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As filed with the Securities and Exchange Commission on March 24, 1999.
Registration No.: 333-22705
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 4 ON
FORM S-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
THOUSAND TRAILS, INC.
(Exact name of Registrant as specified in its charter)
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DELAWARE 709 75-2138671
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
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2711 LBJ Freeway, Suite 200
Dallas, Texas 75234
(972) 243-2228
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
WALTER B. JACCARD, ESQ.
Vice President, General Counsel and Secretary
Thousand Trails, Inc.
2711 LBJ Freeway, Suite 200
Dallas, Texas 75234
(972) 243-2228
(Name, address including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
IRWIN F. SENTILLES, III, ESQ.
Gibson, Dunn & Crutcher LLP
1717 Main Street, Suite 5400
Dallas, Texas 75201
(214) 698-3100
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to
time after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act check
the following box: [X]
If the Registrant elects to deliver its annual report to security holders, or a
complete and legal facsimile thereof, pursuant to Item 11(a)(1) of this Form,
check the following box:
[ ] If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering:
[ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering:
[ ] If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PROSPECTUS
THOUSAND TRAILS, INC.
416,179 SHARES OF COMMON STOCK
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The common stock began THE OFFERINGS o We are offering 10,045 shares of common stock to
trading on the American holders of common stock purchase warrants issued in
Stock Exchange on 1994.
December 4, 1998, under
the symbol "TRV." The o The security holders listed on page 16 may offer from
common stock previously time to time up to 406,134 shares of common stock,
traded on the NASD OTC which they may acquire by exercising common stock
Bulletin Board System purchase warrants issued in 1991 and 1992.
under the symbol "TRLS."
On March 1, 1999, the THE PRICE o The holders of the 1994 warrants must pay us the
last reported sale price exercise price of $1.625 per share to acquire the
of the common stock on shares of common stock we are offering by this
the American Stock prospectus.
Exchange was $5.
o The selling security holders will negotiate with
their respective buyers to determine the price of the
shares they may offer by this prospectus. This price
may not reflect a "market" price. In addition, the
parties will also negotiate the allocation of any
expenses of such sale.
o The selling security holders must pay us the exercise
price of $4.24 per share to acquire the shares of
common stock they may offer by this prospectus.
PROCEEDS TO THE o We will receive all of the proceeds from payment of
COMPANY the exercise price of all the warrants, if the
warrant holders elect to exercise their warrants. If
all of the warrants are exercised, we will receive
$1,738,331.
o We will not receive any of the proceeds from the sale
of the common stock by the selling security holders.
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YOU SHOULD CONSIDER, AMONG OTHER THINGS, THE INFORMATION DISCUSSED IN "RISK
FACTORS," BEGINNING AT PAGE 5.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MARCH 24, 1999.
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TABLE OF CONTENTS
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Prospectus Summary...........................................................................................3
Risk Factors.................................................................................................5
Our business strategy may not prevent a decline in our membership base, which may reduce our future
operating results........................................................................................5
Possible continued campground closures could increase our membership decline.............................5
Members rights may inhibit our ability to implement our business strategy................................5
Our operating results benefit from tax savings due to our net operating loss carryforwards,
whose continued availability is not assured..............................................................5
The high concentration of ownership by a single stockholder may significantly affect the ability
of other stockholders to influence company policy........................................................6
Potential anti-takeover effects of preferred stock and transfer restriction provisions exist in our
certificate of incorporation.............................................................................6
The market for our common stock is not active............................................................6
Forward Looking Statements...............................................................................6
Incorporation of Information
by Reference.............................................................................................8
Additional Information.......................................................................................8
Available Information........................................................................................8
Use of Proceeds..............................................................................................9
Determination of Offering Price..............................................................................9
Market for Common Stock and
Related Stockholder Matters..................................................................................10
Capitalization...............................................................................................11
The Company..................................................................................................11
Business.....................................................................................................12
Current Business Strategy...............................................................................12
Campground Operations...................................................................................12
Resort Interests........................................................................................14
Asset Sales.............................................................................................14
Contracts Receivable....................................................................................15
Selling Security Holders.....................................................................................16
Plan of Distribution.........................................................................................17
Description of Common Stock..................................................................................17
General.................................................................................................17
Transfer Restrictions...................................................................................18
Federal Income Tax Considerations............................................................................22
Dividends...............................................................................................22
Sale or Exchange........................................................................................22
Backup Withholding......................................................................................23
Experts......................................................................................................23
Legal Matters................................................................................................23
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PROSPECTUS SUMMARY
THIS IS ONLY A SUMMARY OF THE OFFERINGS. TO FULLY UNDERSTAND
THE INVESTMENT YOU ARE CONTEMPLATING, YOU MUST CONSIDER THIS ENTIRE
PROSPECTUS AND THE DETAILED INFORMATION INCORPORATED INTO THIS
PROSPECTUS BY REFERENCE, INCLUDING THE FINANCIAL STATEMENTS AND THEIR
ACCOMPANYING NOTES.
UNLESS THE CONTEXT OTHERWISE REQUIRES, THE TERM "THOUSAND
TRAILS" REFERS TO THOUSAND TRAILS, INC., A DELAWARE CORPORATION, AND
ITS PREDECESSORS AND SUBSIDIARIES.
THE COMPANY
We and our subsidiaries own and operate a system of 53 membership-based
campgrounds located in 17 states and British Columbia, Canada, serving 111,000
members as of June 30, 1998. Through our subsidiaries, we also provide a
reciprocal use program for members of approximately 325 recreational facilities
and manage 130 public campgrounds for the US Forest Service.
We entered the membership campground business on June 30, 1991, by
acquiring the capital stock of two companies. We acquired 100% of the capital
stock of National American Corporation, which, along with its subsidiaries, is
commonly called "NACO," and 69% of the capital stock of our predecessor in name,
Thousand Trails, Inc., a Washington corporation. We subsequently increased our
ownership in our predecessor to 80% through a tender offer and acquired the
remaining 20% of the stock of our predecessor in a merger. In July 1996, our
predecessor merged into us, when we were still known as USTrails, Inc. Before
the acquisitions of NACO and our predecessor, we purchased the contracts
receivable that were generated principally by NACO and our predecessor from the
sale of campground memberships and resort interests on an installment basis. In
November 1996, we reincorporated in the State of Delaware and changed our name
to Thousand Trails, Inc.
The mailing address of our principal executive offices is 2711 LBJ
Freeway, Suite 200, Dallas, Texas 75234. Our telephone number is (972) 243-2228.
Our Internet address is www.1000trails.com.
THE SELLING SECURITY HOLDERS
The selling security holders, who are listed on page 16 of this
prospectus, received their warrants in two transactions: one in 1991 as part of
our reorganization and the other in 1992 as part of the retirement of debt of a
predecessor. In each transaction, recipients of these warrants became entitled
to the benefits of registration rights agreements, which included "piggyback"
registration rights. This means that some selling security holders may require
us to register the shares of common stock they are entitled to purchase under
their warrants when we register other shares of common stock. Because we are
registering the shares of common stock offered under the 1994 warrants, we are
also registering the common stock issuable to the selling security holders upon
exercise of their warrants.
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THE OFFERING BY THOUSAND TRAILS
We are offering to holders of the 1994 warrants 10,045 shares of common
stock issuable upon the exercise of their 1994 warrants. The number of
shares of common stock issuable upon exercise of the 1994 warrants is
subject to the antidilution provisions of the 1994 warrants. The
current exercise price of the 1994 warrants is $1.625 per share. The
current expiration date of the 1994 warrants is 5:00 p.m. Eastern time,
on March 31, 1999.
THE OFFERING BY SELLING SECURITY HOLDERS
From time to time, the selling security holders may offer up to 406,134
shares of common stock that are issuable upon the exercise of their
1991 or 1992 warrants. The number of shares of common stock issuable
upon exercise of the 1991 or 1992 warrants is subject to the
antidilution provisions of the 1991 or 1992 warrants. The current
exercise price of their 1991 or 1992 warrants is $4.24 per share and
the current expiration date of their warrants is June 30, 1999. The
selling security holders are not offering the 1991 or 1992 warrants by
this prospectus.
USE OF PROCEEDS
Any proceeds we receive, net of our expenses in the offerings, will be
added to our working capital.
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RISK FACTORS
You should review the risk factors discussed below when considering
whether to purchase shares of our common stock.
OUR BUSINESS STRATEGY MAY NOT PREVENT A DECLINE IN OUR MEMBERSHIP BASE, WHICH
MAY REDUCE OUR FUTURE OPERATING RESULTS.
Our membership base has declined over the past five fiscal years. This
has reduced our revenues. In response to the decline, we have downsized our
business by closing and disposing of campgrounds and decreasing campground
operating costs and general administrative expenses. We have also expanded our
sales and marketing efforts, but these have not produced the level of sales
needed to stop the continuing decline in our membership base. Further decreases
in revenues that are not offset by sufficient expense reductions could have a
material adverse impact on our business and results of operations.
POSSIBLE CONTINUED CAMPGROUND CLOSURES COULD INCREASE OUR MEMBERSHIP DECLINE.
We intend to keep the size of our campground system in an appropriate
relation to the size of our membership base. If the membership continues to
decline, we may close and dispose of additional campgrounds and we will seek to
decrease other expenses. Further reductions in our campground system could
result in an additional decline in our membership.
MEMBERS RIGHTS MAY INHIBIT OUR ABILITY TO IMPLEMENT OUR BUSINESS STRATEGY.
State laws may inhibit our ability to sell under-used campgrounds.
We believe that the success of our business strategy will necessarily
be tied to continued operation of a downsized campground system. California,
Oregon, Nevada, Arizona, Virginia, and Washington have nondisturbance statutes
that limit the ability of an owner to sell or close a campground. These states
contain 32 of our 53 campgrounds, this is approximately 60% of our campgrounds.
In these states, these statutes permit the sale or closure of campgrounds only
if the campgrounds' members receive access to a comparable campground. As a
consequence, although we may be able to sell or close some of our campgrounds as
we have done in the past, a sale or closure of significant numbers of
campgrounds in addition to those currently contemplated will likely be limited
by state law in addition to the membership contracts themselves. In addition,
some members received deeded undivided interests in six of our campgrounds. Due
to the members' property rights in these campgrounds, we cannot effectively
close these campgrounds even if closing the campgrounds were in our best
interests.
Membership contracts and state authorities may inhibit our ability to
use the campgrounds differently.
Membership agreements or understandings, or related governmental
interpretations, may limit our ability to expand or modify the type of business
activities conducted at the campgrounds. As a consequence, we may be prevented
from using the existing campgrounds differently, even if such use would increase
our income from the campgrounds.
Our membership agreements permit senior citizens and disabled members
to fix their dues levels indefinitely.
Our membership agreements generally permit senior citizens and disabled
members to fix the level of their dues indefinitely. This means that, with
respect to these members, we are unable to increase annual dues to meet future
increases in the cost of operating the campgrounds. At the present time,
approximately 35% of our members have requested their dues be fixed and
approximately 50% of our members are eligible to request that their dues be
fixed.
OUR OPERATING RESULTS BENEFIT FROM TAX SAVINGS DUE TO OUR NET OPERATING LOSS
CARRYFORWARDS, WHOSE CONTINUED AVAILABILITY IS NOT ASSURED.
Our net operating loss carryforwards, which are known as "NOLs," may
not be available if an "ownership change" in our capital stock occurs or if we
fail to earn otherwise taxable income before they expire. If we cannot use these
NOLs, then our reported after-tax earnings would be materially reduced.
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Our NOLs equaled $25.5 million as of June 30, 1998, and they can
generally be used to offset our taxable income and thus reduce our income tax
liability in subsequent years within a 15-year carryover period. Section 382 of
the Internal Revenue Code provides that when a corporation undergoes an
"ownership change," the corporation's use of its NOLs is limited each year. If
an ownership change had occurred on February 12, 1999, we would only be able to
use up to $1.76 million per year of NOLs to offset taxable income.
The issuance of shares of common stock in our 1996 capital
restructuring resulted in a substantial change in ownership for purposes of
Section 382. As a result of this restructuring and transactions since that time,
as of December 31, 1998, we were at a change of as much as 31.6%. A 50% change
is required to cause an ownership change.
We placed transfer restrictions on our common stock in an attempt to
avoid an ownership change. However, these restrictions are subject to the
following uncertainties:
o The transfer restrictions do not apply to the exercise of
outstanding warrants or some options to purchase common stock,
including the warrants issued in 1991, 1992, and 1994,
although the transfer restrictions will thereafter apply to
the common stock received upon exercise thereof.
o A court might disagree with our view that the transfer
restrictions are enforceable as to all of the common stock.
o The Internal Revenue Service may take the position that, for
tax purposes, the remedial provisions of the transfer
restrictions are insufficient to prevent an ownership change.
o A court may not enforce every remedial provision set forth in
the transfer restrictions if a stockholder were to challenge
the binding nature of these provisions.
THE HIGH CONCENTRATION OF OWNERSHIP BY A SINGLE STOCKHOLDER MAY SIGNIFICANTLY
AFFECT THE ABILITY OF OTHER STOCKHOLDERS TO INFLUENCE COMPANY POLICY.
As of October 27, 1998, Mr. Andrew Boas, one of our directors,
beneficially owned an aggregate of 48.1% of the outstanding common stock. As a
result, Mr. Boas may be in a position to influence significantly the outcome of
actions by our stockholders.
POTENTIAL ANTI-TAKEOVER EFFECTS OF PREFERRED STOCK AND TRANSFER RESTRICTION
PROVISIONS EXIST IN OUR CERTIFICATE OF INCORPORATION.
Blank check preferred stock could adversely affect the rights of common
stockholders.
We are authorized to issue up to 1,500,000 shares of preferred stock in
one or more series. Our Board of Directors may authorize the issuance of such
shares without any further action by our stockholders.
If the Board decides to issue the preferred stock, the common
stockholders could lose important rights. In particular, the Board of Directors
may grant specific rights to the future holders of preferred stock that could be
used to restrict our ability to merge with or sell our assets to a third party,
or otherwise delay, discourage, or present a change in control. In addition, the
terms may include voting rights, preferences as to dividends and liquidation,
conversion rights, redemptive rights, and sinking fund provisions that would
have priority over the rights of common stockholders.
Transfer Restrictions could discourage a change of control without the
consent of the Board of Directors.
In addition to the potential anti-takeover effect of any preferred
stock, the transfer restrictions applicable to our common stock could also have
the effect of delaying, discouraging, or otherwise preventing a change in
control without the consent of the Board of Directors.
THE MARKET FOR OUR COMMON STOCK IS NOT ACTIVE.
Trading in the common stock is light, and an established market in the
common stock may not exist. Moreover, it is unclear whether the market for
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the common stock is adversely affected by the transfer restrictions provided in
our certificate of incorporation. As a consequence, you may not be able to sell
your common stock in desired amounts at desired prices.
FORWARD LOOKING STATEMENTS
IN THIS PROSPECTUS, WE MAKE, OR INCORPORATE BY REFERENCE, STATEMENTS AS
TO OUR EXPECTED FINANCIAL CONDITION, RESULTS OF OPERATIONS, CASH FLOWS, AND
BUSINESS STRATEGIES, PLANS AND CONDITIONS FOR FUTURE PERIODS. ALL OF THESE
STATEMENTS ARE FORWARD-LOOKING STATEMENTS BASED ON THE BELIEFS AND ASSUMPTIONS
OF OUR MANAGEMENT AND ARE MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF SECTION
27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED. THESE STATEMENTS ARE NOT HISTORICAL AND
INVOLVE RISKS AND UNCERTAINTIES. OUR ACTUAL FINANCIAL CONDITION, RESULTS OF
OPERATIONS, CASH FLOWS, AND BUSINESS STRATEGIES, PLANS AND CONDITIONS FOR FUTURE
PERIODS MAY DIFFER MATERIALLY DUE TO THE RISKS, UNCERTAINTIES AND ASSUMPTIONS
SET FORTH UNDER "RISK FACTORS" AND DESCRIBED ELSEWHERE IN THIS PROSPECTUS OR
INCORPORATED IN THIS PROSPECTUS BY REFERENCE.
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INCORPORATION OF INFORMATION BY REFERENCE
We have enclosed with this prospectus our Annual Report on Form 10-K
for the fiscal year ended June 30, 1998, as amended on Form 10-K/A, our Proxy
Statement for the 1998 Annual Meeting of the Company filed on October 27, 1998,
and our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31,
1998, which we refer to as the "Company Reports", which are incorporated into
this prospectus by reference.
ADDITIONAL INFORMATION
We have filed a Registration Statement on Form S-2 with the Securities
and Exchange Commission under the Securities Act of 1933, as amended. This
prospectus, filed as part of the registration statement, does not contain all of
the information set forth in the registration statement, parts of which are
omitted in accordance with the rules and regulations of the SEC. See the
registration statement for more information. Statements made in this prospectus
as to the contents of any indenture, contract, agreement or other document
referred to are merely summaries and are not necessarily complete. With respect
to each such indenture, contract, agreement or other document filed as an
exhibit to the registration statement, see the exhibit to read the actual
documents. For a prescribed fee, you may inspect and copy the registration
statement and its exhibits and schedules at the public reference facilities
maintained by the SEC and without charge electronically at the SEC's World Wide
Web site. See "Available Information" for the office and World Wide Web site
addresses of the SEC.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended. Accordingly, we file reports, proxy and
information statements, and other information with the SEC. For a prescribed
fee, you may inspect and copy the registration statement and the other
information that we have with the SEC at the SEC's public reference facilities
listed below.
SEC Public Reference Room
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549
SEC Regional Public Reference Facilities
Northwest Atrium Center, Room 3190
500 West Madison Street
Chicago, Illinois 60661
7 World Trade Center
13th Floor
New York, New York 10048
In addition, you may obtain information on the operation of the SEC's
public reference room by calling the SEC at the number listed below.
SEC Public Reference Room Telephone Number
1-800-SEC-0330
We file many of our reports, proxy and information statements, and
other information electronically with the SEC. You can access these documents by
computer at the SEC's World Wide Web address.
SEC World Wide Web Address
http://www.sec.gov.
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USE OF PROCEEDS
We will receive the proceeds of the issuance of shares of our common
stock upon the exercise of the warrants issued in 1994 to the extent of their
exercise price. The 1994 warrants were issued to holders of the 12% secured
notes due 1998 of USTrails in connection with a consent solicitation that
resulted in indenture amendments affecting such notes. These warrants expire
March 31, 1999.
We will not receive any of the proceeds from any sales of common stock
by the selling security holders; however, we will receive proceeds from the
issuance of shares of common stock upon the exercise of the warrants to purchase
such shares held by them to the extent of their exercise price. The 1991
warrants were issued in 1991 in connection with the consummation of the Plan of
Reorganization of USTrails. The 1992 warrants were issued in 1992 in connection
with the retirement of debt of a predecessor. The 1991 and 1992 warrants expire
June 30, 1999.
Any proceeds we receive, net of our expenses in the offerings, will be
added to our working capital. If all of the warrants are exercised, we will
receive $1,738,331.
DETERMINATION OF OFFERING PRICE
The exercise price of the 1994 warrants offered, which is $1.625, was
established by our agreement with a committee of former holders of the 12%
secured notes due 1998 previously issued by USTrails.
The exercise price of the 1991 and 1992 warrants, which is $4.24, was
established as a result of negotiations during our 1991 reorganization.
We do not know whether or when a sale of any of the shares of common
stock offered by the selling security holders will occur or what price, terms or
conditions they may offer. See "Plan of Distribution."
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MARKET FOR COMMON STOCK
AND RELATED STOCKHOLDER MATTERS
MARKET AND TRADING
Our common stock has been publicly traded in the over-the-counter
market under the symbol USTQ from 1992 through November 20, 1996, and under the
symbol TRLS thereafter until December 4, 1998. On December 4, 1998, the common
stock began trading on the American Stock Exchange under the symbol TRV.
Historically, the common stock has not traded every day and the trading volume
has often been small, such that the common stock may not be deemed to be traded
in an established public trading market. The following table sets forth for the
fiscal periods indicated, the high and low bid quotations as quoted through the
NASD OTC Bulletin Board System through December 3, 1998, and the high and low
sales prices as reported on the American Stock Exchange thereafter. Such
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission, and may not necessarily represent actual transactions.
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1999:
Third Quarter
(through March 1) 5 1/4 4 3/8
5 1/8
Second Quarter 3 5/8
First Quarter 5 1/2 3 5/8
1998:
Fourth Quarter 3 1/8 2 1/8
Third Quarter 5 3/8 3 1/8
Second Quarter 4 1/2 3 1/4
First Quarter 4 1/4 3 1/2
1997:
Fourth Quarter 2 7/16 1 3/4
Third Quarter 1 31/32 1 5/16
Second Quarter 1 7/16 15/16
First Quarter 1 1/8 1/2
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On March 1, 1999, the last reported sale price of the common stock on
the American Stock Exchange was $5. As of March 1, 1999, the common stock was
held by 91 holders of record. Moreover, security position listings available to
us listed approximately 549 beneficial holders of common stock.
ABSENCE OF DIVIDENDS
Since inception, we have not paid any dividends. Our loan agreement
prohibits the payment of any cash dividends on the common stock, without the
consent of our lender, until the loan agreement is terminated.
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CAPITALIZATION
The following table sets forth our unaudited consolidated
capitalization as of December 31, 1998 (in thousands). You should read this
table in conjunction with our consolidated financial statements and their notes,
which are incorporated by reference.
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December 31, 1998
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Borrowings under loan agreement 18,988 (1)
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TOTAL DEBT $18,988
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Preferred stock, $.01 par value, 1,500,000 shares authorized, none
issued and outstanding --
Common Stock, $.01 par value, 15,000,000 shares authorized,
7,437,083 shares issued and outstanding $ 75
Additional paid-in capital 20,604
Accumulated deficit subsequent to December 31, 1991,
date of emergence from bankruptcy (14,219)
Cumulative currency translation adjustment (142)
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TOTAL STOCKHOLDERS' EQUITY $6,318
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TOTAL CAPITALIZATION $25,306
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(1) On December 15, 1998, we redeemed all of our outstanding pay-in-kind
notes. In order to fund this redemption, we borrowed approximately $24
million under our loan agreement with Foothill Capital Corporation.
THE COMPANY
We and our subsidiaries own and operate a system of 53 membership-based
campgrounds located in 17 states and British Columbia, Canada, serving 111,000
members as of June 30, 1998. Through our subsidiaries, we also provide a
reciprocal use program for members of approximately 325 recreational facilities
and manage 130 public campgrounds for the US Forest Service.
Corporate History. We entered the membership campground business on
June 30, 1991, with the acquisition of 100% of the capital stock of NACO and 69%
of the capital stock of a predecessor. We subsequently increased our ownership
in a predecessor to 100% through a tender offer and merger and, in July, 1996,
our predecessor was merged into us. Prior to acquiring NACO and our predecessor,
we purchased contracts receivable generated principally by them from the sale of
campground memberships and resort interests on the installment basis. In
November 1996, then known as USTrails, we reincorporated in the State of
Delaware and changed our name to Thousand Trails, Inc.
Restructuring. On July 17, 1996, we consummated a restructuring of our
capital structure. In this restructuring, we retired our 12% secured notes and
issued pay-in-kind notes. This restructuring provided us with a new capital
structure and decreased our outstanding debt to a level we believe we can
support under our downsized operations. We redeemed all of the outstanding
pay-in-kind notes on December 15, 1998.
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BUSINESS
CURRENT BUSINESS STRATEGY
Our current business strategy is to improve our campground operations
and stabilize our campground membership base through increased sales and
marketing efforts or the possible acquisition of members through the purchase of
other membership campground operations. We believe there is a viable market for
campground memberships and that we have a significant opportunity to compete for
campers interested in higher quality facilities and a higher level of service
than is typically available at public campgrounds or competing private
campgrounds. We also believe that it may be possible to acquire members through
the purchase of other membership campground operations, many of which are
experiencing financial difficulties.
However, our membership base has declined over the past five fiscal
years and, accordingly, we have downsized our business by closing and disposing
of campgrounds and decreasing campground operating costs and general and
administrative expenses. We intend to keep the size of our campground system in
an appropriate relation to the size of our membership base. In this regard, we
may close and dispose of additional campgrounds and will seek to decrease other
expenses. At the same time, we intend to expand our sales and marketing efforts
with a view to stopping the membership decline. We also intend to explore the
possible acquisition of members through the purchase of other membership
campground organizations. We believe that the ultimate size of our campground
system and the amounts realized from future asset sales will depend principally
upon the degree to which we can successfully implement this strategy.
CAMPGROUND OPERATIONS
Campgrounds. We and our subsidiaries own and operate a network of 53
membership-based campgrounds located in 17 states and British Columbia, Canada.
We own and operate a network of 32 of these campgrounds under the Thousand
Trails logo, and NACO owns and operates a network of 21 of these campgrounds
under the NACO logo. The 53 campgrounds contain a total of approximately 9,700
acres and 17,700 campsites.
Members using the campgrounds may bring their own recreational
vehicles, tents or other sleeping equipment, or rent travel trailers or cabins
located at the campgrounds or visit for the day. As of June 30, 1998, there were
approximately 73,000 campground members in the Thousand Trails system and 38,000
campground members in the NACO system. However, approximately 38% of the NACO
campground members and approximately 54% of the Thousand Trails campground
members possess the right to use the campgrounds in both networks. Approximately
37% of our campground members reside in California, which contains the largest
percentage of our members. Large numbers of campground members also reside in
Florida, Oregon, Texas, and Washington.
Memberships provide the member's family access to our network of
campgrounds, but do not convey a deeded interest in campgrounds with the
exception of six campgrounds in which members have received deeded undivided
interests in the campground. A member also does not possess the right to use a
specific campsite, trailer, or cabin, or the right to control further
development or operation of a campground.
In the six campgrounds in which members have received deeded undivided
interests, we retain the entire fee interest in the common amenities, such as
the lodge, recreational facilities, and other buildings, and an undivided
interest in the campsites to the extent the interest has not been sold to the
members.
Depending upon member usage, the campgrounds are open year-round or on
a seasonal basis. The campgrounds feature campsites with electrical, water, and
in some cases, sewer connections for recreational vehicles, restroom and shower
facilities, rental trailers or cabins, and other recreational amenities. At each
campground, a manager and staff provide security, maintenance, and recreational
programs that vary by location.
We derive other campground revenue from renting trailers, cabins, and
sports equipment to members, selling food and other items to members from
convenience stores located at the campgrounds, and providing the members access
to laundry facilities and game machines. We also charge members a fee for
storing recreational vehicles and providing food service.
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<PAGE> 14
Existing Membership. At June 30, 1998, we had 111,000 campground
members. The majority of these members have been members for over 10 years. Our
membership base has declined significantly over the past five fiscal years and,
net of new sales, the membership base is presently declining at the rate of
approximately 6% per year. This percentage excludes the 1800 members we lost in
connection with the sale of two campgrounds in fiscal 1998. We attribute this
continuing decline principally to our aging membership base, of whom
approximately 50% are senior citizens. In addition, we estimate that the
memberships sold in recent fiscal years will have an expected life that is
significantly shorter than the expected life of the memberships previously. To
stop the continuing decline in our membership base, we must significantly
increase our campground membership sales over current levels.
Membership Sales. In April 1992, we suspended the sale of new
campground memberships because our sales program was operating at a loss and
with negative cash flow. In the fall of 1992, we began to assist campground
members desiring to sell their memberships in the secondary market. During
fiscal 1994, we determined that we should increase our sales and marketing
efforts in order to replenish our declining campground membership base, and we
began selling new campground memberships on a limited basis. In May 1995, we
introduced new membership products, and significantly increased our sales and
marketing efforts. In recent years, we have focused our membership sales efforts
primarily on guests referred by existing members and customers referred by
recreational vehicle dealers and recreational vehicle manufacturers, who
management believes are more likely to purchase memberships.
Our current membership products offer the consumer a choice of
membership options ranging from the use of campgrounds within a single region to
the use of our entire system of campgrounds with prices ranging from $1,995 to
$3,995. In addition, we charge the member annual dues of $349. During fiscal
1998 and 1997, we sold approximately 2,900 and 3,400 new memberships,
respectively. The average sales price was $1,164 in fiscal 1998 and $707 in
fiscal 1997, and the average annual dues level was $377 in fiscal 1998 and $332
in fiscal 1997. During the past two fiscal years, we offered financing for some
of our higher priced sales. We required a down payment of at least 25% of the
sales price and would finance the balance for periods of up to 36 months. We
estimate that the memberships sold in recent fiscal years will have an expected
life that is significantly shorter than the expected life of the memberships
previously sold.
We have the capacity to sell approximately 66,000 additional new
campground memberships in the future, assuming the sale of ten memberships for
each existing campsite. Further downsizing of our business would reduce this
capacity. Most memberships are transferable with the payment of a transfer fee
to us. The membership contracts, however, prohibit the sale of a membership for
a profit.
Marketing. We believe that camping is a popular and growing activity in
the United States. We believe this is reflected in sales of recreational
vehicles and camping equipment as well as campground use. Moreover, we believe
that the aging of the baby boomers should have a positive effect on sales of
camping equipment and recreational vehicles, and lead to more family camping.
While most campers use national or state parks, we believe that we have
a significant opportunity to compete for campers interested in higher quality
facilities and a higher level of service than is typically available at public
campgrounds or competing private campgrounds. We believe that many campers are
"amenity" campers, whose needs match the benefits provided by our campgrounds,
such as pools, lodges, sport courts, and recreational activities. We believe the
needs of amenity campers are not being met by underfunded national and state
campgrounds. In addition, we believe that we can differentiate our campgrounds
and services from other campgrounds by emphasizing the quality of our facilities
and the benefits and services available at our campgrounds.
Dues. All campground members, including members who own a deeded
undivided interest in a campground, currently pay annual dues ranging generally
from $100 to $600. The annual dues collected from campground members constitute
general revenue. We use the dues to fund our operating expenses, including
corporate expenses and the maintenance and operation of the campgrounds.
However, the membership agreements do not require us to use the dues for any
specific purpose.
The average annual dues paid by our campground members were $351 for
the year ended June 30, 1998, $344 for the year ended June 30, 1997, and $335
for the year ended June 30, 1996. The increases resulted primarily from the
annual
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<PAGE> 15
increase in dues implemented in accordance with the terms of the membership
agreements. In addition, new members generally pay annual dues at a higher level
than the older members retiring from the system.
The membership agreements generally permit us to increase annually the
amount of each member's dues by either (i) the percentage increase in the
consumer price index ("CPI") or (ii) the greater of 10% or the percentage
increase in the CPI. We may not, however, increase the dues on existing
contracts of senior citizens and disabled members who notify us of their age or
disability and request that their dues be frozen. At the present time,
approximately 35% of the members have requested that their dues be frozen
because of their age or disability. We estimate that approximately 50% of the
campground members are senior citizens eligible to request that their dues be
frozen. We are unable to estimate when or if a significant number of these
members will request that their dues be frozen in the future.
Maintenance and Improvements. We make annual capital and maintenance
expenditures to maintain and improve the campgrounds. During fiscal 1998, we
spent $5.2 million on major maintenance, repairs, and improvements at the
campgrounds and anticipate that we will spend an additional $4.7 million on
similar costs in fiscal 1999. We may be required to spend greater amounts on
such items in future years as the facilities age.
Resort Parks International. Resort Parks International, Inc., one of
our wholly owned subsidiaries, operates a reciprocal use program for the benefit
of its members. The Resort Parks International program offers its members
reciprocal use of approximately 325 participating recreational facilities in 44
states and Canada. These recreational facilities consist primarily of
campgrounds that are not otherwise affiliated with us, but also include the 21
campgrounds in our NACO system. Resort Parks International members pay a fee
that entitles them to use any of the participating facilities, including the
NACO campgrounds, subject to the limitation that they cannot use a Resort Parks
International facility located within 125 miles of the home facility. Members of
the participating facilities can become members of Resort Parks International.
Thus, our members who are eligible to use a NACO campground may also join the
Resort Parks International program. As of June 30, 1998, there were
approximately 96,000 Resort Parks International members, of which approximately
16,000 were also NACO or dual-system members.
Campground Management. During fiscal 1994, UST Wilderness Management
Corporation, our wholly owned subsidiary, began to manage public campgrounds for
the US Forest Service. As of June 30, 1998, Wilderness Management had entered
into management contracts covering 130 campgrounds containing a total of
approximately 3,300 campsites. Pursuant to its management contracts with the US
Forest Service, Wilderness Management incurs the expenses of operating the
campgrounds and receives the related revenues, net of a fee paid to the US
Forest Service. These management contracts typically have five year terms.
RESORT INTERESTS
Our resort interests presently consist solely of residential lots and
other miscellaneous real estate that we hold for sale at three resorts. We no
longer manage any resort amenities, which we previously transferred to property
owners' associations. Prior to November 21, 1996, we also managed the timeshare
facilities and sold resort timeshare interests. On November 21, 1996, we sold
our timeshare operations and remaining timeshare inventory. Accordingly, we no
longer operate or sell timeshare facilities.
ASSET SALES
During fiscal 1998, 1997 and 1996, we sold some of our real estate
assets and received proceeds of $8.6 million, $4.7 million, and $7.2 million,
respectively. During this three year period, we sold the timeshare operations at
the resorts, the country club and golf operations at one resort, and various
other properties at the resorts. In addition, we sold or otherwise disposed of
various campgrounds and sold unused buildings and trailers, and excess acreage.
Over the next several years, we intend to dispose of our remaining assets at the
resorts, any campgrounds that are closed as we downsize, and other undeveloped,
excess acreage associated with the campgrounds. The sale of campgrounds requires
addressing the rights of members associated with such campgrounds. The impact of
these rights is uncertain and could adversely affect the availability or timing
of sale opportunities or our ability to realize recoveries from asset sales. In
addition, although we have successfully sold assets during the past several
years, no assurance exists that we will be able to locate a buyer for any of the
remaining assets or that sales on acceptable terms can be effected.
When there are outstanding borrowings under our loan agreement, all
proceeds from asset sales must be paid to Foothill and applied to reduce such
borrowings.
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<PAGE> 16
CONTRACTS RECEIVABLE
Prior to April 1992, we sold substantially all of our campground
memberships and resort residential lots and timeshare interests on the
installment basis, creating a portfolio of contracts receivable. This portfolio
has declined significantly over the past five fiscal years as we have collected
the outstanding contracts receivable. Since April 1992, we have sold only a
limited number of campground memberships and resort timeshare interests on an
installment basis and, as a result, the portfolio of contracts receivable will
continue to decline.
Interest accrues on the unpaid balance of the contracts receivable at
fixed rates, which vary depending upon the size of the down payment and the
length of the contract. The contracts receivable bear interest at rates ranging
from 9.5% to 16.0%, with an approximate weighted average stated interest rate of
13.0% as of June 30, 1998. Monthly installment payments range from $34 to $223
over the term of the contracts receivable, which can be up to ten years. The
terms of most newer contracts receivable, however, have averaged two years or
less. At June 30, 1998, approximately 97% of the campground members and 99% of
the purchasers of resort residential lots and timeshare interests had paid for
their membership or resort residential lots and timeshare interests in full, and
the remaining outstanding contracts receivable had an average remaining term of
19 months.
As of June 30, 1998, we owned contracts receivable with an aggregate
principal balance of $6.8 million, consisting of $6.4 million of contracts
receivable associated with the campgrounds, and $401,000 of contracts receivable
associated with the resorts. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Company Reports
incorporated herein by reference.
When there are outstanding borrowings under our loan agreement, all
collections on the contracts receivable, including principal, interest, and
fees, must be paid to Foothill and applied to reduce such borrowings.
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<PAGE> 17
SELLING SECURITY HOLDERS
The following table sets forth information regarding the selling
security holders' beneficial ownership of the common stock, including common
stock issuable upon exercise of the 1991 or 1992 warrants, as of October 27,
1998. Each of the selling security holders had registered and, assuming exercise
of its 1991 or 1992 warrants, may sell up to the number of shares of common
stock that such selling security holder may receive as a result of such
exercise, as set forth opposite each selling security holder's name below. The
selling security holders may also sell additional shares of common stock that
may be issuable upon exercise of the 1991 or 1992 warrants as a result of their
antidilution provisions. It is not currently possible to predict the number of
shares of common stock, if any, which will be sold or the price, terms or
conditions of their sale. See "Plan of Distribution."
<TABLE>
<CAPTION>
COMMON STOCK
ISSUABLE UPON
EXERCISE OF
COMMON STOCK 1991/1992 COMMON STOCK
BENEFICIALLY WARRANTS THAT BENEFICIALLY OWNED
SELLING SECURITY HOLDERS OWNED MAY BE OFFERED(1) AFTER OFFERING **
------------------------ ------------ ----------------- ---------------------
PERCENT OF
NUMBER CLASS
------ -----
<S> <C> <C> <C> <C>
American Investors Life Insurance Company, Inc. 0 7,121 0 0
Bankers Life & Casualty Company 0 16,540 0 0
Carl Marks Strategic Investments L.P.(2) 2,474,244 194,521 2,474,244 34.6%
Fidelity & Guaranty Life Insurance Company 0 49,622 0 0
Fulton Bank, Custodian for Stanley Steiner, 0 175 0 0
Rollover IRA
Alan Kanis 706 189 706 *
OP Limited Partnership 0 13,232 0 0
Pacholder Associates, Inc. 0 551 0 0
Trussal & Co. 0 616 0 0
United States Fidelity & Guaranty Company 0 88,825 0 0
USF&G Pacholder Fund 0 33,081 0 0
Larry K. West 0 1,521 0 0
Robert and Suzanne Yudelson 0 140 0 0
--------- ------- ---------
TOTAL 2,479,950 406,134 2,479,950
========= ======= =========
</TABLE>
- ----------
* Less than 1%
** Assumes that all shares of common stock that may be offered by selling
security holders are sold.
(1) The selling security holders may also sell additional shares of common
stock that may be issuable from time to time pursuant to the antidilution
provisions applicable to the 1991 or 1992 warrants.
(2) Andrew M. Boas, a director of Thousand Trails, is a general partner of Carl
Marks Management Co., L.P., which is the general partner of Carl Marks
Strategic Investments, L.P. See "Security Ownership of Certain Beneficial
Owners and Management" in the Company Reports incorporated herein by
reference.
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<PAGE> 18
PLAN OF DISTRIBUTION
We are offering 10,045 shares of common stock by reason of the
outstanding 1994 warrants.
The selling security holders may offer and sell the 406,134 shares of
common stock, if and when issued upon the exercise of the 1991 or 1992 warrants,
from time to time acting as principals for their own accounts, through agents or
otherwise, in negotiated or market transactions. The prices, terms and
conditions of any sale will be determined at the time of sale by the seller or
as a result of negotiations between or on behalf of the buyer and the seller.
The sales of such shares may be effected during such time as the registration
statement is effective. The sales may occur in one or more transactions at a
fixed price or prices, which may be changed, or at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at other
negotiated prices. Moreover, the selling security holders may make negotiated
sales at any time if such sales are exempt from the registration requirements of
the Securities Act pursuant to Rule 144 thereunder. Although we have agreed to
pay all costs of the registration of these securities, any other expenses of any
sale will be borne by the parties to the sale as they may agree, including any
distributors' or brokers' commissions. Currently, no underwritten public
offering is contemplated.
We have called to the selling security holders' attention the
restrictions under the federal securities laws applicable to sales registered
under the registration statement, including the requirements of Regulation M
under the Securities Exchange Act. In such connection, the selling security
holders have entered into agreements with us requiring that they will not
violate any federal or state securities laws in connection with the distribution
or transfer of our securities. The selling security holders have each agreed to
indemnify us for the information they supply in connection with the registration
statement. We similarly agreed to indemnify the selling security holders for
other information contained in the registration statement.
DESCRIPTION OF COMMON STOCK
GENERAL
Our authorized capital stock is 15,000,000 shares of common stock, par
value $.01 per share, and 1,500,000 shares of preferred stock, par value $.01
per share. As of October 27, 1998, we had 7,511,708 shares of common stock
issued and outstanding. Our outstanding common stock is fully paid and
non-assessable. In addition, as of such date we had outstanding warrants to
purchase 416,179 shares of common stock and options under our 1991 Employee
Stock Incentive Plan, our 1993 Stock Option and Restricted Stock Purchase Plan,
our 1993 Director Stock Option Plan and the stock option agreement, dated as of
August 1, 1996, with our Chief Executive Officer and President to purchase
1,111,995 shares of common stock. The warrants, options and stock option
agreement are each subject to antidilution provisions.
Preferred Stock. Our certificate of incorporation authorizes our Board
of Directors to establish the designations, powers, preferences and rights of
the preferred stock without further stockholder approval. In the exercise of
this authority, the Board of Directors could establish preferences and rights
for the preferred stock prior and superior to the rights of the common stock,
and it is possible that dividend preferences for the preferred stock could
substantially reduce the amount of any future surplus available for payments on
the common stock. In addition, if the preferred stock were made convertible into
common stock, dilution of the interests of holders of the common stock may
result.
Voting Rights. Holders of common stock are entitled to one vote for
each share held of record on any matter submitted to a vote at a meeting of the
stockholders. Directors are elected by a majority of the votes cast at the
election. Generally, any matter submitted for the approval of the stockholders
must receive the affirmative vote of the holders of a majority of all the shares
represented at a meeting at which a quorum is present. With limited exceptions,
approval of any amendment to our certificate of incorporation or any merger or
consolidation or dissolution, or any sale, lease, or exchange of all or
substantially all of our assets, however, requires the affirmative vote of
holders of shares representing a majority of the votes entitled to be cast.
Stockholder Proposals. Our Bylaws contain a provision establishing an
advance notice procedure for stockholders to bring business before the annual
meeting of stockholders. Generally, notice of business proposed to be brought
before the meeting must be given in writing in the form provided in our Bylaws
to our Secretary not less than 60 or more than 90 days prior to the date of the
annual meeting of stockholders, but if less than 60 days notice of the
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<PAGE> 19
date of the annual meeting is given to the stockholders, notice of proposed
business must be given not later than the tenth day following the day on which
the notice of the date of the annual meeting is mailed. At a special meeting of
stockholders, only such business as is specified in the notice of such special
meeting given by or at the direction of the person or persons calling such
meeting is permitted to come before the meeting. The limitations on procedures
to bring business before the annual meeting of stockholders do not restrict a
stockholder's right to include proposals in proxy material pursuant to rules
promulgated under the Securities Exchange Act. The purpose of requiring advance
notice is to afford our Board of Directors an opportunity to consider the merits
of the business proposed to be brought before the meeting and, to the extent
deemed necessary or desirable by our Board of Directors, to inform stockholders
about those matters.
Election of Directors. Our Certificate of Incorporation does not
contain a provision permitting cumulative voting for the election of directors.
The holders of more than 50% of the common stock voting upon the election of
directors, therefore, may be able to elect all of the directors to be elected at
a meeting of our stockholders. Our directors are elected annually and serve
until their successors are elected and qualified.
Dividends. Holders of shares of common stock are entitled to receive
dividends when, as, and if our Board of Directors declares such dividends from
funds legally available for that purpose. Since inception, we have not paid any
dividends. Moreover, under the terms of our loan agreement with Foothill, we may
not pay any dividends other than stock dividends on the common stock, nor
purchase, redeem or otherwise acquire or retire for value any common stock,
until the obligations thereunder are repaid.
Other Rights. Upon liquidation, the holders of common stock are
entitled to share on a pro rata basis in our net assets after payment of any and
all amounts due to creditors and holders of any preferred stock. The holders of
common stock have no preemptive, redemption or conversion rights.
Change in Control Provisions. We are subject to the provisions of
Section 203 of the Delaware GCL because our common stock is listed on the
American Stock Exchange. In general, Section 203 provides that a Delaware
corporation may not engage in any of a broad range of business combinations,
which may include stock issuances, with an "interested stockholder" or an
affiliate or associate of an interested stockholder unless specified board or
shareholder approvals are obtained. This prohibition applies for a period of
three years after a person becomes an interested stockholder. Generally, an
interested stockholder is a person who, together with affiliates and associates,
owns or within three years did own 15% or more of a corporation's outstanding
voting stock. Stockholders that beneficially received 15% or more of the common
stock in our reincorporation merger in November 1996, however, are not subject
to the provisions of Section 203 and as a consequence business combinations with
such stockholders will not be limited by Section 203. See "Security Ownership of
Certain Beneficial Owners and Management" and "Certain Relationships and Related
Transactions" in the Company Reports, which are incorporated by reference.
TRANSFER RESTRICTIONS
Our certificate of incorporation contains transfer restrictions on our
common stock that are designed to restrict direct and indirect transfers that
could result in the imposition of limitations on our use, for federal income tax
purposes, of its NOLs and other tax attributes. Section 382 of the Internal
Revenue Code limits the use of losses and other tax benefits by a company that
has undergone an "ownership change" as defined in the Internal Revenue Code.
Generally, an ownership change occurs if one or more stockholders, each of whom
owns 5% or more in value of a company's capital stock, increase their aggregate
percentage ownership by more than 50% over the lowest percentage of stock owned
by such stockholders over the preceding three-year period. For this purpose, all
holders who each own less than 5% of a company's capital stock are generally
treated together as one or more 5% stockholders. In addition, constructive
ownership rules, which generally attribute ownership of stock to the ultimate
beneficial owner thereof without regard to ownership by nominees, trusts,
corporations, partnerships or other entities, or to related individuals, are
applied in determining the level of stock ownership of a particular stockholder.
Special rules can also result in the treatment of options and warrants as
exercised in some circumstances. All percentage determinations are based on the
fair market value of a company's capital stock.
If an ownership change were to occur, the amount of taxable income in
any year or portion of a year subsequent to the ownership change that could be
offset by NOLs or other carryovers existing or
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<PAGE> 20
"built-in" prior to such ownership change could not exceed the product obtained
by multiplying:
(a) the aggregate value of the outstanding common stock immediately
prior to the ownership change, with minor adjustments
by (b) the federal long-term tax exempt rate, which was 4.71% for
ownership changes occurring during February 1999.
Because the value of the outstanding common stock, as well as the
federal long-term tax-exempt rate, fluctuates, it is impossible to predict with
any accuracy the annual limitation upon the amount of our taxable income that
could be offset by such NOLs or other items if an ownership change were to
occur. We would incur a corporate-level tax on any taxable income during a given
year in excess of our NOL limitation. The current maximum federal rate is 35%.
While the NOLs not used as a result of this limitation remain available to
offset taxable income for up to 15 years from the year when the NOLs were
generated, an ownership change, under some circumstances, would significantly
defer the utilization of the NOLs, accelerate the payment of federal income tax,
cause a portion of the NOLs to expire prior to their use and reduce
stockholders' equity or increase stockholders' deficit.
The transfer restrictions generally restrict until 2011 any direct or
indirect transfer of common stock that would:
o except as provided below, increase to more than 4.75% the
percentage ownership of common stock of any person who at any
time during the preceding three-year period did not own more
than 4.75% of the common stock
o except as provided below, increase the percentage of common
stock owned by any person that during the preceding three-year
period owned more than 4.75% of the common stock, or by any
group of persons treated as a "5% shareholder," within the
meaning of the Internal Revenue Code, but substituting "4.75%"
for "5 percent"
o cause an ownership change of the Company within the meaning of
Section 382.
Generally, the transfer restrictions contain several exceptions. For
example, the restrictions will not prevent a transfer if, in the determination
of the Board of Directors, the transfer will not result in an aggregate increase
in the ownership of its capital stock by 4.75% shareholders over a three-year
period for purposes of Section 382. As an illustration, this exception will
permit a stockholder who owns less than 4.75% of the common stock to transfer
shares of common stock to any other stockholder who owns 4.75% or less of the
common stock, after giving effect to the transfer. Similarly, the transfer
restrictions will not apply to any transfer if, as a result of the transfer and
in the determination of the Board of Directors, the aggregate increase in the
ownership of our capital stock by 4.75% shareholders over a three-year period
does not exceed 35%. Also, the restrictions will not prevent a transfer if the
purported transferee obtains the approval of the Board of Directors, which
approval may be granted or withheld in the sole and absolute discretion of the
Board of Directors, after considering all facts and circumstances including but
not limited to future events deemed by the Board of Directors to be relevant.
Further, the transfer restrictions could terminate early in some cases. Finally,
transfers will be prohibited only with respect to the amount of the common stock
purportedly transferred in excess of the threshold established in the transfer
restrictions.
The transfer restrictions will apply differently over time. We believe
that the aggregate percentage increase in the ownership of its capital stock by
5 percent shareholders, as defined in Section 382, over the three-year period
ending on December 31, 1998, was as much as 31.6%. Therefore, all transactions,
other than the exercise of the outstanding warrants and some options, that would
increase the aggregate percentage increase owned by 4.75% shareholders are
currently subject to the transfer restrictions.
The application of the transfer restrictions to any particular
stockholder will depend on the stockholder's ownership of our capital stock,
determined after applying numerous attribution rules, and will also depend on
the history of trading of our capital stock. As a result, stockholders are urged
to consult their tax advisors prior to any purchase or sale of common stock.
Transfers included under the transfer restrictions include sales to
persons who would exceed the thresholds discussed above, or to persons whose
ownership of shares would by attribution cause another person to exceed such
thresholds.
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<PAGE> 21
Numerous rules of attribution, aggregation and calculation prescribed under the
Internal Revenue Code and its related regulations will be applied in determining
whether the 4.75% threshold has been met and whether a group of less than 4.75%
shareholders will be treated as a "public group" that is a 4.75% shareholder. As
a result of these attribution rules, a change in the relationship between two or
more persons or entities, or a transfer of an interest other than the common
stock, such as an interest in an entity that, directly or indirectly, owns the
common stock may result in the common stock owned by a stockholder being subject
to the remedial provisions, as described below. The transfer restrictions or in
some cases contractual provisions incorporating the transfer restrictions may
also apply to proscribe the creation or transfer of some "options," which are
broadly defined in respect of the common stock to the extent, generally, that
exercise of the option would result in a proscribed level of ownership.
The Board of Directors has issued instructions to or made arrangements
with our transfer agent to implement the transfer restrictions. The transfer
restrictions provide that the transfer agent shall not record any transfer of
the common stock purportedly transferred in excess of the threshold established
in the transfer restrictions. The transfer agent also has the right, prior to
and as a condition to registering any transfers of the common stock on the stock
transfer records, to request an affidavit from the purported transferee of the
common stock regarding such purported transferee's actual and constructive
ownership of the common stock. If, after requesting such an affidavit, the
transfer agent does not receive an affidavit or the affidavit evidences that the
transfer would violate the transfer restrictions, the transfer agent is required
to notify us and not enter the transfer in the stock transfer records. These
provisions may result in the delay or refusal of requested transfers of the
common stock.
It is the intention of the transfer restrictions that any direct or
indirect transfer of common stock attempted in violation of the restrictions
would be void ab initio as to the purported transferee, and the purported
transferee would not be recognized as the owner of the shares owned in violation
of the restrictions for any purpose, including for purposes of voting and
receiving dividends or other distributions in respect of such common stock, or
in the case of options subject to the transfer restrictions, receiving common
stock in respect of their exercise. Common stock purportedly acquired in
violation of the transfer restrictions is referred to as "excess common stock."
Excess common stock is automatically transferred to a trustee effective
as of the close of business on the business day prior to the date of the
violative transfer. As soon as practicable following the receipt of notice from
us that excess common stock was transferred to the trustee, the trustee is
required to sell such excess common stock in an arms-length transaction that
would not constitute a violation under the transfer restrictions. The net
proceeds of the sale, after deduction, of all costs incurred by us, the transfer
agent, and the trustee, will be distributed first to the purported transferee in
an amount equal to the lesser of such proceeds or the cost incurred by the
stockholder to acquire such excess common stock, and the balance of the
proceeds, if any, will be distributed to a charitable beneficiary together with
any other distributions with respect to such excess common stock received by the
trustee. If the excess common stock is sold by the purported transferee, such
person will be treated as having sold the excess common stock as an agent for
the trustee, and shall be required to remit all proceeds to the trustee less, in
some cases, an amount equal to the amount such person otherwise would have been
entitled to retain had the trustee sold such shares. Pending such sale, any
dividends or other distributions paid prior to discovery by us that the excess
common stock has been transferred to the trustee are treated as held by the
purported transferee as agent for the trustee and must be paid to the trustee
upon demand, and any dividends or other distributions declared but unpaid after
such time shall be paid to the trustee. Votes cast by a purported transferee
with respect to excess common stock prior to our discovery that the excess
common stock was transferred to the trustee will be rescinded as void and recast
in accordance with the desire of the trustee acting for the benefit of the
charitable beneficiary. The trustee shall have all rights of ownership of the
excess common stock.
Special provisions apply where the violative transfer involves a
transfer by a 4.75% shareholder, which provisions are designed to continue to
treat such 4.75% shareholders as owning the shares transferred. In such case, we
must attempt to locate the person or public group that purchased the excess
common stock, and if such person or public group can be located, the excess
common stock and any distributions received thereon will be required to be
returned to the transferor, and the transferor will be required to return the
purchase price, together with all other losses, damages, costs and expenses
20
<PAGE> 22
incurred by that purchaser, to the purchaser. If we are unable to locate the
purchaser within 90 days, to the extent permitted under our debt instruments, we
are required to purchase common stock in a manner that would reduce the
ownership of the person or public group whose ownership increased as a result of
the prohibited transfer and to hold such common stock on behalf of the 4.75%
shareholder that transferred the excess common stock in violation of the
transfer restrictions. In such case, the 4.75% shareholder will be treated as
the owner of the excess common stock for all purposes, and amounts we incur to
finance the purchase of such excess common stock will be treated as a loan to
such stockholder, with interest at the "applicable federal rate" under Section
1274(d) of the Internal Revenue Code.
If the violative transaction results from indirect ownership of common
stock, the transfer restrictions provide a mechanism that is intended to
invalidate the ownership of the common stock actually owned by the violating
stockholder and any persons within such stockholder's control group. Only if
such provisions will not be effective to prevent a violation of the transfer
restrictions will ownership of common stock by other persons be invalidated
under the transfer restrictions.
Notwithstanding the transfer restrictions, there remains a risk that
the following events could cause an ownership change:
o Transfers of common stock that are not restricted by the
transfer restrictions
o Transfers of common stock that are permitted by the Board of
Directors
o Changes in relationships among stockholders
Changes in the relationships of holders of common stock could cause
changes in ownership of common stock through the application of the attribution
rules discussed above, and therefore could also trigger an ownership change
causing a loss of NOLs. We cannot give you any assurance, in the event transfers
in violation of the transfer restrictions are attempted, that the Internal
Revenue Service will not assert that such transfers have federal income tax
significance notwithstanding the transfer restrictions. In addition, the
transfer restrictions will not apply to the exercise of outstanding warrants and
options to purchase common stock, including the 1991 or 1992 warrants and the
1994 warrants. Further, the transfer restrictions may not apply to some
exercises of a portion of the options under the stock option agreement with our
Chief Executive Officer that occur at the end of its term.
The Board of Directors has the discretion to approve a transfer of
stock that would otherwise violate the transfer restrictions upon the prior
written request of a stockholder to the Board of Directors. In addition, the
Board of Directors has the power to waive any of the transfer restrictions in
any instance where it determines that a waiver would be in our best interests
notwithstanding the effect of such waiver on the NOLs or other tax attributes.
If the Board of Directors permits a transfer that would otherwise violate the
transfer restrictions, that transfer or later transfers may result in an
ownership change that would limit the use of tax attributes. The Board of
Directors intends to consider any such attempted transfer individually and
determine at the time whether it is in our best interests, after consideration
of any factors that the Board deems relevant, including possible future events,
to permit such transfer notwithstanding that an ownership change may occur.
If the Board of Directors determines in writing that:
o the following actions are necessary or desirable to preserve
the NOLs or other tax attributes or
o that continuation of the transfer restrictions is no longer
reasonably necessary for the preservation of the NOLs or other
tax attributes
then the Board of Directors may exercise the following powers related to the use
of NOLs:
o accelerate or extend the expiration date of the transfer
restrictions
o modify the definitions of any terms set forth in the transfer
restrictions
o conform transfer restriction provisions to make them
consistent with any future changes in Federal tax law.
Further, the Board of Directors may also exercise the following
additional powers related to the use of NOLs:
o adopt Bylaws, regulations, and procedures not inconsistent
with the
21
<PAGE> 23
transfer restrictions for the purpose of determining whether
any acquisition of common stock would jeopardize our ability
to preserve and use the NOLs or other tax attributes and for
the orderly application, administration and implementation of
the transfer restrictions
o exclusive authority to administer, interpret and make
calculations under the transfer restrictions, which actions
shall be final and binding on all parties if made in good
faith.
As a result of the foregoing, the transfer restrictions serve to
reduce, but do not eliminate, the risk that Section 382 will cause the
limitations described above on the use of NOLs or our other tax attributes. The
transfer restrictions:
o may have the effect of impeding the attempt of a person or
entity to acquire a significant or controlling interest in us
o may render it more difficult to effect a merger or similar
transaction even if such transaction is favored by a majority
of the independent stockholders
o may serve to make a change in management more difficult.
Management does not presently intend to adopt any
anti-takeover measures, and we believe that the tax benefits
of the transfer restrictions outweigh the negative aspects of
any anti-takeover effects they may have.
FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of the significant anticipated
federal income tax consequences with respect to the ownership and disposition of
the common stock. This discussion is general in nature, and does not discuss all
aspects of federal income taxation that may be relevant to you in light of your
particular circumstances, or to the types of investors that are subject to
special treatment under federal income tax laws, such as individual retirement
accounts, insurance companies, tax-exempt organizations, financial institutions,
brokers, dealers, foreign entities, and taxpayers that are neither citizens nor
residents of the United States. In addition, the discussion does not consider
the effect of any foreign, state, local, or other tax laws, or any other United
States tax consequences, such as estate or gift tax consequences, that may be
applicable to you. The summary is based upon the Internal Revenue Code and
applicable Treasury Regulations, proposed regulations, rulings, administrative
pronouncements and decisions as of the date hereof, all of which are subject to
change or differing interpretations at any time and in some circumstances with
retroactive effect.
WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR TO DETERMINE THE FEDERAL,
STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES TO YOU OF THE OWNERSHIP AND
DISPOSITION OF THE COMMON STOCK.
DIVIDENDS
Dividend distributions with respect to the shares of common stock
should constitute dividends for federal income tax purposes to the extent of our
current and accumulated earnings and profits as computed for federal income tax
purposes. Accordingly, distributions should qualify to that extent for the
dividends received deduction for corporations as set forth in Section 243 of the
Internal Revenue Code. Distributions in excess of current and accumulated
earnings and profits will be treated as a tax-free return of capital, which
reduce the holder's tax basis in the shares of common stock to the extent of the
holder's basis in such shares, and, assuming such shares are held as capital
assets, as long-term or short-term capital gain, as the case may be thereafter.
Holders receiving distributions on the shares of common stock also may be
affected by the taxable income limitations set forth in Section 246(b), the
holding period requirements of Section 246(c), the debt-financed portfolio stock
limitations of Section 246A, and the "extraordinary dividend" rules of Section
1059 of the Internal Revenue Code. Holders should consult their tax advisors in
order to determine the application of these provisions. Our Foothill loan
agreement prohibits dividend payments on the common stock.
SALE OR EXCHANGE
Upon a sale or exchange of common stock, the holder generally
recognizes income or loss equal to the amount of cash plus the fair market value
of any property received over the holder's adjusted tax basis in the common
stock sold or exchanged. Assuming the holder held the common stock as a capital
asset, the income or loss will generally be
22
<PAGE> 24
capital gain or loss, and will be long-term capital gain or loss if the holder's
holding period for the common stock exceeds one year at the time of sale. Any
sale proceeds attributable to dividends will be taxed in accordance with the
rules discussed in the preceding paragraph.
BACKUP WITHHOLDING
Under the Internal Revenue Code, a holder of common stock may be
subject, under some circumstances, to "backup withholding" at a rate of 31% with
respect to payments in respect of dividends on the common stock.
This withholding generally applies only if the holder:
o fails to furnish his or its social security or other taxpayer
identification number
o furnishes an incorrect taxpayer identification number
o is notified by the Internal Revenue Service that he or it has
failed to report properly payments of interest and dividends
and the Internal Revenue Service has notified us that he or it
is subject to backup withholding
o fails, if required, to provide a certified statement, signed
under penalty of perjury, that the taxpayer identification
number provided is his or its correct number and that he or it
is not subject to backup withholding. Any amount withheld from
a payment to a holder under the backup withholding rules does
not constitute additional tax, and is allowable as a credit
against such holder's federal income tax liability, provided
that the required information is furnished to the Internal
Revenue Service. Holders of common stock should consult their
tax advisers as to their qualification for exemption from
backup withholding and the procedure for obtaining such an
exemption.
EXPERTS
The consolidated financial statements incorporated by reference in this
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
LEGAL MATTERS
The validity of the common stock offered hereby has been passed upon
for us by Gibson, Dunn & Crutcher LLP, Dallas, Texas.
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<PAGE> 25
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT WE
HAVE REFERRED YOU TO. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. THE INFORMATION CONTAINED IN THIS DOCUMENT IS
ACCURATE ONLY AS OF ITS DATE AND YOU SHOULD NOT ASSUME THAT THE INFORMATION IS
STILL CURRENT BECAUSE YOU RECEIVED THIS PROSPECTUS AT A LATER DATE. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
THOUSAND TRAILS, INC.
416,179
SHARES OF
COMMON STOCK
PROSPECTUS
DATED MARCH 24, 1999
<PAGE> 26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following expenses other than registration fees are estimated;
however, they include amounts expended in connection with pre-effective filings.
The Registrant will pay these expenses and none of them is to be paid by the
selling security holders. The Registrant anticipates that it will incur
additional expenses in connection with any post-effective amendments to the
Registration Statement and any supplements to the Prospectus included therein:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee...... $ 532
Blue Sky fees and expenses............................... 20,000
Printing ................................................ 12,000
Accountants' fees and expenses........................... 9,000
Legal fees and expenses.................................. 35,000
Miscellaneous............................................ 1,968
Total........................................... $78,500
=======
</TABLE>
ITEM 15. 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 Company (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 them defense funds. The Registrant's contributions to the
Indemnification Trusts, net amounts returned to the Registrant, total $804,000
as of June 30, 1998. 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
II-1
<PAGE> 27
opposed to the best interests of the Corporation, and, with respect to any
criminal action or proceeding, had not 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 Company 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 Company 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.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
2.1 Plan of Reorganization of the Company (which was formerly known as
NACO Finance Corporation), dated October 15, 1991, as supplemented
(incorporated by reference to Exhibit 2.1 to USTrails' Annual
Report on Form 10-K for the year ended June 30, 1992, File No.
0-19743).
2.2 Offer to Purchase for Cash the Company's 12% Secured Notes Due
1998 and Additional Series 12% Secured Notes Due 1998 by the
Company, dated June 5, 1996 (the "Offer to Purchase")
(incorporated by reference to Exhibit 99.2 to the Company's
Current Report on Form 8-K filed with the SEC on June 7, 1996,
File No. 0-19743).
2.3 Supplement to the Offer to Purchase, dated June 21, 1996
(incorporated by reference to Exhibit 2.5 to the Company's Annual
Report on Form 10-K filed with the SEC for the year ended June 30,
1996, File No. 0-19743).
2.4 Private Placement Memorandum by the Company offering to exchange
USTrails' 12% Secured Notes Due 1998 and Additional Series 12%
Secured Notes Due 1998 to certain holders of such notes, dated
June 28, 1996 (the "Private Placement Memorandum") (incorporated
by reference to Exhibit 2.6 to the Company's Annual Report on Form
10-K filed with the SEC for the year ended June 30, 1996, File No.
0-19743).
2.5 Letter of Transmittal pertaining to the transmittal of the
Company's 12% Secured Notes Due 1998 and Additional Series 12%
Secured Notes Due 1998 by certain holders of such notes pursuant
to the exchange offer made by the Company in the Private Placement
Memorandum (incorporated by reference to Exhibit 2.7 to the
Company's Annual Report on Form 10-K filed with the SEC for the
year ended June 30, 1996, File No. 0-19743).
</TABLE>
II-2
<PAGE> 28
<TABLE>
<S> <C>
2.6 Supplement to the Private Placement Memorandum, dated July 15,
1996 (incorporated by reference to the Company's Annual Report on
Form 10-K filed with the SEC for the year ended June 30, 1996,
File No. 0-19743).
2.7 Agreement and Plan of Merger, dated as of October 1, 1996, between
the Registrant and USTrails Inc. (predecessor in interest to the
Registrant) (incorporated by reference to the proxy
statement/prospectus filed with the SEC on October 3, 1996 as part
of the Registration Statement on Form S-4, Registration Statement
No. 333-13339 (the "S-4 Registration Statement")).
2.8 Offer to Purchase for Cash the Company's 12% Senior Subordinated
Pay-In-Kind Notes Due 2003, dated as of May 20, 1997 (incorporated
by reference to Exhibit 99.1 to the Company's Current Report on
Form 8-K filed with the SEC on July 8, 1997, File No. 0-19743).
3.1 Restated Certificate of Incorporation of the Registrant
(incorporated by reference to the proxy statement/prospectus filed
with the SEC on October 3, 1996 as part of the S-4 Registration
Statement).
3.2 Amended and Restated By-Laws of the Registrant (incorporated by
reference to Exhibit 3.2 to the Form 8-B filed by the Registrant
with the SEC on November 27, 1996, File No. 0-19743).
4.1 Form of Reorganization Warrant Certificate to purchase shares of
Common Stock and schedule of substantially identical warrants
(incorporated by reference to Exhibit 4.7 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1992, File No.
0-19743).
4.2 Letter Agreement, dated March 19, 1993, between the Company and
Carl Marks Strategic Investments, LP (incorporated by reference to
Exhibit 4.18 to the Company's Registration Statement No. 33-571261
on Form S-2, originally filed with the SEC on January 15, 1993,
File No. 0-19743).
4.3 Form of Warrant Certificate to purchase shares of Common Stock
issued pursuant to the Exchange Agreement with certain holders of
Trails' indebtedness (incorporated by reference to Exhibit 4.3 to
the Company's Current Report on Form 8-K filed with the SEC on
June 25, 1992, File No. 0-19743) and schedule of substantially
identical warrants (incorporated by reference to Exhibit 4.15 to
the Company's Annual Report on Form 10-K for the year ended June
30, 1992, File No. 0-19743).
4.4 Warrant Agency Agreement, dated as of March 2, 1994, between the
Company and Shawmut Bank Connecticut, National Association, as
Warrant Agent (incorporated by reference to Exhibit 4.4 to the
Company's Current Report on Form 8-K filed with the SEC on April
11, 1994, File No. 0-19743).
4.5 Registration Rights Agreement, dated as of June 12, 1992,
regarding the Company's Additional Series Secured Notes and the
shares of Common Stock issuable upon the exercise of certain
warrants (incorporated by reference to Exhibit 4.4 of the
Company's Current Report on Form 8-K filed with the SEC on June
25, 1992, File No. 0-19743).
4.6 Indemnification Agreement, dated as of January 14, 1993, between
the Company and the selling security holders under Registration
Statement No. 33-571261 (incorporated by reference to Exhibit
10.44 to the Company's Registration Statement No. 33-571261 on
Form S-2, originally filed with the SEC on January 15, 1993, File
No. 0-19743).
5.1 Opinion of Gibson, Dunn & Crutcher LLP, counsel to the Registrant,
as to the validity of the securities being registered.
10.1 Credit Agreement, dated as of December 31, 1991, between the
Company and NACO (incorporated by reference to Exhibit 10.27 to
the Company's Annual Report on Form 10-K for the year ended June
30, 1992, File No. 0-19743).
10.2 First Amendment to Credit Agreement, dated as of May 20, 1993,
between the Company and NACO (incorporated by reference to Exhibit
10.48 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1993, File No. 0-19743).
</TABLE>
II-3
<PAGE> 29
<TABLE>
<S> <C>
10.3 Second Amendment to Credit Agreement, dated as of November 10,
1994, between the Company and NACO (incorporated by reference to
Exhibit 10.3 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1995, File No. 0-19743).
10.4 Fourth Amendment to Credit Agreement, dated as of June 10, 1998,
between the Company and NACO (incorporated by reference to Exhibit
10.3 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998, File No. 0-19743).
10.5 Amended and Restated Promissory Note, dated as of November 10,
1994, pursuant to which the Company provides a $40,000,000
revolving credit facility to NACO (incorporated by reference to
Exhibit 10.4 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1995, File No.
0-19743).
10.6 Amended and Restated Promissory Note, dated as of November 10,
1994, pursuant to which the Company provided a $10,765,000 term
loan to NACO (incorporated by reference to Exhibit 10.5 to the
Company's Annual Report on Form 10-K for the year ended June 30,
1995, File No. 0-19743).
10.7 Guaranty, dated as of December 31, 1991, pursuant to which the
subsidiaries of NACO guaranteed certain amounts that NACO owes the
Company (incorporated by reference to Exhibit 10.5 to the
Company's Registration Statement No. 33-73284 on Form S-2,
originally filed with the SEC on December 22, 1993, File No.
0-19743).
10.8 Release From Guaranty, dated as of May 31, 1993, among certain
subsidiaries of the Company, the Company, and Shawmut Bank
Connecticut, National Association, as Trustee (incorporated by
reference to Exhibit 10.56 to the Company's Registration Statement
No. 33-571261 on Form S-2, originally filed with the SEC on
January 15, 1993, File No. 0-19743).
10.9 Release under Credit Agreement and Security Agreement, dated as of
May 31, 1993, among certain subsidiaries of the Company, the
Company, and Shawmut Bank Connecticut, National Association, as
Trustee (incorporated by reference to Exhibit 10.57 to the
Company's Registration Statement No. 33-571261 on Form S-2,
originally filed with the SEC on January 15, 1993, File No.
0-19743).
10.10 Security Agreement, dated as of December 31, 1991, pursuant to
which NACO granted to the Company a security interest in
substantially all of its personal and real property including the
pledge of NACO's stock in its subsidiaries as required by the
credit agreement between the Company and NACO (incorporated by
reference to Exhibit 10.31 to the Company's Annual Report on Form
10-K for the year ended June 30, 1992, File No. 0-19743).
10.11 First Supplement and Amendment to Security Agreement, dated as of
May 20, 1993, among NACO and certain of its subsidiaries, RPI, the
Company, and Shawmut Bank Connecticut, National Association, as
Trustee (incorporated by reference to Exhibit 10.53 to the
Company's Registration Statement No. 33-57l261 on Form S-2,
originally filed with the SEC on January 15, 1993, File No.
0-19743).
10.12 Form of Mortgage from NACO and its subsidiaries to the Company
pursuant to the credit agreement between the Company and NACO
(incorporated by reference to Exhibit 10.32 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1992, File
No. 0-19743, and schedule of documents substantially identical to
the Form of Mortgage (incorporated by reference to Exhibit 10.55
to the Company's Registration Statement No. 33-571261 on Form S-2,
originally filed with the SEC on January 15, 1993, File No.
0-19743).
10.13 Form of First Amendment to Mortgage from NACO and its subsidiaries
to the Company amending certain terms of a Mortgage that
previously granted a beneficial security interest in certain
property to the Company pursuant to the credit agreement between
the Company and NACO, and schedule of documents substantially
identical to the Form of First Amendment to Mortgage (incorporated
by reference to Exhibit 10.13 to the Company's Annual Report on
Form 10-K for the year ended June 30, 1995, File No. 0-19743).
</TABLE>
II-4
<PAGE> 30
<TABLE>
<S> <C>
10.14 Indenture, dated as of July 17, 1996, among the Company, Fleet
National Bank as Trustee, and certain other parties described
therein, pertaining to the Company's Senior Subordinated
Pay-In-Kind Notes Due 2003 (incorporated by reference to Exhibit
4.36 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1996, File No. 0-19743).
10.15 First Supplemental Indenture, dated as of November 20, 1996, by
and among the Registrant, each subsidiary of the Registrant named
as a subsidiary guarantor therein and Fleet National Bank, as
Trustee (incorporated by reference to Exhibit 4.2 to the Form 8-B
filed by the Registrant with the SEC on November 27, 1996).
10.16 Form of Senior Subordinated Pay-In-Kind Note Due 2003
(incorporated by reference to Exhibit 4.37 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1996, File No.
0-19743).
10.17 Loan and Security Agreement, dated as of July 10, 1996, between
the Company and Foothill Capital Corporation (incorporated by
reference to Exhibit 10.19 to the Company's Annual Report on Form
10-K for the year ended June 30, 1996, File No. 0-19743).
10.18 First Amendment to Loan and Security Agreement, dated as of May
16, 1997, between the Company and Foothill Capital Corporation
(incorporated by reference to Exhibit 99.2 to the Company's
Current Report on Form 8-K filed with the SEC on July 8, 1997,
File No. 0-19743).
10.19 Second Amendment to Loan and Security Agreement dated as of
December 23, 1997, between the Company and Foothill (incorporated
by reference to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1997, File No.
0-19743).
10.20 Third Amendment to Loan and Security Agreement dated as of January
5, 1998, between the Company and Foothill Capital Corporation
(incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1998, File No. 0-19743).
10.21 Fourth Amendment to Loan and Security Agreement, dated as of June
10, 1998, between the Company and Foothill (incorporated by
reference to Exhibit 10.17 to the Company's Annual Report on Form
10-K for the year ended June 30, 1998, File No. 0-19743).
10.22 Fifth Amendment to Loan and Security Agreement, dated as of
September 15, 1998, between the Company and Foothill Capital
Corporation (incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, File No. 0-19743).
10.23 Sixth Amendment to Loan and Security Agreement, dated as of
October 21, 1998, between the Company and Foothill Capital
Corporation (incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, File No. 0-19743).
10.24 Secured Promissory Note (Account Note), dated July 10, 1996,
between the Company and Foothill Capital Corporation (incorporated
by reference to Exhibit 10.20 to the Company's Annual Report on
Form 10-K for the year ended June 30, 1996, File No. 0-19743).
10.25 Secured Promissory Note (Term Note), dated July 10, 1996, between
the Company and Foothill Capital Corporation (incorporated by
reference to Exhibit 10.21 to the Company's Annual Report on Form
10-K for the year ended June 30, 1996, File No. 0-19743).
10.26 Form of Pledge and Security Agreement, dated as of July 10, 1996,
between the Company and Foothill Capital Corporation, and schedule
of documents substantially identical to the form of Pledge and
Security Agreement (incorporated by reference to Exhibit 10.22 to
the Company's Annual Report on Form 10-K for the year ended June
30, 1996, File No. 0-19743).
</TABLE>
II-5
<PAGE> 31
<TABLE>
<S> <C>
10.27 Consent and First Amendment to Pledge and Security Agreement,
dated as of October 31, 1997, between certain subsidiaries of the
Company and Foothill Capital Corporation (incorporated by
reference to exhibit 10.2 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998, File No. 0-19743).
10.28 Form of Mortgage, dated as of July 10, 1996, to grant liens to
Foothill Capital Corporation to secure the Company's obligations
under the Loan Agreement with Foothill, and schedule of documents
substantially identical to the form of Mortgage (incorporated by
reference to Exhibit 10.23 to the Company's Annual Report on Form
10-K for the year ended June 30, 1996, File No. 0-19743).
10.29 Form of Assignment of Indebtedness and Mortgage, dated as of July
10, 1996, transferring the liens securing certain indebtedness
that NACO owes to the Company to Foothill Capital Corporation
under the Loan Agreement with Foothill, and schedule of documents
substantially identical to the form of Assignment of Indebtedness
and Mortgage (incorporated by reference to Exhibit 10.24 to the
Company's Annual Report on Form 10-K for the year ended June 30,
1996, File No. 0-19743).
10.30 Form of Subordination Agreement, dated as of July 10, 1996,
between the Company and Foothill Capital Corporation,
subordinating the security interests under the credit agreement
between the Company and NACO to the security interests under the
Credit Agreement with Foothill, and schedule of documents
substantially identical to the form of Subordination Agreement
(incorporated by reference to Exhibit 10.25 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1996, File
No. 0-19743).
10.31 The Company's 1991 Employee Stock Incentive Plan (incorporated by
reference to Exhibit 10.40 to the Company's Annual Report on Form
10-K for the year ended June 30, 1992, File No. 0-19743).
10.32 Amendment No. 1 to the Company's 1991 Employee Stock Incentive
Plan (incorporated by reference to Exhibit 10.8 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1996, File No. 0-19743).
10.33 The Company's 1993 Stock Option and Restricted Stock Purchase Plan
(incorporated by reference to Exhibit 10.22 to the Company's
Registration Statement No. 33-73284 on Form S-2, originally filed
with the SEC on December 22, 1993, File No. 0-19743).
10.34 Amendment No. 1 to the Company's 1993 Stock Option and Restricted
Stock Purchase Plan (incorporated by reference to Exhibit 10.9 to
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996, File No. 0-19743).
10.35 The Company's 1993 Director Stock Option Plan (incorporated by
reference to Exhibit 10.23 to the Company's Registration Statement
No. 33-73284 on Form S-2, originally filed with the SEC on
December 22, 1993, File No. 0-19743).
10.36 Amendment No. 1 to the Company's 1993 Director Stock Option Plan
(incorporated by reference to Exhibit 10.10 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1996. File No. 0-19743).
10.37 Stock Option Agreement, dated as of August 1, 1996, between the
Company and William J. Shaw (incorporated by reference to Exhibit
10.26 to the Form 8-B filed by the Company with the SEC on
November 27, 1996, File No. 0-19743).
10.38 Assumption of Obligations, dated as of November 20, 1996, by the
Company assuming the obligations of USTrails under the USTrails
Inc. 1991 Employee Stock Incentive Plan, as amended; the USTrails
Inc. 1993 Stock Option and Restricted Stock Purchase Plan, as
amended; the USTrails Inc. 1993 Director Stock Option Plan, as
amended; Warrant Certificates originally issued on December 31,
1991, June 12, 1992, and March 2, 1994 to May 16, 1995; and the
Stock Option Agreement, dated as of August 1, 1996, between
USTrails and William J. Shaw (incorporated by reference to Exhibit
10.27 to the Form 8-B filed by the Company with the SEC on
November 27, 1996, File No. 0-19743).
</TABLE>
II-6
<PAGE> 32
<TABLE>
<S> <C>
10.39 Employment Agreement, dated as of May 11, 1995, between the
Company and William J. Shaw, and related Standby Letter of Credit,
dated September 22, 1995, issued by The Bank of California, N.A.,
for the benefit of Mr. Shaw, and Letter, dated September 20, 1995,
from The Wyatt Company, regarding Mr. Shaw's Employment Agreement
(incorporated by reference to Exhibit 10.25 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1995, File
No. 0-19743).
10.40 Letter dated June 29, 1996, from William J. Shaw to the Company,
regarding Mr. Shaw's election to receive the Enterprise Bonus
payable under his Employment Agreement, and Letter, dated July 8,
1996, from Deloitte & Touche LLP, regarding the computation of the
amount of the Enterprise Bonus payable to Mr. Shaw under his
Employment Agreement (incorporated by reference to Exhibit 10.30
to the Company's Annual Report on Form 10-K for the year ended
June 30, 1996, File No. 0-19743).
10.41 Amended and Restated Employment Agreement, dated as of September
10, 1992, among NACO, Trails, RPI, and William F. Dawson
(incorporated by reference to Exhibit 10.49 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1993, File
No. 0-19743), and Letter, dated December 1, 1995, from RPL to
William F. Dawson, regarding certain compensation arrangements
(incorporated by reference to Exhibit 10.4 to the Company's
Quarterly on From 10-Q for the quarter ended December 31, 1995,
File No. 0-19743).
10.42 Amended and Restated Employment Agreement, dated as of December 2,
1992, among the Company, NACO, Trails, and Walter B. Jaccard
(incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form l0-Q for the quarter ended December 31,
1992, File No. 0-19743), and amendment dated November 15, 1994
(incorporated by reference to Exhibit 10.30 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1995, File
No. 0-19743), and amendment dated December 7, 1995 (incorporated
by reference to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1995, File No.
0-19743).
10.43 Employment Agreement, dated as of August 31, 1995, between the
Company and R. Gerald Gelinas (incorporated by reference to
Exhibit 10.32 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1995, File No. 0-19743).
10.44 Indemnification Agreement, dated as of February 18, 1992, between
the Company and Andrew Boas (incorporated by reference to Exhibit
10.23 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1992, File No. 0-19743), and schedule of
substantially identical Indemnification Agreements (incorporated
by reference to Exhibit 10.33 to the Company's Annual Report on
Form 10-K for the year ended June 30, 1995, File No. 0-19743).
10.45 Indemnification Agreement, dated as of September 1, 1995, between
Trails and William J. Shaw, and schedule of substantially
identical Indemnification Agreements (incorporated by reference to
Exhibit 10.36 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1996, File No. 0-19743).
10.46 Indemnification Agreement, dated as of September 1, 1995, between
NACO and William J. Shaw, and schedule of substantially identical
Indemnification Agreements (incorporated by reference to Exhibit
10.37 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1996, File No. 0-19743).
10.47 Indemnification Agreement, dated as of May 8, 1991, between the
Company and Donald W. Hair, and schedule of substantially
identical Indemnification Agreements (incorporated by reference to
Exhibit 10.38 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1996, File No. 0-19743).
10.48 Indemnification Agreement, dated as of November 20, 1996, between
the Company and William J. Shaw and schedule of substantially
identical Indemnification Agreements (incorporated by reference to
Exhibit 10.39 to the Company's Registration Statement No.
333-19357 on Form S-1, originally filed with the SEC on January 7,
1997, File No. 0-19743).
</TABLE>
II-7
<PAGE> 33
<TABLE>
<S> <C>
10.49 Lease, dated February 24, 1994, as amended, between Carter-Crowley
Properties, Inc. as lessor, and the Company as lessee, relating to
the Company's offices in Dallas, Texas (incorporated by reference
to Exhibit 10.35 to the Company's Annual Report on Form 10-K for
the year ended June 30, 1994, File No. 0-19743).
10.50 Lease, dated October 7, 1987, as amended, between Hardy Court
Shopping Center, Inc. as lessor, and NACO as lessee, relating to
NACO's offices in Gautier, Mississippi (incorporated by reference
to Exhibit 10.36 to the Company's Annual Report on Form 10-K for
the year ended June 30, 1994, File No. 0-19743).
10.51 Grantor Trust Agreement, dated as of September 30, 1991, between
Union Bank of California, N.A. (formerly known as The Bank of
California, N.A., and referred to herein as "Union Bank"), and
Trails (incorporated by reference from Trails' Annual Report on
Form 10-K for the year ended June 30, 1992, File No. 0-9246).
10.52 Supplement No. 1 to Grantor Trust Agreement, dated as of July 16,
1996, by USTrails in favor of Union Bank of California, N.A.
(formerly known as The Bank of California, N.A.) supplementing the
Old Trails Trust Agreement (incorporated by reference to Exhibit
10.44 to the Registrant's Registration Statement on Form S-1,
Registration No. 333-19357, originally filed with the SEC on
January 7, 1997).
10.53 Supplement No 2. to Grantor Trust Agreement, dated as of November
20, 1996, by the Company in favor of Union Bank (incorporated by
reference to Exhibit 10.44 to the Company's Registration Statement
No. 333-19357 on Form S-1, originally filed with the SEC on
January 7, 1997, File No.
0-19743).
10.54 Grantor Trust Agreement, dated as of September 30, 1991, between
The Bank of California, N.A. and NACO (incorporated by reference
to Exhibit 10.43 to the Company's Annual Report on Form 10-K for
the year ended June 30, 1992, File No. 0-19743).
10.55 Supplement to Grantor Trust Agreement, dated as of January 22,
1998, between NACO and a majority of the persons presently named
as beneficiaries under the Grantor Trust Agreement, dated as of
September 30, 1991, between NACO and Union Bank of California,
N.A., as Trustee (incorporated by reference to exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998, File No. 0-19743).
10.56 Grantor Trust Agreement, dated May 8, 1991, between the Company
and Texas Commerce Bank, N.A. ("Texas Bank") (incorporated by
reference to Exhibit 10.41 to the Company's Annual Report on Form
10-K for the year ended June 30, 1992, File No. 0-19743).
10.57 Supplement and Succession Agreement to Grantor Trust Agreement,
dated as of October 13, 1992, among Union Bank, Texas Bank, the
Company, and certain beneficiaries under the Grantor Trust
Agreement (incorporated by reference to Exhibit 10.51 to the
Company's Registration Statement No. 33-571261 on Form S-2,
originally filed with the SEC on January 15, 1993, File No.
0-19743).
10.58 Supplement to Grantor Trust Agreement, dated as of November 20,
1996, by the Company in favor of Union Bank (incorporated by
reference to Exhibit 10.43 to the Form 8-B filed by the Company
with the SEC on November 27, 1996, File No. 0-19743).
10.59 Supplement No. 2 to Grantor Trust Agreement, dated as of January
22, 1998, between the Company and a majority of the persons
presently named as beneficiaries under the Grantor Trust
Agreement, dated as of May 8, 1991, as supplemented, between the
Company and Union Bank of California, N.A., as Trustee
(incorporated by reference to Exhibit 10.3 to the Company's
Quarterly Report on Form l0-Q for the quarter ended March 31,
1998, File No. 0-19743).
</TABLE>
II-8
<PAGE> 34
<TABLE>
<S> <C>
10.60 Trust Agreement, dated as of July 22, 1992, establishing the
Company's Flexible Benefits Plan Trust Fund (incorporated by
reference to Exhibit 10.45 to the Company's Annual Report on Form
10-K for the year ended June 30, 1992, File No. 0-19743).
10.61 Thousand Trails, Inc. Employee Savings Trust, dated as of July 1,
1994, between the Company and its subsidiaries and The Bank of
California, N.A., as trustee (incorporated by reference to Exhibit
10.42 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1994, File No. 0-19743).
10.62 Agreement for the Thousand Trails, Inc. Non-Qualified Deferred
Compensation Plan, effective April 23, 1998 (incorporated by
reference to Exhibit 10.56 to the Company's Annual Report on Form
10-K for the year ended June 30, 1998, File No. 0-19743).
10.63 Tax Allocation Agreement, dated as of September 10, 1992, between
the Company and RPI (incorporated by reference to Exhibit 99.6 to
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993, File No. 0-19743).
10.64 Tax Allocation Agreement, dated as of July 1, 1991, between the
Company and NACO (incorporated by reference to Exhibit 10.44 to
the Company's Annual Report on Form 10-K for the year ended June
30, 1994, File No. 0-19743).
10.65 Tax Allocation Agreement, dated as of October 29, 1993, between
the Company and Wilderness Management (incorporated by reference
to Exhibit 10.46 to the Company's Annual Report on Form 10-K for
the year ended June 30, 1994, File No. 0-19743).
10.66 Exchange Agent Agreement, dated as of March 29, 1994, among the
Company, Trails, and American Stock Transfer & Trust Company
(incorporated by reference to Exhibit 99.1 to the Company's
Current Report on Form 8-K filed with the SEC on April 11, 1994,
File No. 0-19743).
10.67 Sample form of current Membership Contract (incorporated by
reference to Exhibit 10.61 to the Company's Annual Report on Form
10-K for the year ended June 30, 1998, File No. 0-19743).
11.1 Statement re: Computation of Per Share Earnings (incorporated by
reference to Exhibit 11.1 to the Company's Annual Report on Form
10-K filed with the SEC for the year ended June 30, 1998, File No.
0-19743).
13.1** The Company's Annual Report on Form 10-K for the year ended June
30, 1998.
13.2** The Company's Annual Report on Form 10-K/A for the year ended June
30, 1998.
13.3*** The Company's Annual Report on Form 10-K/A (Amendment No. 2) for
the year ended June 30, 1998.
13.4** The Company's Proxy Statement for the 1998 Annual Meeting of the
Company filed on October 27, 1998.
13.5** The Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1998.
21.1 Subsidiaries of the Registrant (incorporated by reference to
Exhibit 11.1 to the Company's Annual Report on Form 10-K filed
with the SEC for the year ended June 30, 1998, File No. 0-19743).
23.1 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1).
23.2* Consent of Arthur Andersen LLP.
24.1 Power of Attorney (see signature page of this Registration
Statement, as filed on March 3, 1997).
99.1 Form of Compliance Agreement between the Registrant and Selling
Security Holders.
</TABLE>
II-9
<PAGE> 35
<TABLE>
<S> <C>
99.2 Supplement to Compliance Agreement between the Registrant and
Selling Security Holders.
99.3 Additional Supplement to Compliance Agreement between the
Registrant and Selling Security Holders.
</TABLE>
* Filed herewith.
** Previously filed.
*** To be filed by amendment.
II-10
<PAGE> 36
ITEM 17. UNDERTAKINGS
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a
20% change in the maximum aggregate offering price set
forth in the "Calculation Registration Fee" table in the
effective Registration Statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement.
(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) 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 Securities and Exchange 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 proceedings) 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]
II-11
<PAGE> 37
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant, Thousand Trails, Inc., a Delaware corporation, has duly caused
this Post-Effective Amendment to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on March 24, 1999.
THOUSAND TRAILS, INC.,
A DELAWARE CORPORATION
By: /s/ William J. Shaw
-----------------------------------------
Name: William J. Shaw
Title: President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Post-Effective Amendment to Registration Statement has been signed by the
following persons in the capacities indicated on March 24, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ William J. Shaw Director, Chairman of the Board, President and Chief
- -------------------------------- Executive Officer (principal executive officer and
William J. Shaw acting chief financial officer)
/s/ Bryan Reed Chief Accounting Officer (principal accounting officer)
- --------------------------------
Bryan Reed
/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
*By: /s/ William J. Shaw
---------------------------
William J. Shaw
Attorney-in-Fact
</TABLE>
II-12
<PAGE> 38
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
2.1 Plan of Reorganization of the Company (which was formerly known as
NACO Finance Corporation), dated October 15, 1991, as supplemented
(incorporated by reference to Exhibit 2.1 to USTrails' Annual
Report on Form 10-K for the year ended June 30, 1992, File No.
0-19743).
2.2 Offer to Purchase for Cash the Company's 12% Secured Notes Due
1998 and Additional Series 12% Secured Notes Due 1998 by the
Company, dated June 5, 1996 (the "Offer to Purchase")
(incorporated by reference to Exhibit 99.2 to the Company's
Current Report on Form 8-K filed with the SEC on June 7, 1996,
File No. 0-19743).
2.3 Supplement to the Offer to Purchase, dated June 21, 1996
(incorporated by reference to Exhibit 2.5 to the Company's Annual
Report on Form 10-K filed with the SEC for the year ended June 30,
1996, File No. 0-19743).
2.4 Private Placement Memorandum by the Company offering to exchange
USTrails' 12% Secured Notes Due 1998 and Additional Series 12%
Secured Notes Due 1998 to certain holders of such notes, dated
June 28, 1996 (the "Private Placement Memorandum") (incorporated
by reference to Exhibit 2.6 to the Company's Annual Report on Form
10-K filed with the SEC for the year ended June 30, 1996, File No.
0-19743).
2.5 Letter of Transmittal pertaining to the transmittal of the
Company's 12% Secured Notes Due 1998 and Additional Series 12%
Secured Notes Due 1998 by certain holders of such notes pursuant
to the exchange offer made by the Company in the Private Placement
Memorandum (incorporated by reference to Exhibit 2.7 to the
Company's Annual Report on Form 10-K filed with the SEC for the
year ended June 30, 1996, File No. 0-19743).
2.6 Supplement to the Private Placement Memorandum, dated July 15,
1996 (incorporated by reference to the Company's Annual Report on
Form 10-K filed with the SEC for the year ended June 30, 1996,
File No. 0-19743).
2.7 Agreement and Plan of Merger, dated as of October 1, 1996, between
the Registrant and USTrails Inc. (predecessor in interest to the
Registrant) (incorporated by reference to the proxy
statement/prospectus filed with the SEC on October 3, 1996 as part
of the Registration Statement on Form S-4, Registration Statement
No. 333-13339 (the "S-4 Registration Statement")).
2.8 Offer to Purchase for Cash the Company's 12% Senior Subordinated
Pay-In-Kind Notes Due 2003, dated as of May 20, 1997 (incorporated
by reference to Exhibit 99.1 to the Company's Current Report on
Form 8-K filed with the SEC on July 8, 1997, File No. 0-19743).
3.1 Restated Certificate of Incorporation of the Registrant
(incorporated by reference to the proxy statement/prospectus filed
with the SEC on October 3, 1996 as part of the S-4 Registration
Statement).
3.2 Amended and Restated By-Laws of the Registrant (incorporated by
reference to Exhibit 3.2 to the Form 8-B filed by the Registrant
with the SEC on November 27, 1996, File No. 0-19743).
4.1 Form of Reorganization Warrant Certificate to purchase shares of
Common Stock and schedule of substantially identical warrants
(incorporated by reference to Exhibit 4.7 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1992, File No.
0-19743).
</TABLE>
<PAGE> 39
<TABLE>
<S> <C>
4.2 Letter Agreement, dated March 19, 1993, between the Company and
Carl Marks Strategic Investments, LP (incorporated by reference to
Exhibit 4.18 to the Company's Registration Statement No. 33-571261
on Form S-2, originally filed with the SEC on January 15, 1993,
File No. 0-19743).
4.3 Form of Warrant Certificate to purchase shares of Common Stock
issued pursuant to the Exchange Agreement with certain holders of
Trails' indebtedness (incorporated by reference to Exhibit 4.3 to
the Company's Current Report on Form 8-K filed with the SEC on
June 25, 1992, File No. 0-19743) and schedule of substantially
identical warrants (incorporated by reference to Exhibit 4.15 to
the Company's Annual Report on Form 10-K for the year ended June
30, 1992, File No. 0-19743).
4.4 Warrant Agency Agreement, dated as of March 2, 1994, between the
Company and Shawmut Bank Connecticut, National Association, as
Warrant Agent (incorporated by reference to Exhibit 4.4 to the
Company's Current Report on Form 8-K filed with the SEC on April
11, 1994, File No. 0-19743).
4.5 Registration Rights Agreement, dated as of June 12, 1992,
regarding the Company's Additional Series Secured Notes and the
shares of Common Stock issuable upon the exercise of certain
warrants (incorporated by reference to Exhibit 4.4 of the
Company's Current Report on Form 8-K filed with the SEC on June
25, 1992, File No. 0-19743).
4.6 Indemnification Agreement, dated as of January 14, 1993, between
the Company and the selling security holders under Registration
Statement No. 33-571261 (incorporated by reference to Exhibit
10.44 to the Company's Registration Statement No. 33-571261 on
Form S-2, originally filed with the SEC on January 15, 1993, File
No. 0-19743).
5.1 Opinion of Gibson, Dunn & Crutcher LLP, counsel to the Registrant,
as to the validity of the securities being registered.
10.1 Credit Agreement, dated as of December 31, 1991, between the
Company and NACO (incorporated by reference to Exhibit 10.27 to
the Company's Annual Report on Form 10-K for the year ended June
30, 1992, File No. 0-19743).
10.2 First Amendment to Credit Agreement, dated as of May 20, 1993,
between the Company and NACO (incorporated by reference to Exhibit
10.48 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1993, File No. 0-19743).
10.3 Second Amendment to Credit Agreement, dated as of November 10,
1994, between the Company and NACO (incorporated by reference to
Exhibit 10.3 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1995, File No. 0-19743).
10.4 Fourth Amendment to Credit Agreement, dated as of June 10, 1998,
between the Company and NACO (incorporated by reference to Exhibit
10.3 to the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998, File No. 0-19743).
10.5 Amended and Restated Promissory Note, dated as of November 10,
1994, pursuant to which the Company provides a $40,000,000
revolving credit facility to NACO (incorporated by reference to
Exhibit 10.4 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1995, File No.
0-19743).
10.6 Amended and Restated Promissory Note, dated as of November 10,
1994, pursuant to which the Company provided a $10,765,000 term
loan to NACO (incorporated by reference to Exhibit 10.5 to the
Company's Annual Report on Form 10-K for the year ended June 30,
1995, File No. 0-19743).
10.7 Guaranty, dated as of December 31, 1991, pursuant to which the
subsidiaries of NACO guaranteed certain amounts that NACO owes the
Company (incorporated by reference to Exhibit 10.5 to the
Company's Registration Statement No. 33-73284 on Form S-2,
originally filed with the SEC on December 22, 1993, File No.
0-19743).
</TABLE>
<PAGE> 40
<TABLE>
<S> <C>
10.8 Release From Guaranty, dated as of May 31, 1993, among certain
subsidiaries of the Company, the Company, and Shawmut Bank
Connecticut, National Association, as Trustee (incorporated by
reference to Exhibit 10.56 to the Company's Registration Statement
No. 33-571261 on Form S-2, originally filed with the SEC on
January 15, 1993, File No. 0-19743).
10.9 Release under Credit Agreement and Security Agreement, dated as of
May 31, 1993, among certain subsidiaries of the Company, the
Company, and Shawmut Bank Connecticut, National Association, as
Trustee (incorporated by reference to Exhibit 10.57 to the
Company's Registration Statement No. 33-571261 on Form S-2,
originally filed with the SEC on January 15, 1993, File No.
0-19743).
10.10 Security Agreement, dated as of December 31, 1991, pursuant to
which NACO granted to the Company a security interest in
substantially all of its personal and real property including the
pledge of NACO's stock in its subsidiaries as required by the
credit agreement between the Company and NACO (incorporated by
reference to Exhibit 10.31 to the Company's Annual Report on Form
10-K for the year ended June 30, 1992, File No. 0-19743).
10.11 First Supplement and Amendment to Security Agreement, dated as of
May 20, 1993, among NACO and certain of its subsidiaries, RPI, the
Company, and Shawmut Bank Connecticut, National Association, as
Trustee (incorporated by reference to Exhibit 10.53 to the
Company's Registration Statement No. 33-57l261 on Form S-2,
originally filed with the SEC on January 15, 1993, File No.
0-19743).
10.12 Form of Mortgage from NACO and its subsidiaries to the Company
pursuant to the credit agreement between the Company and NACO
(incorporated by reference to Exhibit 10.32 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1992, File
No. 0-19743, and schedule of documents substantially identical to
the Form of Mortgage (incorporated by reference to Exhibit 10.55
to the Company's Registration Statement No. 33-571261 on Form S-2,
originally filed with the SEC on January 15, 1993, File No.
0-19743).
10.13 Form of First Amendment to Mortgage from NACO and its subsidiaries
to the Company amending certain terms of a Mortgage that
previously granted a beneficial security interest in certain
property to the Company pursuant to the credit agreement between
the Company and NACO, and schedule of documents substantially
identical to the Form of First Amendment to Mortgage (incorporated
by reference to Exhibit 10.13 to the Company's Annual Report on
Form 10-K for the year ended June 30, 1995, File No. 0-19743).
10.14 Indenture, dated as of July 17, 1996, among the Company, Fleet
National Bank as Trustee, and certain other parties described
therein, pertaining to the Company's Senior Subordinated
Pay-In-Kind Notes Due 2003 (incorporated by reference to Exhibit
4.36 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1996, File No. 0-19743).
10.15 First Supplemental Indenture, dated as of November 20, 1996, by
and among the Registrant, each subsidiary of the Registrant named
as a subsidiary guarantor therein and Fleet National Bank, as
Trustee (incorporated by reference to Exhibit 4.2 to the Form 8-B
filed by the Registrant with the SEC on November 27, 1996).
10.16 Form of Senior Subordinated Pay-In-Kind Note Due 2003
(incorporated by reference to Exhibit 4.37 to the Company's Annual
Report on Form 10-K for the year ended June 30, 1996, File No.
0-19743).
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10.17 Loan and Security Agreement, dated as of July 10, 1996, between
the Company and Foothill Capital Corporation (incorporated by
reference to Exhibit 10.19 to the Company's Annual Report on Form
10-K for the year ended June 30, 1996, File No. 0-19743).
10.18 First Amendment to Loan and Security Agreement, dated as of May
16, 1997, between the Company and Foothill Capital Corporation
(incorporated by reference to Exhibit 99.2 to the Company's
Current Report on Form 8-K filed with the SEC on July 8, 1997,
File No. 0-19743).
10.19 Second Amendment to Loan and Security Agreement dated as of
December 23, 1997, between the Company and Foothill (incorporated
by reference to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1997, File No.
0-19743).
10.20 Third Amendment to Loan and Security Agreement dated as of January
5, 1998, between the Company and Foothill Capital Corporation
(incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31,
1998, File No. 0-19743).
10.21 Fourth Amendment to Loan and Security Agreement, dated as of June
10, 1998, between the Company and Foothill (incorporated by
reference to Exhibit 10.17 to the Company's Annual Report on Form
10-K for the year ended June 30, 1998, File No. 0-19743).
10.22 Fifth Amendment to Loan and Security Agreement, dated as of
September 15, 1998, between the Company and Foothill Capital
Corporation (incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, File No.
0-19743).
10.23 Sixth Amendment to Loan and Security Agreement, dated as of
October 21, 1998, between the Company and Foothill Capital
Corporation (incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998, File No. 0-19743).
10.24 Secured Promissory Note (Account Note), dated July 10, 1996,
between the Company and Foothill Capital Corporation (incorporated
by reference to Exhibit 10.20 to the Company's Annual Report on
Form 10-K for the year ended June 30, 1996, File No. 0-19743).
10.25 Secured Promissory Note (Term Note), dated July 10, 1996, between
the Company and Foothill Capital Corporation (incorporated by
reference to Exhibit 10.21 to the Company's Annual Report on Form
10-K for the year ended June 30, 1996, File No. 0-19743).
10.26 Form of Pledge and Security Agreement, dated as of July 10, 1996,
between the Company and Foothill Capital Corporation, and schedule
of documents substantially identical to the form of Pledge and
Security Agreement (incorporated by reference to Exhibit 10.22 to
the Company's Annual Report on Form 10-K for the year ended June
30, 1996, File No. 0-19743).
10.27 Consent and First Amendment to Pledge and Security Agreement,
dated as of October 31, 1997, between certain subsidiaries of the
Company and Foothill Capital Corporation (incorporated by
reference to exhibit 10.2 to the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998, File No. 0-19743).
10.28 Form of Mortgage, dated as of July 10, 1996, to grant liens to
Foothill Capital Corporation to secure the Company's obligations
under the Loan Agreement with Foothill, and schedule of documents
substantially identical to the form of Mortgage (incorporated by
reference to Exhibit 10.23 to the Company's Annual Report on Form
10-K for the year ended June 30, 1996, File No. 0-19743).
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10.29 Form of Assignment of Indebtedness and Mortgage, dated as of July
10, 1996, transferring the liens securing certain indebtedness
that NACO owes to the Company to Foothill Capital Corporation
under the Loan Agreement with Foothill, and schedule of documents
substantially identical to the form of Assignment of Indebtedness
and Mortgage (incorporated by reference to Exhibit 10.24 to the
Company's Annual Report on Form 10-K for the year ended June 30,
1996, File No. 0-19743).
10.30 Form of Subordination Agreement, dated as of July 10, 1996,
between the Company and Foothill Capital Corporation,
subordinating the security interests under the credit agreement
between the Company and NACO to the security interests under the
Credit Agreement with Foothill, and schedule of documents
substantially identical to the form of Subordination Agreement
(incorporated by ,reference to Exhibit 10.25 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1996, File
No. 0-19743).
10.31 The Company's 1991 Employee Stock Incentive Plan (incorporated by
reference to Exhibit 10.40 to the Company's Annual Report on Form
10-K for the year ended June 30, 1992, File No. 0-19743).
10.32 Amendment No. 1 to the Company's 1991 Employee Stock Incentive
Plan (incorporated by reference to Exhibit 10.8 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1996, File No. 0-19743).
10.33 The Company's 1993 Stock Option and Restricted Stock Purchase Plan
(incorporated by reference to Exhibit 10.22 to the Company's
Registration Statement No. 33-73284 on Form S-2, originally filed
with the SEC on December 22, 1993, File No. 0-19743).
10.34 Amendment No. 1 to the Company's 1993 Stock Option and Restricted
Stock Purchase Plan (incorporated by reference to Exhibit 10.9 to
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996, File No. 0-19743).
10.35 The Company's 1993 Director Stock Option Plan (incorporated by
reference to Exhibit 10.23 to the Company's Registration Statement
No. 33-73284 on Form S-2, originally filed with the SEC on
December 22, 1993, File No. 0-19743).
10.36 Amendment No. 1 to the Company's 1993 Director Stock Option Plan
(incorporated by reference to Exhibit 10.10 to the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1996. File No. 0-19743).
10.37 Stock Option Agreement, dated as of August 1, 1996, between the
Company and William J. Shaw (incorporated by reference to Exhibit
10.26 to the Form 8-B filed by the Company with the SEC on
November 27, 1996, File No. 0-19743).
10.38 Assumption of Obligations, dated as of November 20, 1996, by the
Company assuming the obligations of USTrails under the USTrails
Inc. 1991 Employee Stock Incentive Plan, as amended; the USTrails
Inc. 1993 Stock Option and Restricted Stock Purchase Plan, as
amended; the USTrails Inc. 1993 Director Stock Option Plan, as
amended; Warrant Certificates originally issued on December 31,
1991, June 12, 1992, and March 2, 1994 to May 16, 1995; and the
Stock Option Agreement, dated as of August 1, 1996, between
USTrails and William J. Shaw (incorporated by reference to Exhibit
10.27 to the Form 8-B filed by the Company with the SEC on
November 27, 1996, File No. 0-19743).
10.39 Employment Agreement, dated as of May 11, 1995, between the
Company and William J. Shaw, and related Standby Letter of Credit,
dated September 22, 1995, issued by The Bank of California, N.A.,
for the benefit of Mr. Shaw, and Letter, dated September 20, 1995,
from The Wyatt Company, regarding Mr. Shaw's Employment Agreement
(incorporated by reference to Exhibit 10.25 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1995, File
No. 0-19743).
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10.40 Letter dated June 29, 1996, from William J. Shaw to the Company,
regarding Mr. Shaw's election to receive the Enterprise Bonus
payable under his Employment Agreement, and Letter, dated July 8,
1996, from Deloitte & Touche LLP, regarding the computation of the
amount of the Enterprise Bonus payable to Mr. Shaw under his
Employment Agreement (incorporated by reference to Exhibit 10.30
to the Company's Annual Report on Form 10-K for the year ended
June 30, 1996, File No. 0-19743).
10.41 Amended and Restated Employment Agreement, dated as of September
10, 1992, among NACO, Trails, RPI, and William F. Dawson
(incorporated by reference to Exhibit 10.49 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1993, File
No. 0-19743), and Letter, dated December 1, 1995, from RPL to
William F. Dawson, regarding certain compensation arrangements
(incorporated by reference to Exhibit 10.4 to the Company's
Quarterly on From 10-Q for the quarter ended December 31, 1995,
File No. 0-19743).
10.42 Amended and Restated Employment Agreement, dated as of December 2,
1992, among the Company, NACO, Trails, and Walter B. Jaccard
(incorporated by reference to Exhibit 10.1 to the Company's
Quarterly Report on Form l0-Q for the quarter ended December 31,
1992, File No. 0-19743), and amendment dated November 15, 1994
(incorporated by reference to Exhibit 10.30 to the Company's
Annual Report on Form 10-K for the year ended June 30, 1995, File
No. 0-19743), and amendment dated December 7, 1995 (incorporated
by reference to Exhibit 10.1 to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1995, File No.
0-19743).
10.43 Employment Agreement, dated as of August 31, 1995, between the
Company and R. Gerald Gelinas (incorporated by reference to
Exhibit 10.32 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1995, File No. 0-19743).
10.44 Indemnification Agreement, dated as of February 18, 1992, between
the Company and Andrew Boas (incorporated by reference to Exhibit
10.23 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1992, File No. 0-19743), and schedule of
substantially identical Indemnification Agreements (incorporated
by reference to Exhibit 10.33 to the Company's Annual Report on
Form 10-K for the year ended June 30, 1995, File No. 0-19743).
10.45 Indemnification Agreement, dated as of September 1, 1995, between
Trails and William J. Shaw, and schedule of substantially
identical Indemnification Agreements (incorporated by reference to
Exhibit 10.36 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1996, File No. 0-19743).
10.46 Indemnification Agreement, dated as of September 1, 1995, between
NACO and William J. Shaw, and schedule of substantially identical
Indemnification Agreements (incorporated by reference to Exhibit
10.37 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1996, File No. 0-19743).
10.47 Indemnification Agreement, dated as of May 8, 1991, between the
Company and Donald W. Hair, and schedule of substantially
identical Indemnification Agreements (incorporated by reference to
Exhibit 10.38 to the Company's Annual Report on Form 10-K for the
year ended June 30, 1996, File No. 0-19743).
10.48 Indemnification Agreement, dated as of November 20, 1996, between
the Company and William J. Shaw and schedule of substantially
identical Indemnification Agreements (incorporated by reference to
Exhibit 10.39 to the Company's Registration Statement No.
333-19357 on Form S-1, originally filed with the SEC on January 7,
1997, File No. 0-19743).
10.49 Lease, dated February 24, 1994, as amended, between Carter-Crowley
Properties, Inc. as lessor, and the Company as lessee, relating to
the Company's offices in Dallas, Texas (incorporated by reference
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to Exhibit 10.35 to the Company's Annual Report on Form 10-K for
the year ended June 30, 1994, File No. 0-19743).
10.50 Lease, dated October 7, 1987, as amended, between Hardy Court
Shopping Center, Inc. as lessor, and NACO as lessee, relating to
NACO's offices in Gautier, Mississippi (incorporated by reference
to Exhibit 10.36 to the Company's Annual Report on Form 10-K for
the year ended June 30, 1994, File No. 0-19743).
10.51 Grantor Trust Agreement, dated as of September 30, 1991, between
Union Bank of California, N.A. (formerly known as The Bank of
California, N.A., and referred to herein as "Union Bank"), and
Trails (incorporated by reference from Trails' Annual Report on
Form 10-K for the year ended June 30, 1992, File No. 0-9246).
10.52 Supplement No. 1 to Grantor Trust Agreement, dated as of July 16,
1996, by USTrails in favor of Union Bank of California, N.A.
(formerly known as The Bank of California, N.A.) supplementing the
Old Trails Trust Agreement (incorporated by reference to Exhibit
10.44 to the Registrant's Registration Statement on Form S-1,
Registration No. 333-19357, originally filed with the SEC on
January 7, 1997).
10.53 Supplement No 2. to Grantor Trust Agreement, dated as of November
20, 1996, by the Company in favor of Union Bank (incorporated by
reference to Exhibit 10.44 to the Company's Registration Statement
No. 333-19357 on Form S-1, originally filed with the SEC on
January 7, 1997, File No.
0-19743).
10.54 Grantor Trust Agreement, dated as of September 30, 1991, between
The Bank of California, N.A. and NACO (incorporated by reference
to Exhibit 10.43 to the Company's Annual Report on Form 10-K for
the year ended June 30, 1992, File No. 0-19743).
10.55 Supplement to Grantor Trust Agreement, dated as of January 22,
1998, between NACO and a majority of the persons presently named
as beneficiaries under the Grantor Trust Agreement, dated as of
September 30, 1991, between NACO and Union Bank of California,
N.A., as Trustee (incorporated by reference to exhibit 10.4 to the
Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998, File No. 0-19743).
10.56 Grantor Trust Agreement, dated May 8, 1991, between the Company
and Texas Commerce Bank, N.A. ("Texas Bank") (incorporated by
reference to Exhibit 10.41 to the Company's Annual Report on Form
10-K for the year ended June 30, 1992, File No. 0-19743).
10.57 Supplement and Succession Agreement to Grantor Trust Agreement,
dated as of October 13, 1992, among Union Bank, Texas Bank, the
Company, and certain beneficiaries under the Grantor Trust
Agreement (incorporated by reference to Exhibit 10.51 to the
Company's Registration Statement No. 33-571261 on Form S-2,
originally filed with the SEC on January 15, 1993, File No.
0-19743).
10.58 Supplement to Grantor Trust Agreement, dated as of November 20,
1996, by the Company in favor of Union Bank (incorporated by
reference to Exhibit 10.43 to the Form 8-B filed by the Company
with the SEC on November 27, 1996, File No. 0-19743).
10.59 Supplement No. 2 to Grantor Trust Agreement, dated as of January
22, 1998, between the Company and a majority of the persons
presently named as beneficiaries under the Grantor Trust
Agreement, dated as of May 8, 1991, as supplemented, between the
Company and Union Bank of California, N.A., as Trustee
(incorporated by reference to Exhibit 10.3 to the Company's
Quarterly Report on Form l0-Q for the quarter ended March 31,
1998, File No. 0-19743).
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10.60 Trust Agreement, dated as of July 22, 1992, establishing the
Company's Flexible Benefits Plan Trust Fund (incorporated by
reference to Exhibit 10.45 to the Company's Annual Report on Form
10-K for the year ended June 30, 1992, File No. 0-19743).
10.61 Thousand Trails, Inc. Employee Savings Trust, dated as of July 1,
1994, between the Company and its subsidiaries and The Bank of
California, N.A., as trustee (incorporated by reference to Exhibit
10.42 to the Company's Annual Report on Form 10-K for the year
ended June 30, 1994, File No. 0-19743).
10.62 Agreement for the Thousand Trails, Inc. Non-Qualified Deferred
Compensation Plan, effective April 23, 1998 (incorporated by
reference to Exhibit 10.56 to the Company's Annual Report on Form
10-K for the year ended June 30, 1998, File No. 0-19743).
10.63 Tax Allocation Agreement, dated as of September 10, 1992, between
the Company and RPI (incorporated by reference to Exhibit 99.6 to
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993, File No. 0-19743).
10.64 Tax Allocation Agreement, dated as of July 1, 1991, between the
Company and NACO (incorporated by reference to Exhibit 10.44 to
the Company's Annual Report on Form 10-K for the year ended June
30, 1994, File No. 0-19743).
10.65 Tax Allocation Agreement, dated as of October 29, 1993, between
the Company and Wilderness Management (incorporated by reference
to Exhibit 10.46 to the Company's Annual Report on Form 10-K for
the year ended June 30, 1994, File No. 0-19743).
10.66 Exchange Agent Agreement, dated as of March 29, 1994, among the
Company, Trails, and American Stock Transfer & Trust Company
(incorporated by reference to Exhibit 99.1 to the Company's
Current Report on Form 8-K filed with the SEC on April 11, 1994,
File No. 0-19743).
10.67 Sample form of current Membership Contract (incorporated by
reference to Exhibit 10.61 to the Company's Annual Report on Form
10-K for the year ended June 30, 1998, File No. 0-19743).
11.1 Statement re: Computation of Per Share Earnings (incorporated by
reference to Exhibit 11.1 to the Company's Annual Report on Form
10-K filed with the SEC for the year ended June 30, 1998, File No.
0-19743).
13.1** The Company's Annual Report on Form 10-K for the year ended June
30, 1998.
13.2** The Company's Annual Report on Form 10-K/A for the year ended June
30, 1998.
13.3*** The Company's Annual Report on Form 10-K/A (Amendment No. 2) for
the year ended June 30, 1998.
13.4** The Company's Proxy Statement for the 1998 Annual Meeting of the
Company filed on October 27, 1998.
13.5** The Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1998.
21.1 Subsidiaries of the Registrant (incorporated by reference to
Exhibit 11.1 to the Company's Annual Report on Form 10-K filed
with the SEC for the year ended June 30, 1998, File No. 0-19743).
23.1 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit 5.1).
23.2* Consent of Arthur Andersen LLP.
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24.1 Power of Attorney (see signature page of this Registration
Statement, as filed on March 3, 1997).
99.1 Form of Compliance Agreement between the Registrant and Selling
Security Holders.
99.2 Supplement to Compliance Agreement between the Registrant and
Selling Security Holders.
99.3 Additional Supplement to Compliance Agreement between the
Registrant and Selling Security Holders.
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- --------------
* Filed herewith.
** Previously filed.
*** To be filed by amendment.
<PAGE> 1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our report
dated September 4, 1998, on the consolidated financial statements of Thousand
Trails, Inc. and Subsidiaries (and to all references to our Firm), incorporated
by reference in the Post Effective Amendment No 4 to the Registration Statement
on Form S-2.
/s/ ARTHUR ANDERSEN LLP
Dallas, Texas,
March 22, 1999
