As filed with the Securities and Exchange Commission
on March 23, 1998
Registration No. 333-
============================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
AMERICAN SKIING COMPANY
(Exact Name of Issuer as specified in its charter)
Maine 04-3373730
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
Sunday River Access Road
Bethel, Maine 04217
(Address of Principal Executive Offices) (Zip Code)
AMERICAN SKIING COMPANY STOCK OPTION PLAN
(Full title of the plan)
Christopher E. Howard
Senior Vice President and
Chief Administrative Officer
American Skiing Company
Sunday River Access Road
Bethel, Maine 04217
(Name and address of agent for service)
207-824-8100
(Telephone number, including area code,
of agent for service)
============================================================
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
Securities offering aggregate
to be Amount to be price offering Amount of
registered registered per share price registration fee
---------- ------------ --------- --------- ----------------
Common Stock 5,688,699 shares $16 1/4<F1> $91,733,116<F1> $27,061.26<F2>
par value $.01
per share
[FN]
<F1> Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended.
<F2> Pursuant to Rule 457 (c) and (h), the registration fee has been
calculated based on the average of the high and low sales prices
reported on March 17, 1998.
[PAGE]
PART I. INFORMATION REQUIRED IN THE SECTION 10(a)
PROSPECTUS
Item 1. Plan Information.
The documents containing the information specified in Part I
of this Registration Statement will be sent or given to plan
participants as specified by Rule 428(b)(1) of the Securities Act of
1933, as amended (the "Securities Act"). Such documents are not
required to be and are not filed with the Securities and Exchange
Commission (the "Commission") either as part of this Registration
Statement or as a prospectus or prospectus supplement pursuant to Rule
424. These documents and the documents incorporated by reference in
this Registration Statement pursuant to Item 3 of Part II of this form
S-8, taken together, constitute a prospectus that meets the
requirements of Section 10(a) of the Securities Act.
EXPLANATORY NOTE
Pursuant to General Instruction C of Form S-8, this Registration
Statement contains a prospectus meeting the requirements of Part I of
Form S-3 relating to reofferings by certain persons of shares of
Common Stock of American Skiing Company to be acquired pursuant to the
American Skiing Company Stock Option Plan.
2[PAGE]
PROSPECTUS
AMERICAN SKIING COMPANY
5,688,699 Shares Of Common Stock
(Par Value $.01 Per Share)
This Prospectus may be used by certain persons (the "Selling
Shareholders") who may be deemed to be affiliates of American Skiing
Company, a Maine corporation (the "Company"), to sell shares of common
stock, par value $.01 per share, of the Company (the "Common Stock"),
that have been or may be acquired by such persons pursuant to the
American Skiing Company Stock Option Plan.
The Common Stock is traded on the New York Stock Exchange under
the symbol "SKI". It is anticipated that the Selling Shareholders
will offer shares for sale at prevailing prices on the New York Stock
Exchange on the date of sale. All proceeds from any sales of such
shares of Common Stock will inure to the benefit of the Selling
Shareholders. The Company will receive none of the proceeds from the
sale of the shares which may be offered hereby but may receive funds
upon the exercise of the options pursuant to which the Selling
Shareholders will acquire certain of the shares covered by this
Prospectus, which funds, if any, will be used for working capital.
All expenses of the registration incurred in connection herewith are
being borne by the Company, but all selling and other expenses
incurred by the individual Selling Shareholders will be borne by such
Selling Shareholders.
No underwriting is being utilized in connection with this
registration of Common Stock and, accordingly, the shares of Common
Stock are being offered without underwriting discounts. The expenses
of this registration will be paid by the Company. Normal brokerage
commissions, discounts and fees will be payable by the Selling
Shareholders. The Selling Shareholders and any broker executing
selling orders on behalf of the Selling Shareholders may be deemed to
be an "underwriter" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"), in which event commissions received
by such broker may be deemed to be underwriting commissions under the
Securities Act.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR ANY STATE
SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING
SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED.
Neither the delivery of this Prospectus, nor any sales made
hereunder, shall under any circumstances create any implication that
there has been no change in the affairs of the Company since the date
hereof. No person has been authorized to give any information or to
make any representations in connection with the offering other than
those contained or incorporated by reference in this Prospectus, and
if given or made, such information or representations must not be
relied upon as having been authorized by the Company. This Prospectus
does not constitute an offer or solicitation in any jurisdiction in
which such offer or solicitation is unlawful.
The Company's executive offices are located at Sunday River
Access Road, Newry, Maine 04217 and its telephone number at that
location is (207) 824-8100.
The date of this Prospectus is March 23, 1998
[PAGE]
TABLE OF CONTENTS
Page
Available Information...........................................3
Incorporation of Certain Documents by Reference.................3
The Company.....................................................4
Risk Factors....................................................4
The Transactions...............................................17
Use of Proceeds................................................19
Selling Stockholders...........................................19
Plan of Distribution...........................................21
Legal Matters..................................................22
Experts........................................................22
Certain Forward-Looking Statements.............................22
2[PAGE]
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information
can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549; Seven World Trade Center, New York, New
York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60606. Copies of such material can be obtained from
the Public Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. Such
materials can also be inspected at the offices of the New York Stock
Exchange, 20 Broad Street, New York, New York 10005, on which exchange
the Common Stock is listed. The Commission maintains a Web site that
contains reports, proxy statements and other information
electronically filed by the Company with the Commission which can be
accessed over the Internet at http://www.sec.gov.
This Prospectus contains information concerning the Company and
its Stock Option Plan, but does not contain all the information set
forth in the Registration Statement which the Company has filed with
the Commission under the Securities Act of 1933 ("Securities Act").
Statements made in this Prospectus concerning the contents of the
Stock Option Plan and other information included in the Registration
Statement are not necessarily complete, and such statements are
qualified in their entirety by reference to the applicable document
filed with the Commission. The Registration Statement, including
various exhibits, may be inspected at the Commission's office in
Washington, D.C.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission
are incorporated herein by reference: (1) the Company's Registration
Statement on Form S-1 dated November 5, 1997; (2) the Company's
Registration Statement on Form S-1 dated February 10, 1998; and (3)
the Company's Quarterly Report on Form 10-Q for the quarters ended
October 26, 1997, and January 25, 1998.
All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
filing of a post-effective amendment which indicates that all the
securities offered hereby have been sold or which deregisters all such
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of
filing of such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated herein by reference shall be
deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any subsequently
3[PAGE]
filed document which also is, or is deemed to be, incorporated herein
by reference modifies or supersedes such prior statement. Any
statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute part of this Prospectus.
The Company hereby undertakes to provide without charge to each
person to whom a copy of this Prospectus is delivered, upon written or
oral request of any such person, (i) a copy of any and all of the
information that has been or may be incorporated by reference in this
Prospectus, other than exhibits to such documents and (ii) a copy of
any other documents required to be delivered to employees pursuant to
Rule 428(b) under the Securities Act, including the Company's most
recent annual report to stockholders (if any), proxy statement (if
any) and any other communications distributed to its stockholders
generally. Requests for such copies and requests for additional
information about the Stock Option Plan and its administrators should
be directed to Director of Investor Relations, American Skiing
Company, P.O. Box 450, Bethel, Maine 04217. The Company's telephone
number at that location is (207) 824-8100.
THE COMPANY
The Company is the largest operator of alpine resorts in the United
States. The Company owns and operates nine ski resorts, including two
of the five largest resorts in the United States based on 1996-97
skier visits, with at least one resort in each major skiing market.
These nine resorts generated approximately 4.9 million skier visits
during the 1996-97 ski season, representing approximately 9.4% of
total skier visits in the United States for that period. In addition
to operating alpine resorts, the Company develops mountainside real
estate which complements its on-mountain operations. The mailing
address of the Company and the address of its principal executive
offices is Sunday River Access Road, Bethel, Maine 04217; telephone
number (207) 824-8100.
RISK FACTORS
In addition to the other information in this Prospectus,
prospective investors should carefully consider the following risk
factors in evaluating the Company and its business before deciding to
purchase any of the Common Stock offered by this Prospectus. This
Prospectus contains forward-looking statements and the Company's
actual results could differ materially from those anticipated in these
forward-looking statements as a result of numerous factors, including
those set forth in the following risk factors and elsewhere in this
Prospectus. Unless the context otherwise requires all references
herein to the "Company" shall mean (a) American Skiing Company and its
subsidiaries, excluding the Heavenly and Steamboat Resorts (the
"Acquired Resorts"), when used with respect to historical information
contained herein or (b) American Skiing Company and its subsidiaries,
including the Acquired Resorts, when used with respect to information
4[PAGE]
about events that have occurred or will occur after the Acquisition or
when giving pro forma effect thereto. All references herein to (a)
the Company's "fiscal" year shall mean the 52-or-53-week period ended
or ending on the last Sunday in July, (b) the Acquired Resorts' fiscal
year shall mean the Acquired Resorts' fiscal year ended on May 31, (c)
"ski season" shall mean the period from the opening of the first of
the Company's mountains for skiing through the closing of the
Company's last mountain for skiing, typically mid-November to late
May, (d) "skier visits" shall mean one guest accessing a ski mountain
on any one day and (e) real estate residential "units" shall mean
residential real estate ownership interests, including individual
interval interests.
Substantial Leverage and Financial Risks
General. As a result of the Transactions ( as defined below),
the Company is highly leveraged. At October 26, 1997, after giving pro
forma effect to the Transactions, the Company's total long-term debt,
including current maturities, and shareholders' equity would have been
approximately $325 million and $241 million, respectively, and the
Company would have had up to $64.0 million available for borrowings
under the New Credit Facility. In addition, at October 26, 1997, after
giving pro forma effect to the Transactions, total indebtedness would
have represented 57% of total capital and the ratio of Resort EBITDA
(resort revenues less cost of resort operations and marketing, general
and administrative expense) to interest expense would have been
negative 1.8 for the fiscal quarter ended October 26, 1997. The
Company has incurred additional indebtedness in the first two quarters
of fiscal 1998 to fund capital improvements, real estate development
and operations. See "-Seasonality; Fluctuations in Operating Results;
Dependence on Weather Conditions".
Impact on Financial Condition. The high level of debt of the
Company and its subsidiaries will have several important effects on
the Company's future operations, including: (a) the Company will have
significant cash requirements to service its debt (including
approximately $10.6 million of scheduled principal repayments over the
next two fiscal years), reducing funds available for operations,
capital expenditures and acquisitions, thereby increasing the
Company's vulnerability to adverse general economic and industry
conditions; and (b) the financial covenants and other restrictions
contained in the New Credit Facility (as defined), the Indenture (the
"12% Note Indenture"), dated as of June 28, 1996, among ASC East,
certain of its subsidiaries and United States Trust Company of New
York, as Trustee, relating to ASC East's 12% Senior Subordinated Notes
due 2006 (the "12% Notes"), and other agreements relating to the
Company's indebtedness will require the Company to meet certain
financial tests and will restrict its and its subsidiaries' ability to
borrow additional funds and to dispose of assets. The Company does not
plan to establish any debt service reserves for the payment of
principal or interest on any of its indebtedness. Substantially all of
5[PAGE]
the Company's assets, other than the Grand Summit Hotel properties,
are pledged to secure borrowings under the New Credit Facility. The
Company has granted a mortgage to the construction lender on each
Grand Summit Hotel property to secure the construction financing of
such properties.
Capital Expenditure Deferral. Although management believes that
capital expenditures above maintenance levels can be deferred to
address cash flow or other constraints, such activities may not be
deferred for extended periods without adverse effects on skier visits,
revenues and profitability.
Growth Limitations. The Company's continued growth depends, in
part, on its ability to maintain and expand its facilities and to
engage in successful real estate development and, therefore, to the
extent it is unable to do so with internally generated cash, its
inability to finance capital expenditures or real estate development
through borrowed funds or additional equity investments could have a
material adverse effect on the Company's future operations and
revenues.
Capital Requirements
The development of ski resorts is capital intensive. The Company
spent approximately $12.6 million, $28.4 million and $52.3 million in
fiscal 1995, 1996 and 1997, respectively, on resort capital
expenditures and real estate development. In fiscal 1995, 1996 and
1997, the Acquired Resorts spent an aggregate of approximately $6.9
million, $5.9 million and $5.4 million, respectively, on resort
capital expenditures. In fiscal 1998 and fiscal 1999, the Company
plans to spend approximately $65 million and $60 million,
respectively, to enhance its resort operations and approximately $100
million and $115 million, respectively, to develop its real estate
holdings. There can be no assurance that the Company will have
adequate funds, from internal or external sources, to make all planned
or required capital expenditures. A lack of available funds for such
capital expenditures could have a material adverse effect on the
Company's ability to implement its operating strategy. The Company
intends to finance resort capital improvements through internally
generated funds and borrowings under its New Credit Facility and to
finance real estate development through project-specific construction
financing. See "-Substantial Leverage and Financial Risks."
Risks Associated with Rapid Growth
Since 1994, the Company has experienced rapid and substantial
growth. The Company's rapid and substantial growth has placed, and
could continue to place, a significant strain on its management,
employees and operations. The Company's growth has increased the
operating complexity of the Company and the level of responsibility
for new and existing management. For example, members of the Company's
senior management team have limited experience managing publicly
6[PAGE]
traded companies. The Company's ability to compete effectively and to
manage its recent and future growth effectively will depend on its
ability to implement and improve financial and management information
systems on a timely basis and to effect changes in its business, such
as implementing internal controls to handle the increased size of its
operations and hiring, training, developing and managing an increasing
number of experienced management-level and other employees. Unexpected
difficulties during expansion, the failure to attract and retain
qualified employees, or the Company's inability to respond effectively
to recent growth or plan for future expansion, could have a material
adverse effect on the Company.
Growth Through Acquisitions; Integration of Acquired Resorts; Ability
to Finance Acquisitions
The Company continually evaluates potential acquisition
opportunities. The Company will need to finance any future
acquisitions through a combination of internally generated funds,
additional bank borrowings from existing and new credit facilities and
public offerings or private placements of equity (which may cause
dilution to existing holders of capital stock of the Company) and/or
debt securities, the combination of which will depend on several
factors, including the size of the acquired resort and the Company's
capital structure at the time of an acquisition. There can be no
assurance, however, that attractive acquisition candidates will be
identified, that the Company will be able to make acquisitions on
terms favorable to it, that necessary financing will be available on
suitable terms, if at all, or that such acquisitions will be permitted
under applicable antitrust laws. The Company's ability to make such
acquisitions is limited under applicable antitrust laws, and it is
effectively prohibited from acquiring additional resorts in New
England. See "-Substantial Leverage and Financial Risks."
The Company faces risks in connection with the integration of
acquired resorts. Significant management resources and time will be
required to integrate any acquired resorts and unanticipated problems
or liabilities with respect to such new resorts may further divert
management's attention from the Company as a whole, which could have a
material adverse effect on the Company's operations and financial
performance. There can be no assurance that the Company will be able
to realize any additional skier visits, revenues or cost savings in
connection with integrating acquired resorts.
Required Development at The Canyons; Historical Losses of Wolf
The Canyons is a largely undeveloped asset that requires
substantial development of on-mountain facilities, real estate and
related infrastructure. The Company has adopted a five-year business
plan for development of the resort; however, accomplishing its plan is
contingent upon obtaining necessary permits and approvals, obtaining
required financing for planned improvements and generating markets for
the resort that will produce significant increases in skier visits. An
7[PAGE]
estimated $60 million (approximately $16.3 million of which was spent
by December 31, 1997) for on-mountain capital improvements and an
estimated $150 million for real estate development will be required to
fulfill the Company's five-year business plan at The Canyons. There
can be no assurance that capital will be available to fund these
capital improvements or real estate development.
Wolf Mountain ski area ("Wolf"), which makes up a portion of The
Canyons, historically experienced net operating losses, estimated by
the Company to be approximately $2 million in each of fiscal 1997 and
fiscal 1996. The assets acquired from Wolf in connection with the
planned development of The Canyons consisted substantially of rights
to use or acquire undeveloped real estate and limited operating
assets. The majority of the limited operating assets acquired from
Wolf have been, or will be, disassembled or demolished. Substantial
new development is required to build the property into the planned
resort facility. The Company believes that the configuration,
operation and estimated historical financial results of Wolf are not
material to an understanding of future financial operations of the
planned resort at The Canyons, or of the Company on a consolidated
basis. The Company's business plan assumes that it can significantly
increase skier visits and generate positive Resort EBITDA and net
income at The Canyons. There can be no assurance, however, that The
Canyons will generate additional skier visits, positive Resort EBITDA
or net income for the Company.
Real Estate Development
The Company intends to construct, operate and sell interval
ownership and condominium units and other real estate at its ski
resorts. Real estate development and the Company's ability to generate
revenues therefrom may be adversely affected by numerous factors, many
of which are beyond the control of the Company, including the ability
of the Company to successfully market its resorts, the national and
regional economic climate, local real estate conditions (such as an
oversupply of space or a reduction in demand for real estate), costs
to satisfy environmental compliance and remediation requirements
associated with new development/renovation and ongoing operations, the
attractiveness of the properties to prospective purchasers and
tenants, competition from other available property or space, the
ability of the Company to obtain adequate insurance, the ability of
the Company to obtain all necessary zoning, land use, building,
occupancy and other required governmental permits and authorizations
and changes in real estate, zoning, land use, environmental or tax
laws. In addition, real estate development will be dependent upon,
among other things, receipt of adequate financing on suitable terms,
obtaining and maintaining the requisite permits and licenses and, in
certain circumstances, acquiring additional real estate. There can be
no assurance as to whether, when or on what terms such financing,
permits, licenses and real estate may be obtained. The Company does
not have the financing available to complete all of its planned real
estate development. In addition, such efforts entail risks associated
8[PAGE]
with development and construction activities, including cost overruns,
shortages of materials or skilled labor, labor disputes, unforeseen
environmental or engineering problems, work stoppages, and natural
disasters, any of which could delay construction and result in a
substantial increase in cost to the Company. Moreover, the Company's
construction activities typically are performed by third-party
contractors, the timing, quality and completion of which cannot be
controlled by the Company. Nevertheless, claims may be asserted
against the Company for construction defects and such claims may give
rise to liability. There can also be no assurance that the Company
will achieve any additional revenues from such projects. See "-
Substantial Leverage and Financial Risks."
Concentration in Interval Ownership Industry
Because a material portion of the Company's real estate
development business is conducted within the interval ownership
industry, any adverse changes affecting the interval ownership
industry such as an oversupply of interval ownership units, a
reduction in demand for interval ownership units, changes in travel
and vacation patterns, changes in governmental regulations relating to
the interval ownership industry and increases in construction costs or
taxes could have a material adverse effect on the Company's
operations. The Company enters into sales contracts for its
quartershare interval ownership units prior to completion of
construction. Although such contracts require a 5% deposit, there can
be no assurance that any or all purchasers will consummate the
purchase of units under contract and the failure by a large number of
purchasers to complete such purchases could have a material adverse
effect on the Company's operations.
Regulation of Marketing and Sales of Quartershares; Other Laws
The Company's marketing and sales of Grand Summit Hotel
quartershares and other operations are subject to extensive regulation
by the federal government and the states in which the resorts are
located and in which Grand Summit Hotel intervals are marketed and
sold. On a federal level, the Federal Trade Commission Act prohibits
unfair or deceptive acts or competition in interstate commerce. Other
federal legislation to which the Company is or may be subject includes
the Truth-in-Lending Act, the Equal Credit Opportunity Act, the
Interstate Land Sales Full Disclosure Act, the Real Estate Settlement
Practices Act and the Fair Housing Act. In addition, many states have
adopted specific laws and regulations regarding the sale of interval
ownership programs. For example, certain state laws grant the
purchaser the right to cancel a contract of purchase within a
specified period following the earlier of the date the contract was
signed or the date the purchaser has received the last of the
documents required to be provided by the Company. No assurance can be
given that the cost of qualifying under interval ownership regulations
in all jurisdictions in which the Company desires to conduct sales
will not be significant. The Company believes that it is in compliance
9[PAGE]
with all material federal, state and local laws and regulations. The
failure to comply with such laws or regulations could have a material
adverse effect on the Company.
Potential Regulation of Quartershares as Securities
There can be no assurance that the Company's quartershare
interval ownership units will not be considered "securities" under
federal law or the state law in the states where the Company desires
to or does conduct sales or in which its properties are located. If
such interests were considered securities, the Company would be
required to comply with applicable state and federal securities laws,
including laws pertaining to registration or qualification of
securities, licensing of salespeople and other matters. There can be
no assurance that the Company will be able to comply with the
applicable state and federal securities requirements, and if the
Company's quartershare interval interests are deemed to be securities,
such a determination may create liabilities or contingencies that
could have an adverse effect on the Company's operations, including
possible rescission rights relating to the units which have been sold,
which, if exercised, could result in losses to the Company.
Growth Through Resort Expansion
A key element of the Company's strategy is to attract additional
skiers through investment in on-mountain capital improvements. Such
investments are capital intensive and, to the extent that the Company
is unable to finance such capital expenditures from internally
generated cash or otherwise, the Company's results of operations would
be adversely affected. In addition, there can be no assurance that the
Company's investment in on-mountain capital improvements will attract
additional skiers and/or generate additional revenues. See "-
Substantial Leverage and Financial Risks," and "-Capital
Requirements."
Dependence on Highly Leveraged and Restricted Subsidiaries
The Company is a holding company and its ability to pay principal
and interest on the New Credit Facility and its other debt is
dependent upon the receipt of dividends and other distributions, or
the payment of principal and interest on intercompany borrowings from
its subsidiaries. The Company does not have, and may not in the future
have, any assets other than the common stock of ASC East and its other
direct and indirect subsidiaries, including subsidiaries acquired in
connection with the Acquisition. ASC East and its subsidiaries are
parties to the 12% Note Indenture, which imposes substantial
restrictions on ASC East's ability to pay dividends and other
distributions to the Company until the earlier of the maturity of the
12% Notes in 2006 or the redemption thereof pursuant to the terms of
the 12% Note Indenture. In addition, Grand Summit Resort Properties,
Inc., a subsidiary of ASC East, is restricted in its ability to pay
dividends and other distributions to ASC East under the terms of the
10[PAGE]
construction financing facility for its Grand Summit Hotel projects.
The Company's other subsidiaries may become restricted in their
ability to pay dividends and other distributions to the Company in the
future. In addition, the breach of any of the conditions or provisions
under the documents governing the indebtedness of the Company's
subsidiaries could result in a default thereunder and, in the event of
any such default, the holders of such indebtedness could elect to
accelerate the maturity thereof. If the maturity of any such
indebtedness were to be accelerated, such indebtedness would be
required to be paid in full before such subsidiary would be permitted
to distribute any assets or cash to the Company. There can be no
assurance that the assets of ASC East or any of the Company's other
subsidiaries would be sufficient to repay all of its outstanding debt
or that the assets of the Company would be sufficient to repay all of
its outstanding debt. In addition, state law further restricts the
payment of dividends or other distributions to the Company by its
subsidiaries.
Seasonality; Fluctuations in Operating Results; Dependence on Weather
Conditions
Ski and resort operations are highly seasonal. Over the last five
fiscal years, the Company realized an average of approximately 86% of
its resort revenues and over 100% of Resort EBITDA and net income
during the period from November through April and a significant
portion of resort revenues (and approximately 23% of annual skier
visits) was generated during the Christmas and Presidents' Day
vacation weeks. In addition, the Company's resorts typically
experience operating losses and negative cash flows for the period
from May to October. During the six-month period from May to
October 1997, for example, the Company had operating losses
aggregating $36.4 million and negative cash flow from operations
aggregating $73.4 million. The $73.4 million of negative cash flow
from operations for such six month period included $34.8 million
expended in the development of real estate for resale. The Acquired
Resorts have historically experienced similar seasonality. There can
be no assurance that the Company will be able to finance its capital
requirements from external sources during this period. See "-
Substantial Leverage and Financial Risks," and "-Capital
Requirements."
The high degree of seasonality of revenues increases the impact
of adverse events on operating results including, without limitation,
adverse weather conditions, access route closures, equipment failures,
and other developments of even moderate or limited duration occurring
during its peak revenue periods. Adverse weather conditions may lead
to increased power and other operating costs associated with
snowmaking and could render snowmaking wholly or partially ineffective
in maintaining quality skiing conditions. It has been the Company's
experience that unfavorable weather conditions in more highly
populated areas, regardless of actual skiing conditions, can result in
decreased skier visits. Prolonged adverse weather conditions, or the
11[PAGE]
occurrence of such conditions during key periods of the ski season,
can adversely affect operating results.
Purchase Price Allocation for the Acquisition
Under the purchase accounting method, the total purchase price
for the Acquisition will be allocated to the assets and liabilities of
the Acquired Resorts on the basis of their relative fair values and
pursuant to certain appraisals of such assets and liabilities which
the Company expects to complete prior to the end of fiscal 1998. The
Company's preliminary allocation of the Acquisition purchase price
resulted in an excess of purchase price over the fair value of the net
tangible assets acquired, which was allocated to various identifiable
intangible assets and goodwill. The Company believes that its final
allocation (and related amortization periods) will not differ
materially from its preliminary allocation. No assurance can be given,
however, that the actual allocation of the Acquisition purchase price
and the resulting effect on operating income will not differ
materially from the Company's preliminary allocation.
Competition
The skiing industry is highly competitive and capital intensive.
The Company's competitors include other major ski resorts throughout
the United States, Canada and Europe. The Company's competitors also
include other worldwide recreation resorts, including warm weather
resorts and various alternative leisure activities. The competitive
position of the Company's resorts is dependent upon numerous factors,
such as proximity to population centers, availability and cost of
transportation to and within a resort, natural snowfall, snowmaking
quality and coverage, resort size, attractiveness of terrain, lift
ticket prices, prevailing weather conditions, appeal of related
services, quality and availability of lodging facilities, duration of
the ski season and resort reputation. In addition, some of the
Company's competitors have greater financial resources than the
Company which could adversely affect the Company's competitive
position and relative ability to withstand adverse developments. There
can be no assurance that its competitors will not be successful in
capturing a portion of the Company's present or potential customer
base.
Regional and National Economic Conditions
The skiing and real estate development industries are cyclical in
nature and are particularly vulnerable to shifts in regional and
national economic conditions. In particular, a significant portion of
the Company's current skier visits are generated from customers that
reside in the New England states which experienced a significant
economic downturn beginning in 1988. Although data indicate that the
New England economy has recovered significantly, there can be no
assurance that improvement will continue or that stagnation or
declines in skier visits or revenues will not occur. Skiing and
12[PAGE]
vacation unit ownership are discretionary recreational activities
entailing relatively high costs of participation, and any decline in
the regional economies where the Company is operating, or
deterioration in national economic conditions, could adversely impact
skier visits, real estate sales and revenues. Accordingly, the
Company's financial condition, particularly in light of its highly
leveraged condition, could be adversely affected by a worsening in the
regional or national economy. See "-Substantial Leverage and Financial
Risks."
Environmental and Land Use Matters
The Company is subject to a wide variety of federal, state and
local laws and regulations relating to land use and development and to
environmental compliance and permitting obligations (including those
related to the use, storage, discharge, emission and disposal of
hazardous materials and hazardous and nonhazardous wastes). Failure to
comply with such laws could result in the need for capital
expenditures and/or the imposition of severe penalties or restrictions
on operations that could adversely affect present and future resort
operations and real estate development. In addition, such laws and
regulations could change in a manner that materially and adversely
affects the Company's ability to conduct its business or to implement
desired expansions and improvements to its facilities.
Leased Property and Forest Service Permits
Significant portions of the land underlying certain of the
Company's ski resorts are leased or subleased by the Company or used
pursuant to renewable permits or licenses. If any such lease,
sublease, permit or license were to be terminated or not renewed upon
expiration, or renewed on terms materially less favorable to the
Company, the Company's ability to possess and use the land subject
thereto and any improvements thereon would be materially adversely
affected. A substantial portion of the land constituting skiable
terrain at Attitash Bear Peak, Sugarbush, Mount Snow/Haystack,
Steamboat and Heavenly is located on federal land that is used under
the terms of the permits with the United States Forest Service (the
"Forest Service"). Generally, under the terms of such permits, the
Forest Service has the right to review and comment on the location,
design and construction of improvements in the permit area and on many
operational matters. The permits can also be terminated or modified by
the Forest Service to serve the public interest. A termination or
modification of any of the Company's permits could have a material
adverse effect on the results of operations of the Company. The
Company believes termination or modification of the Forest Service
permits is not likely.
Adequacy of Water Supply
The Company's current operations and anticipated growth are
heavily dependent upon its ability, under applicable federal, state
13[PAGE]
and local laws, regulations, permits, and/or licenses or contractual
arrangements, to have access to adequate supplies of water with which
to make snow and otherwise to conduct its operations. There can be no
assurance that applicable laws and regulations will not change in a
manner that could have an adverse effect, or that important permits,
licenses or agreements will be renewed, not canceled, or, if renewed,
renewed on terms no less favorable to the Company. The failure of the
Company to have access to adequate water supplies to support its
current operations and anticipated expansion would have a material
adverse effect on the Company.
Potential Anti-Takeover Provisions
The Company's Articles of Incorporation contain, among other
things, provisions authorizing the issuance of "blank check" preferred
stock, 101/2% Convertible Preferred Stock, including rights to elect
two directors upon the occurrence of certain events, and two classes
of common stock. The Company is also subject to the provisions of
Section 611-A of the Maine Business Corporation Act (the "MBCA").
These provisions could delay, deter or prevent a merger,
consolidation, tender offer or other business combination or change of
control involving the Company that some or a majority of the Company's
shareholders might consider to be in their best interests or that
might otherwise result in such shareholders receiving a premium over
the market price for the Common Stock.
Control of the Company by Principal Shareholder
The Company's common stock is divided into two classes. Leslie B.
Otten, the Company's principal shareholder, owns 100% of the Class A
Common Stock, and, therefore, has the power to elect two-thirds of the
Board of Directors of the Company, which allows for the maintenance of
control of the Company by Mr. Otten with respect to all matters
requiring approval of the Board of Directors. In addition, Mr. Otten
owns shares of Common Stock and Class A Common Stock representing a
majority of all outstanding shares of Common Stock and Class A Common
Stock and, accordingly, is expected to be able to determine the
outcome of all matters submitted to a vote of the shareholders of the
Company, except for matters requiring (i) the vote of a higher
percentage of the voting power than that held by Mr. Otten or (ii) the
vote of the shareholders voting as a separate class under state law or
the Company's Articles of Incorporation and Bylaws.
Dependence on Key Personnel
The Company's success depends to a significant extent upon the
performance and continued service of Mr. Otten, as well as several
other key management and operational personnel. The loss of the
services of Mr. Otten or of such other personnel could have a material
adverse effect on the business and operations of the Company. Other
than Warren C. Cook and Christopher E. Howard, Mr. Otten and the other
key members of management are not subject to employment agreements
14[PAGE]
with the Company or any of its subsidiaries. The Company maintains key
person life insurance on Mr. Otten in the amount of $14.0 million, the
proceeds of which have been assigned to the lenders under the New
Credit Facility.
Stock Options-Compensation Charge
In the first quarter of fiscal 1998, the Company granted to
certain executive officers and other employees options to purchase
672,010 shares of Common Stock at an exercise price of $2.00 per share
(of which options to purchase 543,626 shares of Common Stock were
fully vested). The Company also agreed to pay certain tax liabilities
which the recipients of the options expect to incur upon exercise of
the options. Because the $2.00 per share exercise price was below the
fair market value of a share of Common Stock on the date of grant, the
Company recognized a one-time compensation charge of approximately
$14.3 million in the first quarter of 1998. Such charge is a one-time
charge and has been reflected in the Company's operating results for
the first quarter of 1998 and will be reflected in its operating
results for the 1998 fiscal year. As a result of the charge, the
Company's net loss or net income for such periods, if any, will be
increased or decreased, as the case may be, by the full amount of such
charge.
Shares Eligible for Future Sale
After giving effect to the Transactions, the Company had
outstanding 15,505,022 shares of Common Stock (assuming (i) stock
options to purchase 2,695,107 shares are not exercised, (ii) no
conversion of the 10 1/2% Convertible Preferred Stock, which is
convertible into 2,184,619 shares of Common Stock as of January 23,
1998, and (iii) no shares of Class A Common Stock are converted into
shares of Common Stock and 14,760,530 shares of Class A Common Stock.
All of the 14,750,000 outstanding shares of Common Stock sold in the
Offering are freely tradeable under the Securities Act except for any
shares purchased by "affiliates" of the Company as that term is
defined under the Securities Act. Upon the expiration of the Lock-up
Agreement and other lock-up agreements and exercise of all options
granted under the Stock Option Plan, 4,950,533 shares of Common Stock
and 14,760,530 shares of Class A Common Stock will become eligible for
sale, subject to compliance with Rule 144 of the Securities Act.
Pursuant to the Lock-up Agreement and other lock-up agreements, the
Company, certain shareholders and the executive officers and directors
of the Company have agreed with the Underwriters, until May 12, 1998
(or February 10, 1998 with respect to shares purchased by Mr. Otten in
the Concurrent Offering), not to directly or indirectly offer, pledge,
sell, contract to sell, sell any option or contract to purchase or
grant any option, right or warrant to purchase or otherwise transfer
or dispose of any Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or enter into any swap
or other arrangement that transfers all or a portion of the economic
consequences associated with the ownership of the Common Stock, or
15[PAGE]
cause a registration statement covering any shares of Common Stock to
be filed, without the prior written consent of DLJ, subject to certain
exceptions, including pursuant to a foreclosure by a lender on a loan
to Mr. Otten for which shares of Class A Common Stock and/or Common
Stock were pledged as collateral. No prediction can be made as to the
effect, if any, that future sales of shares, or the availability of
shares for future sale, will have on the market price of the Common
Stock. Sales of substantial amounts of Common Stock in the public
market, or the perception that such sales could occur, could adversely
affect prevailing market prices for the Common Stock and could impair
the Company's ability to raise additional capital through an offering
of its equity securities.
No Prior Public Market; Possible Volatility of Stock Price
Prior to the Offering, there was no public market for the Common
Stock. Although the Common Stock is listed on the New York Stock
Exchange, there can be no assurance that an active public market for
the Common Stock will continue after the Offering. Prices for the
Common Stock will be determined in the marketplace and may be
influenced by many factors, including variations in the financial
results of the Company, changes in earnings estimates by industry
research analysts, investors' perceptions of the Company and general
economic, industry and market conditions. The Company believes that
there are relatively few comparable companies that have
publicly-traded equity securities which may also impact the trading
price of the Common Stock. In addition, the stock market has from time
to time experienced extreme price and volume volatility and such
volatility may adversely affect the market price of the Common Stock.
The market price of the Common Stock could be subject to significant
fluctuations in response to the Company's operating results and other
factors, and there can be no assurance that the market price of the
Common Stock will not decline below the initial Public Offering price,
or market prices for the Common Stock since the Offering. The Company
does not intend to list the 10 1/2% Convertible Preferred Stock or the
10 1/2% Subordinated Debentures on any national securities exchange or
to seek admission thereof for trading on any automated dealer
quotation system. There can be no assurance as to the development of
any trading market or the liquidity of any trading market that may
develop for the 10 1/2% Convertible Preferred Stock or the 10 1/2%
Subordinated Debentures. If an active market for the 10 1/2%
Convertible Preferred Stock or the 10 1/2% Subordinated Debentures
fails to develop or be sustained, the trading price of such Securities
could be adversely affected. The 10 1/2% Convertible Preferred Stock
and the 10 1/2% Subordinated Debentures could trade at prices that may
be higher or lower than the original price paid by the holder
depending on many factors, including prevailing interest rates, the
price of the Common Stock, the Company's operating results, any
election by the Company to extend dividend or interest payment periods
and the market for similar securities.
16[PAGE]
Subordination of 10 1/2% Subordinated Debentures
The payment of principal of and premium and interest on the
10 1/2% Subordinated Debentures will be subordinated to all existing and
future Senior Debt (as defined in the Indenture relating to the 10
1/2% Subordinated Debentures) of the Company. As a result of such
subordination, in the event of the Company's insolvency, liquidation,
reorganization, dissolution or other winding up, or upon the
acceleration of any Senior Debt, the holders of the 10 1/2%
Subordinated Debentures may not be paid. Furthermore, payments on the
10 1/2% Subordinated Debentures will not be permitted if a default
exists or would be caused with respect to any Senior Debt. In
addition, payment of principal of and premium and interest on the 10
1/2% Subordinated Debentures effectively will be subordinated to all
existing and future indebtedness and other liabilities of the
Company's subsidiaries which, at October 26, 1997, aggregated $36.5
million on a pro forma basis after giving effect to the Transactions.
Dividends; Interest
The Company currently intends to retain earnings, if any, to
support its operating strategy and does not anticipate paying cash
dividends on its Common Stock or Class A Common Stock in the
foreseeable future. Dividends on the 10 1/2% Convertible Preferred
Stock, and interest on the 10 1/2% Subordinated Debentures, are
payable in cash on November 12, 2002 or earlier at the Company's
option at a rate of 10 1/2% per annum, compounded quarterly. In
addition, the New Credit Facility and the 101/2% Convertible Preferred
Stock contain restrictions on the ability of the Company to pay cash
dividends on its Common Stock and Class A Common Stock.
THE TRANSACTIONS
The Offering
On November 5, 1997, the Company's registration statement on Form
S-1 (the "IPO Registration Statement") was declared effective by the
Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act") relating to
its initial public offering of Common Stock. On November 12, 1997, the
Company completed the initial public offering of its Common Stock,
pursuant to which 13,916,667 shares of Common Stock were sold to the
public at a price of $18.00 per share (the "Public Offering") in an
underwritten offering for which Donaldson Lufkin & Jenrette Securities
Corporation ("DLJ"), Furman Selz, Morgan Stanley Dean Witter and
Schroder & Co. acted as managing underwriters and 833,333 shares of
Common Stock were sold by the Company directly to Mr. Otten at a price
of $18.00 per share (the "Concurrent Offering" and together with the
Public Offering, the "Offering"). The several underwriters named in
the prospectus contained in the IPO Registration Statement are
referred to herein as the "Underwriters."
17[PAGE]
The Acquisition
On November 12, 1997, the Company purchased the Steamboat and
Heavenly ski resorts for approximately $296 million (the
"Acquisition"), including purchased cash and cash equivalents of $5.3
million. As part of the Acquisition, the Company also purchased the
Sabal Point Golf Course in Orlando, Florida, which the Company sold
for $5.8 million, and a residence in Denver, Colorado, which the
Company sold in December of 1997 (collectively, the "Divestiture").
The Company did not assume any of the funded debt of the Acquired
Resorts.
The Refinancing
On November 12, 1997, the Company entered into a senior secured
credit facility with a group of lenders (the "New Credit Facility"),
pursuant to which the Company may borrow up to $215 million.
Borrowings under the New Credit Facility have been or will be used:
(i) to fund the Acquisition; (ii) to repay all outstanding borrowings
under ASC East's credit facility dated June 28, 1996, among Fleet
National Bank, certain other banks and ASC East (the "Existing Credit
Facility"), in the amount of $59.6 million; (iii) to pay certain fees
and expenses relating to the Acquisition; and (iv) for ongoing general
corporate purposes and capital expenditures.
Redemption of Discount Notes
A portion of the net proceeds of the Offering was used to make a
$27.8 million investment in ASC East to fund the redemption (the
"Redemption") of all outstanding 13.75% Subordinated Discount Notes
due 2007 of ASC East (the "Discount Notes") effected December 28,
1997. The indenture relating to the Discount Notes (the "Discount Note
Indenture") provided for a redemption price equal to 113.75% of the
Accreted Value (as defined in the Discount Note Indenture) of the
Discount Notes on the redemption date. The Company recorded a pretax
extraordinary charge in the first quarter of fiscal 1998 of $3.4
million in connection with the redemption premium related to the
Discount Notes, and a $1.0 million pretax extraordinary charge related
to the write-off of deferred debt issuance costs.
Exchange Offers
Prior to January 23, 1998, the Company owned 96.4% of the
outstanding shares of common stock of ASC East. On January 23, 1998,
the Company and the holders of the 3.6% of the outstanding shares of
common stock of ASC East not owned by the Company entered into an
agreement whereby the Company issued 615,022 shares of Common Stock in
exchange for such shares of common stock of ASC East.
Pursuant to a registration rights agreement (the "ASC East
Registration Rights Agreement") with such former holders of ASC East
common stock, the Company agreed to register for resale such 615,022
18[PAGE]
shares of Common Stock with the Securities and Exchange Commission,
pursuant to the shelf registration statement of which this Prospectus
forms a part.
Pursuant to the terms of a Securities Purchase Agreement, dated
as of July 2, 1997, as amended (the "Securities Purchase Agreement"),
between the Company and the holder of the Canyons Securities, on
November 12, 1997, the holder of the Canyons Securities exchanged all
of the Canyons Securities (the "Preferred Exchange Offer") for shares
of the Company's 10 1/2% Convertible Preferred Stock having an
aggregate liquidation preference of approximately $36.6 million. Each
share of 10 1/2% Convertible Preferred Stock is convertible at any
time, at the holder's option, into a number of shares of Common Stock
("Conversion Shares") equal to the liquidation preference per share of
10 1/2% Convertible Preferred Stock divided by $17.10, subject to
customary antidilution adjustments.
On January 23, 1998, the Company exchanged 140,000 shares of
Common Stock (the "Penley Stock") for all of the issued and
outstanding shares (the "Blunder Bay Shares") of Blunder Bay
Development Corporation, a Maine corporation ("Blunder Bay"), which
shares were owned by Wendy Penley. The Company also paid additional
consideration of $265,000 in cash for the Blunder Bay Shares. Blunder
Bay is a single purpose company the sole asset of which is an
undivided one-half interest in certain real estate leased to Sunday
River for use in its ski resort operations.
The Acquisition, the Divestiture, the issuance of the 615,022
shares of Common Stock to the former holders of ASC East common stock,
the issuance of the 10 1/2 % Convertible Preferred Stock pursuant to
the Preferred Exchange Offer, the issuance of the Penley Stock, the
initial borrowings under the New Credit Facility, the Redemption, the
Consent Solicitation, the Stock Split and the Offering are
collectively referred to herein as the "Transactions."
USE OF PROCEEDS
The shares of Common Stock covered hereby are being registered
for the account of the Selling Shareholders. Accordingly, the Company
will not receive any of the proceeds from the sale of Common Stock by
the Selling Shareholders.
SELLING STOCKHOLDERS
The shares of Common Stock covered by this Prospectus are being
registered for reoffers and resales by Selling Shareholders of the
Company who may acquire such shares pursuant to the Plan. The Selling
Shareholders named below may resell all, a portion, or none of the
shares that they acquire or may acquire pursuant to the Plan.
Key employees deemed to be "affiliates" of the Company who
acquire registered Common Stock under the Plan may be added to the
19[PAGE]
Selling Shareholders listed below from time to time, either by means
of a post-effective amendment hereto or by use of a prospectus filed
pursuant to Rule 424 under the Securities Act. An "affiliate" is
defined in Rule 405 under the Securities Act as a "person that
directly, or indirectly through one or more intermediaries, controls,
or is controlled by, or is under common control with,_ the Company.
The following table sets forth the name and relationship to the
Company of each Selling Shareholder who is (or may be deemed to be) an
affiliate of the Company and who holds options to acquire Common Stock
pursuant to the Plan or who holds restricted shares pursuant to the
Plan together with the number of shares of Common Stock that each
person may currently acquire pursuant to the exercise of such options.
Selling Shareholder Position Number of Options Granted
----------------------------------------------------------------------
Leslie B. Otten President and 1,853,197
Chief Executive
Officer
Thomas M. Richardson Senior Vice President 100,300
and Chief Financial
Officer
Christopher E. Howard Senior Vice President 150,000
and Chief Administrative
Officer
Burton Mills Senior Vice President 80,240
Mountain Operations
G. Christopher Brink Senior Vice President 80,240
Marketing
Warren Cook Senior Vice President 40,120
Operations
Mike Meyers Senior Vice President 10,030
Hotel Development
Scott Oldakowski Senior Vice President 10,030
Real Estate Marketing
and Sales
Philip Gravink Managing Director 10,030
Attitash
Allen Wilson Managing Director 40,120
Killington
Blaise Carrig Managing Director 40,120
The Canyons
20[PAGE]
Christopher Diamond Managing Director 10,030
Mount Snow
Richard McGarry Managing Director 10,030
Sugarbush
Dan Seme Managing Director 10,030
Sunday River
Christopher D. Livak Vice President 4,012
Accounting and
Finance
PLAN OF DISTRIBUTION
Any shares of Common Stock sold pursuant to this Prospectus will
be sold by the Selling Shareholders for their own accounts and they
will receive all of the proceeds from any such sales. The Company
will receive none of the proceeds from the sale of shares which may be
offered hereby but may receive funds upon the exercise of the options
pursuant to which the Selling Stockholders will acquire the shares
covered by this Prospectus, which funds, if any, will be used for
working capital. The Selling Shareholders have not advised the
Company of any specific plans for the distribution of the shares of
Common Stock covered by this Prospectus, but, if and when shares are
sold, it is anticipated that the shares will be sold from time to time
primarily through transactions on the New York Stock Exchange at the
then prevailing market price, although sales may also be made in
negotiated transactions or otherwise, at prices which may or may not
be related to such market price. If shares of Common Stock are sold
through brokers, the Selling Shareholders may pay customary brokerage
commissions and charges. The Selling Shareholders may effect such
transactions by selling shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts,
concessions or commissions from the Selling Shareholders and/or the
purchasers of shares for whom such broker-dealer may act as agent or
to whom they may sell as principal, or both (which compensation as to
a particular broker-dealer may be in excess of customary commissions).
The Selling Shareholders and any broker-dealers that act in connection
with the sale of the shares offered hereby might be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities
Act, and any commissions received by them and any profit on the resale
of shares as principal might be deemed to be underwriting discounts
and commissions under such Act. Shares of Common Stock covered by
this Prospectus also may be sold pursuant to Rule 144 under the
Securities Act rather than pursuant to this Prospectus.
21[PAGE]
LEGAL MATTERS
Certain legal matters in connection with the shares of Common
Stock being offered hereby have been passed upon for the Company by
Pierce Atwood, Portland, Maine.
EXPERTS
The financial statements of the Company included in the Company's
Registration Statement on Form S-1 filed with the Commission on
February 10, 1998, and incorporated by reference in this Prospectus
have been so included in reliance on reports of Price Waterhouse LLP,
independent accountants, given on authority of said firm as experts in
auditing and accounting. The combined balance sheets of the Kamori
Combined Entities as of May 31, 1996 and 1997 and the combined
statements of operations, stockholders' equity and cash flows of the
Kamori Combined Entitles for each of the three years in the period
ended May 31, 1997 incorporated by reference in this Prospectus have
been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto, and are
incorporated by reference in reliance upon the authority of said firm
as experts in giving said reports.
CERTAIN FORWARD-LOOKING STATEMENTS
Certain of the statements contained in this Prospectus are
forward-looking. While the Company believes that these statements are
accurate, its business is highly seasonal and is dependent upon
weather and general economic conditions and various conditions
specific to its industry. Future trends and results cannot be
predicted with certainty and actual results could differ materially
from any forward-looking statements. In particular:
1. Ski and resort operations are highly seasonal. Over the last
five fiscal years, the Company realized an average of approximately
86% of its resort revenues during the period from November through
April and a significant portion of resort revenues (and approximately
23% of annual skier visits) was generated during the Christmas and
Presidents' Day vacation weeks. Adverse weather or market conditions
during these periods could materially adversely effect operating
results and financial performance.
2. The development of ski resorts is capital intensive. The
Company's expansion of its resorts is dependent upon availability of
necessary capital. There can be no assurance that the Company will
have adequate funds, from internal or external sources, to make all
planned and required capital expenditures over the long term.
3. Real estate development and the Company's ability to generate
revenues therefrom may be adversely affected by numerous factors, many
of which are beyond the control of the Company, including the national
22[PAGE]
and regional economic climate and the ability of the company to obtain
all necessary zoning, land use, buildings, occupancy and other
required governmental permits and authorizations and changes in real
estate, zoning, land use, environmental or tax laws. In addition,
real estate development will be dependent upon, among other things,
receipt of adequate financing on suitable terms, obtaining and
maintaining the requisite permits and licenses and, in certain
circumstances, acquiring additional real estate. There can be no
assurance as to whether, when or on what terms such financing,
permits, licenses and real estate may be obtained.
23[PAGE]
PART II. INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents be Reference
The following documents which are filed with the Securities
and Exchange Commission (the "Commission"), are incorporated in this
Registration Statement by reference:
(1) The Registrant's Registration Statement
on Form S-1 dated November 5, 1997.
(2) The Registrant's Registration Statement
on Form S-1 dated February 10, 1998.
(3) The Registrant's Quarterly Report on Form 10-Q for
the quarters ended October 26, 1997, and January 25,
1998.
All Documents subsequently filed by the Registrant pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, as amended, (the "Exchange Act") prior to the filing of a post-
effective amendment which indicates that all shares of Common Stock
offered hereby have been sold or which deregisters all shares of
Common Stock then remaining unsold, shall be deemed to be incorporated
by reference herein and to be part hereof from the respective dates of
filing of such documents.
Item 4. Description of Securities
Not applicable
Item 5. Interests of Named Experts and Counsel
Not applicable
Item 6. Indemnification
The Company is a Maine corporation. Section 719 of the
Maine Business Corporation Act (13-A M.R.S.A. S 101, et
seq.)authorizes the indemnification by a Maine corporation of any
person who is a party or is threatened to be made a party to any
action, suit or proceeding by reason of that person's status as a
director, officer, employee or agent of the corporation; provided that
no such indemnification may be provided for any person if he or she
shall have been finally adjudicated (i) not to have acted honestly or
in the reasonable belief that his or her action was in or not opposed
to the best interests of the corporation or its shareholders, or (ii)
in any criminal proceeding, to have had reasonable cause to believe
his or her conduct was unlawful. In the case of actions brought by or
on behalf of the corporation, indemnification may only be provided if
the court determines that such person is fairly and reasonably
entitled to the requested indemnification. Indemnification must be
provided to the extent that a director, officer, employee or agent has
II-1[PAGE]
been successful, on the merits or otherwise, in defense of an action
of the type described in the second sentence of this paragraph.
The Bylaws of the Company provide that it shall indemnify
any person who is made a party to any threatened, pending or completed
action, suit or proceeding by reason of the fact that he or she is or
was a director or officer of the Company, and may indemnify any
employee or agent of the Company in such circumstances, against
expenses, including attorneys fees, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding. No indemnification
may be provided for any person who shall have been finally adjudicated
not to have acted honestly or in the reasonable belief that his or her
action was in or not opposed to the best interests of the Company or
who had reasonable cause to believe that his or her conduct was
unlawful. Indemnification must be provided to any director, officer,
employee or agent of the Company to the extent such person has been
successful, on the merits or otherwise, in defense of any action or
claim described above. Any indemnification under this provision of
the Bylaws, unless required under the Bylaws or ordered by a court,
can be made only as authorized in each specific case upon a
determination by a majority of disinterested directors or by
independent legal counsel or by the shareholders that such
indemnification is appropriate under the standard set forth in the
preceding sentence.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the
Company has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is therefore unenforceable.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
The Exhibit Index immediately preceding the exhibits is
incorporated herein by reference.
Item 9. Undertakings
1. 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-2[PAGE]
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the Registration Statement;
and
(iii) To include any material information with respect
to the plan of distribution not previously disclosed
in the Registration Statement or any material change
to such information in the Registration Statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post-effective amendment shall be
deemed to be 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.
2. The Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Exchange Act (and, where applicable, each filing of any
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
3. 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 proceeding) is asserted by such director, officer or
II-3[PAGE]
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
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that is has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Newry, State of
Maine, on the 23th day of March, 1998.
AMERICAN SKIING COMPANY
By: /s/ Leslie B. Otten
--------------------------
Leslie B. Otten
President and Chief
Executive Officer
II-4[PAGE]
POWER OF ATTORNEY
We, the undersigned officers and directors of AMERICAN SKIING
COMPANY, hereby severally constitute Leslie B. Otten and Christopher
E. Howard, and each of them singly, our true and lawful attorneys with
full power to them, and each of them singly, to sign for us and in our
names in the capacities indicated below, the Registration Statement on
Form S-8 filed herewith and any and all subsequent amendments to said
Registration Statement, and generally to do all such things in our
names and behalf in our capacities as officers and directors to enable
AMERICAN SKIING COMPANY to comply with all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming
our signatures as they may be signed by said attorneys, or any of
them, to said Registration Statement and any and all amendments
thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Signature Title Date
--------- ----- -------
/s/Leslie B. Otten Chairman of the Board of March 23, 1998
------------------- Directors, President
Leslie B. Otten Chief Executive Officer
and Director
(Principal Executive Officer)
/s/Thomas M. Richardson Chief Financial Officer, March 23, 1998
-------------------- Senior Vice President,
Thomas M. Richardson Treasurer and Director
(Principal Financial and
Accounting Officer)
/s/Christopher E. Howard Senior Vice President, March 23, 1998
--------------------- Chief Administrative
Christopher E. Howard Officer, General Counsel,
Clerk and Director
/s/ Director March 23, 1998
---------------------
Joel B. Alvord
/s/ Director March 23, 1998
---------------------
Gordon M. Gillies
/s/Christopher J. Nassetta Director March 23, 1998
---------------------
Christopher J. Nassetta
II-5[PAGE]
Exhibit Index
Exhibit
Number Description
-------- ------------
4.1(1) Articles of Incorporation of the Registrant
4.2(1) Bylaws of the Registrant
4.3 American Skiing Company Stock Option Plan
5.1 Opinion of Pierce Atwood
12.1 Computation of Ratios of earnings to combined fixed charges
and stock dividends
23.1 Consent of Pierce Atwood (included in Exhibit 5.1)
23.2 Consent of Price Waterhouse LLP.
23.3 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (see page II-5 of this Registration
Statement)
(1) Incorporated herein by reference from the Registrant's
Registration Statement on Form S-1 (File No. 333-33483).
II-6[PAGE]
Exhibit 4.3
ASC HOLDINGS, INC.
AMERICAN SKIING COMPANY STOCK OPTION PLAN
Effective August 1, 1997
1. PURPOSE
This Stock Option Plan, effective August 1, 1997 (the
"Option Plan"), is established by ASC Holdings, Inc., a Maine
corporation (the "Company"), to provide a performance incentive
program for, and to encourage stock ownership in the Company by
officers, directors and management employees of the Company and
its subsidiaries (as defined below), as well as other key persons
whose efforts contribute to the success of the Company and its
subsidiaries. The Company intends that the persons to whom
options are granted (the "Optionee") will acquire a proprietary
interest in the success of the Company (or increase such an
existing interest). The Company also wishes to encourage
Optionees to remain in the employ or service of the Company and
its subsidiaries.
Options granted under this Option Plan to officers and other
employees of the Company and its subsidiaries are intended to
qualify as incentive stock options (the "Incentive Options"),
within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), unless otherwise specifically
designated in the grant of the options or unless otherwise
required under the Code. However, options other than Incentive
Options ("Non-Qualified Options") may also be granted hereunder,
and any options, regardless of designation, that shall not
qualify as Incentive Options shall be deemed Non-Qualified
Options. Incentive Options and Non-Qualified Options are
sometimes together referred to as "options."
2. ADMINISTRATION
(a) Options Committee. This Option Plan shall be
administered by a committee appointed by the board of directors
of the Company (the "Options Committee" or "Committee").
Initially, the Options Committee may consist of one or more
directors of the Company. On and after the Company becomes
subject to the Securities Exchange Act of 1934 (the "Exchange
Act"), the Committee shall be constituted so as to comply with
the requirements of Code Section 162(m) and Rule 16b-3
promulgated under the Exchange Act. All determinations and
rulings of the Committee shall be binding and conclusive on the
Company, all affected Optionees, and all other interested
persons.
[PAGE]
(b) Authority of the Committee. In addition to (and in
furtherance of) any other powers and authority granted under the
Option Plan, the Committee shall have responsibility and
authority, subject to the express limitations of the Option Plan:
(i) To grant options, in its sole discretion, to
eligible persons hereunder from time to time, to determine the
number of shares of Common Stock (as defined below) as to which
such options shall be exercisable, to determine the time or times
when an option or options shall be exercisable by Optionees, and
to determine whether options granted shall be Incentive Options
or Non-Qualified Options (subject to the limitations of Section 5
below);
(ii) To prescribe the other terms (which need not be
identical) of each option granted under the Option Plan to
eligible persons and terms of the associated option agreement,
including, without limitation, any vesting or special exercise
requirements that it may impose;
(iii) To construe and interpret all of the terms
of this Option Plan (including eligibility to participate) and
options granted under it, and to establish, amend and revoke
rules and regulations for administration. The Committee, in the
exercise of this power, may correct any defect or supply any
omission, or reconcile any inconsistency in the Option Plan, or
in any option agreement, in the manner and to the extent it shall
deem necessary or expedient to make the Option Plan fully
effective;
(iv) To determine whether leaves of absence which may
be granted to an Optionee shall constitute a termination of his
or her employment or service for purposes of the Option Plan;
(v) To determine the fair market value of the Common
Stock subject to options on the date of the grant of any such
option (subject to the limitations of Section 6(d) hereof); and
(vi) Generally, to exercise such powers and to perform
such acts as are deemed necessary or expedient to promote the
best interests of the Company with respect to the Option Plan.
Notwithstanding the foregoing, the Option Committee shall: (1)
be under no obligation to grant options to any eligible person;
and (2) not have the authority to grant new options in exchange
for the cancellation of options previously granted under this
Option Plan or any other stock option plan of the Company. No
member of the Board or of the Committee shall be liable for any
good faith determination, act or failure to act in connection
with the Option Plan or any option granted hereunder.
2[PAGE]
3. STOCK SUBJECT TO OPTION PLAN
(a) The stock subject to the options granted hereunder
shall be shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock"). The maximum aggregate number of
shares of Common Stock for which options may be granted
hereunder, excluding the shares involved in the unexercised
portion of any cancelled, terminated or expired options, shall
not exceed 3,000,000 shares of the Common Stock. Such number
shall be subject to adjustment as provided in Section 9 hereof.
(b) Whenever any outstanding option under the Option Plan
expires, is cancelled or is otherwise terminated, the shares of
Common Stock allocable to the unexercised portion of such option
may again become subject to options under the Option Plan.
4. ELIGIBILITY
All officers and full-time management employees (i.e.,
persons performing 1,000 or more hours of service per year in a
management capacity) of the Company or its subsidiaries, as
identified by the Committee from time to time, shall be eligible
to receive grants of options under this Option Plan. Such
officers and management employees may receive grants of Incentive
Options and/or Non-Qualified Options. Key persons (including
directors) selected by the Committee, in its sole discretion,
shall be eligible to receive grants of Non-Qualified Options
only. Members of the Committee shall not be eligible to receive
options hereunder.
The Committee may, in its sole discretion, from time to time
grant options to one or more eligible persons. An Optionee may
hold more than one option.
5. CERTAIN LIMITATIONS ON GRANTS
(a) No person shall be granted an Incentive Option if, at
the time of the grant, such person owns, directly or indirectly,
stock possessing more than ten percent (10%) of the total
combined voting power of the Company, unless the option price is
at least one hundred and ten percent (110%) of the fair market
value of the Common Stock and the exercise period of such
Incentive Option is by its terms limited to five (5) years.
(b) To the extent that the aggregate fair market value of
the Common Stock with respect to which options under this Option
Plan and all other such option plans of the Company (or a "parent
corporation" or "subsidiary corporation" as defined in Section
424 of the Code) are exercisable for the first time by an
Optionee in any calendar year exceeds $100,000, such options
shall not be treated as Incentive Options and shall instead be
considered Non-Qualified Options. Nothing contained herein shall
3[PAGE]
prohibit a grant of a Non-Qualified Option regardless of whether
Incentive Options are granted to such person in such year.
(c) No employee shall, during any one-year period, be
granted options to acquire more than 500,000 shares of Common
Stock.
6. TERMS OF OPTIONS AND OPTION AGREEMENTS
Options issued hereunder shall contain the applicable terms
set forth below (in addition to such other terms as may be
required by other provisions of this Option Plan), and each
Optionee shall be required to execute an option agreement as a
condition to the grant of his or her options hereunder. The
option agreement shall contain such provisions as the Committee
shall from time to time deem necessary or appropriate to give
effect to the purposes and terms of the Option Plan. Option
agreements need not be identical, but each option agreement by
appropriate language shall include the substance of all of the
following provisions:
(a) Any option shall expire on the date specified in the
option agreement, which date shall not be later than the tenth
(10th) anniversary of the date on which the option was granted
(or not later than the 5th anniversary of the date of the grant
for options granted to persons who at the time of the grant own,
directly or indirectly, stock possessing more than 10% of the
total combined voting power of the Company). All options must be
granted by the tenth (10th) anniversary of the effective date of
the Option Plan as specified in Section 15 hereof.
(b) The total number of shares with respect to which an
option may be exercised shall be as specified by the Committee;
provided, however, that the minimum number of shares with respect
to which an option may be exercised at any one time shall be five
(5) shares, and all exercises shall be in integral multiples
thereof, unless the number purchased is the total number at the
time available for purchase under the option.
(c) Each option shall be exercisable in such installments
(which need not be equal) and at such times as designated by the
Committee. To the extent not exercised, installments shall
accumulate and be exercisable, in whole or in part, at any time
after becoming exercisable, but not later than the date the
option expires. No Incentive Option shall be exercisable within
two (2) years of the date on which such option was granted, and
no Non-Qualified Option shall be exercisable within six (6)
months of the date on which the option was granted, except in the
event of a change in control of the Company (as defined in
Section 6(g) hereof). In such event, all options granted prior
to such change in control shall become immediately exercisable.
4[PAGE]
(d) The purchase price per share of Common Stock under each
Incentive Option shall not be less than the fair market value of
the Common Stock subject to the option on the date the option is
granted. For this purpose, the fair market value of the Common
Stock shall be determined by the Committee; provided, however,
that if, at the time of the grant, the Optionee owns, directly or
indirectly, stock possessing more than ten percent (10%) of the
total combined voting power of the Company, the option price
shall be at least one hundred and ten percent (110%) of the fair
market value of the Common Stock. Notwithstanding the foregoing,
(i) if the Common Stock is admitted to quotation on the National
Association of Securities Dealers Automated Quotation System on
the date the option is granted, fair market value of Incentive
Options shall not be less than the average of the highest bid and
lowest asked prices of the Common Stock on such System on such
date or the last date preceding such date on which a sale was
reported, or (ii) if the Common Stock is admitted to trading on a
national securities exchange on the date the option is granted,
fair market value shall not be less than the last sale price
reported for the Common Stock on such exchange on such date or,
if there was no sale on such date, the last date preceding such
date on which a sale was reported.
(e) Except as provided in Section 10 hereof:
(i) No option granted pursuant to the Option Plan
shall be transferable except by will or the laws of descent and
distribution, and options granted hereunder shall be exercisable
during the Optionee's lifetime only by the Optionee; and
(ii) No assignment or transfer of any option, or of the
rights represented thereby, whether voluntary or involuntary, by
operation of law or otherwise, shall vest in the assignee or
transferee any interest or right in the option whatsoever, but
immediately upon any attempt to assign or transfer any option the
same shall terminate and be of no force or effect.
(f) The option shall be subject to any provision necessary
to assure compliance with federal and state securities laws.
(g) For purposes of the Option Plan, a "change in control"
shall be deemed to have taken place in the event of (i) a merger
or other reorganization after which the shareholders of the
Company prior to such transaction own less than a majority of the
outstanding stock of the surviving entity following the
consummation of the transaction, (ii) a sale of all or
substantially all of the assets of the Company, or (iii) a sale,
transfer or other disposition of more than 50% of the Common
Stock of the Company, other than in connection with any public
offering of the Common Stock.
5[PAGE]
7. METHOD OF EXERCISE; PAYMENT OF PURCHASE PRICE
(a) An Optionee may exercise an option by delivering to the
Committee on any business day a written notice specifying the
number of shares of Common Stock the Optionee then desires to
purchase (the "Notice").
(b) Payment for the shares of Common Stock purchased
pursuant to the exercise of an option shall be made in full
either in cash in an amount equal to the option price for the
number of shares specified in the Notice or in shares of Common
Stock having an aggregate fair market value equal to such option
price.
8. USE OF PROCEEDS FROM SALE OF STOCK
Proceeds from the sale of Common Stock pursuant to options
granted under the Option Plan shall constitute general funds of
the Company to be used primarily for its general business
activities.
9. ADJUSTMENT UPON CHANGES IN CAPITALIZATION
(a) If the outstanding shares of the Company's Common Stock
as a whole are increased, decreased or changed into, or exchanged
for, a different number or kind of shares or securities of the
Company, whether through merger, consolidation, reorganization,
recapitalization, reclassification, stock dividend, stock split,
combination of shares, exchange of shares, change in corporate
structure or the like, an appropriate and proportionate
adjustment shall be made in the number and kinds of shares
subject to the Option Plan, and in the number, kinds, and per
share exercise price of shares subject to unexercised options or
portions thereof granted prior to any such change. Any such
adjustment in an outstanding option, however, shall be made
without a change in the total price applicable to the unexercised
portion of the option, but with an adjustment in the price for
each share of Common Stock covered by the option.
(b) Upon a change in control (as defined in Section 6(g)
above), the Option Plan and the options issued thereunder shall
terminate, unless provision is made in connection with such
transaction for the assumption of options theretofore granted, or
the substitution for such options of new options of the successor
employer corporation or a parent or subsidiary thereof, with
appropriate adjustments as to the number and kinds of shares and
the per share exercise prices. In the event of such termination,
all outstanding options shall be exercisable in full for at least
thirty (30) days prior to the termination date whether or not
otherwise exercisable during such period.
(c) Adjustments under this Section shall be made by the
Committee, whose determination as to what adjustment shall be
made shall be conclusive. The Committee shall have the
6[PAGE]
discretion and power in any such event to determine and to make
effective provision for the acceleration of the time during which
an option may be exercised, notwithstanding the provisions of the
option setting forth the date or dates of which all or any part
of it may be exercised. No fractional shares of Common Stock
shall be issued under the Option Plan on account of any
adjustment specified above.
10. EFFECT OF TERMINATION OF EMPLOYMENT OR SERVICE
(a) In the event of the death of an Optionee while in the
employ or service of the Company, the option, whether or not
exercisable at the time of the death of the Optionee, may be
exercised, as provided in Section 6 hereof, by the estate of the
Optionee or by a person who acquired the right to exercise such
option by bequest or inheritance from such Optionee, in the case
of an Incentive Option, within one (1) year after the date of
such death but not later than the date on which the option would
otherwise expire, and, in the case of a Non-Qualified Option, for
the remaining term of the option.
(b) If the employment or service of an Optionee is
terminated by reason of disability as defined in Code Section
22(e)(3), the options held by such Optionee may be exercised,
whether or not exercisable at the time of such termination, in
the case of an Incentive Option, within one (1) year after such
termination but not later than the date on which the option would
otherwise expire, and, in the case of a Non-Qualified Option, at
any time during the remaining term of the option.
(c) If the employment or service of an Optionee is
terminated for any reason other than such death or disability,
options held by such Optionee shall, to the extent not vested
under the terms of the applicable Option Agreement, be cancelled
upon such termination and shall not thereafter be exercisable,
except as provided in paragraph (d) of this section.
(d) An Optionee whose employment or service is
involuntarily terminated in connection with or within one (1)
year after a change in control of the Company (as defined in
Section 6(g) hereof) shall be permitted to exercise his options,
whether or not exercisable at the date of such termination as
follows: (i) in the case of an Incentive Option, within three
(3) months after the date of such termination, but not later than
the date on which the option would otherwise expire, and (ii) in
the case of a Non-Qualified Option, at any time during the
remaining term of the option.
(e) An Optionee who is not a director of the Company and
whose employment is voluntarily terminated due to early
retirement may request a waiver from the Committee in order to
exercise all unexercised and outstanding options. The Committee
will determine whether such waiver will be granted or not and, if
7[PAGE]
granted, the period of time in which such options may be
exercised.
(f) Notwithstanding the foregoing, an option be terminated
by mutual agreement of the Company and the Optionee.
11. AMENDMENT OF OPTION PLAN
At any time, and from time to time, the Board of Directors
of the Company may amend the Option Plan, subject to any required
regulatory approval and to the limitation that, except as
provided in Section 9 hereof, no amendment shall be effective
unless approved by the affirmative vote of the holders of a
majority of the outstanding shares of the Company at an annual or
special meeting held within twelve (12) months before or after
the date of such amendment's adoption, where such amendment will:
(a) Increase the number of shares of Common Stock as to
which options may be granted under the Option Plan;
(b) Change in substance Section 4 hereof relating to
eligibility to participate in the Option Plan;
(c) Change the minimum option price limitations; or
(d) Increase the maximum term of any option granted herein.
Except as provided in Section 9 hereof, rights and
obligations under any option granted before amendment of the
Option Plan shall not be altered or impaired by amendment of the
Option Plan, except with the consent of the person to whom the
option was granted.
12. TERMINATION OR SUSPENSION OF THE OPTION PLAN
The Board of Directors of the Company at any time may
terminate or suspend the Option Plan in its sole discretion.
Unless sooner terminated, the Option Plan shall terminate on the
tenth anniversary of the effective date specified in Section 15
hereof, but such termination shall not affect any option
theretofore granted. An option may not be granted while the
Option Plan is suspended or after it is terminated.
Rights and obligations under any option granted while the
Option Plan is in effect shall not be altered nor impaired by
suspension or termination of the Option Plan except with the
consent of the Optionee. An option may be terminated by
agreement between an Optionee and the Company and, in lieu of the
terminated option, a new option may be granted with an exercise
price which may be higher or lower than the exercise price of the
terminated option.
8[PAGE]
13. SECURITIES LAW MATTERS; ISSUANCE OF SHARES
The obligation of the Company to sell and deliver shares of
Common Stock under options granted under the Option Plan shall be
subject to all applicable federal and state securities laws,
rules and regulations and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate
by the Committee. The issuance of shares of Common Stock on the
exercise of an option shall be conditioned on obtaining such
appropriate representations, warranties, restrictions and
agreements of the Optionee as the Committee may require.
Additionally, the shares, when issued upon the exercise of an
option, shall be subject to other transfer restrictions, rights
of first refusal and rights of repurchase (as set forth in the
Articles of Incorporation or Bylaws of the Company, or as
incorporated by reference into any applicable stock purchase
agreement). Notwithstanding the foregoing, all shares of Common
Stock issued by the Company to an optionee upon the exercise of
his options shall be registered under the Securities Act of 1933,
as amended (the "Securities Act").
14. MISCELLANEOUS
(a) The Optionee shall not be deemed to be the holder of,
or to have any of the rights of a holder with respect to, any
shares of Common Stock subject to such option unless and until
the option shall have been exercised pursuant to the terms
thereof, the Company shall have issued and delivered the shares
to the Optionee, and the Optionee's name shall have been entered
as a stockholder of record on the books of the Company.
Thereupon, the Optionee shall have full voting, dividend and
other ownership rights with respect to such shares of Common
Stock.
(b) Neither the adoption of the Option Plan by the Board of
Directors nor the submission of the Plan to the stockholders of
the Company for approval shall be construed as creating any
limitations on the power of the Board (or any person or committee
to which it may delegate authority) to adopt such other incentive
arrangements as may be either applicable generally or only in
specific cases.
(c) Upon the grant of options hereunder and the issuance of
shares of Common Stock pursuant to the exercise thereof, the
Company (or applicable subsidiary) shall withhold from any
compensation or other amounts payable to the Optionee, any taxes
required to be withheld under federal, state or local law as a
result of the grant or exercise of such option or the sale of the
shares issued upon exercise thereof. To the extent that
compensation or other amounts, if any, payable to the Optionee is
insufficient to pay any taxes required to be so withheld, the
Company (or subsidiary) may, in its sole discretion, require the
Optionee (or such other person entitled herein to exercise the
option), as a condition of the exercise of an option, to pay in
9[PAGE]
cash to the Company (or subsidiary) an amount sufficient to cover
such tax liability or otherwise to make adequate provision for
the Company's satisfaction of its withholding obligations under
federal, state and local law.
(d) This Option Plan is purely voluntary on the part of the
Company, and the continuance of the Plan shall not be deemed to
constitute a contract between the Company (or subsidiary) and any
employee or other eligible person, or to be consideration for or
a condition of the employment or service of any employee.
Nothing contained in this Plan shall be deemed to give any
employee the right to be retained in the employ or service of the
Company (or subsidiary) or a successor corporation, or to
interfere with the right of the Company (or subsidiary) or any
such corporation to discharge or retire any employee thereof at
any time. No employee shall have any right to or interest in
options authorized hereunder prior to the grant thereof to such
employee, and upon such grant he shall have only such rights and
interests as are expressly provided herein.
(e) In the event that any provision of this Plan is found
to be invalid or otherwise unenforceable under any applicable
law, such invalidity or unenforceability shall not be construed
as rendering any other provisions contained herein as invalid or
unenforceable, and all such other provisions shall be given full
force and effect to the same extent as though the invalid or
unenforceable provision was not contained herein.
(f) This Plan shall be governed by and construed in
accordance with the laws of the State of Maine.
15. EFFECTIVE DATE
The Option Plan shall become effective on August 1, 1997,
having been approved by the sole shareholder and the sole
director on July 31, 1997.
10[PAGE]
PIERCE ATWOOD
One Monument Square
Portland, Maine 04101
(207) 791-1100
Exhibits 5.1 and 23.1
March 20, 1998
American Skiing Company
Sunday River Access Road
Bethel, Maine 04217
Re: Stock Option Plan
Dear Sirs:
We have assisted in the preparation of a Registration
Statement on Form S-8 (the "Registration Statement") to be filed
with the Securities and Exchange Commission relating to 5,688,699
shares of Common Stock, par value $.01 per share (the "Shares"),
of American Skiing Company, a Maine corporation (the "Company"),
issuable upon exercise of options granted or to be granted under
the Company's Stock Option Plan (the "Plan").
We have examined and relied upon the Company's Articles of
Incorporation and Bylaws and originals, or copies certified to
our satisfaction, of all pertinent records of the meetings of the
directors and stockholders of the Company, the Registration
Statement and such other documents relating to the Company as we
have deemed relevant for the purposes of this opinion.
In our examination of the foregoing documents, we have
assumed the genuineness of all signatures and the authenticity of
all documents submitted to us as originals, and the conformity to
original documents of all documents submitted to us as certified
or photostatic copies.
Based on and subject to the foregoing, we are of the opinion
that the Company has duly authorized for issuance the Shares
covered by the Registration Statement issued or to be issued
under the Plan, as described in the Registration Settlement, and
the Shares, when issued in accordance with the terms of the Plan,
will be legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion with the
Securities and Exchange Commission in connection with the
Registration Statement.
Very truly yours,
/s/ Pierce Atwood
Exhibit 12.1
STATEMENT REGARDING COMPUTATION OF RATIOS
<TABLE>
Computation of ratio of earnings to combined fixed changes and preferred
stock dividend:
(In thousands)
<CAPTION>
For the Year For the Year For the Year For the Year For the Year For the Quarter
Ended Ended Ended Ended Ended Ended
July 25, 1993 July 31, 1994 July 30, 1995 July 28, 1996 July 27, 1997 January 25, 1998
<S> <C> <C> <C> <C> <C> <C>
Pre-Tax
Income from
continuing
operations 4,887 4,673 5,519 1,561 (9,345) 10,893
Interest expense 849 1,023 2,205 4,699 23,730 6,325
Preferred stock
charges 0 0 0 0 0 0
-----------------------------------------------------------------------------------------------
Adjusted
Earnings 5,736 5,896 7,724 6,260 14,365 17,218
Fixed Charges
Interest expense 849 1,023 2,205 4,699 23,730 6,325
Preferred stock
charges 0 0 0 0 0 0
-----------------------------------------------------------------------------------------------
Total fixed
charges 849 1,023 2,205 4,699 23,730 6,325
Ratio of
Earnings to
fixed charges 6.756 4.763 3.503 1.332 0.606 2.722
Deficiency n/a n/a n/a n/a n/a n/a
</TABLE>
<TABLE>
<CAPTIONS>
Pro forma Pro forma
For the Year For the Quarter For the Quarter
Ended Ended Ended
July 27, 1997 October 26, 1997 October 26, 1997
<S> <C> <C> <C>
Pre-tax income from
continuing operations (5,886) (34,238) (41,414)
Interest expense 27,737 7,521 8,473
----------------------------------------------------
Preferred stock charges
Adjusted Earnings 21,851 (26,717) (32,941)
Fixed Charges
Interest expense 27,737 7,521 8,473
Preferred stock charges 444 2,431 2,431
----------------------------------------------------
Total fixed charges 28,181 9,952 10,904
Ratio of earnings
to fixed charges 0.775 (2.685) (3.021)
Deficiency n/a (29,148) (35,372)<PAGE>
</TABLE>
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this
Registration Statement on Form S-8 of our report dated September 19,
1997, except as to Note 16 which is as of October 10, 1997, which
appears on page F-2 of the Company's Form S-1 (Nos. 333-33483 and 333-
45363).
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
March 19, 1998
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use
of our report and to all references to our Firm included in or made a
part of this registration statement.
ARTHUR ANDERSEN LLP
Denver, Colorado
March 20, 1998
