<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
THOUSAND TRAILS, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 2711 LBJ FREEWAY, SUITE 200 75-2138671
(State or Other Jurisdiction of DALLAS, TEXAS 75234 (I.R.S. Employer
Incorporation or Organization) (972) 243-2228 Identification No.)
(Address of Principal Executive Offices Including Zip Code)
________________________________
STOCK OPTION AGREEMENT DATED AS OF AUGUST 1, 1996
(Full Title of the Plan)
________________________________
WALTER B. JACCARD, ESQ.
VICE PRESIDENT, GENERAL COUNSEL, AND SECRETARY
THOUSAND TRAILS, INC.
2711 LBJ FREEWAY, SUITE 200
DALLAS, TEXAS 75234
(Name and Address of Agent For Service)
________________________________
(972) 243-2228
(Telephone Number, Including Area Code, of Agent For Service)
________________________________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share 664,495 $.69 $458,501.55(1) $134.94
-------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Paragraph (h) of Rule 457 under the Securities Act, Thousand
Trails, Inc. ("Registrant") has determined the offering price upon the
basis of the price at which the options may be exercised, $.69 per share.
<PAGE>
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES
THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT").
664,495 SHARES
THOUSAND TRAILS, INC.
COMMON STOCK
($.01 PAR VALUE)
_______________________________
OFFERED PURSUANT TO THE
STOCK OPTION AGREEMENT DATED AS OF AUGUST 1, 1997
February 28, 1997
Mr. William J. Shaw
Thousand Trails, Inc.
2711 LBJ Freeway, Suite 200
Dallas, Texas 75234
Dear Mr. Shaw:
This prospectus relates to shares of common stock, par value $.01 per
share (the "Shares"), of Thousand Trails, Inc., a Delaware corporation (the
"Company"), issuable to you, under the Company's Stock Option Agreement dated as
of August 1, 1996 (the "Stock Option Agreement").
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference in this
Prospectus, except to the extent that any statement or information therein is
modified or superseded by a statement or information contained in any other
subsequently filed document incorporated herein by reference. Any statement or
information so modified will not be deemed a part of this Prospectus, except as
so modified, and any statement or information so superseded will not be deemed
part of this Prospectus.
1. The Company's Annual Report on Form 10-K for the year ended June
30, 1996.
1
<PAGE>
2. The Company's Quarterly Reports on Form 10-Q for the quarters
ended September 30, 1996 and December 31, 1996.
3. The Company's Current Report on Form 8-K, filed with the
Commission on November 27, 1996.
4. The description of the Shares set forth in the proxy
statement/prospectus filed with the Commission on October 3, 1996
as part of the Registration Statement on Form S-4, Registration
Statement No. 333-13339 (the "S-4 Registration Statement"), which
was incorporated by reference in the Company's Form 8-B filed
with the Commission on November 27, 1996.
All reports and other documents that the Company subsequently files
with the Commission pursuant to Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act, prior to the filing of a post-effective amendment to the
Registration Statement (as hereinafter defined) indicating that the Company has
sold all of the securities offered under this Prospectus or that deregisters all
such securities then remaining unsold, shall be deemed to be incorporated by
reference into this Prospectus from the date that the Company files such report
or document.
AVAILABLE INFORMATION
The Company has filed with the Commission a registration statement on
Form S-8 (referred to herein, together with all amendments and exhibits, as the
"Registration Statement") under the Securities Act with respect to the shares of
the Common Stock which are reserved for issuance under the Agreement. This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For additional information, please refer to the
Registration Statement.
The Company is subject to the informational requirements of the
Exchange Act, and in accordance with such requirements files reports, proxy
statements, and other information with the Commission. The public may inspect
and copy at prescribed rates such reports, proxy statements, and other
information at the public reference facilities that the Commission maintains at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the
Commission's regional offices located at 7 World Trade Center, 13th Floor, New
York, New York 10048. The Commission maintains a World Wide Web site on the
Internet at http://www.sec.gov that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission.
The Company hereby undertakes to provide, without charge, to you, upon
written or oral request, a copy of the information that has been incorporated by
reference in the Registration Statement (not including exhibits to the
information that is incorporated by reference into this Prospectus) and of the
other documents required to be delivered to employees pursuant to Rule 428(b)
under the Securities Act. Requests for such documents, and additional
information about the Stock Option Agreements, should be directed to the
2
<PAGE>
Secretary, Thousand Trails, Inc., 2711 LBJ Freeway, Suite 200, Dallas, Texas
75234, telephone number (972) 243-2228.
The Stock Option Agreement is not subject to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), nor is it qualified under
Section 401K of the Internal Revenue Code.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a brief discussion of the federal income tax
treatment that will generally apply with respect to the options granted pursuant
to the Stock Option Agreement. These rules are highly technical and subject to
change. The following discussion is limited to the Federal income and certain
employment tax rules in effect on the date hereof and relevant to the Company
and to individuals who are citizens or residents of the United States. The
discussion does not address the State, local or foreign income tax rules
relevant to the Stock Option Agreement or other U.S. tax provisions such as
estate and gift taxes.
ISOs. Generally, you will not be taxed and the Company will not be
entitled to a deduction on the grant or the exercise of ISOs. An exception
exists if you dispose of the shares acquired upon the exercise of the ISOs
within: (i) one year after the date that the Company issues the shares pursuant
to the exercise of such ISOs or (ii) two years after the date that the Company
granted the ISOs. In such a case, you will recognize ordinary income in an
amount equal to the excess of the lesser of the amount realized on the date of
sale or the fair market value on the date of exercise over the exercise price,
with any remaining gain being capital gain. The Company will then be entitled
to a deduction in an amount equal to the amount of ordinary income that you
recognize.
If you do not sell the shares received upon the exercise of the ISOs
within the above described time limits, you will not recognize any ordinary
income upon any subsequent sale of the shares. You will instead recognize
capital gain or loss in an amount equal to the difference between the amount
realized on the sale and the exercise price, provided that the shares constitute
capital assets you. The Company will not be entitled to any deduction in this
event.
Exercise of ISOs may result in alternative minimum tax liability for
you.
Non-Qualified Options. Generally, the grant of non-qualified options
will not be a taxable event to you. Upon exercise of the non-qualified options,
you will generally recognize ordinary income in an amount equal to the excess of
the then fair market value of the shares acquired upon exercise over the
exercise price. The Company will generally be entitled to a deduction equal to
such amount. Upon the later disposition of the shares, appreciation or
depreciation after the date of exercise will be a capital gain or loss,
respectively, provided that the shares constitute capital assets to you.
3
<PAGE>
Use of Shares as Consideration. Special rules will apply if you pay
the exercise or purchase price by delivering previously owned shares or other
property or by reducing the number of shares otherwise issuable pursuant to any
options. The surrender or withholding of such shares or other property may
cause you to recognize gain with respect thereto. Such gain will be taxable as
ordinary income if the shares surrendered or withheld were acquired upon the
exercise of ISOs and the surrender occurs within one year after the exercise or
two years after the date of grant of the ISOs. In addition, you will recognize
income with respect to the withheld shares equal to the difference between the
then fair market value of the shares and the exercise price or basis thereof.
Deduction Limit. Under Section 162(m) of the Code, income tax
deductions of publicly-traded companies may be limited to the extent total
compensation (including base salary, annual bonus, stock option exercises and
non-qualified benefits) for certain executive officers exceeds $1 million (less
the amount of any "excess parachute payments" as defined in Section 280G of the
Code) in any one year. However, under Section 162(m), the deduction limit does
not apply to certain "performance-based" compensation established by an
independent compensation committee which is adequately disclosed to, and
approved by, stockholders. In particular, stock options will satisfy the
performance-based exception if the awards are made by a qualifying compensation
committee, the plan sets the maximum number of shares that can be granted to any
particular employee within a specified period and the compensation is based
solely on an increase in the stock price after the grant date (i.e. the option
exercise price is equal to or greater than the fair market value of the stock
subject to the award on the grant date). The Stock Option Agreement is intended
to conform to the performance-based exception under Section 162(m).
Withholding Requirements. In connection with the options granted
pursuant to the Stock Option Agreement, the Company must withhold federal taxes
with respect to any ordinary income that you recognize in connection with such
options. The Company may also have to withhold state and local taxes with
respect thereto. You must pay such withholding liability to the Company. With
the prior consent of the committees administering the Stock Option Agreement,
you may be allowed to deliver to the Company shares of Existing Common Stock in
the amount of such withholding liability.
THE SUMMARY OF THE EFFECT OF THE FEDERAL INCOME TAX UNDER THE
AGREEMENTS DOES NOT PURPORT TO BE COMPLETE, AND IT IS RECOMMENDED THAT YOU
CONSULT YOUR OWN TAX ADVISORS FOR COUNSELING. THE TAX TREATMENT UNDER FOREIGN,
STATE, OR LOCAL LAW IS NOT COVERED IN THIS SUMMARY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
4
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No person is authorized to make any representations in connection with
the securities offered pursuant to this Prospectus, other than the
representations set forth in this Prospectus. In addition, notwithstanding
anything else to the contrary, no offer to sell or solicitation of an offer to
buy any of the securities offered by this Prospectus or any sale of the
securities offered by this Prospectus shall occur in any state or other
jurisdiction where such offer, solicitation, or sale would be unlawful. Neither
the delivery of this Prospectus nor any sale made pursuant to this Prospectus
shall create any implication that the information set forth in this Prospectus
is correct as of any time subsequent to the date of this Prospectus.
5
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The information requested in Part I of this Form S-8 is included in
the prospectus for the Plan, which the Registrant has excluded from this Form
S-8 in accordance with the instructions thereto.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents that the Registrant or its predecessor,
USTrails, Inc., a Nevada corporation ("USTrails") have previously filed with the
Securities and Exchange Commission (the "Commission") are hereby incorporated by
reference herein:
1. The Annual Report of USTrails on Form 10-K for the year ended
June 30, 1996.
2. The Quarterly Reports of USTrails on Form 10-Q for the quarters
ended September 30, 1996 and December 31, 1996.
3. The Current Report of USTrails on Form 8-K filed with the
Commission on July 25, 1996, and the Registrant's Current Report
on Form 8-K filed with the Commission on November 27, 1996.
4. The description of the common stock, par value $.01 per share, of
the Registrant (the "Shares") set forth in the proxy
statement/prospectus filed with the Commission on October 3, 1996
as part of the Registration Statement on Form S-4, Registration
Statement No. 333-13339 (the "S-4 Registration Statement"), which
was incorporated by reference in the Registrant's Form 8-B filed
with the Commission on November 27, 1996.
All reports and other documents that the Registrant subsequently files
with the Commission pursuant to Sections 13(a), 13(c), 14, or 15(d) of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), prior to
the filing of a post-effective amendment indicating that the Registrant has sold
all of the securities offered hereunder or that deregisters the distribution of
all such securities then remaining unsold, shall be deemed to be incorporated by
reference herein from the date that the Registrant files such report or
document. Statements contained in reports and documents incorporated herein by
reference shall be deemed to be modified or superseded to the extent that
statements in any subsequently filed reports and documents that are also
incorporated herein by reference, or in any amendments hereto, are inconsistent
therewith.
2
<PAGE>
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under its Bylaws, the Registrant must indemnify its present and former
directors and officers for the damages and expenses that they incur in
connection with threatened or pending actions, suits, or proceedings arising
because of their status as directors and officers, provided that they acted in
good faith and in a manner that they reasonably believed to be in or not opposed
to the best interests of the Registrant (or with respect to any criminal action
or proceeding, provided that they had no reasonable cause to believe that their
conduct was unlawful).
The Registrant must advance funds to these individuals to enable them to
defend any such threatened or pending action, suit, or proceeding. The
Registrant cannot release such funds, however, until it receives an undertaking
by or on behalf of the requesting individual to repay the amount if a court of
competent jurisdiction ultimately determines that such individual is not
entitled to indemnification. The Registrant has established trusts (the
"Indemnification Trusts") that will reimburse its present and former directors
and officers for any indemnifiable damages and expenses that they incur and that
will advance to the defense funds. The Registrant contributed $800,000 to the
Indemnification Trusts. Pursuant to the trust agreements, interest on the
Indemnification Trusts corpus becomes part of the trust estate.
The Indemnification Trusts will terminate on the earlier of: (i) the
execution by a majority of the beneficiaries of a written instrument terminating
the trusts, (ii) the exhaustion of the entire trust estate, or (iii) the
expiration of ten years from the establishment of the trusts. The
Indemnification Trusts may not terminate, however, if there is pending or
threatened litigation with respect to a claim by a beneficiary against the
Indemnification Trust, until: (i) a final judgment in such proceeding, (ii) the
execution and delivery of a statement by such beneficiary that assertion of a
threatened claim is unlikely, or (iii) the expiration of all applicable statutes
of limitations. The Registrant possesses a residuary interest in the trust
estates upon termination of the Indemnification Trusts.
Section 145 of the Delaware Corporate Law provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that such person is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if such person acted in good faith and in a manner
the person reasonably believed to be in or not opposed to the best interests of
the Registrant, and, with respect to any criminal
3
<PAGE>
action or proceeding, had no reasonable cause to believe was unlawful. A similar
standard of care is applicable in the case of derivative actions, except that
indemnification only extends to expenses (including attorneys' fees) incurred in
connection with defense or settlement of such an action and then, where the
person is adjudged to be liable to the corporation, only if and to the extent
that the Court of Chancery of the State of Delaware or the court in which such
action was brought determines that such person is fairly and reasonably entitled
to such indemnity and then only for such expenses as the court shall deem
proper.
The Registrant has entered into Indemnity Agreements with its directors and
officers contractually obligating the Registrant to provide indemnification
rights substantially similar to those described above.
The Registrant is empowered by Section 102(b)(7) of the Delaware Corporate
Law to include a provision in its Certificate of Incorporation that limits a
director's liability to the Registrant or its stockholders for monetary damages
for breaches of his or her fiduciary duty as a director. The Registrant's
Certificate of Incorporation states that directors shall not be liable for
monetary damages for breaches of their fiduciary duty to the fullest extent
permitted by the Delaware Corporate Law.
The Registrant maintains directors' and officers' insurance for certain
expenses and losses.
Under the Registrant's stock option plans, the Registrant must indemnify
the members of the Board of Directors of the Registrant and the Compensation
Committee thereof, which committee administers the plans, for any damages and
expenses that they incur in connection with such plans or the making of awards
thereunder, so long as they act in good faith.
Additionally, National American Corporation ("NACO"), a wholly-owned
subsidiary of the Registrant, has indemnification obligations to its directors
and officers. In connection therewith, NACO contributed $200,000 to a trust. The
trust will reimburse the NACO directors and officers for any indemnifiable
damages and expenses that they incur and will advance defense funds to them.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<S> <C>
4.1 Amended and Restated Certificate of Incorporation of the
Registrant (incorporated by reference to the Proxy
Statement/Prospectus filed with the Commission on October 3, 1996
as part of the Registration Statement on Form S-4, Registration
Statement No. 333-13339 (the "S-4 Registration Statement").
</TABLE>
4
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<TABLE>
<CAPTION>
<S> <C>
4.2 Amended and Restated Bylaws of the Registrant (incorporated by
reference to Exhibit 3.2 to the Form 8-B filed with the
Commission on November 27, 1996 ("Form 8-B").
4.3 Stock Option Agreement dated as of August 1, 1996, between
USTrails Inc. and William J. Shaw (incorporated by reference to
Exhibit 10.26 to Form 8-B).
5.1 Opinion of Gibson, Dunn & Crutcher LLP.
23.1 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1).
23.2 Consent of Arthur Andersen & Co. to incorporate by reference
their Report of Independent Public Accountants set forth in the
Annual Report of USTrails Inc. on Form 10-K for the year ended
June 30, 1996.
24 Power of Attorney (see signature page of Registration Statement
included herein).
</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;
and
(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) of this section 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 Section 15(d) of the
Securities Exchange of 1934 that are incorporated by reference in the
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.
5
<PAGE>
(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
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 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.
(c) 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.
[SIGNATURES ON THE NEXT PAGE]
6
<PAGE>
SIGNATURES
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 Dallas, State of Texas, on this 28th day of February,
1997.
THOUSAND TRAILS, INC.
By: /s/ William J. Shaw
------------------------------------------
Name: William J. Shaw
Title: Chairman of the Board, President, and
Chief Executive Officer
7
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below does hereby constitute and appoint William J. Shaw and Walter B.
Jaccard, and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and resubstitution, for him and in his name, place
and stead, in any and all capacities, to sign any and all amendments (including,
without limitation, post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents, and each of them, or his or 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, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on February 28th, 1997.
REGISTRANT OFFICERS AND DIRECTORS
Signature Title
--------- -----
/s/ William J. Shaw Director, Chairman of the Board, President and
- ---------------------------
William J. Shaw Chief Executive Officer (principal executive
officer)
/s/ Harry J. White, Jr. Vice President, Chief Financial Officer, Chief
- ---------------------------
Accounting Officer and Treasurer (principal
Harry J. White, Jr. financial and accounting officer)
/s/ Andrew M. Boas Director
- ---------------------------
Andrew M. Boas
/s/ William P. Kovacs Director
- ---------------------------
William P. Kovacs
/s/ Donald R. Leopold Director
- ---------------------------
Donald R. Leopold
/s/ H. Sean Mathis Director
- ---------------------------
H. Sean Mathis
/s/ Douglas K. Nelson Director
- ---------------------------
Douglas K. Nelson
8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NO.
- ----------- ------------------------------------------------------- --------------
<S> <C> <C>
4.1 Amended and Restated Certificate of Incorporation of the
Registrant (incorporated by reference to the Proxy
Statement/Prospectus filed with the Commission on October 3,
1996 as part of the Registration Statement on Form S-4,
Registration Statement No. 333-13339 (the "S-4 Registration
Statement")................................................. N/A
4.2 Amended and Restated Bylaws of the Registrant (incorporated
by reference to Exhibit 3.2 to the Form 8-B filed with the
Commission on November 27, 1996 ("Form 8-
B")......................................................... N/A
*4.3 Stock Option Agreement dated as of August 1, 1996, between
USTrails Inc. and William J. Shaw (incorporated by reference
to Exhibit 10.26 to Form 8-B)............................... 11
*5.1 Opinion of Gibson, Dunn & Crutcher LLP...................... 20
*23.1 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit
5.1)........................................................ N/A
*23.2 Consent of Arthur Andersen LLP to incorporate by reference
their Report of Independent Public Accountants set forth in
the Annual Report of USTrails Inc. on Form 10-K for the year
ended June 30, 1996......................................... 23
*24 Power of Attorney (see signature page of Registration
Statement included herein).................................. N/A
</TABLE>
____________________________
* Filed herewith.
9
<PAGE>
EXHIBIT 4.3
EXECUTION COPY
USTRAILS INC.
STOCK OPTION AGREEMENT
This Stock Option Agreement ("AGREEMENT") is made and entered into as of
---------
the Date of Grant indicated below by and between USTrails Inc., a Nevada
corporation (the "COMPANY"), and the William J. Shaw ("OPTIONEE").
------- --------
A. Optionee is the President and Chief Executive Officer of the Company.
In order to retain and motivate Optionee subsequent to the consummation of the
restructuring of the outstanding debt represented by the Company's 12% Senior
Secured Notes Due 1998, and to align the interest of Optionee with the
stockholders of the Company by providing for a proprietary interest of Optionee
in the Company, all of which will substantially benefit the Company, the Special
Committee of the Board of Directors of the Company (the "BOARD") has approved
-----
the grant to Optionee of an option to purchase shares of the common stock, par
value $.01 per share, of the Company (the "COMMON STOCK"), on the terms and
------------
conditions set forth herein.
B. In consideration of the foregoing recitals and the covenants set forth
herein, the parties hereto hereby agree as follows.
1. GRANT OF OPTION; CERTAIN TERMS AND CONDITIONS. The Company hereby
---------------------------------------------
grants to Optionee, subject to stockholder approval (which stockholder approval
shall be within twelve months of the Date of Grant), and Optionee hereby
accepts, as of the Date of Grant, an option to purchase the number of shares of
Common Stock indicated below (the "OPTION SHARES") at the Exercise Price per
-------------
share indicated below, which option shall expire at 5:00 o'clock p.m. (local
time at the Company's principal executive office) on the Expiration Date
indicated below (unless earlier terminated pursuant to Section 2 hereof or, with
respect to the portion of the Option not constituting an Incentive Stock Option,
extended pursuant to Section 8(c) hereof), and shall be subject to all of the
terms and conditions set forth in this Agreement (the "OPTION").
------
DATE OF GRANT: August 1, 1996
NUMBER OF SHARES PURCHASABLE: 664,495
EXERCISE PRICE PER SHARE: $.69
EXPIRATION DATE: July 31, 2006
OPTIONS TO PURCHASE UP TO 144,927 OPTION SHARES ARE INTENDED TO QUALIFY AS AN
INCENTIVE STOCK OPTION (FOR PURPOSES HEREOF, SUCH PORTION OF THE OPTION IS
REFERRED TO AS THE "INCENTIVE STOCK OPTION") UNDER SECTION 422 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED ("CODE"). THE COMPANY AND THE OPTIONEE HEREBY
ACKNOWLEDGE THAT THE EXERCISE PRICE REPRESENTS THE FAIR MARKET VALUE OF THE
COMMON STOCK ON THE DATE OF GRANT. THE OPTION SHALL BE EXERCISABLE, DURING HIS
LIFETIME, ONLY BY THE OPTIONEE. THE OPTIONS WITH RESPECT TO ALL OTHER OPTION
SHARES SHALL NOT BE AN INCENTIVE STOCK OPTION, BUT RATHER SHALL BE A
NONQUALIFIED OPTION.
<PAGE>
2. TERMINATION OF OPTION.
(A) TERMINATION OF EMPLOYMENT OR OTHER STATUS.
(i) Death or Disability. In the event that Optionee shall
-------------------
cease to be an employee of the Company (such event shall be referred to
herein as the "TERMINATION" of Optionee's "STATUS") by reason of the death
----------- ------
or Permanent Disability (as hereinafter defined) of Optionee, then the
Option shall, subject to Section 8(c), terminate upon the earlier of the
Expiration Date or the first anniversary of the date of such Termination of
Status. "PERMANENT DISABILITY" shall be deemed to have occurred if:
--------------------
(A) as result of the Optionee's incapacity due to
physical or mental illness, the Optionee shall
have been continuously absent from his duties for
at least six (6) consecutive months, and
(B) the Company shall have given the Optionee written
notice of the termination of the Optionee's
employment or other Status on account of the
Optionee's Disability, and
(C) thirty (30) days shall have elapsed after the
giving of such notice, and
(D) the Optionee shall not have resumed his duties on
a full time basis prior to the expiration of such
thirty (30) day period.
(ii) Termination by the Company. Except as provided below,
--------------------------
if Optionee's Status is Terminated by the Company for any reason other than
death or Permanent Disability, then, subject to Section 8(c), the Option
shall terminate upon the earlier of the Expiration Date or the completion
of three (3) months after the date of such Termination. However, if the
Termination was for "cause," as defined below, the Option shall terminate
immediately upon such Termination. For purposes hereof, "cause" shall mean
termination of the Optionee's Status by the Company because of: (i) the
Optionee's conviction for or plea of nolo contendere to any felony or crime
involving moral turpitude, (ii) the Optionee's commission of an act of
personal dishonesty or breach of fiduciary duty involving personal profit
in connection with the Optionee's employment by the Company, (iii) the
Optionee's commission of an act involving intentional misconduct on the
part of the Optionee in the conduct of his duties, (iv) the Optionee's
willful failure to execute lawful policies of the Company, (v) chronic
alcoholism or any other form of addiction to drugs on the part of the
Optionee, or (vi) a material breach by the Optionee of any material
provision of any the Employment Agreement between Optionee and the Company
dated as of May 11, 1995, as amended, modified or supplemented from time to
time, or any other employment agreement to which he may from time to time
be a party.
(iii) Voluntary Resignation. If a Optionee's Status is
---------------------
terminated due to the Optionee's resignation (as determined by the Board), then,
<PAGE>
subject to Section 8(c), the Option shall terminate upon the earlier of the
Expiration Date or the completion of three (3) months after the date of such
Termination.
(b) Other Events Causing Termination of Option. Notwithstanding
------------------------------------------
anything to the contrary in this Agreement, the Option shall terminate upon the
consummation of any of the following events, or, if later, the thirtieth day
following the first date upon which such event shall have been approved by both
the Board and the stockholders of the Company, or upon such later date as shall
be determined by the Board:
(i) the dissolution or liquidation of the Company; or
(ii) a sale of substantially all of the property and assets of
the Company, unless the terms of such sale shall provide otherwise.
3. ADJUSTMENTS. In the event that the outstanding securities of the
------------
class then subject to the Option are increased, decreased, or exchanged for or
converted into cash, property, and/or a different number or kind of securities,
or cash, property, and/or securities are distributed in respect of such
outstanding securities, in either case as a result of a reorganization, merger,
consolidation, recapitalization, restructuring, reclassification, spin-off,
spin-out, dividend (other than a regular cash dividend) or other distribution,
stock split, reverse stock split or the like, or in the event that substantially
all of the property and assets of the Company are sold, then, unless such event
shall cause the Option to terminate pursuant to Section 3(b) hereof, (A) a
committee of the Board of Directors of the Company comprised solely of two or
more directors who qualify as "outside directors" (as defined in Code Section
162(m)) and (B) a committee of the Board of Directors comprised solely of "non
employee directors" (as defined in Rule 16b-3 promulgated under the Securities
Exchange Act of 1934) or the full Board of Directors (the "COMMITTEES") shall
----------
make appropriate and proportionate adjustments in the number and type of shares
or other securities or cash or other property that may thereafter be acquired
upon the exercise of the Option; provided, however, that any such adjustments in
the Option shall be made without changing the aggregate Exercise Price of the
then unexercised portion of the Option.
4. EXERCISE. Subject to stockholder approval within twelve months of the
--------
Date of Grant and subject also to Section 8 hereof, the Option shall be
exercisable, in full or in part, at any time and from time to time after the
date the Option is so approved by the stockholders of the Company and prior to
the Expiration Date (unless earlier terminated pursuant to Section 2, but
subject to Section 8(c)). The Option shall be exercisable during Optionee's
lifetime only by Optionee, and after Optionee's death only by the person or
entity entitled to do so under Optionee's last will and testament or applicable
intestate law. The Option may only be exercised by the delivery to the Company
of a written notice of such exercise, which notice shall specify the number of
Option Shares to be purchased (the "PURCHASED SHARES") and the aggregate
----------------
Exercise Price for such shares (the "EXERCISE NOTICE"), together with payment in
---------------
full of such aggregate Exercise Price in cash or by check payable to the
Company; provided, however, that payment of such aggregate Exercise Price may
instead be made, in whole or in part:
(i) with the prior approval of the Committees, by the delivery to
the Company of a promissory note in a form and amount satisfactory to the Board,
provided that the principal amount of such note shall not exceed the excess of
such
<PAGE>
aggregate Exercise Price over and above the aggregate par value of the Purchased
Shares; or
(ii) with prior approval of the Committees, by the delivery to the
Company of a certificate or certificates representing shares of Common Stock,
duly endorsed or accompanied by a duly executed stock powers, which delivery
effectively transfers to the Company good and valid title to such shares, free
and clear of any pledge, commitment, lien, claim or other encumbrance (such
shares to be valued on the basis of the aggregate Fair Market Value thereof on
the date of such exercise), provided that the Company is not then prohibited by
the terms of any contractual obligation or legal restriction from purchasing or
acquiring such shares of Common Stock.
5. PAYMENT OF WITHHOLDING TAXES.
----------------------------
(a) If the Company is obligated to withhold an amount on account of
any federal, state, or local tax, including, but not limited to, any income tax,
F.I.C.A. tax, disability insurance tax, or other employment tax, imposed for any
reason, including, without limitation, upon the exercise of the Option or
subsequent disposition of the underlying stock, then the Optionee, upon the
occurrence of the taxable event and providing the Optionee is still an employee
of the Company, shall pay the applicable withholding liability (the "WITHHOLDING
-----------
LIABILITY") to the Company in cash or by check payable to the Company; provided,
- ---------
however, that, in the discretion of the Committees, Optionee may, pursuant to an
irrevocable election of Optionee (a "WITHHOLDING ELECTION") made on or prior to
--------------------
the date of such exercise, instead pay all or any part of the Withholding
Liability by the delivery to the Company of a stock certificate or certificates
representing shares of Common Stock, duly endorsed or accompanied by a duly
executed stock powers, which delivery effectively transfers to the Company good
and valid title to such shares, free and clear of any pledge, commitment, lien,
claim, or other encumbrance (such shares to be valued on the basis of the
aggregate Fair Market Value thereof on the date of such exercise), provided that
the Company is not then prohibited by the terms of any contractual obligation or
legal restriction from purchasing or acquiring such shares of Common Stock. For
purposes hereof, "FAIR MARKET VALUE" shall mean the average of the closing bid
-----------------
and asked quotation for the Common Stock as quoted through the NASD OTC Bulletin
Board and National Quotation Bureau's Pink Sheets or, if quoted thereon, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotations System.
(b) The Committees, in their sole discretion, may (1) impose such
additional conditions under Section 4 and Section 5 as may be required to comply
with Section 16 under the Exchange Act and the rules promulgated thereunder, and
(2) waive any of the restrictions in Section 4 and Section 5 in the event that
either (A) the transaction would not result in liability under Section 16(b) of
the Exchange Act, or (B) the Optionee consents to liability thereunder and
consents to disgorge any profits relating thereto to the Company.
(c) The Committees shall have sole discretion to approve or
disapprove any Withholding Election and may adopt such rules and regulations as
are consistent with and necessary to implement the foregoing. The Committees may
permit Optionee to make a Withholding Election to pay withholding taxes in
excess of the minimum amount required by law, provided that the amount of
withholding taxes so paid does not exceed the estimated total federal, state,
and local tax liability of Optionee attributable to such exercise.
<PAGE>
6. STOCK EXCHANGE REQUIREMENTS; APPLICABLE LAWS.
--------------------------------------------
(a) Notwithstanding anything to the contrary in this Agreement, no
shares of stock purchased upon exercise of the Option, and no certificate
representing all or any part of such shares, shall be issued or delivered if
(a) such shares have not been admitted to listing or approved for quotation upon
official notice of issuance on each stock exchange or automated quotation system
upon which shares of that class are then listed, or (b) in the opinion of
counsel to the Company, such issuance or delivery would cause the Company to be
in violation of or to incur liability under any federal, state or other
securities law, or any requirement of any stock exchange listing agreement to
which the Company is a party or other rules or regulations of the National
Association of Securities Dealers, Inc. to which the Company is subject, or any
other requirement of law or of any administrative or regulatory body having
jurisdiction over the Company.
(b) Optionee represents to the Company that Optionee is a bona fide
resident of the State of Texas (the "STATE"). Notwithstanding anything to the
-----
contrary herein, this Agreement shall not become effective until the making of
all applicable security filings under the laws of the State and the
effectiveness thereof. Optionee shall promptly notify the Company in writing if
the Optionee becomes a bonafide resident of any jurisdiction other than the
State.
7. NONTRANSFERABILITY. Neither the Option nor any interest therein may
------------------
be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise
transferred in any manner other than by will or the laws of descent and
distribution.
8. RESTRICTIONS. (a) Except as otherwise permitted under Section 16 of
------------
the Exchange Act (including any rules promulgated thereunder), Optionee may not,
if he is subject to liability under Section 16 of the Exchange Act, sell any
Option Share issued hereunder until the expiration of the six (6) month period
commencing on the Date of Grant, unless the same would either not result in
liability under said Section 16 or the Optionee consents to such liability and
consents to disgorge any profits relating thereto to the Company.
(b) Optionee may not exercise this Option if, and to the extent that,
Option Shares issued hereunder would constitute "Excess Common Stock" as defined
in Article Nine of the Restated Bylaws of the Company (or any successor
provision in the charter or bylaws of the Company or its successor in interest);
provided, however, that with respect to that portion of the Option constituting
the Incentive Stock Option, the restriction on exercise in this Section 8(b)
shall not apply during the 90 day period immediately prior to the Expiration
Date.
(c) If pursuant to any provision hereof the Option would terminate on a
date on which Optionee is prohibited from exercising all or a portion of the
Option pursuant to Section 8(b), the term of the Option shall be extended with
respect to that portion of the Option Shares which would constitute "Excess
Common Stock" and shall terminate on the date which is 90 days after the date
the Option may thereafter first be exercised with respect to such Option Shares
without limitation pursuant to Section 8(b); provided that portion of the
Option constituting the Incentive Stock Option shall in any event expire on the
Expiration Date.
(d) Optionee acknowledges and agrees that the Option Shares issued
hereunder shall be subject to the restrictions set forth in Article Nine of the
Restated By-Laws of the Company (or any successor provision in the charter or
bylaws of the
<PAGE>
Company or its successor in interest) and each certificate representing Option
Shares will contain a legend substantially to the following effect (or as may be
required to give notice of any successor provision in the charter or bylaws of
the Company or its successor in interest):
TRANSFER OF THESE SHARES IS SUBJECT TO RESTRICTIONS DESIGNED
TO AVOID AN "OWNERSHIP CHANGE" WITHIN THE MEANING OF SECTION 382
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. SUCH
RESTRICTIONS ARE SET FORTH IN ARTICLE NINE OF THE RESTATED BYLAWS
OF THE COMPANY. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE
HEREOF AGREES TO BE BOUND BY SUCH RESTRICTIONS. THE COMPANY WILL
FURNISH TO THE RECORD HOLDER OF THIS CERTIFICATE UPON REQUEST TO
THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS, A COPY OF SUCH
RESTRICTIONS.
(e) Optionee understands and acknowledges that the Option and Option
Shares have not been registered under the Securities Act of 1933, as amended
(the "Securities Act"), or other applicable securities laws and represents that
he is acquiring the Option and will acquire the Option Shares for his own
account for investment and not with a view to any distribution thereof. Optionee
acknowledges that, unless issued pursuant to an effective registration
statement, each certificate for Option Shares will contain a legend
substantially to the following effect:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH SECURITY ONLY PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OR PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO IT.
9. STOCKHOLDER RIGHTS. No person or entity shall be entitled to vote,
------------------
receive dividends, or be deemed for any purpose the holder of any Option Shares
until the Option shall have been duly exercised to purchase such Option Shares
in accordance with the provisions of this Agreement.
10. STATUS RIGHTS. No provision of this Agreement or of the Option
-------------
granted hereunder shall (a) confer upon Optionee any right to continue in his
Status with the Company, (b) affect the right of the Company to Terminate the
Status of Optionee, with or without cause, or (c) confer upon Optionee any right
to participate in any employee benefit plan or other program of the Company.
<PAGE>
11. NOTICES. Any notice to be given to the Company shall be personally
-------
delivered to or addressed to the Secretary of the Company, at its principal
office, and any notice to be given to the Optionee shall be addressed to him at
the address given beneath his signature hereto, or at such other address as the
Optionee may hereafter designate in writing to the Company. Any notice to the
Company is deemed given when received by the Company. Any notice to the
Optionee is deemed given when enclosed in a properly sealed envelope addressed
as aforesaid, and deposited, postage prepaid, in a post office or branch post
office regularly maintained by the United States.
12. SUCCESSOR AND ASSIGNS. This Agreement shall inure to the benefit of
---------------------
and be binding upon the parties hereto and the Optionee's beneficiaries, heirs,
executors, and administrators, and the Company's successors and assigns.
13. GOVERNING LAW. This Agreement and the Option granted hereunder shall
-------------
be governed by and construed and enforced in accordance with the laws of the
State of Nevada (except to the extent preempted by federal law).
[Signatures on next page]
<PAGE>
IN WITNESS WHEREOF, the Company and Optionee have duly executed this
Agreement effective as of the Date of Grant.
USTRAILS INC.
By: ___________________________________
Name:______________________________
Title:_____________________________
OPTIONEE
________________________________________
William J. Shaw
Social Security Number:_________________
Address: _______________________________
_______________________________
_______________________________
<PAGE>
EXHIBIT 5.1
February 28, 1997
Thousand Trails, Inc.
2711 LBJ Freeway, Suite 200
Dallas, Texas 75234
Re: Registration Statement on Form S-8, as filed on February 28, 1997 (the
"Registration Statement")
Dear Ladies and Gentlemen:
We have acted as special counsel to Thousand Trails, Inc., a Delaware
corporation (the "Company"), successor by merger to USTrails Inc., a Nevada
corporation ("USTrails"), in connection with the Company's registration of the
proposed issuance of up to 664,495 shares (the "Shares") of Common Stock, par
value $.01 per share, of the Company pursuant to the Stock Option Agreement
dated as of August 1, 1996 (the "Stock Option Agreement"). We are rendering
this opinion pursuant to Item 601(b)(5) of Regulation S-K under the Securities
Act of 1933, as amended.
To render the opinion set forth herein, we have examined the documents
described below. We have assumed that no agreements or understandings exist
among any of the parties to these documents or with any third parties that would
expand, modify, or otherwise affect the terms of these documents or the
respective rights or obligations of the parties thereunder.
1. The Restated Certificate of Incorporation of the
Company.
2. The Amended and Restated Bylaws of the Company.
3. The resolutions of the Special Committee of the Board
of Directors of the Company, dated as of September 12,
1996 and November 19, 1996.
<PAGE>
Thousand Trails, Inc.
February 28, 1997
Page 2
4. The resolutions of the Board of Directors of the
Company, dated as of September 12, 1996 and November
19, 1996.
5. The stockholders' resolutions of the Company's annual
meeting held on November 19, 1996.
We have also examined such other documents as we deemed necessary to render
the opinions set forth herein. In connection with our examination, we have
assumed the authenticity of all documents submitted to us as originals, the
genuineness of all signatures, the legal capacity of all natural persons, the
conformity to originals of all copies of documents submitted to us, and the
authenticity of the originals of such copied documents. We have also relied
upon the certificates of public officials and corporate officers with respect to
the accuracy of all matters contained therein without any independent
verification thereof.
Based upon the foregoing examination and in reliance thereon, and subject
to the assumptions stated and relying on statements of fact contained in the
documents that we have examined, it is our opinion that, when (i) the
Registration Statement has become effective under the Securities Act and
assuming no stop order has been issued by the Commission with respect thereto,
(ii) the Shares have been issued and sold as contemplated in the Registration
Statement and in accordance with the provisions of the Stock Option Agreement,
as applicable, (iii) the Company has received consideration for the Shares in
excess of the par value of the Common Stock and as contemplated by the Stock
Option Agreement, as applicable, and (iv) the Shares have been duly delivered,
the Shares will be legally issued, fully paid and non-assessable.
Our opinions expressed herein are based upon the laws of the State of Texas
and the Delaware General Corporation Law, and nothing herein shall be deemed to
be an opinion as to the laws of any other jurisdiction. We assume no obligation
to revise or supplement this opinion should the present laws of the State of
Texas or the Delaware General Corporation Law, or the interpretation thereof,
change.
This opinion is intended solely for the Company's use. No other person may
rely upon this opinion or reproduce or file it publicly without our prior
written consent. We hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the Registration Statement.
Very truly yours,
GIBSON, DUNN & CRUTCHER LLP
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
reports included in or made a part of this registration statement, and to all
references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Dallas, Texas
February 27, 1997
