<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 1, 1999
REGISTRATION NO. 33-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TRENDWEST RESORTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OREGON 93-1004403
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
9805 WILLOWS ROAD, REDMOND, WASHINGTON 98052
-------------------------------------- -------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
TRENDWEST RESORTS 1999 EMPLOYEE STOCK PURCHASE PLAN
TRENDWEST RESORTS 1997 EMPLOYEE STOCK OPTION PLAN
(FULL TITLE OF THE PLAN)
GARY A. FLORENCE
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
TRENDWEST RESORTS, INC.
9805 WILLOWS ROAD
REDMOND, WASHINGTON 98052
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(425) 498-2500
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================
PROPOSED MAXIMUM PROPOSED
TITLE OF OFFERING PRICE MAXIMUM AMOUNT OF
SECURITIES AMOUNT TO BE PER AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED SHARE OFFERING PRICE (1) FEE (1)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, SHARES
WITHOUT PAR VALUE 1,356,451 $21.4375 $ 29,073,832 $8,082.52
===================================================================================================
</TABLE>
(1) THE PROPOSED MAXIMUM OFFERING PRICE PER SHARE AND THE REGISTRATION FEE WERE
CALCULATED IN ACCORDANCE WITH RULE 457(h) UNDER THE ACT BASED ON THE AVERAGE OF
THE HIGH AND LOW PRICES FOR TRENDWEST RESORTS, INC. COMMON STOCK ON JUNE 16,
1999, AS QUOTED BY THE NASDAQ NATIONAL MARKET SYSTEM.
EXHIBIT INDEX IS LOCATED ON PAGE II-5.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed or to be filed with the Commission by the
registrant are incorporated by reference in this registration statement.
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998, filed with the Commission pursuant to
Section 13(a) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act").
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since end of the fiscal year covered by the
Company's Annual Report on Form 10-K referred to in (a) above.
(c) The description of the Company's Common Stock contained in a
registration statement on Form 8-A filed pursuant to Section 12
of the Exchange Act (Registration No.000-22979).
(d) All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof 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 herein and to be a part hereof from the
date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not Applicable
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's Articles of Incorporation provide that the liability of
the directors of the Company for monetary damages will be eliminated to the
fullest extent permissible under Oregon law. This is intended to eliminate the
personal liability of a director for monetary damages in an action brought by or
in the right of the Company for breach of a director's duties or the Company or
its stockholders except for liability (i) for any breach of the director's duty
of loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or knowing violation of law,
(iii) for any unlawful distribution to stockholders, or (iv) for any transaction
from which the director derived an improper personal benefit. This provision
does not limit or eliminate the rights of the Company or any stockholder to seek
non-monetary relief, such as an injunction or rescission, in the event of a
breach of a director's duty of care. This provision also does not affect the
director's responsibilities under any other laws, such as the federal or state
securities or environmental laws.
The Articles of Incorporation and the Bylaws also provide that the
Company shall indemnify, to the fullest extent permitted under Oregon law, any
person who has been made, or is threatened to be made, a party to an action,
suit or legal proceeding by reason of the fact that the person is or was a
director or officer of the Corporation. The Company intends to enter into
separate indemnification agreements with each of its directors. These agreements
will require the Company to indemnify its directors to the fullest extent
permitted by law, including circumstances in which indemnification would
otherwise be discretionary. Among other things, the agreements require the
Company to indemnify directors against certain liabilities that may arise by
reason of their status or service as a director and to
Page II-1
<PAGE> 3
advance their expenses incurred as a result of any proceeding against them as to
which they could be indemnified. The Company also intends to obtain insurance on
behalf of its executive officers and directors for certain liabilities arising
out of their actions in such capacities. The Company believes that these
contractual arrangements, the provisions in its Articles of Incorporation and
Bylaws and insurance coverage are necessary to attract and retain qualified
persons as directors and officers.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4.1 Trendwest Resorts, Inc. 1999 Employee Stock Purchase Plan
4.2 Trendwest Resorts, Inc. 1997 Employee Stock Option Plan
5.1 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe (See Exhibit 5.1)
23.2 Consent of KPMG LLP, Independent Auditors
24 Power of Attorney (See page II-4 of this Registration
Statement)
</TABLE>
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
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 by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Page II-2
<PAGE> 4
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulations S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(h) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Securities and
Exchange Commission such indemnification is against public policy as expressed
in the 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 of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Page II-3
<PAGE> 5
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Redmond, State of Washington, on the 30th day of
June, 1999.
TRENDWEST RESORTS, INC.
/s/ GARY A FLORENCE
------------------------------------
Gary A. Florence, Vice President
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
William F. Peare and Gary A. Florence, or either of them, his attorney-in-fact,
with the power of substitution for him, in any and all capacities, to sign any
amendments to this Registration Statement, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorneys-in-fact and their substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.
<TABLE>
<S> <C> <C>
/s/ WILLIAM F. PEARE President, Chief Executive June 30, 1999
- ---------------------------------------------- Officer and Director
William F. Peare (Principal Executive Officer)
/s/ JEFFERY P. SITES Executive Vice President, June 30, 1999
- ---------------------------------------------- Chief Operating Officer and
Jeffery P. Sites Director
/s/ GARY A. FLORENCE Vice President, Treasurer June 30, 1999
- ---------------------------------------------- and Chief Financial Officer
Gary A. Florence (Principal Financial Officer)
/s/ JEROL E. ANDRES Director June 30, 1999
- ----------------------------------------------
Jerol E. Andres
/s/ HARRY L. DEMOREST Director June 30, 1999
- ----------------------------------------------
Harry L. Demorest
Director
- ----------------------------------------------
Michael P. Hollern
Director
- ----------------------------------------------
Douglas P. Kintzinger
/s/ LINDA M. TUBBS Director June 30, 1999
- ----------------------------------------------
Linda M. Tubbs
/s/ RODERICK C. WENDT Director June 30, 1999
- ----------------------------------------------
Roderick C. Wendt
</TABLE>
Page II-4
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<S> <C>
4.1 Trendwest Resorts, Inc. 1999 Employee Stock Purchase Plan
4.2 Trendwest Resorts, Inc. 1997 Employee Stock Option Plan
5.1 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe (see Exhibit 5.1)
23.2 Consent of KPMG LLP, Independent Auditors
24 Power of Attorney (See page II-4 of this Registration Statement)
</TABLE>
Page II-5
<PAGE> 1
Exhibit 4.1
TRENDWEST RESORTS, INC.
1999 EMPLOYEE STOCK PURCHASE PLAN
Trendwest Resorts, Inc. (the "Company") does hereby establish its 1999
Employee Stock Purchase Plan (the "Plan") as follows:
1. Purpose of the Plan. The Plan is intended to provide a method whereby
eligible employees of the Company and its Subsidiaries will have an opportunity
to acquire a proprietary interest in the Company through the purchase of shares
of common stock of the Company. The Company believes that employee participation
in the ownership of the Company is of benefit to both the employees and the
Company. The Company intends to have the Plan qualify as an "employee stock
purchase plan" under Section 423 of the Code. The provision of the Plan shall,
accordingly, be construed so as to extend and limit participation in a manner
that is consistent with the requirements of that Section of the Code.
2. Definitions.
Account means the funds that are accumulated with respect to each
individual Participant as a result of payroll deductions for the purpose of
purchasing Shares under the Plan. The funds that are allocated to a
Participant's account shall at all times remain the property of that
Participant, but such funds will be commingled with the general funds of the
Company and will not accrue interest.
Board means the Board of Directors of the Company.
Code. means the Internal Revenue Code of 1986, as amended.
Commencement Date means the January 1, April 1, July 1, or October 1 as
the case may be, on which the particular Offering begins.
Compensation means wages and all other compensation, excluding
reimbursements, expense allowance, fringe benefits, moving expenses, deferred
compensation and welfare benefits.
Ending Date means the March 31, June 30, September 30, December 31, or
the nearest prior business day as the case may be, on which the particular
Offering concludes.
ESPP Broker means a qualified stock brokerage or other financial
services firm that has been designated by the Company.
Holding Period mean the holding period that is set forth in Section
423(a) of the Code, which, as of the date that the Company's Board of Directors
adopted this Plan, is both (a) that two (2) year period after the Commencement
Date and (b) that one (1) year period after transfer to a Participant of any
Shares under the Plan.
Participant means an employee who, pursuant to Section 3, is eligible to
participate in the Plan and has complied with the requirements of Section 7.
Pay Period means the payroll cycle of the Participant, which can be
weekly, bi-weekly or bi-monthly.
Offerings means the twenty separate consecutive three month offerings
for the purchase and sale of Shares under the Plan. Each one of the Offerings
shall be referred to as an "Offering."
Shares means shares of the Company's common stock, without par value,
that will be sold to Participants under the Plan.
<PAGE> 2
Subsidiaries means any present or future domestic or foreign corporation
that: (i) would be a "subsidiary corporation" of the Company as that term is
defined in Section 424 of the Code, and (ii) whose employees have been
designated by the Board to be eligible, subject to Section 3, to be Participants
under the Plan.
Withdrawal Notice means a notice, in a form designated by the Company,
that a Participant who wishes to withdraw from an Offering must submit to the
Company pursuant to Section 22 prior to the Ending Date.
3. Employees Eligible to Participate. Any regular employee of the
Company or any of its Subsidiaries who (a) is in the employ of the Company or
any of its Subsidiaries on the Commencement Date, (b) has been so employed for
at least ninety days, without a break in service of over 30 days and (c) has
worked an average of twenty (20) hours per week during such employment is
eligible to participate in the Plan, except officers of the Company within the
meaning of Rule 16a-1 promulgated by the Securities and Exchange Commission
under Section 16 of the Securities Exchange Act of 1934, as amended.
4. Offerings. The Plan shall consist of twenty separate consecutive
three month Offerings. The first Offering shall commence on July 1, 1999.
Thereafter, Offerings shall commence on each subsequent January 1, April 1, July
1, and October 1, and the final Offering under the Plan shall commence on April
1, 2004 and terminate on June 30, 2004.
5. Price. The purchase price per Share shall be 85 percent of the fair
market value of the stock on the Ending Date. Fair market value shall mean the
average of high and low closing bid price as reported on the National
Association of Securities Dealers Automated Quotation System or, if the stock is
traded on a stock exchange, the closing price for the stock on the principal of
such exchange.
6. Number of Shares Reserved Under the Plan. The maximum number of
Shares that will be offered under the Plan is 500,000. If, on any date, the
total number of Shares for which purchase rights are to be granted pursuant to
Section 9 exceeds the number of Shares then available under this Section 6,
(after deduction of all Shares (a) that have been purchased under the Plan, and
(b) for which rights to purchase are then outstanding), the Company shall make a
pro rata allocation of the Shares that remain available in as nearly a uniform
manner as shall be practicable and as it shall determine, in its sole judgement,
to be equitable. In such event, each Participant's payroll deductions shall be
reduced accordingly and the Company shall give to each Participant a written
notice of such reduction.
7. Participant. An eligible employee may become a Participant by
completing the Enrollment Agreement that shall be provided by the Company and
filing it with the Company prior to the Commencement Date of the Offering to
which it relates, Participation in one Offering under the Plan shall neither
limit, nor require, participation in any other Offering. The period for
enrollment into the Plan shall terminate 10 days prior to the next Commencement
Date.
8. Participant Contributions. At the time the Enrollment Agreement is
filed with the Company, each Participant shall authorize the Company to make
payroll deductions of either (a) a fixed dollar amount per pay period or (b) a
whole percentage (not partial or fractional) of Compensation; provided, however,
that no payroll deduction shall exceed 10 percent of Compensation per Pay Period
nor exceed $2,500 during any Offering. The amount of the minimum fixed dollar
deduction may be adjusted by the Board of Directors from time to time; provided,
however, that a Participant's existing rights under any Offering that has
already commenced may not be adversely affected thereby.
Each Participant's payroll deductions shall be credited to that
Participant's Account. A Participant's payroll deductions shall begin on the
Commencement Date, and shall end on the Ending Date unless the Participant
elects to withdraw pursuant to Section 13. A Participant may discontinue
participation in the Plan as provided in Section 13, but no other change may be
made during an Offering and, specifically, a Participant may not alter the
amount or rate of payroll deductions during an Offering.
9. Granting of Right to Purchase. On the Commencement Date, the Plan
shall be deemed to have granted automatically to each Participant a right to
purchase as many Shares (including fractional Shares) as may be purchased with
such Participant's Account on the Ending Date.
2
<PAGE> 3
10. Purchase of Shares. On the Ending Date, each Participant who has not
otherwise withdrawn from an Offering shall be deemed to have carried out the
right to purchase, and shall be deemed to have purchased at the purchase price
set forth in Section 5, the number of Shares (including fractional Shares) that
may be purchased with such Participant's Account.
11. Participant's Rights as a Shareholder. No Participant shall have any
rights of a shareholder with respect to any Shares until the Shares have been
purchased in accordance with Section 10 and issued by the Company.
12. Evidence of Ownership of Shares.
12.1 Promptly following the Ending Date of each Offering, the
Shares that are purchased by each Participant shall be deposited into an account
that is established in the Participant's name with the ESPP Broker.
12.2 A Participant may direct, by written notice to the Company
prior to the Ending Date of the pertinent Offering, that the ESPP Broker account
be established in the names of the Participant and one such other person as may
be designated by the Participant as joint tenants with right of survivorship,
tenants in common, or community property, to the extent and in the manner
permitted by applicable law. Unless otherwise directed, the account will be
established as joint tenants with right of survivorship.
12.3 A Participant shall be free to undertake a disposition, as
that term is defined in Section 424(c) of the Code (which generally includes any
sale, exchange, gift or transfer of legal title), of Shares in the Participant's
ESPP Broker account at any time, whether by sale, exchange, gift or other
transfer of title. Subject to Section 12.4 below, in the absence of such a
disposition of the Shares, however, the Shares must remain in the Participant's
account at the ESPP Broker until the Holding Period has been satisfied. With
respect to Shares for which the Holding Period has been satisfied, a Participant
may move such Shares to an account at another brokerage firm of the
Participant's choosing or request that a certificate that represents the Shares
be issued and delivered to the Participant.
12.4 (a) A participant may file a written designation of a
beneficiary who is to receive any shares and cash, if any, from the
participant's account under the Plan in the event of such participant's death
subsequent to an Exercise Date on which the option is exercised by prior to
delivery to such participant of such shares and cash. In addition, a participant
may file a written designation of a beneficiary who is to receive any cash from
the participant's account under the Plan in the event of such participant's
death prior to exercise of the option. If a participant is married and the
designated beneficiary is not the spouse, spousal consent shall be required for
such designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant and in the absence of a beneficiary validly designated under the
Plan who is living at the time of such participant's death, the Company shall
deliver such shares and/or cash to the executor or administrator of the estate
of the participant, or if no such executor or administrator has been appointed
(to the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known to
the Company, then to such other person as the Company may designate.
13. Withdrawal.
13.1 A Participant may withdraw from an Offering, in whole but
not in part, at any time prior to the Ending Date by delivering a Withdrawal
Notice to the Company, in which event the Company shall refund the Participant's
entire Account as soon as practicable thereafter.
13.2 An employee who has previously withdrawn from the Plan may
re-enter by complying with the requirements of Section 7. Upon compliance with
such requirements, an employee's re-entry into the Plan will become effective on
the Commencement Date of the next Offering following withdrawal.
3
<PAGE> 4
14. Continuation. At the conclusion of each Offering, the Company shall
automatically re-enroll each Participant in the next Offering unless otherwise
instructed.
15. Interest. No interest shall be paid or allowed on a Participant's
Account.
16. Rights Not Transferable. No Participant shall be permitted to sell,
assign, transfer, pledge, or otherwise dispose of or encumber such Participant's
Account or any rights to purchase or to receive Shares under the Plan other than
by will or the laws of descent and distribution, and such rights and interests
shall not be liable for, or subject to, a Participant's debts, contracts, or
liabilities. If a Participant purports to make a transfer, or a third party
makes a claim in respect of a Participant's rights or interests, whether by
garnishment, levy, attachment or otherwise, such purported transfer or claim
shall be treated as a withdrawal election under Section 13.
17. Termination of Employment. As soon as practicable upon termination
of a Participant's employment with the Company for any reason whatsoever,
including but not limited to death or retirement, the Participant's Account
shall be returned to the Participant or the Participant's estate, as applicable.
18. Amendment or Discontinuance of the Plan. The Board shall have the
right to amend, modify or terminate the Plan at any time without notice,
provided that (i) subject to Sections 19 and 23.1(b), no Participant's existing
rights under any Offering that is in progress may be adversely affected thereby,
and (ii) subject to Section 19, in the event that the Board desires to retain
the favorable tax treatment under Section 421 and 423 of the Code, no such
amendment of the Plan shall increase the number of Shares that were reserved for
issuance hereunder unless the Company's shareholders approve such an increase.
19. Changes in Capitalization. In the event of reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, offerings or rights, or any other change in the capital structure
of the Company, the Board may make such adjustment, if any, as it may deem
appropriate in the number, kind, and the price of the Shares that are available
for purchase under the Plan, and in the number of Shares that an employee is
entitled to purchase.
20. Share Ownership. Notwithstanding anything herein to the contrary, no
Participant shall be permitted to subscribe for any Shares under the Plan if
such Participant, immediately after such subscription, owns shares that account
for (including all shares that may be purchased under outstanding subscriptions
under the Plan) five percent or more of the total combined voting power or value
of all classes of shares of the Company or its Subsidiaries. For the foregoing
purposes the rules of Section 424(d) of the Code shall apply in determining
share ownership. In addition, no Participant shall be allowed to subscribe for
any Shares under the Plan that permit such Participant's rights to purchase
Shares under all "employee stock purchase plans" of the Company and its
Subsidiaries to accrue at a rate that exceeds $25,000 of the fair market value
of such shares (determined at the time such right to subscribe is granted) for
each calendar year in which such right to subscribe is outstanding at any time.
21. Administration. The Plan shall be administered by the Board, which
may engage the ESPP Broker to assist in the administration of the Plan. The
Board shall be vested with full authority to make, administer, and interpret
such rules and regulations as it deems necessary to administer the Plan, and any
determination, decision, or action of the Board in connection with the
construction, interpretation, administration or application of the Plan shall be
final, conclusive, and binding upon all Participants and any and all persons
that claim rights or interests under or through a Participant. The Board may
delegate any or all of its authority hereunder to a committee of the Board, as
it may designate.
22. Notices. All notices or other communications by a Participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, that is designated by the Company from time to time for the receipt
thereof, and, in the absence of such a designation, the Company's Staff Services
Department; Attn: Director, shall be authorized to receive such notices.
23. Termination of the Plan.
4
<PAGE> 5
23.1 This Plan shall terminate at the earliest of the following:
(a) June 30, 2004;
(b) The date of the filing of a Statement of Intent to Dissolve
by the Company or the effective date of a merger or consolidation wherein the
Company is not to be the surviving corporation, which merger or consolidation is
not between or among corporations related to the Company. Prior to the
occurrence of either of such events, on such date as the Company may determine,
the Company may permit a Participant to carryout the right to purchase, and to
purchase at the purchase price set forth in Section 5, the number of Shares that
may be purchased with that Participant's Account;
(c) The date the Board acts to terminate the Plan in accordance
with Section 18 above; and
(d) The date when all of the Shares that were reserved for
issuance hereunder have been purchased.
23.2 Upon termination of the Plan, the Company shall refund to
each Participant the balance of each Participant's Account.
24. Limitations on Sale of Stock Purchased Under the Plan. The Plan is
intended to provide Shares for investment and not for resale. The Company does
not, however, intend to restrict or influence the conduct of any employee's
affairs. An employee, therefore, may sell Shares that are purchased under the
Plan at any time, subject to compliance with any applicable federal or state
securities laws. THE EMPLOYEE ASSUMES THE RISK OF ANY MARKET FLUCTUATIONS IN THE
PRICE OF THE SHARES.
25. Governmental Regulation. The Company's obligation to sell and
deliver Shares under this Plan is subject to any governmental approval that is
required in connection with the authorization, issuance, or sale of such Shares.
26. No Employment Rights. The Plan does not, directly or indirectly,
create any right for the benefit of any employee or class of employees to
purchase any Shares under the Plan, or create in any employee or class of
employees any right with respect to continuation of employment by the Company,
and it shall not be deemed to interfere in any way with the Company's right to
terminate, or otherwise modify, an employee's employment at any time.
27. Governing Law. The law of the state of Oregon shall govern all
matters that relate to this Plan except to the extent it is superseded by the
laws of the United States.
5
<PAGE> 1
Exhibit 4.2
TRENDWEST RESORTS, INC.
1997 Employee Stock Option Plan
SECTION 1 Purpose. The purpose of the Trendwest Resorts, Inc. 1997
Employee Stock Option Plan (the "Plan") is to enable Trendwest Resorts, Inc.
(the "Company") to attract and retain the services of people with training,
experience and ability and to provide additional incentive to such persons by
granting them an opportunity to participate in the ownership of the Company.
SECTION 2 Stock Subject to Plan. The stock subject to this Plan shall be
the Company's common stock, no par value per share (the "Common Stock"),
presently authorized but unissued or subsequently acquired by the Company.
Subject to adjustment as provided in Section 10, the aggregate amount of Common
Stock reserved for issuance or delivery upon exercise of all options granted
under this Plan shall not exceed 5% of the shares of Common Stock outstanding
from time to time. If any option granted under this Plan shall expire or
terminate for any reason without having been exercised in full, the unpurchased
shares subject thereto shall thereupon again be available for purposes of this
Plan, including for replacement options which may be granted in exchange for
such expired, surrendered, exchanged, canceled or terminated options.
SECTION 3 Administration. The Plan shall be administered by the Board of
Directors of the Company, in accordance with the following terms and conditions:
3.1 General Authority. Subject to the express provisions of the
Plan, the Board of Directors shall have the authority, in its discretion, to
determine all matters relating to options to be granted under the Plan,
including the selection of individuals to be granted options, the number of
shares to be subject to each option, the exercise price, the term, whether such
options shall be immediately exercisable or shall become exercisable in
increments over time, and all other terms and conditions thereof. Grants under
this Plan to persons eligible need not be identical in any respect, even when
made simultaneously. The Board of Directors may from time to time adopt rules
and regulations relating to the administration of the Plan. The interpretation
and construction by the Board of Directors of any terms or provisions of this
Plan or any option issued hereunder, or of any rule or regulation promulgated in
connection herewith, shall be conclusive and binding on all interested parties.
The Board of Directors in its sole discretion, may grant incentive stock options
("Incentive Stock Options") as such term is defined in Section 422 of the
Internal Revenue Code of 1986, as amended, (the "Code") and/or nonqualified
stock options ("Nonqualified Stock Options"). A Nonqualified Stock Option is a
stock option which is not an Incentive Stock Option. The type of option granted,
whether an Incentive Stock Option or a Nonqualified Stock Option shall be
clearly identified by the Board of Directors when granted. The term option when
used in this Plan should refer to Incentive Stock Options and Nonqualified Stock
Options, collectively.
3.2 Delegation to a Committee. Notwithstanding the foregoing, the
Board of Directors, if it so determines, may delegate any or all authority for
the administration of the Plan to a committee of the Board of Directors (the
"Committee") comprised exclusively of two or more Non-Employee Directors as that
term is defined in Rule 16b-3(b)(3) promulgated under the Securities Exchange
Act of 1934, as amended (the "1934 Act"), and thereafter references to the Board
of Directors in this Plan shall be deemed to be references to the Committee to
the extent provided in the resolution establishing the committee.
3.3 Replacement of Options. The Board of Directors, in its
absolute discretion, may grant options subject to the condition that options
previously granted at a higher or lower exercise price under the Plan be
cancelled or exchanged in connection with such grant. The number of shares
covered by the new options, the exercise price, the term and the other terms and
conditions of the new option, shall be determined in accordance with the Plan
and may be different from the provisions of the cancelled or exchanged options.
Alternatively, the Board of Directors may, with the agreement of the Optionee,
amend previously granted options to establish the exercise price at the then
current fair market value of the Company's Common Stock.
3.4 Loans to Optionees. The Board of Directors, in its absolute
discretion, may provide that the Company loan to Optionees sufficient funds to
exercise any option granted under the Plan and/or to pay
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withholding tax due upon exercise of such option. The Board of Directors shall
have the authority to make such determinations at the time of grant or exercise
and shall establish repayment terms thereof, including installments, maturity
and interest rate.
SECTION 4 Eligibility. Options may be granted only to persons who, at
the time the option is granted, are directors, employees, consultants or
independent contractors of the Company or any of its present or future parent or
subsidiary corporations (as those terms are used in Section 422(a)(2) and (d)(1)
and Section 424(e) and (f) of the Code, hereafter a "Parent" or "Subsidiary").
Any individual to whom an option is granted under this Plan shall be referred to
hereinafter as "Optionee." Any Optionee may receive one or more grants of
options as the Board of Directors as shall from time to time determine, and such
determinations may be different as to different Optionees and may vary as to
different grants. Optionees who are not employees will only be eligible to
receive Nonqualified Stock Options.
SECTION 5 Terms and Conditions of Options. Options granted under this
Plan shall be evidenced by written agreements which shall contain such terms,
conditions, limitations and restrictions as the Board of Directors shall deem
advisable and which are not inconsistent with this Plan. Each option granted
hereunder shall clearly indicate whether it is an Incentive Stock Option or a
Nonqualified Stock Option. Notwithstanding the foregoing, all such options shall
include or incorporate by reference the following terms and conditions:
5.1 Number of Shares; Exercise Price. The maximum number of
shares that may be purchased pursuant to the exercise of each option shall be as
established by the Board of Directors, provided, however, that the maximum
number of shares with respect to which an option or options may be granted to
any Optionee in any one fiscal year of the Company shall not exceed 50,000
shares (the "Maximum Annual Optionee Grant"). The exercise price of all options
granted hereunder shall be as established by the Board of Directors, but in no
event shall be less than the fair market value per share of the Common Stock at
the time the option is granted, as determined in good faith by the Board of
Directors.
5.2 Duration of Options. Subject to the restrictions contained in
Section 9, the term of each option shall be established by the Board of
Directors and, if not so established, shall be ten years from the date it is
granted, but in no event shall the term of any Incentive Stock Option exceed ten
years.
5.3 Exercisability. Each option shall prescribe the installments,
if any, in which an option granted under the Plan shall become exercisable and
the time periods after which such installments shall become exercisable. The
Board of Directors, in its absolute discretion, may waive or accelerate any
installment requirement contained in outstanding options. In no case may an
option be exercised as to less than 100 shares at any one time (or the remaining
shares covered by the option if less than 100) during the term of the option.
Only whole shares shall be issued pursuant to the exercise of any option.
5.4 Incentive Stock Option. Any option which is issued as an
Incentive Stock Option under this Plan, shall, notwithstanding any other
provisions of this Plan or the option terms to the contrary, contain all of the
terms, conditions, restrictions, rights and limitations required to be an
Incentive Stock Option, and any provision to the contrary shall be disregarded.
The Board of Directors may require an Optionee to give the Company prompt notice
of any disposition of shares of Common Stock acquired by the exercise of an
Incentive Stock Option prior to the expiration of two years after the date of
grant of the option and one year from the date of exercise.
SECTION 6 Nontransferability of Options. Options granted under this Plan
and the rights and privileges conferred hereby may not be transferred, assigned,
pledged or hypothecated in any manner (whether by operation of law or otherwise)
other than by will or the applicable laws of descent and distribution, or by
gift to a revocable trust of which the Optionee is a trustee, and shall not be
subject to execution, attachment or similar process. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of any option under
this Plan or any right or privilege conferred hereby, contrary to the provisions
hereof, or upon the sale or levy or any attachment or similar process, such
option thereupon shall terminate and become null and void. During an Optionee's
lifetime, any options granted under this Plan are personal to him or her and are
exercisable solely by such Optionee. Notwithstanding the foregoing, the Company
may permit an Optionee to, during the Optionee's lifetime, designate a
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person who may exercise the option after the Optionee's death by giving written
notice of such designation to the Company (such designation may be changed from
time to time by the Optionee by giving written notice to the Company revoking
any earlier designation and making a new designation).
SECTION 7 Certain Limitations Regarding Incentive Stock Options. The
grant of Incentive Stock Options shall be subject to the following special
limitations:
7.1 Limitation on Amount of Grants. As to all Incentive Stock
Options granted under the terms of this Plan, to the extent that the aggregate
fair market value of the stock (determined at the time the Incentive Stock
Option is granted) with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year (under this Plan and
all other incentive stock option plans of the Company, a related corporation or
a predecessor corporation) exceeds $100,000, such options shall be treated as
Nonqualified Stock Options. The previous sentence shall not apply if the
Internal Revenue Service issues a public rule, issues a private ruling to the
Company, any Optionee or any legatee, personal representative or distributee of
an Optionee or issues regulations changing or eliminating such annual limit. No
such limitation shall apply to Nonqualified Stock Options.
7.2 Grants to 10% Shareholders. Incentive Stock Options may be
granted a person owning more than 10% of the total combined voting power of all
classes of stock of the Company and any Parent or Subsidiary only if (a) the
exercise price is at least 110% of the fair market value of the stock at the
time of grant, and (b) the option is not exercisable after the expiration of
five years from the date of grant.
SECTION 8 Exercise of Options. Options shall be exercised in accordance
with the following terms and conditions:
8.1 Procedure. Options shall be exercised by delivery to the
Company of written notice of the number of shares with respect to which the
option is exercised.
8.2 Payment. Payment of the option price shall be made in full
within 5 business days of the notice of exercise of the option and shall be in
cash or bank-certified or cashier's checks, or personal check if permitted by
the Board of Directors. To the extent permitted by the terms of the option grant
and by applicable laws and regulations (including, but not limited to, federal
tax and securities laws and regulations), an option may be exercised by delivery
of shares of Common Stock of the Company which have been held by the Optionee
for a period of at least six months having a fair market value equal to the
exercise price, such fair market value to be determined in good faith by the
Board of Directors. Such payment in stock may occur in the context of a single
exercise of an option or successive and simultaneous exercises, sometimes
referred to as "pyramiding," which provides that, rather than physically
exchanging certificates for a series of exercises, bookkeeping entries will be
made pursuant to which the Optionee is permitted to retain his existing stock
certificate and a new stock certificate is issued for the net shares.
If the Company's Common Stock is registered under the 1934 Act, and if
permitted by the Board of Directors, and to the extent permitted by applicable
laws and regulations, (including, but not limited to, federal tax and securities
laws and regulations) an option also may be exercised by delivery of a properly
executed exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company the amount of sale or loan proceeds to pay the
exercise price.
8.3 Federal Withholding Tax Requirements. Upon exercise of an
option, the Optionee shall, upon notification of the amount due and prior to or
concurrently with the delivery of the certificates representing the shares, pay
to the Company amounts necessary to satisfy applicable federal, state and local
withholding tax requirements or shall otherwise make arrangements satisfactory
to the Company for such requirements. In order to implement this provision, the
Company or any related corporation shall have the right to retain and withhold
from any payment of cash or Common Stock under this Plan the amount of taxes
required by any government to be withheld or otherwise deducted and paid with
respect to such payment. At its discretion, the Company may require an Optionee
receiving shares of Common Stock to reimburse the Company for any such taxes
required to be withheld by the Company and withhold any distribution in whole or
in part until the Company is so reimbursed. In lieu thereof, the Company shall
have the right to withhold from any other cash amounts due or to become due from
the Company to the
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Optionee an amount equal to such taxes. The Company may also retain and withhold
or the Optionee may elect, subject to approval by the Company at its sole
discretion, to have the Company retain and withhold a number of shares having a
market value not less than the amount of such taxes required to be withheld by
the Company to reimburse the Company for any such taxes and cancel (in whole or
in part) any such shares so withheld.
SECTION 9 Termination of Employment, Disability and Death
9.1 General. If the employment of the Optionee by the Company, a
Parent or a Subsidiary shall terminate by retirement or for any reason other
than death, disability or cause as hereinafter provided, any Option granted
hereunder may be exercised by the Optionee at any time prior to the expiration
of three months after the date of such termination of employment (unless by its
terms the option sooner terminates or expires).
9.2 Disability. If the employment of the Optionee by the Company,
a Parent or a Subsidiary is terminated because of the Optionee's disability (as
herein defined), the option may be exercised by the Optionee at any time prior
to the expiration of one year after the date of such termination (unless by its
terms the option sooner terminates or expires), but only if, and to the extent
the Optionee was entitled to exercise the option at the date of such
termination. For purposes of this section, an Optionee will be considered to be
disabled if the Optionee is unable to engage in any substantial gainful activity
by reason of any medically determinable mental or physical impairment which can
be expected to result in death or which has lasted or can be expected to last a
continuous period of not less than 12 months.
9.3 Death. In the event of the death of an Optionee while in the
employ of the Company, a Parent or a Subsidiary, the option shall be exercisable
on or prior to the expiration of one year after the date of such death (unless
by its terms the option sooner terminates and expires), but only if and to the
extent the Optionee was entitled to exercise the option at date of such death
and only by the Optionee's personal representative if then subject to
administration as part of the Optionee's estate, or by the person or persons to
whom such Optionee's rights under the option shall have passed by the Optionee's
will or by the applicable laws of descent and distribution.
9.4 Termination for Cause. If the Optionee's employment with the
Company, a Parent or a Subsidiary is terminated for cause, any option granted
hereunder shall automatically terminate as of the first advice or discussion
thereof, and such Optionee shall thereupon have no right to purchase any shares
pursuant to such option. "Termination for Cause" shall mean dismissal for
dishonesty, conviction or confession of a crime punishable by law (except minor
violations), violation of the Company's drug testing policies, fraud,
misconduct or disclosure of confidential information.
9.5 Waiver or Extension of Time Periods. The Board of Directors
shall have the authority, prior to or within the times specified in this Section
9 for the exercise of any such option, to extend such time period or waive in
its entirety any such time period to the extent that such time period expires
prior to the expiration of the term of such option. In addition, the Board of
Directors may grant, pursuant to a specific resolution adopted at the time of
grant, modify or eliminate the time periods specified in this Section 9.
However, no Incentive Stock Option may be exercised after the expiration of ten
(10) years from the date such option is granted. If an Optionee holding an
Incentive Stock Option exercises such option, by permission, after the
expiration of the various time periods specified in this Section 9, and by
virtue of such exercise the option is no longer treated as an Incentive Stock
Option under the Code, such Option shall automatically be converted into a
Nonqualified Stock Option.
9.6 Termination of Options. To the extent that the option of any
deceased Optionee or of any Optionee whose employment is terminated shall not
have been exercised within the limited periods prescribed in this Section 9,
including any extension period, all further rights to purchase shares pursuant
to such option shall cease and terminate at the expiration of such period. No
Incentive Stock Option may be exercised after the expiration of ten (10) years
from the date such option is granted, notwithstanding any provision to the
contrary.
9.7 Non-employee Optionees. Options granted to Optionees who are
not employees of the Company, a Parent or a Subsidiary at the time of grant
shall not be subject to the provisions of this Section 9, except as specifically
provided in the option.
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SECTION 10 Acceleration upon Change in Control. Notwithstanding any
other provision of the Plan, if the Board determines that a Change in Control
(as defined in the next paragraph) has occurred or is about to occur, the
options theretofore granted hereunder to a person who at the time of the Change
in Control is an employee, consultants or independent contractor of the Company
or any of its subsidiaries shall, subject to the approval of the Board and the
satisfaction of any applicable requirements or limitations of Rule 16b-3 under
the Exchange Act, become exercisable to the full extent theretofore not
exercised, but in no event after the option period specified in each individual
option agreement.
For purposes of this Section 10 only, a Change in Control
of the Company shall be deemed to have occurred if (A) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company, becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities, or (B)
during any period of two consecutive years individuals who at the beginning of
such period constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in clauses (A) or (C) of this paragraph) whose
election by the Board or nomination for election by the Company's stockholders
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (C) the stockholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.
SECTION 11 Option Adjustments
11.1 Adjustments Upon Changes in Capitalization. The aggregate
number and class of shares on which options may be granted under this Plan, the
Maximum Annual Optionee Grant set forth in Section 5.1, the number and class of
shares covered by each outstanding option and the exercise price per share
thereof (but not the total price), and all such options, shall each be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock of the Company resulting from a split-up, spin-off or
consolidation of shares or any like capital adjustment, or the payment of any
stock dividend.
11.2 Effect of Certain Transactions. Except as provided in
subsection 11.2, upon a merger, consolidation, acquisition of property or stock,
separation, reorganization (other than a merger or reorganization of the Company
in which the holders of Common Stock immediately prior to the merger or
reorganization have the same proportionate ownership of Common Stock in the
surviving corporation immediately after the merger or reorganization) or
liquidation of the Company, as a result of which the shareholders of the Company
receive cash, stock or other property in exchange for their shares of Common
Stock, any option granted hereunder shall terminate, but, provided that the
Optionee shall have the right immediately prior to any such merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation to exercise his or her option in whole or in part whether or not the
vesting requirements set forth in the option agreement have been satisfied.
11.3 Conversion of Options on Stock for Stock Exchange. If the
shareholders of the Company receive capital stock of another corporation
("Exchange Stock") in exchange for their shares of Common Stock in any
transaction involving a merger, consolidation, acquisition of property or stock,
separation or reorganization (other than a merger or reorganization of the
Company in which the holders of Common Stock immediately prior to the merger or
reorganization have the same proportionate ownership of Common Stock in the
surviving corporation immediately after the merger or reorganization), all
options granted hereunder shall terminate in accordance with the provision of
subsection 11.2 unless the Board of Directors and the corporation issuing the
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Exchange Stock, in their sole and arbitrary discretion and subject to any
required action by the shareholders of the Company and such corporation, agree
that all such options granted hereunder are converted into options to purchase
shares of Exchange Stock. The amount and price of the such options shall be
determined by adjusting the amount and price of the options granted hereunder in
the same proportion as used for determining the number of shares of Exchange
Stock the holders of the Common Stock receive in such merger, consolidation,
acquisition of property or stock, separation or reorganization. The vesting
schedule set forth in the option agreement shall continue to apply to the
options granted for the Exchange Stock.
11.4 Fractional Shares. In the event of any adjustment in the
number of shares covered by any option, any fractional shares resulting from
such adjustment shall be disregarded and each such option shall cover only the
number of full shares resulting from such adjustment.
11.5 Determination of Board of Directors to be Final. All such
adjustments shall be made by the Board of Directors and its determination as to
what adjustments shall be made, and the extent thereof, shall be final, binding
and conclusive.
SECTION 12 Securities Regulations
12.1 Compliance. Shares shall not be issued with respect to an
option granted under this Plan unless the exercise of such option and the
issuance and delivery of such shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, any applicable state
securities laws, the Securities Act of 1933, as amended, the 1934 Act, the rules
and regulations promulgated thereunder, and the requirements of the Nasdaq Stock
Market or any stock exchange upon which the shares may then be listed, and shall
further be subject to the approval of counsel for the Company with respect to
such compliance. Inability of the Company to obtain from any regulatory body
having jurisdiction, the authority deemed by the Company's counsel to be
necessary for the lawful issuance and sale of any shares hereunder, shall
relieve the Company of any liability in respect of the nonissuance or sale of
such shares as to which such requisite authority shall not have been obtained.
12.2 Representations by Optionee. As a condition to the exercise
of an option, the Company may require the Optionee to represent and warrant at
the time of any such exercise that the shares are being purchased only for
investment and without any present intention to sell or distribute such shares,
if, in the opinion of counsel for the Company, such representation is required
by any relevant provision of the laws referred to in Section 12.1. At the option
of the Company, a stop transfer order against any shares of stock may be placed
on the official stock books and records of the Company, and a legend indicating
that the stock may not be pledged, sold or otherwise transferred unless an
opinion of counsel was provided (concurred in by counsel for the Company)
stating that such transfer is not in violation of any applicable law or
regulation, may be stamped on the stock certificate in order to assure exemption
from registration. The Board of Directors may also require such other action or
agreement by the Optionees as may from time to time be necessary to comply with
the federal and state securities laws. This provision shall not obligate the
Company to undertake registration of options or stock hereunder.
SECTION 13 Employment Rights. Nothing in this Plan or any option or
right granted pursuant hereto shall confer upon any Optionee any right to be
continued in the employment or service of the Company, a Parent or any
Subsidiary of the Company or to remain a director, or to interfere in any way
with the right of the Company, a Parent or any Subsidiary, in its sole
discretion, to terminate such Optionee's employment or service at any time or to
remove the Optionee as a director at any time.
SECTION 14 Amendment and Termination
14.1 Action by Shareholders. The Plan may be terminated, modified
or amended by the shareholders of the Company.
14.2 Action by Board of Directors. The Board of Directors may at
any time suspend, amend or terminate this Plan. No termination, suspension or
amendment of the Plan may, without the consent of each
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Optionee to whom any option shall theretofore have been granted, adversely
affect the rights of such Optionees under such options.
14.3 Automatic Termination. Unless the Plan shall theretofore
have been terminated as herein provided, this Plan shall terminate ten (10)
years from the earlier of: (a) the date on which the Plan is adopted; or (b) the
date on which this Plan is approved by the shareholders of the Company. No
option may be granted after such termination, or during any suspension of this
Plan. The amendment or termination of this Plan shall not, without the consent
of the Optionee, alter or impair any rights or obligations under any option
theretofore granted under this Plan.
SECTION 15 Effective Date of the Plan. This Plan shall become effective
on the date of its adoption by the Board of Directors of the Company and options
may be granted immediately thereafter but no option may be exercised under the
Plan unless and until the Plan shall have been approved by the shareholders
within 12 months after the date of adoption of the Plan by the Board of
Directors. If such approval is not obtained within such period the Plan and any
options granted thereunder shall be null and void.
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Exhibit 5.1
June 21, 1999
Board of Directors
Trendwest Resorts, Inc.
9805 Willows Road
Redmond, Washington 98052
Gentlemen:
We have acted as counsel for Trendwest Resorts, Inc., an Oregon corporation (the
"Company"), in connection with the preparation and filing of a Registration
Statement ("Registration Statement") on Form S-8 under the Securities Act of
1933, as amended, for 856,451 shares (the "Option Shares") of the Company's
common stock, without par value (the "Common Stock"), that are issuable pursuant
to the Trendwest Resorts Employee Stock Option Plan (the "Option Plan") and
500,000 shares of the Common Stock (the "Stock Purchase Shares") that are
issuable pursuant to the Trendwest Resorts Employee Stock Purchase Plan (the
"Stock Purchase Plan").
We have examined the Registration Statement, the Option Plan, the Stock Purchase
Plan, the proceedings of the Board of Directors and shareholders of the Company
and such other documents and records as we deem necessary for the purpose of
this opinion. In connection with this opinion, we have, with your consent,
assumed the authenticity of all records, documents and instruments submitted to
us as originals, the genuineness of all signatures, the legal capacity of
natural persons and the authenticity and conformity to the originals of all
records, documents and instruments submitted to us as copies.
This opinion is limited to the laws of the State of Oregon. We disclaim any
opinion as to any statute, rule, regulation, ordinance, order or other
promulgation of any other jurisdiction or any federal, regional or local
governmental body.
Based on the foregoing and our examination of such questions of law as we have
deemed necessary or appropriate for the purpose of this opinion, we are of the
opinion that:
1. upon the issuance of the Option Shares under the Option Plan as provided
therein, the Option Shares will be legally issued, fully paid and
nonassessable; and
2. upon the issuance of the Stock Purchase Shares under the Stock Purchase
Plan as provided therein, the Stock Purchase Shares will be legally
issued, fully paid and nonassessable.
<PAGE> 2
Board of Directors Exhibit 5.1
Trendwest Resorts
June 21, 1999
Page 2
We hereby consent to the filing of this Opinion as an Exhibit to the
Registration Statement.
Very truly yours,
/s/ Heller Ehrman White & McAuliffe
HELLER EHRMAN WHITE & MCAULIFFE
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Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Trendwest Resorts, Inc.:
We consent to the use of our report incorporated herein by reference.
KPMG LLP
Seattle, Washington
June 29, 1999
