As filed with the Securities and Exchange Commission on April 18, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-3
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 (IRS Employer
of incorporation or organization) Identification Number)
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4649 Morena Boulevard
San Diego, California 92117
(619) 581-4530
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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JACK MCGRORY Copies to:
President and Chief Executive Officer SCOTT N. WOLFE, ESQ.
4649 Morena Boulevard Latham & Watkins
San Diego, California 92117 701 "B" Street, Suite 2100
(619) 581-4530 San Diego, California 92101
(Name, address, including zip code, (619) 236-1234
and telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. ___
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. _X_
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. ___
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. ___
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. ___
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
Proposed Proposed
Amount Maximum Maximum Amount of
Title of Shares to be Aggregate Aggregate Registration
to be Registered Registered Price Per Share(1) Offering Price(1) Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 par value........... 1,500,000 $19.094 $28,641,500 $8,450
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</TABLE>
(1) Estimated solely for purposes of calculating the amount of the registration
fee pursuant to Rule 457, and based on a per share price of $19.094, the
average of the high and low prices of the Company's common stock as
reported on The Nasdaq Stock Market on April 16, 1998.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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Page 1 of 18
Exhibit Index on Page 15
<PAGE>
SUBJECT TO COMPLETION, DATED APRIL 18, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BY ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PROSPECTUS
PRICE ENTERPRISES, INC.
1,500,000 Shares of Common Stock, Par Value $.0001 Per Share
This Prospectus relates to 1,500,000 shares of common stock, par value
$.0001 per share (the "Common Stock"), of Price Enterprises, Inc., a Maryland
corporation (the "Company"), which may be offered from time to time by certain
stockholders of the Company (such holders being hereinafter described as the
"Selling Stockholders"). See "Selling Stockholders." The shares of Common Stock
to be registered hereunder are hereinafter referred to as the "Securities."
All of the Securities are to be offered for the account of the Selling
Stockholders. The Selling Stockholders, directly or through agents, dealers or
underwriters, may offer and sell from time to time all or any part of the
Securities held by each of them in amounts and on terms to be determined or at
quoted prices then prevailing on The Nasdaq Stock Market. To the extent
required, the amounts of the Securities to be sold, purchase prices, public
offering prices, the names of any agents, dealers or underwriters, and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying Prospectus Supplement or, if appropriate, a
post-effective amendment to the Registration Statement of which this Prospectus
is a part. The Selling Stockholders reserve the sole right to accept and,
together with any agent of the Selling Stockholders, to reject in whole or in
part any proposed purchase of the Securities. The Selling Stockholders will pay
any sales commissions or other seller's compensation applicable to such
transactions. The Selling Stockholders and agents who execute orders on their
behalf may be deemed to be underwriters as that term is defined in Section 2(11)
of the Securities Act of 1933, as amended (the "Securities Act"), and a portion
of any proceeds of sales and discounts, commissions or other seller's
compensation may be deemed to be underwriting compensation for purposes of the
Securities Act.
The Company will not receive any of the proceeds from the sale of the
Securities.
The Company will pay all costs of the registration of the Securities, and
the Selling Stockholders have agreed to reimburse the Company for such costs.
Such costs, fees and disbursements are estimated to be approximately $25,000.
The Common Stock to be registered hereunder is listed for trading on The
Nasdaq Stock Market under the symbol "PREN."
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The shares of Common Stock offered hereby involve a high degree of risk.
See "Risk Factors" at page 7 of this Prospectus.
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2
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE
CONTRARY IS UNLAWFUL.
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The date of this Prospectus is ____________, 1998.
3
<PAGE>
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"). These materials can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's regional offices located at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, 13th
Floor, New York, New York 10048. Copies of such material can be obtained at
prescribed rates from the public reference section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549. Electronic reports, proxy statements
and other information filed through the Commission's Electronic Data Gathering,
Analysis and Retrieval system are publicly available through the Commission's
Web site (http://www.sec.gov). In addition, the Common Stock is listed on The
Nasdaq Stock Market and similar information concerning the Company can be
inspected and copied at the offices of the National Association of Securities
Dealers, Inc., 1735 "K" Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on Form
S-3 (including all amendments thereto, the "Registration Statement"), with
respect to the Securities offered hereby. As permitted by the rules and
regulations of the Commission, this Prospectus does not contain all of the
information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information about the Company and the Securities
offered hereby, reference is made to the Registration Statement and the exhibits
thereto, which may be examined without charge at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, and copies of which may be obtained from the
Commission upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference and shall be deemed to be a part hereof:
(a)(1) Annual Report on Form 10-K for the fiscal year ended August 31,
1997;
(a)(2) Annual Report on Form 10-K for the transition period ended
December 31, 1997;
(b)(1) Quarterly Report on Form 10-Q for the quarter ended December 22,
1996;
(b)(2) Quarterly Report on Form 10-Q for the quarter ended March 16,
1997;
(b)(3) Quarterly Report on Form 10-Q for the quarter ended June 8, 1997;
(c) Current Report on Form 8-K filed September 12, 1997, as amended
by Amendment No. 1 to Form 8-K filed October 14, 1997;
(d) Definitive Proxy Materials for the Company's Annual Meeting of
Stockholders held December 16, 1997;
(e) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the Company's transition period
ended December 31, 1997; and
(f) The description of the Common Stock set forth in the Registration
Statement on Form S-4 dated September 15, 1994, as amended by
Amendment No. 1 to Form S-4 filed November 3, 1994 and Amendment
No. 2 to Form S-4 dated November 17, 1994.
4
<PAGE>
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Securities shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date 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 Prospectus to the extent that a statement
contained herein or in any 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 Prospectus.
A copy of any or all of the documents incorporated herein by reference
(other than exhibits unless such exhibits are specifically incorporated by
reference in any such document) will be provided without charge to any person,
including a beneficial owner, to whom a copy of this Prospectus is delivered,
upon written or oral request. Requests for such copies should be addressed to
the Secretary of the Company, 4649 Morena Boulevard, San Diego, California 92117
(telephone number: (619) 581-4530).
5
<PAGE>
THE COMPANY
This Prospectus contains certain "forward-looking" statements within the
meaning of the Private Securities Litigation Reform Act of 1995 which provides a
new "safe harbor" for these types of statements. To the extent statements in
this Prospectus involve, without limitation, the Company's expectations for
growth, estimates of future revenue, expenses, profit, cash flow, balance sheet
items or any other guidance on future periods, these statements are
forward-looking statements. Forward-looking statements contain risks and
uncertainties which include those identified in this Prospectus and other risks
identified from time to time in the Company's filings with the Securities and
Exchange Commission, press releases and other communications. The Company
assumes no obligation to update forward-looking statements.
The Company's principal business is acquiring, developing, operating,
managing and leasing real property. The Company's current portfolio is
substantially comprised of commercial rental properties including shopping
centers and "power centers" leased to major retail tenants such as Costco, The
Sports Authority, The Home Depot, Kmart, Marshalls, PetsMart and Borders Books.
As of December 31, 1997, the Company owned 27 real estate properties and held
one property pursuant to a 22-year ground lease, which have an aggregate net
book value of $353 million. Approximately 59% of annual minimum rents are
derived from tenants with investment grade credit ratings.
The Company's business strategy is to continue to enhance the value and
operating income of the Company's portfolio by, among other things, completing
the development and leasing of existing properties and acquiring new investment
properties. In making new real estate investments, the Company intends to
continue to place emphasis on acquiring well-located income-producing commercial
properties, principally occupied by credit rated tenants in the western and
northeastern United States, with attractive yields and potential for increases
in income and capital appreciation. The Company also may take advantage of
attractive investments in other geographic areas and product types in order to
enhance stockholder value. The Company also may participate in public-private
partnerships to acquire and develop or redevelop properties in major cities. In
addition, the Company will from time to time consider the disposition or
exchange of existing investments in order to improve its investment portfolio or
increase its funds from operations. The Company's management continuously
reviews the Company's properties and attempts to develop appropriate programs to
renovate and modernize its properties in order to improve funds from operations
and property values. The Company's investment and portfolio management objective
is to maximize funds from operations and distributions to stockholders. The
Company also currently owns and operates a self storage business, "Price Self
Storage," with one facility open in San Diego, California. The Company has
decided to expand the self storage business on a limited basis.
The Company provides property management directly for all of its
properties. Self-management enables the Company to more closely control leasing
and property management. Internal property management also provides the Company
opportunities for operating efficiencies by enabling it to acquire additional
properties without proportionate increases in property management expenses. The
Company's property management program is implemented by property management and
leasing professionals located in offices in San Diego, California, Fairfax,
Virginia and White Plains, New York.
The Company's executive offices are located at 4649 Morena Boulevard, San
Diego, California 92117, and its telephone number is (619) 581-4530. The Company
is incorporated under the laws of the State of Maryland.
6
<PAGE>
RISK FACTORS
Economic Performance and Value of Centers Dependent on Many Factors. Real
property investments are subject to varying degrees of risk. The economic
performance and values of real estate can be affected by many factors, including
changes in the national, regional and local economic climates, local conditions
such as an oversupply of space or a reduction in demand for real estate in the
area, the attractiveness of the properties to tenants, competition from other
available space, the ability of the owner to provide adequate maintenance and
insurance, and increased operating costs. In recent years, there has been a
proliferation of new retailers and a growing consumer preference for
value-oriented shopping alternatives that have, among other factors, heightened
competitive pressures. In certain areas of the country, there may also be an
oversupply of retail space. As a consequence, many companies in all sectors of
the retailing industry have encountered significant financial difficulties. A
substantial portion of the Company's income is derived from rental revenues from
retailers in community shopping centers and power centers. Accordingly, no
assurance can be given that the Company's financial results will not be
adversely affected by these developments in the retail industry.
Dependence on Rental Income from Real Property. Since substantially all of
the Company's income is derived from rental income from real property, the
Company's income and funds available for distribution would be adversely
affected if a significant number of the Company's tenants were unable to meet
their obligations to the Company or if the Company were unable to lease a
significant amount of space in its properties on economically favorable lease
terms. There can be no assurance that any tenant whose lease expires in the
future will renew such lease or that the Company will be able to re-lease space
on economically advantageous terms.
Illiquidity of Real Estate Investments. Equity real estate investments are
relatively illiquid and therefore tend to limit the ability of the Company to
vary its portfolio promptly in response to changes in economic or other
conditions. In addition, to the extent the properties are not subject to triple
net leases, certain significant expenditures such as real estate taxes and
maintenance costs are generally not reduced when circumstances cause a reduction
in income from the investment. Should such events occur, the Company's income
and funds available for distribution would be adversely affected.
Risk of Bankruptcy of Major Tenants. The bankruptcy or insolvency of a
major tenant or a number of smaller tenants may have an adverse impact on the
properties affected and on the income produced by such properties. Under
bankruptcy law, a tenant has the option of assuming (continuing) or rejecting
(terminating) any unexpired lease. If the tenant assumes its lease with the
Company, the tenant must cure all defaults under the lease and provide the
Company with adequate assurance of its future performance under the lease. If
the tenant rejects the lease, the Company's claim for breach of the lease would
(absent collateral securing the claim) be treated as a general unsecured claim.
The amount of the claim would be capped at the amount owed for unpaid
pre-petition lease payments unrelated to the rejection, plus the greater of one
year's lease payments or 15% of the remaining lease payments payable under the
lease (but not to exceed the amount of three years' lease payments).
Reliance on Major Tenants. As of December 31, 1997, the Company's largest
tenant was Costco which accounted for approximately 19.1% of the Company's total
annual minimum rent revenue as of such date. The financial position of the
Company and its ability to make distributions may be adversely affected by
financial difficulties experienced by such tenant, or any other major tenant of
the Company, including a bankruptcy, insolvency or general downturn in business
of any such tenant or in the event any such tenant does not renew its leases as
they expire.
Control by Directors and Executive Officers. Robert E. Price, who is
Chairman of the Board, and Sol Price, a significant stockholder of the Company
and the father of Robert E. Price, beneficially owned as of December 31, 1997 an
aggregate of approximately 11.2 million shares, or 47.1% of the outstanding
Common Stock of the Company. As a result, these stockholders will effectively
control the outcome of all matters submitted to the Company's stockholders for
approval, including the election of directors. In addition, such ownership could
discourage acquisition of the Company's Common Stock by potential investors, and
could have an anti-takeover effect, possibly depressing the trading price of the
Company's Common Stock.
7
<PAGE>
Competition for Acquisition of Real Estate. The Company faces competition
in the acquisition, operation and sale of its properties. Such competition can
be expected from other businesses, individuals, fiduciary accounts and plans and
other entities engaged in real estate investment. Some of the Company's
competitors are larger and have greater financial resources than the Company.
This competition may result in a higher cost for properties the Company wishes
to purchase. The tenants leasing the Company's properties generally face
significant competition from other operators. This may result in an adverse
impact on that portion, if any, of the rental stream to be paid to the Company
based on a tenant's revenues and also may adversely impact the tenant's results
of operations or financial condition.
Environmental Risks. Under various Federal, state and local laws,
ordinances and regulations, the Company may be considered an owner or operator
of real property, or may have arranged for the disposal or treatment of
hazardous or toxic substances and, therefore, may become liable for the costs of
removal or remediation of certain hazardous substances released on or in its
property or disposed of by it, as well as certain other potential costs which
could relate to hazardous or toxic substances (including governmental fines and
injuries to persons and property). Such liability may be imposed whether or not
the Company knew of, or was responsible for, the presence of such hazardous or
toxic substances.
Taxation of the Company. The Company has elected to be taxed as a REIT
under the Internal Revenue Code of 1986, as amended (the "Code"), commencing
with the four months ended December 31, 1997. To maintain its status as a REIT
for Federal income tax purposes, the Company generally is required each year to
distribute to its stockholders at least 95% of its taxable income. In addition,
the Company is subject to a 4% nondeductible excise tax on the amount, if any,
by which certain distributions paid by it with respect to any calendar year are
less than the sum of 85% of its ordinary income for such calendar year, 95% of
its capital gain income for the calendar year and any amount of such taxable
income that was not distributed in prior years. As long as the Company meets the
requirements under the Code, for qualification as a REIT each year, the Company
will be entitled to a deduction when calculating its taxable income for
dividends paid to its stockholders. For the Company to qualify as a REIT,
however, certain detailed technical requirements must be met (including certain
income, asset and stock ownership tests) under Code provisions for which, in
many cases, there are only limited judicial or administrative interpretations.
Although the Company intends to operate so that it will continue to qualify as a
REIT, the highly complex nature of the rules governing REITs, the ongoing
importance of factual determinations and the possibility of future changes in
the Company's circumstances preclude any assurance that the Company will so
qualify in any year. For any taxable year that the Company fails to qualify as a
REIT, it would not be entitled to a deduction for dividends paid to its
stockholders in calculating its taxable income. Consequently, distributions to
stockholders would be substantially reduced and could be eliminated because of
the Company's increased tax liability. Should the Company's qualification as a
REIT terminate, the Company may not be able to elect to be treated as a REIT for
the subsequent five-year period, which would substantially reduce and could
eliminate distributions to stockholders for the years involved.
8
<PAGE>
SELLING STOCKHOLDERS
All of the Securities offered hereby will be sold for the account of the
Selling Stockholders. Information regarding the Selling Stockholders is set
forth in the following table.
<TABLE>
<CAPTION>
Shares of Common Shares of Common Shares of Common Percent of
Registered Stock Owned Stock Being Offered Stock Owned Common Stock
Owners Prior to Offering for Stockholders After Offering(1) Owned After Offering
------ ----------------- ---------------- -------------- --------------------
<S> <C> <C> <C> <C>
The Price Family 2,622,580 400,000 2,222,580 9.36
Charitable Fund
The Price 610,490 300,000 310,490 1.30
Charitable
Remainder Trust
The Price Family 5,165,170 800,000 4,365,170 18.39
Charitable Trust
</TABLE>
(1) Assumes the sale of all shares offered hereby to persons who are not
affiliates of the Selling Stockholders.
None of the Selling Stockholders has any position, office or other material
relationship with the Company or any of its affiliates (or had any such
position, office or material relationship within the past three years), except
that (i) Robert E. Price, the Chairman of the Company, James F. Cahill, a
director of the Company, and Sol Price, a significant stockholder of the Company
and father of Robert E. Price, are directors of The Price Family Charitable
Fund, (ii) Robert E. Price and Sol Price are trustees of The Price Charitable
Remainder Trust, and (iii) Robert E. Price and Sol Price are trustees of The
Price Family Charitable Trust.
PLAN OF DISTRIBUTION
The Company is registering the shares of Common Stock offered by the
Selling Stockholders hereunder pursuant to an agreement among the Company and
Selling Stockholders. Pursuant to such agreement, the Selling Stockholders have
agreed to reimburse the Company for its expenses in connection with this
registration.
The shares of Common Stock offered hereunder may be sold from time to time
by the Selling Stockholders, or by pledgees, donees, transferees or other
successors in interest. Such sales may be made on The Nasdaq Stock Market or in
the over-the-counter market or otherwise at prices and on terms then prevailing
or related to the then current market price, or in negotiated transactions at
prices determined by the parties thereto. The shares of Common Stock may be sold
to or through one or more broker-dealers acting as agent or principal in
underwritten offerings, block trades, agency placements, exchange distributions,
brokerage transactions, privately negotiated transactions, short sales or
otherwise, or in any combination of transactions.
In connection with any transaction involving the Common Stock,
broker-dealers or others may receive from the Selling Stockholders, and may in
turn pay to other broker-dealers or others, compensation in the form of
commissions, discounts or concessions in amounts to be negotiated at the time.
Broker-dealers and any other persons participating in a distribution of the
Common Stock may be deemed to be "underwriters" within the meaning of the Act in
connection with such distribution, and any such commissions, discounts or
concessions may be deemed to be underwriting documents or commissions under the
Act.
Any or all of the sales or other transactions involving the Common Stock
described above, whether effected by the Selling Stockholders, any broker-dealer
or others, may be made pursuant to this Prospectus. In addition, any shares of
Common Stock that qualify for sale pursuant to Rule 144 under the Act may be
sold under Rule 144 rather than pursuant to this Prospectus.
9
<PAGE>
To comply with the securities laws of certain states, if applicable, the
Common Stock may be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, shares of Common Stock may not be sold
unless they have been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is complied with
under applicable state securities laws.
EXPERTS
The financial statements of the Company appearing in the Company's Transition
Report (Form 10-K) for the period ended December 31, 1997 and Annual Report
(Form 10-K) for the year ended August 31, 1997, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their reports thereon included
therein and incorporated herein by reference. Such financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
With respect to the unaudited condensed interim financial information for the
quarters ended December 22, 1996, March 16, 1997 and June 8, 1997, incorporated
by reference in this Prospectus, Ernst & Young LLP have reported that they have
applied limited procedures in accordance with professional standards for a
review of such information. However, their separate reports, included in the
Company's Quarterly Reports on Form 10-Q for the quarters ended December 22,
1996, March 16, 1997 and June 8, 1997 and incorporated herein by reference,
state that they did not audit and they do not express an opinion on that interim
financial information. Accordingly, the degree of reliance on their reports on
such information should be restricted considering the limited nature of the
review procedures applied. The independent auditors are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 (the "Act") for
their reports on the unaudited interim financial information because those
reports are not a "report" or a "part" of the Registration Statement prepared or
certified by the auditors within the meaning of Sections 7 and 11 of the Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Piper & Marbury LLP, Baltimore, Maryland.
10
<PAGE>
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No dealer, salesperson or other individual has been authorized to give any
information or make any representations other than those contained in this
Prospectus and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer by the Company to sell, or a solicitation of an offer to
buy, the securities offered hereby in any jurisdiction where, or to any person
to whom, it is unlawful to make an offer or solicitation. Neither the delivery
of this Prospectus nor any sale made hereunder shall, under any circumstances,
create an implication that there has been any change in the affairs of the
Company since the date hereof or that the information contained herein is
correct or complete as of any time subsequent to the date hereof.
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TABLE OF CONTENTS
Page
----
Available Information........................................................ 4
Incorporation of Certain
Documents by Reference................................................... 4
The Company.................................................................. 6
Risk Factors................................................................. 7
Selling Stockholders......................................................... 9
Plan of Distribution ........................................................ 9
Experts...................................................................... 10
Legal Matters................................................................ 10
================================================================================
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1,500,000 Shares
Price Enterprises, Inc.
Common Stock
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P R O S P E C T U S
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____________, 1998
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is an itemized statement of expenses to be incurred in
connection with this Registration Statement. All such expenses will be paid by
the Company. The Selling Stockholders have agreed to reimburse the Company for
such expenses.
Securities and Exchange Commission registration fee............ $ ___
Blue Sky fees and expenses..................................... 2,000
Public accountants' fees....................................... 5,000
Company legal fees and expenses................................ 10,000
Miscellaneous expenses......................................... ___
TOTAL................................................ $25,000
=======
All of the above items except the registration fee are estimates.
Item 15. Indemnification of Directors and Officers.
The Company's Articles of Incorporation 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
Corporate 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 16. Exhibits.
5.1 Opinion of Piper & Marbury LLP.
15.1 Letter Regarding Unaudited Financial Informatiom.
23.1 Consent of Piper & Marbury LLP (included in Exhibit 5.1 hereto).
23.2 Consent of Ernst & Young LLP.
24.1 Power of Attorney (included on signature page hereto).
II-1
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement;
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most
recent post-effective amendment 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 (1)(i) and
(1)(ii) above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the Registrant pursuant to Section
13 or 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.
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 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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 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 the 17th day of
April, 1998.
PRICE ENTERPRISES, INC.
By:/S/ JACK MCGRORY
-----------------------------------------
Jack McGrory
President and Chief Executive Officer
POWER OF ATTORNEY
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. Each person whose signature appears below hereby authorizes
Jack McGrory, with full power of substitution and resubstitution, as his true
and lawful attorneys-in-fact, for him in any and all capacities, to sign any
amendments (including post-effective amendments or supplements) to this
Registration Statement and to file the same, with exhibits thereto, and other
documents in connection therewith, with the Commission.
Signature Title Date
/S/ ROBERT E. PRICE Chairman April 17, 1998
- ----------------------
Robert E. Price
/S/ JACK MCGRORY President, Chief Executive April 17, 1998
- ---------------------- Officer and Director
Jack McGrory
/S/ PAUL A. PETERSON Vice Chairman of the Board April 17, 1998
- ----------------------
Paul A. Peterson
/S/ GARY W. NIELSON Executive Vice President April 17, 1998
- ---------------------- and Chief Financial Officer
Gary W. Nielson
/S/ JAMES F. CAHILL Director April 17, 1998
- ----------------------
James F. Cahill
/S/ ANNE L. EVANS Director April 17, 1998
- ----------------------
Anne L. Evans
/S/ MURRAY L. GALINSON Director April 17, 1998
- ----------------------
Murray L. Galinson
II-3
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as part of this Registration Statement on
Form S-3 or are incorporated herein by reference.
Exhibit No. Description Page
5.1 Opinion of Piper & Marbury LLP 16
15.1 Letter Regarding Unaudited Financial Informatiom 17
23.1 Consent of Piper & Marbury LLP (included
in Exhibit 5.1 hereto). 16
23.2 Consent of Ernst & Young LLP. 18
24.1 Power of Attorney (included on signature
page hereto). --
EXHIBIT 5.1
[LETTERHEAD]
PIPER & MARBURY, L.L.P.
April 16, 1998
Price Enterprises, Inc.
4649 Morena Boulevard
San Diego, California 92117
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-3 of Company (the "Registration Statement") flied with the
Securities and Exchange Commission (the "Commission"), of up to 1,500,000 shares
of Common Stock, par value $.0001 per share, of the Company (the "Shares") to be
issued to the public from time to time by the selling stockholders described
therein.
In our capacity as Maryland counsel to the Company, we have examined the
Registration Statement, the Charter and By-Laws of the Company, minutes of the
proceedings of the Company's Board of Directors authorizing the issuance of the
Shares, 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 all public records reviewed are accurate and complete. As
to factual matters we have relied on the Certificate and have not independently
verified the matters stated therein.
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 the Shares have
been duly and validly authorized and legally issued and are fully paid and
nonassessable.
<PAGE>
PIPER & MARBURY
L.L.P.
Price Enterprises, Inc.
April 16, 1998
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the Prospectus included in the Registration Statement. In giving our
consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Act or the rules and regulations of
the Commission thereunder.
Very truly yours,
/s/ Piper & Marbury L.L.P.
Exhibit 15.1
Letter Regarding Unaudited Financial Information
Board of Directors
Price Enterprises, Inc.
We are aware of the incorporation by reference in the Registration Statement
(Form S-3) of Price Enterprises, Inc. for the registration of 1,500,000 shares
of common stock of our reports dated January 1, 1997, April 11, 1997 and July
14, 1997 relating to the unaudited condensed consolidated interim financial
statements of Price Enterprises, Inc. that are included in its Forms 1O-Q for
the quarters ended December 22, 1996, March 16, 1997 and June 8, 1997.
/s/ Ernst & Young LLP
San Diego, California
April 17, 1998
EXHIBIT 23.2
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Price Enterprises,
Inc. for the registration of 1,500,000 shares of common stock and to the
incorporation by reference therein of our reports dated January 16, 1998 and
October 16, 1997, with respect to the financial statements and schedule of Price
Enterprises, Inc. included in its Annual Reports (Form 10-K) for the transition
period ended December 31, 1997 and for the year ended August 31, 1997,
respectively, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
San Diego, California
April 17, 1998
