upon the issuance
and delivery of the Shares in accordance with the Board Resolutions and the
terms set forth in the Plans, the Shares will have been duly and validly
authorized and will be validly issued, fully paid, and nonassessable.
This opinion is solely for the use of the Company in connection with the
Registration Statement. This opinion may not be relied on by any other person or
in any other connection without prior written approval. This opinion is limited
to the matters set forth herein, and no other opinion should be inferred beyond
the matters expressly stated. We express no opinion as to the laws of any
jurisdiction other than the State of Maryland. This opinion concerns only the
effect of the laws (exclusive of the securities or "blue sky" laws and the
principles of conflict of laws) of the State of Maryland as currently in effect.
We assume no obligation to supplement this opinion if any applicable laws change
after the date hereof or if any facts or circumstances come to our attention
after the date hereof that might change this opinion. We hereby consent to the
filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ PIPER & MARBURY L.L.P.
Exhibit 23.1
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to The Price Enterprises 1995 Combined Stock Grant and Stock
Option Plan, As Amended and The Price Enterprises Directors' 1995 Stock Option
Plan, As Amended of our report dated January 16, 1998, with respect to the
financial statements and schedule of Price Enterprises, Inc. included in its
Transition Report (Form 10-K) for the transition period from September 1, 1997
to December 31, 1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
San Diego, CA
August 28, 1998
