[LETTERHEAD OF AMERICAN SKIING COMPANY]
November 10, 2000
Dear Shareholder:
You are cordially invited to attend the 2000 Annual Meeting of
Shareholders of American Skiing Company. This year's Annual Meeting
will be held at our new Grand Summit Hotel at The Canyons Resort, in
Park City, Utah at 9:00 a.m., Mountain Time, on Tuesday, December 12,
2000. We hope you are able to join us and view this beautiful new
property for yourself.
The enclosed Notice and Proxy Statement contain complete
information about matters to be considered at the Annual Meeting, at
which the business and operations of our Company will also be reviewed.
If you plan to attend, please check the box provided on the proxy card.
Only shareholders entitled to vote at the Annual Meeting and their
proxies will be permitted to attend the Annual Meeting.
Whether or not you plan to attend, we urge you to complete,
sign and return the enclosed proxy card, so that your shares will be
represented and voted at the Annual Meeting.
Sincerely yours,
/s/ Leslie B. Otten
Leslie B. Otten
Chairman and Chief Executive Officer
<PAGE>
AMERICAN SKIING COMPANY
P.O. Box 450
Bethel, ME 04217
---------------------------------------
NOTICE OF THE 2000 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 12, 2000
-------------------------------------
November 10, 2000
To our Shareholders:
The Annual Meeting of Shareholders of American Skiing Company, a Delaware
corporation, will be held on Tuesday, December 12, 2000, at 9:00 a.m., local
time, at the Grand Summit Hotel at The Canyons Resort, Park City, Utah:
(1) To elect Directors;
(2) To amend the 1997 Stock Option Plan of American Skiing Company in order
to add an additional 3,000,000 shares of Common Stock to the 1997 Stock Option
Plan;
(3) To ratify the appointment of Arthur Andersen LLP as independent public
accountants; and
(4) To transact such other business as may properly come before the
meeting.
The record date for the determination of the shareholders entitled to vote
at the meeting or at any adjournment thereof is the close of business on
November 3, 2000 (the "Record Date"). Only shareholders of record at the close
of business on the Record Date are entitled to notice of and to vote at the
Annual Meeting. All shareholders are cordially invited to attend the Annual
Meeting.
A copy of the Company's Annual Report to shareholders for the fiscal year
ended July 30, 2000 is enclosed.
A list of shareholders entitled to vote at the Annual Meeting will be open
to the examination of any shareholder, for any purpose germane to the meeting,
at the offices of the Company's Transfer Agent and Registrar, Boston Equiserve,
150 Royall Street, Canton, Massachusetts, 02021, during ordinary business hours
for ten days prior to the Annual Meeting, as well as at the Company's executive
offices at Sunday River Road, Bethel, ME 04217.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED REPLY ENVELOPE. THIS WILL NOT
LIMIT YOUR RIGHT TO ATTEND OR VOTE AT THE MEETING.
By Order of the Board of Directors
/s/ Christopher E. Howard
Christopher E. Howard
Secretary
<PAGE>
AMERICAN SKIING COMPANY
-----------------------
PROXY STATEMENT FOR THE 2000
ANNUAL MEETING OF SHAREHOLDERS
-----------------------
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy, being mailed to shareholders on or about
November 10, 2000, is solicited by the Board of Directors of American Skiing
Company (the "Company") for use at the Annual Meeting of Shareholders (the
"Meeting") to be held on Tuesday, December 12, 2000. In case the Meeting is
adjourned, the proxy will be used at any adjournments thereof. If matters other
than those specifically set forth in the accompanying Notice of Annual Meeting
are presented at the Meeting for action, which is not currently anticipated, the
proxy holders will vote the proxies in accordance with their best judgment. The
mailing address of the Company is P.O. Box 450, Bethel, ME 04217.
If a proxy is received before the Meeting, the shares represented by it
will be voted unless the proxy is revoked by written notice to the Secretary of
the Company prior to the Meeting or by voting by ballot at the Meeting.
Shareholders may change their vote at any time before their proxy is voted at
the Meeting, by doing any one of the following:
o sending a written notice to the Secretary of the Company at P.O. Box 450,
Bethel, Maine, 04217 (notice must be received prior to the Meeting in order
to be effective);
o completing a new proxy card and sending it to Boston Equiserve, P.O. Box
8040, Boston, MA 02266-8040 (new proxy card must be received prior to the
Meeting in order to be effective); or
o attending the Meeting and voting in person.
You may request a new proxy card by calling Boston Equiserve at 781-575-3120.
VOTING SECURITIES
Holders of Common Stock and Class A Common Stock of the Company as of
the close of business on November 3, 2000 will be entitled to vote on all
matters at the Meeting other than the election of Series B Directors. Holders of
the Company's 10.5% Mandatorily Redeemable Preferred Stock (the "Series A
Preferred Stock") and Series B Convertible Participating Preferred Stock (the
"Series B Preferred Stock") as of the close of business on November 3, 2000 will
be entitled to vote together with the Common Stock and Class A Common Stock, on
an as-if-converted basis, on all matters other than the election of directors
(as to which the holders of the Series B Preferred Stock will be entitled to
vote on the election of the Series B Directors). On such date there were
outstanding and entitled to vote 15,708,633 shares of Common Stock of the
Company, 14,760,530 shares of Class A Common Stock of the Company, 36,626 shares
of Series A Preferred Stock of the Company, and 150,000 shares of Series B
Preferred Stock of the Company. Pursuant to the Company's Certificate of
Incorporation (the "Charter"), four directors of the Company are elected by a
majority vote of the holders of Class A Common Stock, four directors of the
Company are elected by a majority vote of the holders of the Series B Preferred
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Stock and three directors are elected by a majority vote of the holders of the
Common Stock. The holders of the Series A Preferred Stock do not participate in
the election of directors. Each share of Common Stock and Class A Common Stock
is entitled to one vote with respect to each other matter to be voted on at the
Meeting. As to matters other than the election of directors, each share of
Series A Preferred Stock and each share of Series B Preferred Stock is entitled
to vote as though it were converted to Common Stock at the conversion price
applicable to the stock in question. On that basis, each share of Series A
Preferred Stock will be entitled to approximately 79.85 votes with respect to
all matters arising at the meeting, other than the election of directors, and
each share of Series B Preferred Stock will be entitled to approximately 211.59
votes with respect to all matters arising at the Meeting, other than the
election of directors.
The holders of a majority of outstanding shares of Common Stock, Class
A Common Stock, Series A Preferred Stock and Series B Preferred Stock entitled
to vote shall constitute a quorum for the transaction of business at the
Meeting. Proxies marked as abstaining (including proxies containing broker
non-votes) on any matter to be acted upon by shareholders will be treated as
present at the Meeting for purposes of determining a quorum but will not be
counted as votes cast on such matters.
The cost of soliciting proxies in the form enclosed will be borne by
the Company. In addition to the solicitation by mail, proxies may be solicited
personally, or by telephone, by employees of the Company. The Company may
reimburse brokers holding Common Stock in their names or in the names of their
nominees for their expenses in sending proxy material to the beneficial owners
of such Common Stock.
CERTAIN MATTERS RELATING TO CHANGE IN CONTROL OF THE COMPANY
On July 31, 2000, the Company, Leslie B. Otten, the holder of all of
the Company's Class A Common Stock and a portion of the Company's Common Stock,
and Oak Hill Capital Partners, L.P., its affiliates and associates
(collectively, "Oak Hill"), the holder of the Company's Series B Preferred
Stock, entered into an amendment to an existing stockholders' agreement among
them. Pursuant to the amendment, Oak Hill and Mr. Otten have agreed, on a best
efforts basis, and to vote their shares in a manner that will ensure Oak Hill
being able to appoint up to six directors to the Board and Mr. Otten being able
to appoint up to two directors to the Board (depending on their respective
shareholdings). Therefore, pursuant to the amended stockholders' agreement and
the Company's Charter, Oak Hill and Mr. Otten may elect up to eight of the 11
members of the Company's Board.
In addition, under the terms of the amended stockholders' agreement, as
long as Oak Hill owns at least 20% of the outstanding shares of American Skiing
Common Stock (on an as-if-converted basis), the affirmative vote of a majority
of the Board or the executive committee of the Board, including at least one
director designated by Oak Hill, will be required to approve significant Board
actions. Therefore, Oak Hill is in a position to direct and/or significantly
influence Board decisions.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL INFORMATION - ELECTION OF DIRECTORS
The Charter and the bylaws of the Company provide that four directors
of the Company shall be elected by the holders of the Class A Common Stock (the
"Class A Directors"), four directors shall be elected by the holders of the
Series B Preferred Stock (the "Series B Directors") and three directors shall be
elected by the holders of the Common Stock (the "Common Directors"). All
directors are elected for a one year term. Currently, the Board of Directors is
comprised of eleven members, four of which are Class A Directors, four of which
are Series B Directors and three of which are Common Directors. At the Meeting,
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<PAGE>
four Class A Directors will be elected by the Class A Common Stock holders, four
Series B Directors will be elected by the Series B Preferred Stock holders and
three Common Directors will be elected by the Common Stock holders. Those
nominees receiving the highest numbers of votes at the Meeting will be elected
to the respective directorships for which they have been nominated.
Leslie B. Otten owns all of the Class A Common Stock of the Company.
Consequently, Mr. Otten has the ability to elect all of the Class A Directors.
Pursuant to the stockholders' agreement entered into with Oak Hill, Mr. Otten
has agreed to vote his Class A Common Stock so as to elect two directors
appointed by Oak Hill.
Oak Hill controls all of the Series B Preferred Stock of the Company.
Consequently, Oak Hill has the ability to elect all of the Series B Directors.
The Board of Directors retains the authority to fill any vacancies on
the Board arising at any time prior to the Annual Meeting with new directors who
may or may not be nominees listed below. Such new directors would serve the
balance of the existing term of the director(s) they were appointed to replace
(i.e., until the election of directors at the Annual Meeting).
The persons named as proxies in the accompanying proxy, who have been
designated by the Board of Directors, intend to vote, unless otherwise
instructed in such proxy, FOR the election of Messrs. Hawkes, Wachter and
Whetsell as Common Directors.
RECOMMENDATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE IN FAVOR OF EACH OF THE NOMINEES.
INFORMATION WITH RESPECT TO NOMINEES
Set forth below is certain information concerning each nominee for
director of the Company. Each director or nominee is nominated for a one year
term.
Nominees for Common Directors
David B. Hawkes. Director. 56. Mr. Hawkes was elected to the Board of
Directors of the Company on December 8, 1998. He is a co-owner and consultant
with Cloudhawk Management Consultants, L.L.C., a management consulting firm
based in Portland, Maine. Before founding Cloudhawk in 1993, Mr. Hawkes served
as a partner with KPMG Peat Marwick from 1974 to 1993, part of that time in
charge of the firm's Portland, Maine tax practice. Mr. Hawkes also serves as a
member of the Board of Directors of several private companies.
Paul Wachter, Director. 43. Mr. Wachter has served as a director of the
Company since his election to the Board on December 16, 1999. Mr. Wachter is the
founder and Chief Executive Officer of Main Street Advisors, a financial
advisory firm. Prior to forming Main Street Advisors in 1997, Mr. Wachter was a
Managing Director and Head of Schroder & Co. Incorporated's Lodging and Gaming
Group, its Sports and Leisure Group, and Schroder's West Coast investment
banking effort. From 1987 to 1993, Mr. Wachter worked at Kidder Peabody where he
founded and was responsible for Kidder's Hotel, Resorts and Leisure Group, and
managed Kidder Peabody's Los Angeles investment banking group. He began his
career as an investment banker at Bear, Stearns & Co., Inc., covering the
entertainment industry. From 1982 to 1985 Mr. Wachter worked at Paul, Weiss,
Rifkind, Wharton and Garrison as a tax attorney.
Paul W. Whetsell, Director. 50. Mr. Whetsell has served as a director
of the Company since his election to the Board on December 16, 1999. Mr.
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Whetsell is the Chairman of the Board of Directors and Chief Executive Officer
of MeriStar Hospitality Corporation, a position he has held since August 1998.
Mr. Whetsell has also been Chairman of the Board of Directors and Chief
Executive Officer of MeriStar Hotels & Resorts, Inc. for the same time period.
Prior to August 1998, Mr. Whetsell had been Chairman of the Board of Directors
of CapStar Hotel Company since 1996 and had served as President and Chief
Executive Officer of CapStar Hotel Company since its founding in 1987.
Nominees For Class A Directors
Gordon M. Gillies, Director. 56. Mr. Gillies was appointed as a
director of the Company on February 9, 1998. Mr. Gillies retired as a Coast
Guard Officer in 1970, attended the University of New Mexico (M.A. 1972) and
Wake Forest University (J.D. 1976). Mr. Gillies practiced law in Maine from 1976
to 1991, when he retired from practice to join the faculty of Hebron Academy, a
private boarding-day secondary school in Maine.
Leslie B. Otten, Director, Chairman and Chief Executive Officer. 51.
Mr. Otten has served in his present capacity since the inception of the Company
in July, 1997. In 1971, Mr. Otten joined Sherburne Corporation, then the parent
company of Sunday River, Killington and Mount Snow. Mr. Otten became Assistant
to the General Manager of Sunday River in 1972 and became its General Manager in
1974. In 1980, Mr. Otten purchased Sherburne's 90% interest in Sunday River and
acquired the remaining 10% interest from the minority shareholders in 1989. From
1980 until the initial public offering of American Skiing Company in 1997, he
was the sole director, President and Chief Executive Officer of the Company (or
its predecessors).
Robert J. Branson, Nominee for Director. 52. Mr. Branson is affiliated
with RMB Realty, Inc., an affiliate of Oak Hill Capital Management, Inc., in
which capacity he has served since 1989. From 1981 through 1989, Mr. Branson was
a Principal of Linden & Branson, a real estate investment advisory firm. From
1970 to 1981, Mr. Branson worked with Arthur Andersen & Co. Mr. Branson is a
member of the board of directors of Travel Centers of America and several
private company boards, and was formerly a member of the board of Keystone
Property Trust.
Alexandra C. Hess, Nominee for Director. 31. From July 1999 to the
present, Ms. Hess has been an associate at Oak Hill Capital Management, Inc.
From September 1996 through June 1999, Ms. Hess was employed in the New York
office of Mitchell Madison Group, a strategic consulting firm. Prior to becoming
employed at Mitchell Madison Group, Ms. Hess earned an M.P.P. from Harvard
University, an M.A. from the University of Pennsylvania and an A.B., magna cum
laude from Princeton University.
Nominees for Series B Directors
Bradford E. Bernstein. Director. 33. Mr. Bernstein has served as a
director of the Company since his election to the Board on August 5, 1999. Mr.
Bernstein has been a Partner at Oak Hill Capital Management, Inc., a private
investment company, since its formation in 1999. Previously, he was a Managing
Director at Oak Hill Partners, Inc. which he joined in 1992. He has served or
currently serves on the Board of Directors of Caliber Collision Centers, Inc.
and EPiX (formerly Payroll Transfers, Inc.). Prior to 1992, Mr. Bernstein was
with Patricof & Co. Ventures, a venture capital firm, and at Merrill Lynch & Co.
J. Taylor Crandall. Director. 46. Mr. Crandall was elected a director
of the Company on August 5, 1999. Mr. Crandall has served as Vice President and
Chief Financial Officer of Keystone, Inc., the principal investment vehicle of
4
<PAGE>
Robert M. Bass of Fort Worth, Texas since October 1996, and as Chief Operating
Officer since August 1998. He has also served as President, Director and sole
stockholder of Acadia MGP, Inc. (managing general partner of Acadia Investment
Partners, L.P., the sole general partner of Acadia Partners, L.P. (an investment
partnership)) since 1992. Mr. Crandall also serves as a director of U.S.
Oncology, Broadwing Inc., Specialty Foods Corporation, Sunterra, Inc. and
Washington Mutual Inc. He also serves on the Board of Advisors of Oak Hill
Capital Partners and Oak Hill Strategic Partners, L.P., both of which he helped
found; on the Investment Committees of Insurance Partners, L.P. and Brazos Fund,
L.P., and on the Advisory Committees of Boston Ventures Limited Partnership V
and B-K Capital Partners, L.P. Prior to his affiliation with Keystone, Mr.
Crandall was a Vice President with the First National Bank of Boston, where he
managed a leveraged buy-out group and the bank's Dallas energy office.
Steven B. Gruber. Director. 43. Mr. Gruber was elected as a director of
the Company on August 5, 1999. From February 1999 to the present, Mr. Gruber has
been a Managing Partner of Oak Hill Capital Management, Inc., the manager of Oak
Hill Capital Partners, L.P. From March 1992 to present he has been a Managing
Director of Oak Hill Partners, Inc. From May 1990 to March 1992, he was a
Managing Director of Rosecliff, Inc. Since February 1994, Mr. Gruber has also
been an officer of Insurance Partners Advisors, L.P., an investment advisor to
Insurance Partners, L.P. Since October 1992, he has been a Vice President of
Keystone, Inc. (formerly known as Robert M. Bass Group, Inc.). From 1981 to
1990, Mr. Gruber was a managing director and co-head of High Yield Securities
and held various other positions at Lehman Brothers, Inc. He is also a director
of Superior National Insurance Group, Inc., Grove Worldwide, LLC, Reliant
Building Products, Inc., and several private companies related to Keystone,
Inc., Insurance Partners, L.P. and Oak Hill Partners, Inc.
William S. Janes. Director. 47. Mr. Janes was elected as a director of
the Company on August 5, 1999. Mr. Janes is the President of RMB Realty, Inc.,
and oversees the real estate investments of Keystone, Inc., and certain entities
related to Keystone. Mr. Janes has served or currently serves on numerous
boards, including MeriStar Hospitality Corporation, Paragon Group, Inc. (now
publicly traded as Camden Property Trust), Brazos Asset Management, Inc., and
Carr Real Estate Services, Inc. He also serves on the Investment Committee of
Brazos Fund, L.P. Prior to joining RMB Realty in 1990, Mr. Janes was with
Lincoln Property Company, servicing as Regional General Partner and overseeing
development operations in the mid-Atlantic region.
5
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth the executive officers of the Company
and its primary subsidiaries as of the date hereof:
<TABLE>
Name/Age Position
<S> <C>
Leslie B. Otten, 51 Chairman and Chief Executive Officer
G. Christopher Brink, 47 Senior Vice President--Marketing
William J. Fair, 38 Chief Operating Officer, President-Resort Operations
Christopher E. Howard, 43 Executive Vice President and Secretary
Hernan R. Martinez, 48 Senior Vice President and Chief Operating Officer, American
Skiing Company Resort Properties, Inc.
Mark J. Miller, 43 Senior Vice President and Chief Financial Officer
</TABLE>
For biographical information about Mr. Otten, see "Directors."
G. Christopher Brink, Senior Vice President--Marketing. Mr. Brink has
been with the Company since 1993 and in his present capacity since July 1996.
Prior to joining the Company, Mr. Brink served from 1991 to 1993 as a director
of off-site sale centers for Marriott Vacation Ownership, Inc.
William J. Fair, Chief Operating Officer, President-Resort Operations.
Mr. Fair joined American Skiing Company in May, 2000. Prior to joining the
Company, Mr. Fair was employed as president of Universal Studios' Port Aventura
theme park in Tarragona, Spain from 1998 to April, 2000. Mr. Fair served as
senior vice president for business operations at Universal Creative, a division
of Universal Studios, Inc. from 1997 to 1998. Between 1992 and 1997, Mr. Fair
was employed by Walt Disney Co. in multiple capacities including director of
finance and business planning for Disney Development Company.
Christopher E. Howard, Executive Vice President and Secretary. Mr.
Howard has been an officer of the Company since its inception in July, 1997. Mr.
Howard joined the Company's predecessor in 1996 after serving as its outside
counsel. From 1982 to October, 1996, Mr. Howard practiced with Pierce Atwood,
northern New England's largest law firm, where he had been a partner since 1988
with a practice emphasizing real estate development and project finance. He was
also a founder and interim Chief Executive Officer of Maine's second largest
insurance company.
Hernan R. Martinez, Senior Vice President and Chief Operating Officer,
American Skiing Company Resort Properties, Inc. Mr. Martinez joined American
Skiing Company in July, 2000. From 1996 to April, 2000 Mr. Martinez served as a
managing director of Tishman-Speyer Properties of New York, an international
real estate development company. Between 1994 and 1996, Mr. Martinez was chief
executive officer of another commercial real estate development company, Del
Plata Properties of Buenos Aires, Argentina.
Mark J. Miller, Senior Vice President, Chief Financial Officer. Mr.
Miller joined American Skiing Company in December, 1998. Prior to that time, Mr.
Miller served in several positions with Showboat, Inc., and its subsidiaries,
including Executive Vice President - Financial Administration from November 1997
until May 1998, and as Executive Vice President of Operations from July 1994
through November 1997. Mr. Miller served as President and CEO of Atlantic City
Showboat, Inc. (a subsidiary of Showboat), as well as other positions with that
company, between 1985 and 1995.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following table provides information concerning compensation paid
by the Company to the Chief Executive Officer and the other four highest paid
executive officers of the Company whose compensation was at least $100,000 for
Fiscal 2000 (collectively, the "Named Executive Officers").
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
--------------------------------------------- --------------------------------------------
Restricted Securities
Fiscal Other annual Stock underlying All other
Name and Principal Position Year Salary Bonus compensation Awards Options/SARs Compensation
-------------------------- -- -------- ------------- --------------- --------------- ----------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Leslie B. Otten 2000 $407,692.43 $23,649.56(2) $ -- --- 0 ---
Chairman and Chief 1999 $392,308.00 $ -- $15,000.00(1) --- 175,000 ---
Executive Officer 1998 $386,538.00 $ -- $10,000.00(1) --- 1,853,197 ---
Christopher E. Howard 2000 $299,999.95 $ 8,868.58(2) $413,386.39(3) --- 200,000 ---
Executive Vice 1999 $250,000.00 $75,000.00 $15,000.00(1) --- 110,000 ---
President 1998 $223,076.00 $61,271.00 $10,000.00(1) --- 150,450 ---
Mark J. Miller(5) 2000 $277,885.30 $ 7,390.50(2) $ -- --- 175,000 ---
Chief Financial Officer 1999 $153,846.40 $45,000.00 $ -- --- 100,000 ---
Senior Vice President 1998 N/A N/A N/A N/A N/A N/A
Allen Wilson 2000 $245,390.00 $ -- $ -- --- 100,000 ---
President and Manageing 1999 $236,130.00 $ -- $ -- --- 7,000 ---
Director
Killington Resort 1998 $210,195.00 $ -- $ -- --- 40,120 ---
Blaise Carrig 2000 $284,538.38 $50,000.00 $29,167.56(4) --- 100,000 ---
President and 1999 $209,999.92 $ -- $45,881.52(4) --- 11,000 ---
Managing Director 1998 $150,020.00 $ -- $39,859.00(4) --- 40,120 ---
The Canyons Resort
-------------------------- -- -------- ------------- --------------- --------------- ----------- ---------------- ----------------
</TABLE>
(1) Represents fees paid to such employee for attendance at meetings of the
Board of Directors of the Company.
(2) Represents bonus for Fiscal 2000, paid in Fiscal 2001.
(3) Represents the following: (a) $342,959.08 in tax gross-up payment made
upon exercise of employee's $2.00 stock options, and (b) $70,427.31 in
the form of non-cash bonus from Fiscal 1999, exercised in Fiscal 2000.
Non-cash bonus compensation was paid in form of quartershare unit in
Company's Jordan Grand Summit Hotel at Sunday River resort. Retail
price of quartershare interest is listed as compensation amount.
(4) Represents vehicle and housing allocations.
(5) Mr. Miller became an employee of the Company in December, 1998, and
consequently did not receive any compensation during the Company's 1998
fiscal year.
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The following table sets forth information concerning individual grants of stock
options made under the 1997 Stock Option Plan during Fiscal 2000 for services
rendered by each of the Named Executive Officers.
<TABLE>
Options Granted During Fiscal 2000
Potential realizable value at assumed annual
Individual Grants rates of stock price appreciation for option term (1)
------------------------------------------------- ---------------------------------------------------
NUMBER OF
SECURITIES % OF TOTAL EXERCISE
UNDERLYING OPTIONS/SARS GRANTED OR BASE
OPTIONS/SARS TO EMPLOYEES DURING PRICE
NAME GRANTED (#) FISCAL 2000 ($/SH) EXPIRATION DATE 5% ($) 10% ($)
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Leslie B. Otten 0 0% N/A N/A $ 0 $ 0
Christopher E. Howard(2) 200,000 7.52% $3.00 January 27, 2010 $377,336.78 $956,245.48
Mark J. Miller(2) 175,000 6.58% $3.00 January 27, 2010 $330,169.68 $836,714.79
Allen Wilson(3) 100,000 3.76% $3.00 January 27, 2010 $188,668.39 $478,122.74
Blaise Carrig(4) 100,000 3.76% $3.00 January 27, 2010 $188,668.39 $478,122.74
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The potential realizable value uses the hypothetical rates specified by
the Securities and Exchange Commission and is not intended to forecast
future appreciation, if any, of the Company's Common Stock price.
(2) All options granted to such individuals in Fiscal 2000 will vest
according to the following schedule: 30% on January 27, 2001, 30% on
January 27, 2002, 20% on January 27, 2003 and 20% on January 27, 2004.
(3) All options granted to Mr. Wilson in Fiscal 2000 will vest according to
the following schedule: 20% on January 27, 2001, 20% on January 27,
2002, 20% on January 27, 2003, 20% on January 27, 2004 and 20% on
January 27, 2005.
(4) All options granted to Mr. Carrig in Fiscal 2000 will vest according to
the following schedule: 33.4% on January 27, 2001, 33.3% on January 27,
2002 and 33.3% on January 27, 2003.
The following table sets forth information concerning each exercise of
stock options during Fiscal 2000 by each of the Named Executive Officers and the
value of unexercised options at July 30, 2000.
<TABLE>
Aggregated Options/SAR Exercises During Fiscal Year
Ended July 30, 2000, and Option/SAR Values as of
July 30, 2000
-------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES ACQUIRED VALUE REALIZED OPTIONS/SARS IN-THE-MONEY OPTIONS/SARS
NAME ON EXERCISE (#) ($) (Exercisable/Unexercisable) (Exercisable/Unexercisable)(1)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Leslie B. Otten N/A N/A ---/--- $ ---/---
Christopher E. Howard 30,090 $0 230,360/200,000 $37,311.60/---
Mark J. Miller N/A N/A 34,000/241,000 $ ---/---
Allen Wilson N/A N/A 25,472/121,648 $7,462.32/$4,974.88
Blaise Carrig N/A N/A 26,272/124,848 $7,462.32/$4,974.88
-------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The "Value of Unexercised In-the-Money Options/SARs at July 30, 2000" was
calculated by determining the difference between the closing price on the New
York Stock Exchange of the underlying Common Stock at July 28, 2000, of $2.31
and the exercise price of the option. An option is "In-the-Money" when the fair
market value of the underlying Common Stock exceeds the exercise price of the
option.
8
<PAGE>
Employment Agreements
The Company has entered into an employment agreement with Mr. Otten
pursuant to which Mr. Otten has agreed to serve as the Chairman and Chief
Executive Officer of the Company. The employment agreement has a five year term
ending December 31, 2005. The term is subject to automatic renewals for
additional one-year periods, unless either party provides 90 days written notice
of his or its desire not to extend the term. Pursuant to the terms of the
employment agreement, Mr. Otten serves as a member of the Executive Committee
and Nominating Committee of the Company's Board of Directors, as a member of the
Board of Directors of each material subsidiary of the Company and as the highest
ranking corporate officer of the Company. The employment agreement provides that
Mr. Otten shall be paid a base salary of $380,000, with increases determined by
the Board of Directors. Mr. Otten's base salary is also subject to annual
increases equal to the percentage change in the consumer price index from the
previous year. Mr. Otten may earn a bonus payment of between $190,000 and
$380,000 depending on the Company's attainment of certain earnings levels, as
well as an additional bonus in any fiscal year of up to $100,000, which may be
granted in the sole discretion of the Board of Directors. Upon termination of
Mr. Otten's employment by the Company without Cause, by Mr. Otten for Good
Reason or as a result of Mr. Otten's Disability (as such terms are defined in
the employment agreement), Mr. Otten shall be entitled to receive a severance
payment equal to twenty-four months base salary. The employment agreement also
provides that Mr. Otten shall not compete with the Company during his employment
and for twelve months following termination of employment, with the exception of
certain permitted real estate development activities at the Sugarbush and Sunday
River resorts and, during that same period will not solicit employees of the
Company.
Mr. Howard and the Company have entered into an employment agreement
pursuant to which Mr. Howard is entitled to: (i) a base salary equal to $300,000
per annum, (ii) a bonus of up to $150,000 per annum, dependant upon the
attainment of certain earnings levels by the Company and (iii) a severance
benefit equal to $510,000 in the event of termination of employment for any
reason.
Mr. Miller and the Company have entered into an employment agreement
pursuant to which Mr. Miller is entitled to: (i) a base salary equal to $300,000
per annum, (ii) a bonus of up to 50% of base salary per annum, dependant upon
the attainment of certain earnings levels by the Company, (iii) a severance
benefit equal to one year's base salary plus one year's bonus in the event of
termination of employment for any reason other than a change in control of the
Company and (iv) upon termination of employment for any reason within one year
following a change in control of the Company (defined as a reduction in Mr.
Otten's ownership of the Company below 20%), a severance benefit equal to two
years' base salary and bonus, which benefit is currently equal to $900,000.
Mr. Carrig and the Company have entered into an employment agreement
pursuant to which Mr. Carrig is entitled to: (i) a base salary equal to $275,000
per annum, (ii) an annual bonus of up to 20% of base salary, dependant upon the
satisfaction of certain revenue goals of the Company, and (iii) a severance
benefit equal to one year's base salary in the event of termination of
employment by the Company without cause.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Compensation
Committee") is comprised of Messrs. Bernstein, Wachter and Otten. The
Compensation Committee is responsible for establishing and administering the
9
<PAGE>
Company's executive compensation programs and determining awards under the
Company's 1997 Stock Option Plan.
The report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933, as
amended (the "Securities Act") or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
Compensation Philosophy
The Compensation Committee's compensation philosophy is designed to
support the Company's primary objective of creating long term value for
shareholders. The Compensation Committee follows a three-pronged compensation
strategy applicable to the Company's executive officers and other key employees,
including the Chief Executive Officer ("CEO"), whereby such employees are
compensated through three separate but related compensation schemes:
First, each such employee receives a base salary consistent with his or
her core responsibilities;
Second, a short term bonus, generally determined annually, is
established to provide reward and incentive for shorter term productivity; and
Third, stock options are awarded under the Company's 1997 Stock Option
Plan to provide a longer term incentive and reward longer term Company loyalty
and performance.
This strategy is intended to: (i) attract and retain talented
executives; (ii) emphasize pay for performance; and (iii) encourage management
stock ownership.
The Internal Revenue Code imposes a limitation on the deduction for
certain executive officers' compensation unless certain requirements are met.
The Compensation Committee has carefully considered the impact of these tax laws
and has taken certain actions intended to preserve the Company's tax deduction
with respect to any affected compensation. The Company's 1997 Stock Option Plan
qualifies for tax deductibility. The following are descriptions of the Company
compensation programs for executive officers, including the CEO.
Base Salary
The Company generally establishes base salary ranges by considering
compensation levels in similarly sized companies in the
resort/leisure/hospitality industry and the real estate development industry.
The base salary and performance of each executive officer is reviewed
periodically (at least annually) by his or her immediate supervisor (or the
Compensation Committee, in the case of the CEO) resulting in salary actions as
appropriate. An employee's level of responsibility is the primary factor used in
determining base salary. Individual performance and industry information are
also considered in determining any salary adjustment. The Compensation Committee
reviews and approves all executive officer salary adjustments as recommended by
the CEO. The Compensation Committee reviews the performance of the CEO and
establishes his base salary.
10
<PAGE>
Bonus Plan
The Company has established an incentive compensation plan for certain
employees of the Company, which is designed to provide rewards for shorter term
productivity by key employees. The bonus plan is generally directed at key
members of the management team, and currently includes approximately 200
employees. The plan provides for payment of cash bonuses if certain levels of
resort and company-wide earnings are met.
Stock Option Plan
The Company's 1997 Stock Option Plan is designed to align management
interests with those of shareholders. In furtherance of this objective, the
level of stock option grants for executive officers is determined by the
Compensation Committee each year, typically in consultation with the CEO, except
with respect to the CEO himself. Awards for all employees (including all
executive officers) are determined by giving equal consideration to base salary,
level of responsibility and industry long-term compensation information.
Compensation Committee
/s/ Leslie B. Otten
/s/ Bradford E. Bernstein
/s/ Paul Wachter
REPORT OF AUDIT COMMITTEE
The report of the Audit Committee shall not be deemed incorporated by
reference by any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act or the Exchange Act, except
to the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
The Audit Committee of the Board of Directors (the "Audit Committee")
is comprised of Messrs. Hawkes, Bernstein and Gillies. Mr. Hawkes and Mr.
Gillies qualify as independent members of the Audit Committee under New York
Stock Exchange ("NYSE") rules. Due to his position as a partner in Oak Hill
Capital Management, Inc., Mr. Bernstein does not qualify as an independent
member of the Audit Committee under NYSE rules. Mr. Bernstein was approved by
the Board of Directors as a non-independent member of the Audit Committee
following a determination by the Board that Mr. Bernstein's relationship with
Oak Hill would not interfere with his exercise of independence from management
and the Company.
11
<PAGE>
The Audit Committee is primarily responsible for the effectiveness of
the Company's accounting policies and practices, financial reporting and
internal controls. The Audit Committee Charter was adopted by the Board of
Directors in December, 1999. A copy of the Audit Committee Charter is included
herewith as Appendix A. Pursuant to its Charter, the Audit Committee is
authorized to: establish and review the activities of the independent auditors
and the internal auditors; review and approve the format of the financial
statements to be included in the annual report to the shareholders; review
recommendations of the independent auditors and responses of management; review
and discuss the Company's financial reporting, loss exposures and asset control
with the auditors and management; monitor the Company's program for compliance
with policies on business ethics; annually obtain from the independent auditors
a written delineation of their relationships and professional services and take,
or recommend that the Board take, appropriate action to ensure the continuing
independence of the auditors; review with the independent auditors and the
Company's financial and accounting personnel the adequacy and effectiveness of
the Company's accounting and financial controls; review quarterly and annual
financial statements of the Company to determine that the independent auditors
do not take exception to the disclosure and content of the quarterly financial
statements, and that they are satisfied with the disclosure and content of the
annual financial statements; inquire about significant risks and exposures to
the Company and assess steps to minimize such risks; review with financial
management of the Company and the independent auditors the results of their
timely analysis of significant financial reporting issues and practices; review
legal and regulatory matters that may have a material effect on the financial
statements or Company compliance policies; review any transactions among the
Company, its subsidiaries and their employees or affiliates; receive reports
from the Company's compliance officer regarding related party transactions and
compliance with corporate policies; and direct and supervise any special
investigations the Committee deems necessary. The Audit Committee held five
meetings during the Company's 2000 fiscal year.
In conjunction with its activities during the Company's 2000 fiscal
year, the Audit Committee has reviewed and discussed the Company's audited
financial statements with management of the Company. The members of the Audit
Committee have also discussed with the Company's independent auditors the
matters required to be discussed by SAS 61 (Codification of Statements on
Auditing Standards, AU Section 380). The Audit Committee has received from the
Company's independent accountants the written disclosures and the letter
required by Independence Standards Board Standard No. 1, and has discussed with
the independent accountants the independent accountants' independence. Based on
the foregoing review and discussions, the Audit Committee recommended to the
Board of Directors of the Company that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the Company's fiscal
year ended July 30, 2000.
Audit Committee
/s/ David Hawkes
/s/ Bradford E. Bernstein
/s/ Gordon Gillies
12
<PAGE>
PERFORMANCE GRAPH
The following table compares the performance of the Company's Common
Stock to the Russell 2000 and the Company's Peer Group Index*.
SKI Russell 2000 Peer Group
11/6/97 1.00 1.00 1.00
1/23/98 0.84 0.96 0.94
4/24/98 0.91 1.08 1.15
7/24/98 0.74 0.99 1.05
10/23/98 0.41 0.83 0.77
1/22/99 0.32 0.95 0.92
4/23/99 0.18 0.97 0.98
7/22/99 0.29 1.02 1.05
10/22/99 0.27 0.95 0.84
1/28/00 0.15 1.14 0.80
4/28/00 0.12 1.14 0.72
7/28/00 0.14 1.11 0.66
*The Company's peer group index performance is weighted according to
market capitalization.
The total shareholder return assumes that $100 is invested at the
beginning of the period in the Common Stock of the Company, The Russell 2000,
and the Company's peer group. The Company's peer group, as selected by the
Company, is comprised of Vail Resorts, Inc., Intrawest Corp., Fairfield
Communities, Inc., Boca Resorts, Premier Parks, Inc., and Cedar Fair, L.P. The
Company has selected this peer group because these companies operate in the
Resort/Leisure/Hospitality sector or the Resort Real Estate Development sector.
The Company included The Russell 2000 in the graph because the Company is
included in such index and because there is no industry index for the Company's
business. Total shareholder return is weighted according to market
capitalization; therefore companies with a larger market capitalization have a
greater impact on the peer group index results. Historical stock performance
during this period may not be indicative of future stock performance.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
Set forth in the following table is the beneficial ownership of Common
Stock, Class A Common Stock and Series B Preferred Stock, as of November 3,
2000, for all Directors and executive officers of the Company and all Directors
and executive officers as a group. No Director or executive officer owns more
than 1% of the outstanding shares of Common Stock (including exercisable
options), with the exception of Mr. Otten, who owns approximately 9.31% of the
total outstanding shares of Common Stock (including exercisable options) and all
of the outstanding shares of Class A Common Stock, and Mr. Howard, who owns
approximately 1.63% of the total outstanding shares of Common Stock (including
13
<PAGE>
exercisable options). All Directors and executive officers as a group own
approximately 73.45% of the total outstanding shares of voting stock (including
exercisable options). No Director or executive officer, other than Mr. Otten,
owns any Class A Common Stock. No Director or executive officer other than the
Directors designated by the Oak Hill entities could be deemed to beneficially
own any Series B Preferred Stock.
<TABLE>
---------------------------------------------------------------------------------------------------------------
Total All
Class A Common Series B Voting
Common Stock(15) Stock Preferred Stock Stock(2)
---------------- ------------------- --------------- -----------
Directors and Executive Officers(1) Shares % Shares % Shares % %
----------------------------------- -------- ---- ---------- ------ --------- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Leslie B. Otten(3)(4) 1,523,333 9.31% 14,760,530 100.00% - - 24.75%
Christopher E. Howard(5) 260,450 1.63% - - - - *
Mark J. Miller(6) 68,000 * - - - - *
Blaise Carrig(6) 28,472 * - - - - *
Allen Wilson(6) 26,872 * - - - - *
Paul Wachter(16) 25,000 * - - - - *
Gordon M. Gillies(6) 15,000 * - - - - *
Robert J. Branson(7) 46,000 * - - 150,000 100% 48.77%
Bradford E. Bernstein(8) 40,000 * - - 150,000 100% 48.76%
Steven B. Gruber(9) 40,000 * - - 150,000 100% 48.76%
William Janes(10) 40,000 * - - 150,000 100% 48.76%
J. Taylor Crandall(11) 40,000 * - - 150,000 100% 48.76%
Paul W. Whetsell(6) 10,000 * - - - - *
David B. Hawkes(12) 13,000 * - - - - *
Alexandra C. Hess(13) 40,000 * - - 150,000 100% 48.76%
Directors and Executive Officers as a 2,016,127 11.98% 14,760,530 100.00% 150,000 100% 73.45%
group(14)
</TABLE>
------------------------------
* Less than one percent
1. The executive officers in this table are Messrs. Otten, Howard, Wilson,
Miller and Carrig.
2. Including shares of Series A Preferred Stock not held by any of the
Directors or executive officers of the Company.
3. Includes 660,000 shares of Common Stock issuable under exercisable
options granted under the Company's 1997 Stock Option Plan. Also
includes 30,000 shares of Common Stock owned by Albert Otten Trust
f.b.o. Mildred Otten, as to which Mr. Otten is trustee and
co-beneficiary. Does not include 20,510 shares of Common Stock issuable
under exercisable options granted under the Company's 1997 Stock Option
Plan to Mr. Otten's spouse, Christine Otten, as to which Mr. Otten
disclaims beneficial ownership.
4. As of November 3, 2000, all of Mr. Otten's shares of Common Stock and
Class A Common Stock were pledged to secure a margin loan from ING U.S.
Capital LLC, the proceeds of which were used by Mr. Otten to purchase
approximately 833,333 shares of Common Stock in the initial public
offering on November 6, 1997.
5. Includes 230,360 shares of Common Stock issuable under exercisable
options granted under the Company's 1997 Stock Option Plan.
6. All shares of Common Stock beneficially owned by such person are
issuable under exercisable options granted under the Company's 1997
Stock Option Plan.
7. Includes 40,000 shares of Common Stock issuable under exercisable
options granted to Oak Hill Capital Management, Inc., under the
Company's 1997 Stock Option Plan and 150,000 Series B Preferred Stock
shares held by various Oak Hill entities. Mr. Branson, a nominee
Director of the Company, is a limited partner of certain other Oak Hill
entities. Mr. Branson disclaims beneficial ownership of the 40,000
shares of Common Stock and 150,000 shares of Series B Preferred Stock
referred to above, except to the extent of his pecuniary interest
therein. Also includes 6,000 shares of Common Stock held by The Branson
Family LLC, which Mr. Branson is the managing member of, but as to
which Mr. Branson disclaims beneficial ownership.
14
<PAGE>
8. Includes 40,000 shares of Common Stock issuable under exercisable
options granted to Oak Hill Capital Management, Inc., under American
Skiing's 1997 Stock Option Plan and 150,000 Series B Preferred Stock
shares held by various Oak Hill entities. Mr. Bernstein, a Director of
the Company, is a limited partner of certain other Oak Hill entities.
Mr. Bernstein disclaims beneficial ownership of the 40,000 shares of
Common Stock and 150,000 shares of Series B Preferred Stock referred to
above, except to the extent of his pecuniary interest therein.
9. Includes 40,000 shares of Common Stock issuable under exercisable
options granted to Oak Hill Capital Management, Inc., under the
Company's 1997 Stock Option Plan and 150,000 Series B Preferred Stock
shares held by various Oak Hill entities. Mr. Gruber, a Director of the
Company, is a Manager and Vice President of OHCP MGP, LLC (the general
partner of the general partner of Oak Hill Capital Partners, L.P. and
Oak Hill Capital Management Partners, L.P.) and a limited partner of
certain other Oak Hill entities. Mr. Gruber disclaims beneficial
ownership of the 40,000 shares of Common Stock and 150,000 shares of
Series B Preferred Stock referred to above, except to the extent of his
pecuniary interest therein.
10. Includes 40,000 shares of Common Stock issuable under exercisable
options granted to Oak Hill Capital Management, Inc., under the
Company's 1997 Stock Option Plan and 150,000 Series B Preferred Stock
shares held by various Oak Hill entities. Mr. Janes, a Director of the
Company, is a limited partner of certain other Oak Hill entities. Mr.
Janes disclaims beneficial ownership of the 40,000 shares of Common
Stock and 150,000 shares of Series B Preferred Stock referred to above,
except to the extent of his pecuniary interest therein.
11. Includes 40,000 shares of Common Stock issuable under exercisable
options granted to Oak Hill Capital Management, Inc., under the
Company's 1997 Stock Option Plan and 150,000 Series B Preferred Stock
shares held by various Oak Hill entities. Mr. Crandall, a Director of
the Company, is a Manager and Vice President of OHCP MGP, LLC (the
general partner of the general partner of Oak Hill Capital Partners,
L.P. and Oak Hill Capital Management Partners, L.P.) and a limited
partner of certain other Oak Hill entities. Mr. Crandall disclaims
beneficial ownership of the 40,000 shares of Common Stock and 150,000
shares of Series B Preferred Stock referred to above, except to the
extent of his pecuniary interest therein.
12. Includes 12,500 shares of common stock issuable under exercisable
options granted under the Company's 1997 Stock Option Plan.
13. Includes 40,000 shares of Common Stock issuable under exercisable
options granted to Oak Hill Capital Management, Inc., under the
Company's 1997 Stock Option Plan and 150,000 Series B Preferred Stock
shares held by various Oak Hill entities. Ms. Hess, a nominee for
Director of the Company, is an associate with certain other Oak Hill
entities. Ms. Hess disclaims beneficial ownership of the 40,000 shares
of Common Stock and 150,000 shares of Series B Preferred Stock referred
to above, except to the extent of her pecuniary interest therein.
14. Includes 1,116,204 shares of common stock issuable under exercisable
options granted under the Company's 1997 Stock Option Plan. Also
includes 150,000 Series B Preferred Stock shares held by various Oak
Hill entities as to which beneficial ownership is disclaimed by Messrs.
Gruber, Bernstein, Crandall, Janes and Branson and Ms. Hess, except to
the extent of their pecuniary interest therein.
15. In computing the number of shares of Common Stock beneficially owned by
a person, shares of Common Stock subject to options and warrants held
by that person that are currently exercisable or that become
exercisable within 60 days of November 3, 2000 are deemed outstanding.
For purposes of computing the percentage of outstanding shares of
Common Stock beneficially owned by such person, such shares of stock
subject to options or warrants that are currently exercisable or that
become exercisable within 60 days of November 3, 2000 are deemed to be
outstanding for such person but are not deemed to be outstanding for
purposes of computing the ownership percentage of any other person.
16. Includes 12,500 shares of common stock issuable under exercisable
options granted under the Company's 1997 Stock Option Plan to Mr.
Wachter, and 12,500 shares of common stock issuable under exercisable
options granted under the Company's 1997 Stock Option Plan to Main
Street Advisors, Inc., in which Mr. Wachter is a principal.
15
<PAGE>
INFORMATION AS TO CERTAIN STOCKHOLDERS
Set forth below is certain information with respect to the only persons
known to the Company who owned beneficially more than 5% of any class of the
Company's voting securities as of November 3, 2000.
<TABLE>
-------------------------------------------------------------------------------------------------------------------------
Class A Series B Series A
Common Stock Common Stock Preferred Stock Preferred Stock % of All
Beneficially Owned Beneficially Owned Beneficially Owned Beneficially Owned Voting
------------------ ----------------- ------------------ ------------------ Stock
% of % of % of % of Beneficially
Five Percent Shareholders Shares Class Shares Class Shares Class Shares Class Owned
------------------------- ------ ----- ------ ----- ------ ----- ------ ----- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Oak Hill Capital Partners, L.P. 40,000(1) * -- --% 150,000(2) 100% -- --% 48.76%
201 Main Street
Fort Worth, Texas 76102
Leslie B. Otten 1,523,333(3)(4) 9.31% 14,760,530 100.0 -- -- -- -- 24.75%
American Skiing Company
P.O. Box 450
Bethel, ME 04217
Madeleine LLC 1,352,800 8.61% -- -- -- -- 36,626(5) 100.0 6.57%
C/o Cerberus
450 Park Avenue
New York, NY 10022
State of Wisconsin Investment 3,018,000 19.21% -- -- -- -- -- -- 4.63%
Board
P.O. Box 7842
Madison, WI 53707
</TABLE>
--------------------------
o Less than one percent
1. Includes 40,000 shares of Common Stock issuable to Oak Hill Capital
Management, Inc. under exercisable options granted under the Company's
1997 Stock Option Plan.
2. Includes 2,000 shares of the Series B Preferred Stock owned by OHCP
Ski, L.P., 7,400 shares of the Series B Preferred Stock owned by Oak
Hill Securities Fund, L.P., and 7,400 shares of the Series B Preferred
Stock owned by Oak Hill Securities Fund II, L.P., which together may be
deemed to constitute a "group" for purposes of Section 13(d) of the
Exchange Act. As a result, each entity may be deemed to beneficially
own all of the shares of Series B Preferred Stock owned by the other.
Each such entity disclaims beneficial ownership of the shares owned by
the others. Together the Oak Hill entities beneficially own 100% of the
Series B Preferred Stock and 48.76% of the outstanding voting stock of
the Company.
3. In computing the number of shares of Common Stock beneficially owned by
Mr. Otten, shares of Common Stock subject to options and warrants held
by Mr. Otten that are currently exercisable or that become exercisable
within 60 days of November 3, 2000 are deemed outstanding. For purposes
of computing the percentage of outstanding shares of Common Stock
beneficially owned by Mr. Otten, shares of Common Stock subject to
options or warrants that are currently exercisable or that become
exercisable within 60 days of November 3, 2000 are deemed to be
outstanding but are not deemed to be outstanding for purposes of
computing the ownership percentage of any other person.
4. Includes 660,000 shares of Common Stock issuable under exercisable
options granted under the Company's 1997 Stock Option Plan. Also
includes 30,000 shares of Common Stock owned by Albert Otten Trust
f.b.o. Mildred Otten, as to which Mr. Otten is trustee and
co-beneficiary. Does not include 20,510 shares of Common Stock issuable
under exercisable options granted under the Company's 1997 Stock Option
Plan to Mr. Otten's spouse, Christine Otten, as to which Mr. Otten
disclaims beneficial ownership.
5. Together with accrued and unpaid dividends through October 31, 2000,
the Series A Preferred Stock is convertible into 2,924,732 shares of
Common Stock.
16
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive
officers and directors and persons who own more than ten percent of a registered
class of the Company's equity securities to file initial reports of ownership
and changes in ownership with the Securities and Exchange Commission ("SEC") and
the NYSE. Such officers, directors and shareholders are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms they
file. Based solely on a review of the copies of such forms furnished to the
Company, all persons subject to the reporting requirements of Section 16(a)
filed the required reports on a timely basis for the fiscal year ended July 30,
2000 ("Fiscal 2000"), except that Mr. Howard and Mr. Brink each filed one late
report on Form 4.
BOARD OF DIRECTORS' MEETINGS, COMMITTEES AND FEES
The Board of Directors of the Company held a total of eleven meetings
during Fiscal 2000, four of which were held in person and seven of which were
telephonic meetings. The Board of Directors has an Audit Committee, a Nominating
Committee, a Compensation Committee and an Executive Committee.
The Compensation Committee is authorized and directed to: (i) review
and report to the Board on the Company's programs for attracting, retaining and
promoting executives, and for developing future senior management; (ii) review
and make recommendations to the Board regarding compensation for the chief
executive officer and other inside directors; (iii) review and approve
performance targets, participation and level of awards for long-term incentive
award plans; (iv) review, approve and report to the Board concerning
administration of compensation programs; and (v) administer any stock option
plans which may be adopted and the granting of options under such plans. The
current members of the Compensation Committee are Messrs. Otten, Wachter and
Bernstein. The Compensation Committee held seven meetings in Fiscal 2000, two of
which were telephonic meetings.
The Nominating Committee is authorized and directed to screen, on
behalf of the Board, candidates for election to the Board for regularly
scheduled elections or to fill vacancies on the Board. The Board is ultimately
responsible for nominating new members and filling vacancies. In addition, the
Nominating Committee annually reviews employment and other relationships of
directors to assure that there is no current relationship between any
non-employee director and the Company that would comprise the independence of
any director. The members of the Nominating Committee are Messrs. Otten and
Gruber. Shareholder nominees for Board of Directors positions are considered by
the Nominating Committee. Nominees for the next annual meeting should be
addressed to the Nominating Committee c/o Christopher Howard, Secretary,
American Skiing Company and delivered to the Company's executive offices prior
to July 31, 2001. The Nominating Committee held one meeting during Fiscal 2000.
The Executive Committee is vested with the full powers of the Board of
Directors, and is intended to meet regularly between meetings of the full Board
of Directors. The current members of the Executive Committee are Messrs. Otten,
Gruber, Howard and Bernstein. The Executive Committee held seven meetings during
Fiscal 2000.
During Fiscal 2000, all of the persons who were directors of the
Company at the times of such meetings attended 75% or more of the meetings of
the Board of Directors and of committees of the Board of Directors on which they
served either in person or telephonically.
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<PAGE>
The Company reimburses each member of the Board of Directors for
expenses incurred in connection with attending Board and committee meetings.
Directors who are not employees of the Company are paid $5,000 for attendance at
each meeting of the Board, up to a maximum in any year of $20,000. The Company
has also granted options to purchase 10,000 shares of Common Stock to
non-employee directors upon their election and each re-election to the Board of
Directors, which are fully vested at the time of granting and have a term of 10
years with an exercise price not less than fair market value as of the date of
the grant. The Board of Directors has not determined whether these benefits will
be continued during the Company's current fiscal year.
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS
Mr. Otten is the obligor under a margin loan (the "Margin Loan") with
ING (U.S.) Capital Corporation. The Margin Loan has two different maintenance
bases: (i) one which requires that the aggregate market value of the collateral
be at a certain level in order to take additional advances under the arrangement
to make interest payments (the "Advance Base") and (ii) one which requires that
the aggregate market value of the collateral be at a certain level in order to
avoid a default under the terms of the Margin Loan (the "Minimum Base"). The
Margin Loan is collateralized by Mr. Otten's 833,333 shares of Common Stock and
14,760,530 shares of Class A Common Stock. At any time that the aggregate market
value of the collateral is below the Minimum Base, Mr. Otten is required to
either pay down the balance of the Margin Loan or to pledge additional
collateral. The Company is not liable for nor do any of its assets collateralize
the Margin Loan. In connection with the loan, the Company entered into a
registration rights agreement with the lender containing customary provisions
pursuant to which the lender will have the right to require the Company to
register with the SEC, at the Company's expense, the shares pledged by Mr. Otten
to secure the loan.
After the consummation of the Series B Preferred Stock sale to Oak
Hill, the Company, through one of its subsidiaries, acquired or obtained rights
to acquire the following assets from entities owned or controlled by Mr. Otten:
- The land underlying the snowmaking ponds at the Sunday River
resort, together with all associated water rights, which were
previously leased by a subsidiary of the Company, for a
purchase price of $2.1 million;
- The Ski Dorm building and land underlying the Snow Cap Inn,
each located at the Sunday River resort, for an aggregate
purchase price of $679,000; and
- Approximately 3,300 acres of undeveloped land at the Sunday
River resort, which was optioned to a subsidiary of the
Company for an initial payment of $650,000, which payment may
be applied to the purchase price. The purchase price is
$3,692,000, which is a 12% discount from the appraised value
of the land. The purchase price will be discounted by another
20% or 10% if the Option is exercised within 12 and 24 months
of the option date, respectively.
In each case, the independent members of the Board of Directors (with Mr. Otten
abstaining) determined that the asset being acquired was of significant
strategic value to the Company. Each of the assets was (or, in the case of the
Option described above, will be upon exercise of the Option) acquired at or
below its appraised value, as determined by independent appraisals commissioned
by the Company.
In connection with the foregoing asset sale, the Company also repaid
the outstanding principal and accrued interest of a note from a subsidiary of
18
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the Company payable to Mr. Otten totaling approximately $2.0 million. The note
was originally issued to Mr. Otten to cover certain tax liabilities generated
when the Company's subsidiary converted from a subchapter S corporation to a
subchapter C corporation.
Mr. Wachter, a member of the Board of Directors, is the founder and
principal in Main Street Advisors. Prior to Mr. Wachter's election to the Board
of Directors, Main Street Advisors, through Mr. Wachter, acted as one of the
Company's investment bankers in connection with the sale of Series B Preferred
Stock to Oak Hill, for which it was paid a fee of $1,585,278.
On May 10, 2000, the Company, through one of its subsidiaries,
purchased two parcels of land adjacent to the Company's Sugarbush resort from
Sugarbush Land Holdings, Inc., a corporation controlled by Mr. Otten. The two
parcels, totaling approximately 128 acres, were purchased for an aggregate price
of approximately $589,000. The terms of the purchase, including the purchase
price, were reviewed and approved by the Executive Committee and Audit Committee
of the Company's Board of Directors.
In March, 2000, the Company, through one of its subsidiaries, sold
residential units at the Company's Sundial Lodge at The Canyons to Mr. Blaise
Carrig, Mr. Christopher Howard and Mr. Daniel Duquette. Mr. Carrig is President
of the Company's subsidiary which operates The Canyons. Mr. Howard is the
Company's Executive Vice President. Mr. Duquette is a member of the Company's
Board of Directors. Mr. Carrig and Mr. Howard each purchased one residential
unit in the Sundial Lodge for a purchase price of $201,000. Mr. Duquette
purchased one residential unit in the Sundial Lodge for a purchase price of
$345,000. The purchase prices at which Mr. Carrig, Mr. Howard and Mr. Duquette
purchased these units were the same as those at which the units (or units of
comparable size and finish) were offered for sale to the general public.
Mr. Branson, a nominee for Director, has provided certain real estate
advisory services to the Company and to Oak Hill Capital Management, Inc., for
which he was paid by the Company a total of $341,480 in Fiscal 2000. Of this
total amount, $161,890 was paid to Branson and Associates, an entity controlled
by Mr. Branson.
Jill Rundle, the spouse of G. Christopher Brink (one of the Company's
executive officers), is employed by the Company as the Director of Advertising
and Marketing. In connection with her employment, Ms. Rundle was paid $62,988 in
Fiscal 2000.
PROPOSAL NO. 2
AMENDMENT TO THE STOCK OPTION PLAN
General; Terms of the Stock Option Plan
Under the Company's Stock Option Plan, 5,688,699 shares of Common Stock
are reserved for issuance upon the exercise of stock options. As of October 31,
2000, the Compensation Committee had granted options to purchase a total of
5,316,930 shares, leaving 371,769 available for future grant. If Proposal No. 2
is adopted at the Meeting, that number of shares reserved for issuance under the
Stock Option Plan would be increased to 8,688,699. As of October 31, 2000, such
underlying stock had a market value of $19,549,572. The Stock Option Plan is
designed to attract, retain and motivate directors and key employees. The
Compensation Committee administers and interprets the Stock Option Plan.
Officers and full-time management employees (those performing at least 1,000
hours of service per year in a management capacity) of the Company or any of its
subsidiaries are eligible to receive incentive stock options as well as
non-qualified stock options, and directors of the Company and other key persons
designated by the Compensation Committee are eligible to receive non-qualified
stock options. As of October 31, 2000, there were approximately 70 officers and
full-time management employees eligible to participate in the Stock Option Plan,
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<PAGE>
and an additional 9 directors and other key persons eligible to participate. The
Company intends to continue to administer the Stock Option Plan in compliance
with the requirements of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), with the intended result that certain amounts paid which
are taxable as income to holders of stock options granted pursuant to such Stock
Option Plan will be deductible by the Company for federal income tax purposes.
Both incentive stock options and non-qualified stock options may be
granted under the Stock Option Plan on such terms and at such prices as
determined by the Compensation Committee pursuant to the requirements of
applicable law. The per share exercise price of incentive stock options may not
be less than the fair market value of the Common Stock on the date of grant.
Future grants of stock options are expected to have an exercise price equal to
the fair market value of the Common Stock on the date of grant. Each option is
for a term of not less than five years or more than 10 years, as determined by
the Compensation Committee. Options granted under the Stock Option Plan are not
transferable other than by will or by the laws of descent and distribution.
Under the Stock Option Plan, the Company has granted options to
purchase an aggregate of 5,316,930 shares of the Common Stock with exercise
prices ranging from $2.00 per share to $18.00 per share (excluding options which
have been returned to the plan following termination of employment or have
otherwise been forfeited by the option holder).
The Stock Option Plan provides that all of an employee's options will
become exercisable in full immediately upon termination of employment because of
death or permanent disability, and provides that the Compensation Committee in
its discretion may permit accelerated exercisability upon an employee's early
retirement (at age 55 or over or after five years of employment).
In the event of a "change in control" (as defined in the Stock Option
Plan) all outstanding options will be exercisable in full for 30 days prior to
such event and will terminate upon consummation of such event, unless assumed or
replaced by other options in connection with such event.
As required by Section 422 of the Code, the Stock Option Plan provides
that the Company may grant an optionee an incentive stock option ("ISO") with
respect to shares with an aggregate fair market value at the time of the grant
in excess of $100,000 during any particular calendar year, provided that such
option does not become first exercisable by the optionee in an amount exceeding
$100,000 per calendar year. This provision does not apply to an option
designated to be a non-qualified stock option ("NQSO").
The Board of Directors may terminate the Stock Option Plan at any time
and may amend the Stock Option Plan from time to time. However, the Board may
not change the maximum number of shares for which options may be granted, expand
the categories of eligible grantees, change the minimum exercise prices,
increase the maximum term of any options or otherwise materially increase the
benefits under the Stock Option Plan without shareholder approval. No amendment
or termination may adversely affect an optionee's rights under any issued option
without the optionee's consent.
The Stock Option Plan provides that the number and price of the shares
covered by each option and the total number of shares that may be granted under
the Stock Option Plan shall be proportionately adjusted to reflect, as deemed
equitable and appropriate by the Board of Directors, any stock dividend, stock
split or share combination of the shares or recapitalization of the Company. It
also provides that to the extent deemed equitable and appropriate by the Board
of Directors, in any merger, consolidation, reorganization, liquidation or
dissolution, any option granted under the Stock Option Plan shall pertain to the
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<PAGE>
securities and other property to which a holder of the number of shares covered
by the option would have been entitled to receive in connection with such event.
Pursuant to the Code, an incentive stock option plan may not have a
term longer than ten years from the earlier of the date the plan is adopted or
the date the plan is approved by the stockholders. Accordingly, the Stock Option
Plan will expire July 31, 2007 (except as to options outstanding on that date).
Federal Income Tax Treatment
Generally, the grant of either an ISO or a NQSO under the Stock Option
Plan will not cause recognition of income by the optionee or entitle the Company
to an income tax deduction. Upon exercise of an option, the tax treatment will
generally vary depending on whether the option is an ISO or a NQSO. The exercise
of an ISO will generally not cause recognition of income by the optionee or
entitle the Company to a tax deduction. However, the amount by which the fair
market value of the shares obtained exceeds the exercise price on the date of
exercise is an item of tax preference to the optionee for alternative minimum
tax purposes. Upon the sale of such shares, the optionee generally will
recognize capital gain or loss if the shares have been held for at least two
years from the date of the option grant and at least one year after the shares
were purchased. If the applicable holding periods are not satisfied, then any
gain realized in connection with the disposition of such shares will generally
be taxable as compensation income in the year in which the disposition occurred,
to the extent of the difference between fair market value of such shares on the
date of exercise and the option exercise price. The balance of any gain will be
characterized as capital gain. The Company is entitled to a tax deduction to the
extent, and at the time, that the participant realizes compensation income.
The exercise of a NQSO will generally cause the optionee to recognize
taxable income equal to the difference between the exercise price and the fair
market value of the shares obtained on the date of exercise. The Company must
then, in most cases, obtain from the optionee funds to meet tax withholding
requirements arising from that income recognition. The exercise of a NQSO will
also generally entitle the Company to an income tax deduction equal to the
amount of the income recognized by the exercising option holder. Upon the
disposal of shares acquired pursuant to the exercise of a NQSO, the optionee's
basis for determining taxable gain or loss will be the sum of the option price
paid for the shares plus any related compensation income recognized by the
optionee, and such gain or loss will be long-term or short-term capital gain or
loss depending on whether the option holder has held the shares for more than
one year.
Registration with SEC
The Company has filed a registration statement with the SEC pursuant to
the Securities Act covering the offering of the shares under the Stock Option
Plan. If the amendment is approved, the Company intends to file a similar
registration statement covering the 3,000,000 additional shares available for
issuance under the Stock Option Plan.
Vote Required
The affirmative vote of the holders of record of a majority of the
outstanding shares of Common Stock and Class A Common Stock (as well as, on an
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as-if-converted basis, the outstanding shares of Series A Preferred Stock and
Series B Preferred Stock), voting together as a single class, is required for
approval of the amendment.
The following table sets forth, as of November 3, 2000, the total stock
options granted to certain employees and directors of the Company.
<TABLE>
---------------------------------------------------------------------------------------------------------------------
Percentage of Total
Directors, Executive Officers and Certain Groups Options Granted Options Granted
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Leslie B. Otten, Chairman, Chief Executive Officer, Director 900,000(1) 16.93%
Christopher E. Howard, Executive Vice President, Director 430,360 8.09%
Mark J. Miller, Senior Vice President, Chief Financial Officer 275,000 5.17%
Blaise Carrig, President and Managing Director, The Canyons Resort 151,120 2.84%
Allen Wilson, President and Managing Director, Killington Resort 147,120 2.77%
Robert J. Branson, Nominee for Director 40,000(2) 0.75%
Alexandra C. Hess, Nominee for Director 40,000(3) 0.75%
Current Executive Officers as a Group 1,903,600(4) 35.80%
Current Directors as a Group (excluding Executive Officers) 115,000(5) 2.16%
All Employees as a Group (excluding CurrentExecutive Officers 3,298,330 62.03%
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
1. Does not include 2,028,197 shares previously granted to Mr. Otten which
Mr. Otten voluntarily returned to the 1997 Stock Option Plan in
January, 2000. Also does not include 20,810 options granted to Mr.
Otten's spouse, Christine Otten, as to which Mr. Otten disclaims
beneficial ownership.
2. 2. Such options were granted to Oak Hill Capital Management, Inc. Mr.
Branson, a nominee for Director of American Skiing, is a limited
partner of certain other Oak Hill entities. Mr. Branson disclaims
beneficial ownership of such options, except to the extent of his
pecuniary interest therein.
3. Such options were granted to Oak Hill Capital Management, Inc. Ms.
Hess, a nominee for Director of American Skiing, is an associate with
certain other Oak Hill entities. Ms. Hess disclaims beneficial
ownership of such options, except to the extent of her pecuniary
interest therein.
4. The current executive officers Messrs. Otten, Howard, Miller, Carrig,
and Wilson.
5. Includes 12,500 exercisable options granted to Main Street Advisors,
Inc., in which Mr. Wachter, a Director of American Skiing, is a
principal. Also includes 40,000 exercisable options granted to Oak Hill
Capital Management, Inc., as to which beneficial ownership is
disclaimed by Messrs. Gruber, Bernstein, Crandall, and Janes (each of
whom are Directors of American Skiing), except to the extent of their
pecuniary interest therein.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
THE AMENDMENT TO INCREASE THE SHARES RESERVED
UNDER THE STOCK OPTION PLAN BY 3,000,000 SHARES
22
<PAGE>
PROPOSAL NO. 3.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, based on the recommendation of the Audit
Committee, has voted to retain Arthur Andersen LLP to serve as the Company's
independent public accountants for the fiscal year ending July 29, 2001. Arthur
Andersen LLP expects to have a representative at the Meeting who will have the
opportunity to make a statement and who will be available to answer appropriate
questions.
It is understood that even if the appointment is ratified, the Board of
Directors, in its discretion, may direct the appointment of a new independent
accounting firm at any time during the year if the Board of Directors believes
that such a change would be in the best interests of the Company and its
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE RATIFICATION OF
THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDED JULY 29, 2001.
For fiscal years prior to 1999, the consolidated financial statements
of the Company were audited and reported on by PricewaterhouseCoopers LLP
("PwC"). On March 13, 1999, the Company was informed by PwC that they were
resigning as independent accountants of the Company effective March 13, 1999.
PwC's resignation was accepted by the Board of Directors. On March 31, 1999, the
Audit Committee approved the hiring of Arthur Andersen LLP as the independent
auditors of the Company.
In connection with the audits of the Company's consolidated financial
statements for the two fiscal years ended July 27, 1997 and July 26, 1998, and
the subsequent interim period through March 13, 1999, there were no
disagreements between the Company and PwC on any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedures,
which disagreements, if not resolved to PwC's satisfaction would have caused PwC
to make reference to the subject matter of the disagreement in connection with
PwCs audit report on the consolidated financial statements of the Company. In
addition, the audit reports of PwC on the consolidated financial statements of
the Company as of and for the two fiscal years ended July 26, 1998 did not
contain any adverse opinion or disclaimer of opinion, nor were such reports
qualified or modified as to uncertainty, audit scope, or accounting principles.
FUTURE SHAREHOLDER PROPOSALS
The Company anticipates that its proxy statement for the next annual
meeting will be released to shareholders no later than November 15, 2001. In
order for proposals by shareholders to be considered for inclusion in the Proxy
and Proxy Statement relating to the 2001 annual meeting, such proposals must be
received by the Secretary of the Company no later than July 20, 2001.
OTHER MATTERS
At the date of this Proxy Statement, the Board of Directors has no
knowledge of any business other than that described herein which will be
presented for consideration at the meeting. In the event any other business is
presented at the meeting, the persons named in the enclosed proxy will vote such
proxy thereon in accordance with their judgment in the best interests of the
Company.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR FISCAL 2000 (INCLUDING
FINANCIAL STATEMENTS AND SCHEDULES THERETO), WHICH WAS FILED WITH THE SEC ON
OCTOBER 26, 2000, WILL BE PROVIDED WITHOUT CHARGE TO ANY PERSON TO WHOM THIS
23
<PAGE>
PROXY STATEMENT IS MAILED UPON THE WRITTEN REQUEST OF ANY SUCH PERSON TO FOSTER
STEWART, VICE PRESIDENT, GENERAL COUNSEL AND ASSISTANT SECRETARY, AMERICAN
SKIING COMPANY, 2ND FLOOR, ONE MONUMENT WAY, PORTLAND, MAINE 04101.
By Order of the Board of Directors
/s/ Christopher E. Howard
Christopher E. Howard
Executive Vice President and Secretary
November 10, 2000
24
<PAGE>
PROXY
AMERICAN SKIING COMPANY
Proxy Solicited on Behalf of the Board of Directors of the Company
for the Annual Meeting of Shareholders--December 12, 2000
The undersigned holder of COMMON STOCK hereby constitutes and appoints Leslie B.
Otten and Christopher E. Howard, and each of them, the undersigned's true and
lawful agents and proxies with full power of substitution in each, to represent
the undersigned at the Annual Meeting of Shareholders of American Skiing
Company, to be held at the Grand Summit Hotel, The Canyons Resort, Park City,
Utah, on Tuesday, December 12, 2000 at 9:00 a.m. local time and at any
adjournments thereof, on all matters coming before said meeting.
You are encouraged to specify your choices by marking in the appropriate boxes,
but you need not mark any boxes if you wish to vote in accordance with the Board
of Directors' recommendations. Please complete, sign and return this proxy card
promptly.
SEE REVERSE SIDE SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
[x] Please mark votes as in this example.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder(s); If no direction is made, this
proxy will be voted FOR all nominees named in Proposal 1 and FOR
Proposal 2 and Proposal 3.
1. Election of Common Directors
Nominees: David Hawkes, Paul Wachter, Paul Whetsell
FOR ALL NOMINEES [ ] [ ] WITHHELD FROM ALL NOMINEES
[ ] For all nominees except as noted above
2. Amendment of the 1997 Stock Option Plan to increase the shares
of Common Stock reserved under the 1997 Stock Option Plan by
3,000,000 shares.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Ratification of appointment of Arthur Andersen L.L.P. as
independent public accountants.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. In their discretion, upon other matters as they properly come
before the meeting.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
Please mark, sign and return promptly using the enclosed envelope. Executors,
administrators, trustees, etc., should give full title as such. If the signer is
a corporation, please sign full corporate name by duly authorized officer.
Signature: Date: Signature: Date:
<PAGE>
APPENDIX A
American Skiing Company
Audit Committee Charter and Duties
December, 1999
PREAMBLE: The following Audit Committee Charter and Duties are designed
to serve the goals of the Board of Directors of American Skiing Company but not
to eliminate its overall fiduciary duties.
RESOLVED, that the charter and duties of the Audit Committee of the
Board of Directors (the "Audit Committee") shall be:
1. Overseeing that management has maintained the reliability and integrity
of the accounting policies and financial reporting and disclosure
practices of the Company;
2. Overseeing that management has established and maintained processes to
assure that an adequate system of internal control is functioning
within the Company; and
3. Overseeing that management has established and maintained processes to
assure compliance by the Company with all applicable laws, regulations
and Company policy.
RESOLVED, that the Audit Committee shall have the following specific
power and duties:
1. Holding such meetings as may be necessary and such special meetings as
may be called by the Chairman of the Audit Committee or at the request
of the independent accountants or the General Auditor;
2. Creating an agenda for the ensuing year;
3. Reviewing the performance of the independent accountants and making
recommendations to the Board of Directors regarding the appointment or
termination of the independent accountants;
4. Conferring with the independent accountants and the internal auditors
concerning the scope of their examination of the books and records of
the Company and its subsidiaries; reviewing and approving the
independent accountants' annual engagement letter; reviewing and
approving the Company's internal audit charter, annual audit plans and
budgets; directing the special attention of the auditors to specific
matters or areas deemed by the Committee or the auditors to be of
special significance; and authorizing the auditors to perform such
supplemental reviews or audits as the Committee may deem desirable;
5. Reviewing with management, the independent accountants and the chief
financial officer significant risks and exposures, audit activities and
significant audit findings;
6. Reviewing the range and cost of audit and non-audit services performed
by the independent accountants;
7. Reviewing the Company's audited financial statements and the
independent accountants' opinion rendered with respect to such
financial statements, including reviewing the nature and extent of any
significant changes in accounting principals or the application
therein;
8. Reviewing the adequacy of the Company's systems of internal control;
9. Obtaining from the independent accountants, the chief financial officer
and internal auditors their recommendations regarding internal controls
and other matters relating to the accounting procedures and the books
and records of the Company and its subsidiaries and reviewing the
corrections of controls deemed to be deficient;
A-1
<PAGE>
10. Providing an independent, direct communication between the Board of
Directors, internal auditors and independent accountants;
11. Reviewing the adequacy of internal controls and procedures related to
executive expenses, travel and entertainment, including use of Company
aircraft;
12. Reviewing with appropriate Company personnel the actions taken to
ensure compliance with the Company's Code of Conduct and the results of
confirmations and violations of such Code;
13. Reviewing the programs and policies of the Company designed to ensure
compliance with applicable laws and regulations and monitoring the
results of these compliance efforts;
14. Reviewing the procedures established by the Company that monitor the
compliance by the Company with its loan and indenture covenants and
restrictions;
15. Reporting through its Chairman to the Board of Directors following the
meetings of the Audit Committee;
16. Maintaining minutes or other records of meetings and activities of the
Audit Committee;
17. Reviewing the powers of the Committee annually and reporting and making
recommendations to the Board of Directors on these responsibilities;
18. Conducting or authorizing investigations into any matters within the
Audit Committee's scope of responsibilities. The Audit Committee shall
be empowered to retain independent counsel, accountants, or others to
assist in the conduct of any investigation;
19. Considering such other matters in relation to the financial affairs of
the Company and its accounts, and in relation to the internal and
external audit of the Company as the Audit Committee may, in its
discretion, determine to be advisable.
A-2
<PAGE>
APPENDIX B
SECOND AMENDMENT TO THE
AMERICAN SKIING COMPANY STOCK OPTION PLAN
Effective as of December 12, 2000
This Second Amendment to the American Skiing Company Stock Option Plan
(the "Plan") is adopted by American Skiing Company, formerly known as ASC
Holdings, Inc. (the "Company"), effective as of December 12, 2000.
WHEREAS, the Company has reserved the right to amend the Plan, subject
to certain limitations, under Section 11 of the Plan document; and
WHEREAS, the shareholders of the Company have approved an increase in
the maximum aggregate number of shares of Common Stock for which options may be
granted under the Plan as set forth in Section 3(a) of the Plan 5,688,699 shares
to 8,688,699 shares; and
WHEREAS, the Company now wishes to amend the Plan as set forth below;
NOW, THEREFORE, the Plan is hereby amended as follows:
1. The second sentence of Section 3(a) of the Plan is hereby amended by
deleting the reference to "5,689,699 shares" and inserting in its place a
reference to "8,688,699 shares".
2. This amendment shall be effective as of December 12, 2000.
IN WITNESS WHEREOF, the Company has caused this Second Amendment to the
Plan to be executed by its duly authorized officer on this 12th day of December,
2000, to be effective as set forth above.
AMERICAN SKIING COMPANY
---------------------------
Name:
Title:
B-1
<PAGE>
