<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
AUGUST 28, 1997
------------------------------------------------------
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
SIGNATURE RESORTS, INC.
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 000-21193 95-4582157
(STATE OR OTHER JURISDICTION (COMMISSION TITLE NUMBER) (IRS EMPLOYER
OF INCORPORATION) IDENTIFICATION NUMBER)
1875 SOUTH GRANT STREET, SUITE 650
SAN MATEO, CALIFORNIA 94402
------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(650) 312-7171
------------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On June 5, 1997, Signature Resorts, Inc. ("Signature") entered into a
definitive Agreement for Purchase and Sale of the Entire Issued Share Capital
(the "Stock Purchase Agreement") to acquire LSI Group Holdings Plc ("LSI"), a
United Kingdom public limited company, from Ian K. Ganney, Richard Harrington
and Stephen Massey (the "LSI Shareholders"). LSI, directly and through its
wholly-owned subsidiaries, develops, markets and operates through a points-
based club system eleven (11) vacation ownership resorts located in England's
Lake District and Midlands (3 resorts), Southern England (1 resort), the sun
coast of Spain (3 resorts), the Spanish island of Menorca (2 resorts),
Lanzarote in the Canary Islands (1 resort) and the Austrian Alps (1 resort).
LSI's wholly-owned operating subsidiaries are LS Promotions Limited, a United
Kingdom limited company, Pine Lake Plc, a United Kingdom public limited
company, Woodford Bridge Country Club Limited, a United Kingdom limited
company, Benal Holdings Limited, a Gibraltar limited company, Los Amigos Beach
Club Limited, an Isle of Man limited company, Floriana Holdings Limited, a
Gibraltar limited company, Hewicoon SL, a Spain limited company, LS
International Resort Management Limited, a United Kingdom limited company, LSI
Travel Club Limited, a United Kingdom limited company, LS Financial Services
Limited, a United Kingdom limited company, and LS Interval Ownership Limited, a
United Kingdom limited company. Following closing of the acquisition, Signature
currently intends to continue to operate the resorts through LSI and its
wholly-owned subsidiaries. In addition, Messrs. Ganney and Harrington will
continue to be employed by LSI as its Chairman and Chief Executive Officer,
respectively.
At closing on August 28, 1997, pursuant to the Stock Purchase Agreement,
Signature acquired all of the issued and outstanding share capital of LSI (the
"Acquisition") in exchange for 1,330,934 newly-issued shares of Signature
common stock (the "Signature Stock") and approximately $1,036,000 in cash paid
to a minority shareholder (the "Cash Consideration") from Signature's working
capital. Based on the closing price of Signature's common stock on the Nasdaq
National Market on August 28, 1997, the 1,330,934 shares of Signature Stock
issued in the Acquisition were valued at an aggregate of approximately $48.2
million and represented on a pro forma basis 5.6% of the shares of common stock
outstanding on such date. Signature intends to account for the Acquisition
using the pooling of interests method of accounting for business combinations.
Pursuant to the Stock Purchase Agreement, certain beneficial shareholders of
LSI agreed to indemnify Signature from and against certain expenses and damages
arising out of a breach of a representation, warranty or covenant made by LSI
or its shareholders in the Stock Purchase Agreement. In order to establish a
procedure for the satisfaction of claims by Signature for indemnification, the
Stock Purchase Agreement requires 10% of the 1,330,934 shares of Signature
Stock received by the LSI Shareholders upon consummation of the Acquisition be
deposited into escrow and held pursuant to an escrow agreement. The Stock
Purchase Agreement provides that the escrow shares will be held by the escrow
agent to satisfy claims made within the earlier of (i) one year from the
closing date, or (ii) the date of issuance of first independent audit report of
LSI's United Kingdom statutory accounts which includes any period ending after
the closing date. If no claim for indemnification is outstanding at the end of
the applicable period, the remaining escrowed shares will be released to the
LSI Shareholders.
Pursuant to the terms of the Stock Purchase Agreement, Signature and certain
of the LSI Shareholders entered into a registration rights agreement (the
"Registration Rights Agreement") with respect to the registration of the
Signature Stock delivered to Messrs. Ganney and Harrington at closing (the
"Registrable Shares"). The Registration Rights Agreement provides for either
(i) a registration statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, as
amended (the "Securities Act") covering the Registrable Shares, or (ii) an
amendment of an effective shelf registration of Signature to provide for the
inclusion of the Registrable Shares. Signature agrees to use its maximum
reasonable efforts (subject to procedures and limitations imposed by the
Securities and Exchange Commission) to cause the shelf registration to be
declared effective under the Securities Act with respect to an aggregate of:
(1) as soon as practicable following the August 28, 1997 closing of the
Acquisition and in no event later than the date Signature publicly releases
financial statements covering at least 30 days of combined operations of
Signature and LSI, a number of Registrable Shares of the Signature Stock the
sale of which would generate $9.0 million in gross sales proceeds at a price
equal to the closing sales price for Signature's common stock on the closing
date of the
2
<PAGE>
Acquisition; (2) with respect to all Registrable Shares of the Signature Stock
not included in such shelf registration (the "Remaining Shares"), (a) 33% of
the Remaining Shares as soon as practicable following August 28, 1999, (b) 67%
of the Remaining Shares as soon as practicable following August 28, 2000, and
(c) 100% of the Remaining Shares as soon as practicable following August 28,
2001. Signature further agrees to keep the shelf registration continuously
effective under the Securities Act for a period of the shorter of (i) two
years from the closing date of the Acquisition, (ii) the date when all
Registrable Shares are tradeable without restriction under any applicable
rules and regulations under the Securities Act of 1933, or (iii) when all
Registrable Shares covered by the shelf registration have been disposed of in
accordance therewith. If during a two year period following the closing date
of the Acquisition, Signature proposes filing a registration statement under
the Securities Act with respect to the proposed sale of Signature common stock
(or securities exchangeable or convertible therefor) in an underwritten
offering, then Signature agrees to provide the LSI Shareholders the
opportunity to include in such registration statement the Registrable Shares.
For additional information concerning the Stock Purchase Agreement, LSI's
assets, the indemnity obligations of LSI and its beneficial owners, and the
Registration Rights Agreement, see the attached Exhibits incorporated by
reference or filed herewith in Item 7 below.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial statements of businesses acquired. The financial statements
for LSI and Subsidiaries required by this Item 7(a) are incorporated by
reference to the Form 8-K, filed by Signature on September 9, 1997.
(b) Pro forma financial information. The pro forma financial information for
LSI and Subsidiaries required by this Item 7(b) are incorporated by reference
to the Form 8-K filed by Signature on September 9, 1997.
(c) Exhibits.
<TABLE>
<C> <S>
2.1 Agreement for Purchase and Sale of the Entire Issued Share Capital of
LSI Group Holdings plc dated as of June 5, 1997 between Signature and
shareholders of LSI Group Holdings plc and the Amendment to the
Agreement for Purchase and Sale of the Entire Issued Share Capital of
LSI Group Holdings plc dated as of August 28, 1997 between Signature and
shareholders of LSI Group Holdings plc is incorporated by reference to
Exhibit 2.3 to Amendment No. 1 to Form S-1 on
Form S-3 (No. 333-30285), filed by Signature on September 9, 1997.
2.2 Amendment to the Agreement for Purchase and Sale of the Entire Share
Capital of LSI Group Holdings plc dated August 28, 1997, between
Signature and shareholders of LSI Group Holdings plc is filed herewith
in accordance with the provisions of Item 601 of Regulation S-K.
4 Registration Rights Agreement dated as of August 28, 1997 between
Signature and Ian K. Ganney and Richard Harrington is incorporated by
reference to Exhibit 10.10 to Amendment No. 1 to Form S-1 on Form S-3
(No. 333-30285), filed by Signature on September 9, 1997.
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
SIGNATURE RESORTS, INC.
/s/ Andrew D. Hutton
By: _________________________________
Name: Andrew D. Hutton
Title: Vice President and General
Counsel
Dated: September 12, 1997
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
2.1 Agreement for Purchase and Sale of the Entire Issued Share Capital of
LSI Group Holdings plc dated as of June 5, 1997 between Signature and
shareholders of LSI Group Holdings plc and the Amendment to the
Agreement for Purchase and Sale of the Entire Issued Share Capital of
LSI Group Holdings plc dated as of August 28, 1997 between Signature and
shareholders of LSI Group Holdings plc is incorporated by reference to
Exhibit 2.3 to Amendment No. 1 to Form S-1 on Form S-3 (no. 333-30285),
filed by Signature on September 9, 1997.
2.2 Amendment to the Agreement for Purchase and Sale of the Entire Share
Capital of LSI Group Holdings plc dated August 28, 1997, between
Signature and shareholders of LSI Group Holdings plc is filed herewith
in accordance with the provisions of Item 601 of Regulation S-K.
4 Registration Rights Agreement dated as of August 28, 1997 between
Signature and Ian K. Ganney and Richard Harrington is incorporated by
reference to Exhibit 10.10 to Amendment No. 1 to Form S-1 on Form S-3
(no. 333-30285), filed by Signature on September 9, 1997.
</TABLE>
4
<PAGE>
EXHIBIT 2.2
AMENDMENT TO AGREEMENT FOR
--------------------------
PURCHASE AND SALE OF THE ENTIRE ISSUED
--------------------------------------
SHARE CAPITAL OF LSI GROUP HOLDINGS PLC
---------------------------------------
THIS AMENDMENT is made and entered into as of this 28th day of August, 1997, by
and among SIGNATURE RESORTS, INC., a Maryland corporation ("SIGNATURE"), and IAN
K. GANNEY ("GANNEY"), RICHARD HARRINGTON ("HARRINGTON") and STEPHEN MASSEY
("MASSEY") (Ganney, Harrington and Massey being referred to individually as a
"LSI SHAREHOLDER" or, collectively, the "LSI SHAREHOLDERS").
W I T N E S S E T H:
--------------------
WHEREAS, the parties have previously entered into an Agreement for Purchase and
Sale of the Entire Issued Share Capital of LSI Group Holdings plc, dated as of
June 5, 1997 (the "STOCK PURCHASE AGREEMENT"); and
WHEREAS, the parties are desirous of amending the Stock Purchase Agreement in
accordance with the terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged, the parties hereto do mutually agree as follows:
1. PAYMENT OF PURCHASE CONSIDERATION TO MASSEY. The provisions of the Stock
-------------------------------------------
Purchase Agreement with respect to the nature of the Purchase Consideration
to be paid to the LSI Shareholders is amended to provide that the parties
agree that rather than Massey receiving his portion of the Purchase
Consideration in the form of shares of Signature Stock, that Massey shall
receive payment of the Purchase Consideration in the form of cash, payable
by cashier's check, certified funds or wire transfer at Closing. The
amount of Purchase Consideration to be received by Massey shall be equal to
the Massey's pro rata share of the number of shares of Signature Stock
which would
1
<PAGE>
otherwise be payable to Massey as the Final Purchase Consideration if this
Amendment were not adopted, multiplied by the Closing Price (as determined
in Section 1.3(a)(i) of the Stock Purchase Agreement). The parties
acknowledge that Massey's shares of LSI Stock are held by Sedgwick Noble
Lowndes Trust Corporation Limited as Trustee of the Prudential Bache Group
(U.K.) Supplementary Scheme Ref. S. Massey, which shall receive the
Purchase Consideration for Massey.
2. UNITED STATES TAX TREATMENT. The parties acknowledge that based upon this
---------------------------
Amendment the transaction is not intended to qualify as a tax-free
organization pursuant to Section 368(a)(1)(B) of the Internal Revenue Code
of 1986, as amended, and, in that respect, all references to such treatment
in the Stock Purchase Agreement are hereby deleted, including, but not
limited to, Section 1.3(d), Section 4.14, and Section 7.2(f).
3. REGISTRATION RIGHTS. Section 4.10(b) and Article V of the Stock Purchase
-------------------
Agreement are hereby amended to reflect that the Registration Rights
Agreement referred to therein shall be entered into solely between
Signature, and Ganney and Harrington, as opposed to all LSI Shareholders.
4. HOLDBACK. The terms of Section 9.4 and 9.5 of the Stock Purchase
--------
Agreement, as well as the Escrow Agreement described therein and in Section
4.10(c) shall be entered into only among Signature, and Ganney and
Harrington. The amount to be deposited into the escrow pursuant to the
Escrow Agreement and Section 9.4 of the Stock Purchase Agreement shall be
ten percent (10%) of the shares of Signature stock delivered to Ganney and
Harrington. The delivery of the Holdback Shares pursuant to Section 9.5 of
the Stock Purchase Agreement, shall be made solely to Ganney and
Harrington. Nothing contained herein shall otherwise modify or amend the
terms of Article IX of the Stock Purchase Agreement with respect to
indemnification by the LSI Shareholders except that Section 9.4 is hereby
amended to provide that Signature shall have no right to assert any claim
against the Holdback Shares for any claim premised upon Section 3.5 of the
Stock Purchase Agreement after the earlier of (i) the first anniversary of
the
2
<PAGE>
Closing Date or (ii) the date of issuance of the first independent
audit report of LSI Group Holdings plc's UK statutory accounts which
includes any period ending after the Closing Date.
5. DEFINITIONS. Except as may be specifically provided herein, all
-----------
capitalized terms and otherwise defined shall have the same meaning as in
the Stock Purchase Agreement.
6. EFFECTIVE AMENDMENT. Except as specifically amended or otherwise provided
-------------------
herein, the terms, conditions and agreements of the Stock Purchase
Agreement are hereby affirmed.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and seals as
of the day and year first written above.
SIGNATURE RESORTS, INC.
By: /s/ Andrew D. Hutton
____________________________________
Title: Vice President & General Counsel
_________________________________
/s/ Ian K. Ganney
_______________________________________
IAN K. GANNEY
/s/ Richard Harrington
_______________________________________
RICHARD HARRINGTON
/s/ Stephen Massey
_______________________________________
STEPHEN MASSEY
3
