SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10KSB
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from __________ to __________
Commission File No. 0-3802
Western Standard Corporation
(Name of small business issuer in its charter)
Wyoming 83-0184378
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
205 South Broadway
Riverton, Wyoming 82501
(Address of principal (Zip Code)
executive offices)
Issuer's telephone number, including area code: (307)856-9288
Securities registered pursuant to Section 12(b) of the Exchange
Act: None
Securities registered pursuant to Section 12(g) of the Exchange
Act:
Common Stock, $.05 par value
(Titles of Class)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12
months (or for such shorter period that the issuer was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained herein, and no disclosure will
be contained, to the best of registrant's knowledge in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10KSB or any amendment to this Form 10KSB. [X]
Issuer's revenues for the fiscal year ended December 31, 1999 were
$8,660,995.
As of March 21, 2000, there were 9,965,015 shares of the
registrant's common stock outstanding. The aggregate market value
of the voting stock held by non-affiliates of the registrant was
$307,802, based upon the average of the bid and asked prices of the
common stock on December 28, 1999.
DOCUMENTS INCORPORATED BY REFERENCE:
Page 1 of 79 pages. The exhibit index begins on page 43.
PART I.
Item 1. Description of Business.
Business Development
Western Standard Corporation ("WSC") was incorporated under
Wyoming law on February 24, 1955. WSC and its subsidiaries hold
interests in and to mineral, oil and gas, and recreational real
estate properties and the Snow King Ski Area (the "Ski Area"), the
Snow King Hotel (the "Hotel"), and the Snow King Complex (the
"Complex") in Jackson, Wyoming. WSC's primary business activity is
its operation of the Hotel, the Ski Area, and the Complex through
its subsidiary, Snow King Resort, Inc. ("SKRI").
The Snow King Complex is managed by Snow King Resort
Management, Inc. ("SKRMI") pursuant to a management agreement with
SKRI providing for a management fee equal to 2% of gross revenues.
SKRMI is entirely owned and controlled by Manuel B. Lopez and
Stanford E. Clark, officers and directors of WSC.
SKRI
SKRI is a Wyoming corporation formed on December 28, 1990, by
WSC to serve as a vehicle to accomplish a Restructuring fully
explained in prior Forms 10-K and 10-KSB. The officers and
directors of SKRI are as follows:
Manuel B. Lopez, President and Director
Stanford E. Clark, Vice President, Treasurer and Director
Clarene Law, Vice President and Director
Joseph Byron, Vice President and Director
Creed Law, Secretary
James Peck, Director
Peter Wold, Director
Max C. Chapman, Director
(a) Mr. Lopez is also Vice President and a Director of Western
Standard Corporation.
(b) Mr. Clark is also President and a Director of Western
Standard Corporation.
(c) Mr. Peck is also a Director of Western Standard
Corporation. Effective March 2, 1999, he was appointed Corporate
Secretary.
The principal executive offices of SKRI are located at 400
East Snow King Avenue, Jackson Hole, Wyoming, 83001, telephone
number (307) 733-5200.
The beginning capital structure of SKRI is as follows:
Common Stock. The articles of incorporation of SKRI authorize
two classes of common stock, Class A Common Stock and Class B
Common Stock. The preferences, limitations and relative rights of
both classes of common stock are equivalent in all respects, with
the exception of voting rights with respect to the election of
directors. The holders of Class A Common Stock are entitled to
elect three directors of SKRI while the holders of Class B Common
Stock are entitled to elect four directors. There are currently
12,000 shares of Class B Common Stock, outstanding, all of which
are owned by WSC. Initially, there were 2,150 shares of Class A
Common Stock outstanding, all of which is owned by the investors
who purchased shares in the Offering. (See page 4 for additional
sale of shares.)
Preferred Stock. The articles of incorporation of SKRI
authorize one class of preferred stock, Class A Preferred Stock.
Each share of Class A Preferred Stock is entitled to a cumulative
dividend preference of $7.00 per share per year, has no voting
rights, and is entitled to a liquidation dividend preference of
$140.00 per share. After payment of the above described dividend
preferences, the Class A Preferred Stock shall participate equally
in any dividends declared.
Convertible Subordinated Debentures. Each Convertible
Subordinated Debenture, which debentures were issued in
denominations of $20,720 face amount each, is convertible into 148
shares of Class A Preferred Stock, bears interest at the rate of
10.5% per annum (payable annually and with unpaid interest accruing
at the rate of 12% per annum in the event of any failure to make an
interest payment when due), is subordinated to the Orix Loan with
respect to the payment of principal and interest, the funding of
certain reserve accounts, and the payment of management fees for
operation of the Hotel, matures on January 31, 2007, and is subject
to the right of SKRI to call all or a portion of the debentures as
follows: (i) on or after January 31, 1994, but prior to January
30, 1995, for 130% of the face amount plus accrued but unpaid
interest; (ii) on or after January 31, 1995, but prior to January
30, 1996, for 125% of the face amount plus accrued but unpaid
interest; (iii) on or after January 31, 1996, but prior to January
30, 1997, for 115% of the face amount plus accrued but unpaid
interest; (iv) on or after January 31, 1997, but prior to January
30, 1998, for 110% of the face amount plus accrued but unpaid
interest; and (v) on or after January 31, 1998, for 105% of the
face amount plus accrued but unpaid interest.
All of these debentures were converted to Class A preferred
stock in 1994.
Additional Sales of Stock. SKRI sold, in a private offering,
800 shares of Class A Common Stock of SKRI for $140 per share
($112,000 in the aggregate), and $2,072,000 face amount of
Debentures for 100% of the face amount. The total amount of funds
raised in the private offering, before expenses of the offering,
was $2,184,000. Manuel B. Lopez and his wife, Deborah, purchased
10% of the securities sold in the Offering. Margaret Peck, the
largest shareholder of WSC (26.8%), also purchased 10% of the
securities sold in the Offering.
In April, 1992, SKRI granted an option to purchase 3,000
shares of Class B Common Stock for a period of ten years at a price
of $140 per share to Mr. Lopez and his wife.
In March, 1993, the SKRI debenture holders purchased an
additional 1,350 shares of Class A Common Stock at a price of $140
per share. In 1994, the debenture holders purchased 1,550 shares
of Class A stock at $140.00 per share.
In 1994, all outstanding convertible debentures were converted
into 14,800 shares of Class A preferred stock at $140.00 per share.
At December 31, 1994 and December 31, 1999, 3,700 shares of Class
A, 12,000 shares of Class B, and 14,800 shares of Class A preferred
nonvoting stock, were issued and outstanding. The issuance of the
Class A preferred nonvoting stock did not reduce Western Standard's
voting power in Snow King Resort, Inc., although preferred Class A
nonvoting stock has certain preferred claims on Snow King Resort,
Inc.'s assets in case of dissolution.
As a result of the Restructuring, SKRI now owns all of the
assets comprising the Ski Area and the Hotel. WSC now owns
approximately 76.43% of the outstanding voting stock of SKRI. SKRI
intends to operate the Complex in the same manner as they have been
operated over the last several years.
Each shareholder in Snow King Center, Inc. has signed an
option to exchange all of his shares for Snow King Resort, Inc.
shares at the basis of ten Center shares for one Resort share. If
all of these options are exercised, 98 shares of Snow King
Resort,Inc. Class A stock will be issued. To date, no options have
been exercised.
As part of the Restructuring, SKRI entered into a new
operating agreement with SKRMI pursuant to which SKRMI manages the
Snow King Complex. The operating agreement provides for the
payment to SKRMI of a management fee equal to 2% of the gross
revenues of the Hotel. Payment of principal and interest on the
Debentures is subordinated to payment of the management fee.
Payment of the management fee is subordinated to the payment of
principal and interest on the First Interstate Bank loan.
Competitive Conditions
Locally, the Ski Area and the Hotel are faced with intense
competition from a newer, bigger, more prestigious and nationally
recognized ski resort, which is in close proximity to its
operations. Such ski resort, known as Teton Village, is owned and
operated by a company with greater financial resources than WSC and
SKRI. Nationally, the ski resort industry is extremely competitive
and many of WSC's and SKRI's competitors have more experience and
greater financial resources than does WSC and SKRI.
Oil and gas exploration and production is a highly competitive
business. If WSC were to engage in active oil and gas operations,
it would compete with a number of other companies, including major
oil companies and other independent operators, virtually all having
more experience and greater financial resources. WSC does not hold
a significant competitive position in the oil and gas industry.
WSC's oil and gas interests are operated by others.
Likewise, WSC's recreational land activities are faced with
keen competition from much larger more financially capable
companies. WSC's competitive position in this area of activity is
insignificant.
Oil and Gas Customers
WSC believes there is a ready market for its share of oil and
gas produced by operators of properties in which it has an
interest. However, WSC has no control over worldwide factors
affecting supply and demand for oil and gas which influence oil and
gas prices. Eighty-Eight Oil Company purchased approximately all
of WSC's share of oil production during 1999. KN Energy purchased
the gas.
Patents, Licenses, Franchises and Concessions
SKRI owns a Resort liquor license which is subject to renewal
each year. It has been renewed through 2000.
The Ski Area is operated primarily on land owned by the United
States which SKRI is permitted to use pursuant to a special use
permit expiring October 31, 2011. The permit is non-transferrable
and is terminable upon 30 days written notice to SKRI if a
determination is made by the Secretary of Agriculture or any
official of the Forest Service that the public interest requires
such termination. SKRI is required to pay an annual fee for the
permits which is based upon revenues generated by the Ski Area.
Environmental Impact
WSC's holding and/or development of its oil and gas and SKRI's
recreational properties requires compliance with various
requirements concerning environmental quality; and such compliance
may necessitate significant capital outlays, may materially affect
potential future earnings of WSC, or may cause material changes in
WSC's business. WSC believes that it is in substantial compliance
with all applicable environmental laws, rules, and regulations.
Number of Persons Employed
During 1999, WSC, including its subsidiaries, because of the
seasonality of its business, had between 175 and 259 employees,
including its officers.
Seasonality
The activities of the Hotel and the Ski Area are seasonal in
nature and are highly dependent on the number of tourists visiting
the area and the number of conventions and tour groups booked.
Tourism reaches peaks from May through September and, for skiing,
from December through March.
Financial Information About Industry Segments
WSC includes in its financial reporting two segments, an oil
and gas segment and a Snow King Hotel segment. The financial
information relating to segments may be found in the Consolidated
Financial Statements included in this Annual Report on 10KSB as
Item 7.
Item 2. Description of Property.
RECREATION AREA PROPERTIES
Teton County, Wyoming
The assets and the properties herein referred to as the Hotel
and the Ski Area consist of the following:
(1) 8.29 acres on which the 204 room hotel with a convention
center and related facilities are located.
(2) 43.5 acres and Town of Jackson leases on 27.2 contiguous
acres. A lease on the ski shelter and part of the 27.2
acres expires May 31, 2023. The lease on the balance
(the larger portion, including the Ice Rink) of the 27.2
acres expires May 31, 2033. During 1992, the Town
and SKRI agreed to demolish the ski shelter and replace
it with a larger structure having both a ski shelter and
a skating rink. These structures have been completed
and are in use. The skating rink is leased by a new
entity; see Item 12. "Certain Relationships and Related
Transactions."
(3) A 30-year Forest Service Term Special Use Permit on
369.51 acres on the adjoining Snow King Mountain, which
expires October 31, 2011. This lease has been extended
to December 31, 2039.
(4) A warming hut at the base of Snow King Mountain.
(5) A double chair ski lift on Snow King Mountain constructed
and put into use in 1981.
(6) A double chair lift reaching from the base of Snow King
Mountain to approximately 1/2 the distance to the top of
the mountain. This lift was acquired July 14, 1986 and
is known as the Rafferty Lift.
(7) In 1994, a triple chair lift was installed that extends
approximately half way to the top of Snow King mountain.
This opens up additional intermediate skiing areas. The
cost of the new chair lift, additional lights for night
skiing, water lines, pump, and additional snow making
equipment installed, totalled $1,683,997.
(8) Mountain grooming and communications equipment.
(9) A warming hut and snack shop at the summit of Snow King
Mountain.
(10) The Alphorn Motel in Jackson, Wyoming, consisting of 17
units, a large lodge room, and a small cabin, located on
six lots of land at the base of Snow King Mountain
adjacent to the ski lift. It is closed at present.
(11) Alpine Slide.
All of the above properties are subject to the lien of First
Interstate Bank as security for their loan.
During 1992, SKRI transferred 1.3 acres of land to the town of
Jackson for a location on which to construct an indoor skating
rink.
Fremont County, Wyoming
WSC, through its subsidiary, Western Recreation Corporation,
sold 40 acres of the Ocean Lake property during 1997 for $65,000.
The remaining 80 acres was sold for $57,500 in August, 1998.
MINERAL AND OIL AND GAS PROPERTIES
The following is a brief description of the mineral and oil
and gas properties in which WSC held an interest as of December 31,
1999:
Mining Claims
Number Approximate Wyoming
Name Mineral of claims Acreage County
Such Claim No. 7 Uranium 1 20 Carbon
WSC owns a 5% net profit interest in Patented Such Claim No. 7.
Non-Producing Oil and Gas Interests
Leases
on Which Approxi-
Royalties are mate WSC's County Date Leases
Held Acreage Interest and State Expire
Treasure Unit 320 2.0%* Sweetwater Held by
Lease w-28853 Wyoming production
in Unit
Daly Lease, 400 12.5%** Campbell Held by
Kitty Field Wyoming production
in Unit
* Overriding royalty interest.
** Working interest.
Producing Oil and Gas Properties
WSC is not the operator of any of the oil and gas properties
described below from which it received income during 1999. WSC
does not know of any planned exploration in 2000 on any of the oil
and gas properties operated by others in which it has interest.
WSC does not plan active exploration of any of its oil and gas
properties during 2000.
To the best of WSC's knowledge, the underlying leases are in
good standing. Reference is made to pages F-21 and F-22, Note 8
included with the Consolidated Financial Statements for detailed
information concerning WSC's oil and gas operations for its three
fiscal years ended December 31, 1999.
As a result of WSC's difficult financial position stemming
from its working capital deficit, operating losses and lack of
liquidity, and the fact that WSC holds small non-operating
interests in its oil and gas properties, it has not engaged an
independent petroleum engineering firm to render a report on its
oil and gas reserves. Further, WSC has no staff or expertise
enabling it to internally estimate its oil and gas reserves. The
financial statement carrying value of the properties is nominal and
it has recovered its entire investment. WSC has not engaged in
active oil and gas operations during the past three years and does
not expect to do so during 2000. The Consolidated Financial
Statements do, however, contain a considerable amount of
information concerning WSC's oil and gas segment and the results of
its operations during the past three years. The following further
describes WSC's oil and gas properties:
Kaye Field
WSC owned a 20.348% working interest (15.26% net revenue
interest) in two producing wells located on 308 gross (62.67) net
acres in Section 5, T36N, R67W, Converse County, Wyoming (#22-5 and
#24-5).
WSC's entire interest in wells #22-5 and #24-5 in the Kaye
Field was sold in January, 1997 for $70,000 cash to Ensign Oil &
Gas, Inc. to avoid the expense of an attempt to water flood the
field and to avoid the loss of income from the wells while
production was stopped during the water flood attempt. WSC would
have been unable to contribute its share of the water flood
expense.
Central Hilight Unit
WSC owns a 1.0827% royalty interest in Tract #47 of the
Central Hilight Unit located in Campbell County, Wyoming, which
currently produces from the Muddy Formation. Tract #47 has been
assigned a 6.268% interest in the Central Hilight Unit, which
converts to a 0.0006787 interest to WSC. The Unit was formed by
the Wyoming Oil and Gas Commission, effective November 1, 1971, and
placed under a water flood program.
Grady Unit
Effective September 1, 1971, the date these properties were
unitized, WSC purchased a 5.027% working interest (2.721% net
revenue interest) in the Grady Unit, which consists of
approximately 9,440 gross (472 net) acres located in T45N and T46N,
R71W, Campbell County, Wyoming. In 1993, WSC's working interest
was reduced to 0.029644. This provides additional revenue to WSC.
In April, 1998, Western Standard Corporation sold for
$12,837.75, the Grady Unit Shallow Rights to coal methane, which
covers certain property in the Grady Unit to a depth of 2,500 feet
or stratigraphic equivalent of the base of the Tertiary Age Coal
Formation within the lands.
Kitty Field/Daly Lease
In July 1999, Western Standard sold its interest in 50 net
acres from the surface to a 2,500 foot depth for 2 years, unless
production results, for $10,000 to Kennedy Oil. Kennedy Oil plans
to drill for methane gas.
Payne Field
WSC has a 1% OR in the Payne Field which consists of 320 gross
acres, 35.2 net acres, in Campbell County, Wyoming.
Exploratory and Development Wells Drilled
WSC did not participate in the drilling of any wells during
the last three fiscal years.
Production, Productive Wells and Reserves
Two of WSC's significant oil and gas properties are subject to
complex unitization agreements involving a large number of wells
with varying ownership interest making any attempt to estimate its
reserves difficult, relatively expensive, and subject to error.
Moreover, WSC is not certain that operators would open their
technical files to any engineer employed by WSC.
Miscellaneous
WSC is not obligated to provide quantities of oil or gas in
the future under existing contracts or agreements.
WSC has not filed any reports containing oil or gas reserve
estimates with any federal or foreign governmental authority or
agency within the past 12 months.
Item 3. Legal Proceedings.
Previous law suits have been settled by our insurance carrier.
Neither WSC nor SKRI is a party to any lawsuit or legal proceeding
on December 31, 1999 or March 20, 2000, and none are contemplated
or threatened against them.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders during
the fourth quarter of the year ended December 31, 1999.
PART II.
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
WSC's common stock, $0.05 par value, is sporadically traded
over the counter. Trading in WSC's common stock is reported by the
National Daily Quotation Service ("pink sheets") and the National
Association of Securities Dealers, Inc. Non-NASDAQ OTC Bulletin
Board. Quotations shown below reflect inter-dealer prices, without
retail mark-up, mark-down or commission and may not necessarily
represent actual transactions.
Bid Prices
Low High
1999
First Quarter .03 .03
Second Quarter .03 .0313
Third Quarter .03 .0313
Fourth Quarter .015 .0313
1998
First Quarter .0625 .0625
Second Quarter .0625 .0625
Third Quarter .03125 9/32
Fourth Quarter .03125 9/32
As of December 31, 1999, there were approximately 3,506
holders of record of WSC's common stock.
WSC has not paid any dividends on its common stock and does
not expect to do so in the foreseeable future.
Item 6. Management's Discussion and Analysis or Plan of Operation.
Management recommends that the discussion below be read in
conjunction with the Financial Statements and Notes thereto
included in this Annual Report on Form 10KSB as Item 7.
Liquidity and Capital Resources
As explained in Item 1 of this Annual Report on Form 10KSB,
Western Standard Corporation completed a restructuring of
its interests in the entire Snow King Complex in Jackson Hole,
Wyoming, in March, 1992. This has placed all of the assets of Snow
King, Incorporated and Snow King Partnership in a new company, Snow
King Resort, Inc.
It is believed that oil and gas revenues, rent, a small amount
of interest and cash reserves, will make it possible for Western
Standard Corporation to meet its expenses in 2000.
Snow King Resort, Inc. had paid its $5,000,000 loan from ORIX
USA and Jackson State Bank down to $3,863,000 by September 13,
1994. On that date, it borrowed an additional amount of $1,387,000
from these same two lenders increasing the balance of the loan to
$5,250,000 with the original loan being amended. Monthly payments
on the loan are to be computed on a fifteen (15) year amortization
schedule based upon an assumed interest rate for calculation of
such principal payments, at 9% per annum. Principal and interest
payments on loans were currently paid.
On April 15, 1996, SKRI refinanced its loan with ORIX USA at
a fixed interest rate of 10 1/8% for five years. Part of the
proceeds were used to pay other debt. The amount of the new loan
was $6,150,000. A copy of the loan documents (the third
modification to the loan agreement) was submitted with Form 8-K
dated April 15, 1996, and is incorporated herein by reference.
In March 1999, Snow King Resort, Inc. refinanced with First
Interstate Bank of Casper, Wyoming in the amount of $9,370,000 at
beginning interest rate of 7.98%. These funds were used to pay
ORIX USA and Jackson State Bank in full, other debt and to renovate
the Hotel. Certain documents relating to this transaction are
attached as exhibits #94.4.17 and #94.4.18.
Revenues from the operations of Snow King Resort, Inc., a
$630,000 line of credit from the First Interstate Bank of Casper,
Wyoming who refinanced the Hotel, and limited additional borrowings
are expected to be sufficient to allow Snow King Resort, Inc. to
meet its principal, interest and other operating expenses during
2000.
Results of Operations
1999 vs. 1998
Overall - 1999 ended with a net loss of $545,043 compared to
a net income of $249,705 in 1998.
Other revenue increased from $11,484 in 1998 to $29,307 in
1999.
Oil and Gas Segment
Operating income of the Oil and Gas Segment increased from
$18,383 in 1998 to $23,055 in 1999. Also refer to item 1. above.
Snow King Resort Segment
Net income of the Snow King Resort decreased from income of
$295,883 in 1998 to a loss of $690,795 in 1999.
Revenues decreased from $9,435,653 in 1998 to $8,608,633 in
1999.
Operating expenses increased from $8,437,151 in 1998 to
$8,639,942 in 1999.
Impact of Inflation
For the two most recent fiscal years inflation and changing
prices have not had a detrimental impact on revenues or net income.
WSC has generally been able to raise its prices to counteract cost
increases without adversely affecting demand for its products and
services.
Item 7. Financial Statements.
Independent Auditor's Report F-1 to F-2
Financial Statements:
Consolidated Balance Sheets F-3
Consolidated Statements of Shareholders' Equity F-4
Consolidated Statements of Operations F-5
Consolidated Statements of Cash Flow F-6 to F-7
Supplemental Schedules:
Schedule of Property, Equipment and Intangible
Assets (1999) - Schedule A F-8
Schedule of Accumulated Depreciation, Depletion
and Amortization (1999) - Schedule A-1 F-9
Schedule of Property, Equipment and Intangible
Assets (1998) - Schedule B F-10
Schedule of Accumulated Depreciation, Depletion
and Amortization (1998) - Schedule B-1 F-11
Schedule of Property, Equipment and Intangible
Assets (1997) - Schedule C F-12
Schedule of Accumulated Depreciation, Depletion
and Amortization (1997) - Schedule C-1 F-13
Notes to Consolidated Financial Statements F-14 to F-25
CLIFFORD H. MOORE AND COMPANY, CPAs
205 South Broadway
Riverton, WY 82501
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
and Stockholders of
Western Standard Corporation
We have audited the accompanying consolidated balance sheets
of Western Standard Corporation and Subsidiaries as of December 31,
1999 and 1998, and the related consolidated statements of
shareholders' equity, operations, and cash flows, for the years
ended December 31, 1999, 1998 and 1997. These financial statements
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
The Company has not presented oil and gas reserve quantities
and changes in those reserve quantities that the financial
Accounting Standards Board (FASB) has determined in FASB Statement
Number 19 (Financial Accounting and Reporting by Oil and Gas
Producing Companies) is necessary to supplement, although not
required to be part of, the basic financial statements. The
Company has also not presented certain information required by
Regulation S-X (210. 4-10) of the Securities and Exchange
Commission regarding certain disclosures for oil and gas producing
activities.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of
Western Standard Corporation and Subsidiaries as of December 31,
1999 and 1998, and the results of their operations and cash flows
for the years ended December 31, 1999, 1998 and 1997, in conformity
with generally accepted accounting principles.
Our examinations were made for the purpose of expressing an
opinion on the basic financial statements taken as a whole. The
supplemental schedules listed in the index of financial statements
are presented for purposes of complying with the Securities and
Exchange Commission's rules and regulations under the Securities
Exchange Act of 1934 and are not otherwise a required part of the
basic financial statements. The supplemental schedules have been
F-1
subjected to the auditing procedures applied in the examination of
the basic financial statements and, in our opinion, fairly state in
all material respects the financial date required to be set forth
therein in relation to the basic financial statements taken as a
whole.
March 15, 2000
Riverton, Wyoming
F-2
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1999 AND 1998
ASSETS
1999 1998
CURRENT ASSETS:
Cash $ 276,313 $ 220,416
Accounts receivable (net of
allowance for doubtful accounts
of $8,640 in 1999; $17,274 in
1998) 291,938 206,089
Inventories 66,741 47,058
Prepaid expenses 205,431 181,128
Total current assets $ 840,423 $ 654,691
PROPERTY AND EQUIPMENT:
At cost, net of accumulated depr.
of $4,833,463 and $4,584,681 in
1999 and 1998, respectively
(Schedules A and B) $ 9,374,111 $ 7,894,852
OTHER ASSETS:
Restricted cash (Note 4) $ 17,548 $ 13,015
Account receivable - Snow King
Resort Center, Inc. (Notes 8 & 13) 1,446,151 1,255,977
Allowance for doubtful receivable
(Note 13) ( 1,260,000) ( 1,000,000)
Leasehold interest, net of
amortization (Note 9) 100,777 34,625
Other receivables - officer (Note 8) 10,800 10,900
Other (Note 3) 93,832 86,624
Patronage capital, net of discount
(Note 15) 229,500 -0-
Total other assets $ 638,608 $ 401,141
TOTAL ASSETS $ 10,853,142 $ 8,950,684
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $ 500,404 $ 492,403
Accrued expenses 483,590 329,688
Advance deposits 509,971 396,302
Current maturity of debt (Note 4) 516,735 1,015,678
Total current liabilities $ 2,010,700 $ 2,234,071
LONG-TERM LIABILITIES:
Long-term debt (Note 4) $ 8,312,327 $ 5,478,636
Fee payable - officer (Note 8) 90,000 90,000
Total long-term liabilities $ 8,402,327 $ 5,568,636
MINORITY INTEREST IN SUBSIDIARY $ 2,071,635 $ 2,234,454
SHAREHOLDERS' EQUITY (DEFICIT):
Common stock, $.05 par value,
10,000,000 shares authorized,
9,965,015 shares issued and out-
standing at 12/31/99 & 12/31/98 $ 401,201 $ 401,201
Capital in excess of par value 3,334,801 3,334,801
Accumulated deficit ( 5,367,522) ( 4,822,479)
Total shareholders' equity (deficit)($ 1,631,520) ($ 1,086,477)
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT) $ 10,853,142 $ 8,950,684
The accompanying notes to financial statements
are an integral part of these statements.
F-3
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
ASSETS
Capital Total
Capital in excess share-
Shares stock of Accumulated holders'
outstanding common par value deficit equity
BALANCE,
12/31/96 9,965,015 $401,201 $3,334,801 ($4,261,756)($ 525,754)
1997 net
loss -0- -0- -0- ( 810,428)( 810,428)
BALANCE,
12/31/97 9,965,015 $401,201 $3,334,801 ($5,072,184)($1,336,182)
1998 net
income -0- -0- -0- 249,705 249,705
BALANCE,
12/31/98 9,965,015 $401,201 $3,334,801 $4,822,479 $1,086,477
1999 net
loss -0- -0- -0- ( 545,043)( 545,043)
BALANCE,
12/31/99 9,965,015 $401,201 $3,334,801 ($5,367,522)($1,631,520)
The accompanying notes to financial statements
are an integral part of these statements.
F-4
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
1999 1998 1997
REVENUES:
Snow King Resort $ 8,608,633 $ 9,434,701 $ 8,522,295
Oil and gas interests
(Note 10) 23,055 18,383 27,880
Rentals 505 716 1,081
Interest 17,776 10,768 7,653
Other 1,026 -0- -0-
Gain on assets sold 10,000 54,005 114,410
Total revenues $ 8,660,995 $ 9,518,573 $ 8,673,319
EXPENSES:
Snow King Resort
operating $ 7,664,968 $ 7,823,251 $ 7,342,616
Oil and gas interests 11,660 10,749 16,555
Amortization 69,063 22,761 24,586
Depreciation 566,509 650,129 622,970
Provision for doubtful
accounts -0- 6,000 6,000
Other 49,374 -0- 46,810
Loan prepayment penalties 252,788 -0- -0-
Interest 711,339 686,238 700,956
Total expenses $ 9,325,701 $ 9,199,128 $ 8,760,493
NET INCOME (LOSS) BEFORE
EXTRAORDINARY ITEM ($ 664,706) $ 319,445 ($ 87,174)
Extraordinary Item:
Patronage capital 216,842 -0- -0-
Provision for Snow King
Resort Center receivable
collectibility ( 260,000) -0- ( 1,000,000)
Net income (loss) before
provision for income
tax ($ 707,864) $ 319,445 ($ 1,087,174)
Provision for income tax
(Note 7) -0- ( 107,834) -0-
($ 707,864) $ 211,611 ($ 1,087,174)
Benefit of loss carry-
overs (Note 7) -0- 107,834 -0-
NET INCOME (LOSS) ($ 707,864) $ 319,445 ($ 1,087,174)
Minority interest in
(income) loss of
subsidiary 162,821 ( 69,740) 276,746
NET INCOME (LOSS) ($ 545,043) $ 249,705 ($ 810,428)
INCOME (LOSS) PER COMMON
SHARE (Computed on the
weighted average number
of shares outstanding
for the year) ($ .0547) $ .0251 ($ .0813)
WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING 9,965,015 9,965,015 9,965,015
The accompanying notes to financial statements
are an integral part of these statements.
F-5
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
1999 1998 1997
INCREASE (DECREASE) IN CASH:
Cash flows from operating
activities:
Cash received from
customers $ 8,631,202 $ 9,409,545 $ 8,563,259
Cash paid to suppliers
and employees ( 7,590,727)( 8,207,105)( 7,193,242)
Interest received 17,776 10,768 7,653
Interest paid ( 964,127)( 686,238)( 700,956)
Net cash provided
by operations $ 94,124 $ 526,970 $ 676,714
Cash flows from investing
activities:
(Payments to) decrease
in restricted cash
capital expenditure
account ($ 4,533) $ 5,283 $ 2,282
Sales of assets 4,529 66,505 130,660
Investment related
corporation ( 100) -0- ( 1,856)
Capital expenditures ( 2,050,297)( 421,634)( 289,356)
(Investment)/repayment
Snow King Center ( 190,174)( 120,081)( 100,778)
Prepayment of Town of
Jackson lease ( 82,400) -0- -0-
Net cash provided
(used) by investing
activities ($ 2,322,975)($ 469,927)($ 259,048)
Cash flows from financing
activities:
Borrowing from banks and
leasing companies $ 9,478,406 $ 1,491,707 $ 1,083,870
Principal payments to
banks and leasing
companies ( 7,143,658)( 1,710,496)( 1,277,171)
Payment of loan fees ( 50,000) -0- ( 2,125)
Net cash provided
(used) by financing
activities $ 2,284,748 ($ 218,789)($ 195,426)
Net increase (decrease)
in cash $ 55,897 ($ 161,746) $ 222,240
Cash at beginning of year 220,416 382,162 159,922
Cash at end of year $ 276,313 $ 220,416 $ 382,162
Cash consists of cash on hand and cash in unrestricted bank
accounts and short term cash investments.
(These statements of cash flows are continued
on the next page)
The accompanying notes to financial statements
are an integral part of these statements.
F-6
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997
1999 1998 1997
RECONCILIATION OF NET
INCOME TO NET CASH:
Net income (loss) ($ 545,043) $ 249,705 ($ 810,428)
Adjustments to reconcile
net income to net cash
provided (used) by
operating activities:
Depreciation 635,572 672,890 647,556
Increase (decrease) in
advance deposits 113,669 ( 76,343)( 16,060)
(Increase) decrease in
accounts receivable ( 85,849)( 38,093) 28,061
(Increase) decrease in
prepaid expenses ( 24,303) 22,927 ( 21,206)
Decrease (increase) in
inventories ( 19,683) 136 ( 5,584)
(Decrease) increase in
payable and accrued
expenses 161,903 ( 313,824) 266,251
Gain on assets sold -0- ( 54,005)( 114,410)
Change in other
receivables ( 9,923)( 6,162)( 20,552)
Provision for Snow King
Resort Center
receivable 260,000 -0- 1,000,000
Accrued interest -
officer note 100 -0- ( 168)
Increase in patronage
capital ( 229,500) -0- -0-
Allocation of minority
interest in subsidiary
income or loss ( 162,819) 69,739 ( 276,746)
Net cash provided
by operations $ 94,124 $ 526,970 $ 676,714
The accompanying notes to financial statements
are an integral part of these statements.
F-7
Schedule A
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999
Balance at Balance at
beginning Additions Retire- end
Classification of period at cost ments of period
PROPERTY AND
EQUIPMENT:
Land $ 1,553,761 $ 475,094 $ -0- $ 2,028,855
Mineral claims
and leases 500 -0- -0- 500
Producing oil
and gas
interests 265,719 -0- -0- 265,719
Machinery and
equipment 117,678 -0- -0- 117,678
Hotel building
& imprvmnts. 7,083,977 417,723 -0- 7,501,700
Hotel furni-
ture and
fixtures 3,457,898 1,157,480 322,256 4,293,122
$12,479,533 $2,050,297 $322,256 $14,207,574
Property and equipment $14,207,574
Accumulated depreciation (Schedule A-1) ( 4,833,463)
Property and equipment, net of accumulated
depreciation $ 9,374,111
Amortizable Assets:
Costs of
acquiring
ski shelter
lease $ 42,538 $ 82,400 $ -0- $ 124,938
Accumulated
amortization ( 24,161)
Net $ 100,777
Prepaid loan
fees $ 91,360 $ 50,000 ($ 91,360) $ 50,000
Accumulated
amortization ( 5,970)
Net $ 44,030
The accompanying notes to financial statements
are an integral part of these statements.
F-8
Schedule A-1
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1999
Depreciation
and
amortization
Balance at charged to Balance at
beginning costs and Retire- end
Classification of period expenses ments of period
PROPERTY AND
EQUIPMENT:
Producing oil
and gas
interests $ 246,181 $ -0- $ -0- $ 246,181
Machinery
and equip-
ment 106,742 -0- -0- 106,742
Hotel building
& improve-
ments 1,465,528 267,225 -0- 1,732,753
Hotel furni-
ture and
fixtures 2,766,230 299,284 317,727 2,747,787
$ 4,584,681 $566,509 $317,727 $ 4,833,463
AMORTIZATION:
Leasehold
interest $ 7,913 $ 16,248 $ -0- $ 24,161
Loan fees $ 44,515 $ 52,815 $ 91,360 $ 5,970
The accompanying notes to financial statements
are an integral part of these statements.
F-9
Schedule B
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
Balance at Balance at
beginning Additions Retire- end
Classification of period at cost ments of period
PROPERTY AND
EQUIPMENT:
Land $ 1,464,516 $ 101,745 $ 12,500 $ 1,553,761
Mineral claims
and leases 500 -0- -0- 500
Producing oil
and gas
interests 265,719 -0- -0- 265,719
Machinery and
equipment 117,678 -0- -0- 117,678
Hotel building
& imprvmnts. 6,985,311 98,666 -0- 7,083,977
Hotel furni-
ture and
fixtures 3,236,675 221,223 -0- 3,457,898
$12,070,399 $ 421,634 $ 12,500 $12,479,533
Property and equipment $12,479,533
Accumulated depreciation (Schedule B-1) ( 4,584,681)
Property and equipment, net of accumulated
depreciation $ 7,894,852
Amortizable Assets:
Costs of
acquiring
ski shelter
lease $ 42,538 $ -0- $ -0- $ 42,538
Accumulated
amortization ( 7,913)
Net $ 34,625
Prepaid loan
fees $ 91,360 $ -0- $ -0- $ 91,360
Accumulated
amortization ( 44,515)
Net $ 46,845
The accompanying notes to financial statements
are an integral part of these statements.
F-10
Schedule B-1
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1998
Depreciation
and
amortization
Balance at charged to Balance at
beginning costs and Retire- end
Classification of period expenses ments of period
PROPERTY AND
EQUIPMENT:
Producing oil
and gas
interests $ 246,181 $ -0- $ -0- $ 246,181
Machinery
and equip-
ment 106,742 -0- -0- 106,742
Hotel building
& improve-
ments 1,223,657 241,871 -0- 1,465,528
Hotel furni-
ture and
fixtures 2,357,972 408,258 -0- 2,766,230
$ 3,934,552 $ 650,129 $ -0- $ 4,584,681
AMORTIZATION:
Leasehold
interest $ 6,497 $ 1,416 $ -0- $ 7,913
Loan fees $ 23,170 $ 21,345 $ -0- $ 44,515
The accompanying notes to financial statements
are an integral part of these statements.
F-11
Schedule C
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
Balance at Balance at
beginning Additions Retire- end
Classification of period at cost ments of period
PROPERTY AND
EQUIPMENT:
Land $ 1,383,088 $ 87,678 $ 6,250 $ 1,464,516
Mineral claims
and leases 500 -0- -0- 500
Producing oil
and gas
interests 323,562 -0- 57,843 265,719
Machinery and
equipment 135,569 -0- 17,891 117,678
Hotel building
& imprvmnts. 6,887,975 97,336 -0- 6,985,311
Hotel furni-
ture and
fixtures 3,132,333 104,342 -0- 3,236,675
$11,863,027 $ 289,356 $ 81,984 $12,070,399
Property and equipment $12,070,399
Accumulated depreciation (Schedule C-1) ( 3,934,552)
Property and equipment, net of accumulated
depreciation $ 8,135,847
Amortizable Assets:
Costs of
acquiring
ski shelter
lease $ 42,538 $ -0- $ -0- $ 42,538
Accumulated
amortization ( 6,497)
Net $ 36,041
Prepaid loan
fees $409,248 $ 2,125 $320,013 $ 91,360
Accumulated
amortization ( 23,170)
Net $ 68,190
The accompanying notes to financial statements
are an integral part of these statements.
F-12
Schedule C-1
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, EQUIPMENT AND INTANGIBLE ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1997
Depreciation
and
amortization
Balance at charged to Balance at
beginning costs and Retire- end
Classification of period expenses ments of period
PROPERTY AND
EQUIPMENT:
Producing oil
and gas
interests $ 294,024 $ -0- $47,843 $ 246,181
Machinery
and equip-
ment 124,633 -0- 17,891 106,742
Hotel building
& improve-
ments 992,871 230,786 -0- 1,223,657
Hotel furni-
ture and
fixtures 1,965,788 392,184 -0- 2,357,972
$ 3,377,316 $ 622,970 $65,734 $ 3,934,552
AMORTIZATION:
Leasehold
interest $ 5,081 $ 1,416 $ -0- $ 6,497
Loan fees $320,013 $ 23,170 $ 320,013 $ 23,170
The accompanying notes to financial statements
are an integral part of these statements.
F-13
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1: HISTORY OF THE COMPANY:
The Company was incorporated under the laws of the State of
Wyoming in 1955. It acquired oil, gas and mineral properties which
were assigned to other operators with the Company retaining a
royalty position in the properties assigned.
In 1971 and 1972, the Company acquired real estate, including
the Snow King ski area in Jackson, Wyoming, land and improvements
adjacent to Ocean Lake, Fremont County, Wyoming, and producing oil
and natural gas interests. Construction of a hotel-convention
center began in Jackson during 1973. The complex was operational
in early 1976 and was completed in 1977.
In 1981, 50% of the Snow King area and the convention center
was sold to Pick-Jackson Corp. and the remaining 50% was
transferred to two partnerships.
On March 13, 1992, the Snow King Resort was reacquired by a
subsidiary of Western Standard Corporation.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Fixed Assets:
The company capitalizes those additions and betterments which
increase the useful lives of its assets and expenses repair and
maintenance items.
When items are disposed of, their cost is removed from the
accounts along with the accumulated depreciation and the resulting
gain or loss is reflected in the income statement.
Oil and Gas Revenue:
Oil and gas revenue and expenditures are accounted for using
the successful efforts method. This method of accounting for oil
and gas properties capitalizes only those costs directly associated
with proven reserves.
Depreciation, Depletion and Amortization:
Depreciation, depletion and amortization on oil and gas
properties are computed using the straight-line method. Other
depreciable assets are depreciated by the straight-line method over
the estimated useful lives of the
assets as follows: equipment, 3 to 10 years; buildings and
improvements, 10 to 30 years; the hotel building, 37.5 years; and
the chair lift, 40 years.
Inventories:
Food and beverage inventories at the hotel are carried at
cost, computed on a first-in, first-out basis.
F-14
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Continued:
Affiliates:
The consolidated financial statements include the accounts of
Western Standard Corporation and its wholly owned subsidiary,
Western Recreation
Corporation. Western Standard owns 76.43% of its subsidiary, Snow
King Resort, Inc. Snow King Resort, Inc.'s transactions are
included in the consolidated financial statements. All significant
intercompany transactions and accounts have been eliminated.
Snow King Resort, Inc. acquired fixed assets and operating
assets and liabilities in several transactions closing on March 13,
1992.
Substantially all the assets and liabilities of Snow King,
Incorporated were acquired for 9,500 shares of Class B stock of
Snow King Resort, Inc. These assets and liabilities were recorded
at Snow King, Incorporated's book value on Snow King Resort, Inc.'s
books because they were acquired from a related corporation. These
assets and liabilities consisted of cash, accounts receivable,
other assets, fixed assets and accumulated depreciation, accounts
payable, advance deposits, other liabilities, leases payable and
notes payable. Snow King, Incorporated was subsequently
liquidated.
Snow King Resort, Inc. issued 2,500 shares of Class B stock to
Western Standard for Western Standard's 50% interest in the assets
of Snow King Partnership. These assets consist of land, buildings
and ski lifts. No value was assigned to these assets because they
were acquired at Western Standard's basis of zero.
Snow King Resort, Inc. borrowed $5,000,000 from banks, issued
$2,072,000 in convertible debentures, and sold $112,000 in Class A
stock to outside investors in order to purchase the hotel building,
land, and furniture and fixtures for the total purchase price of
$6,000,000. Snow King Resort, Inc. paid $350,000 for its remaining
50% interest in Snow King Partnership's assets. The convertible
debentures were converted into Class A preferred stock in Snow King
Resort, Inc. in 1994.
Western Standard Corporation and Snow King, Incorporated have
placed all their shares of Class B common stock of Snow King
Resort, Inc. into a voting trust, granting to Manuel B. Lopez the
sole right to vote such shares for the duration of the voting
trust. The initial term of the voting trust is ten years, and may
be extended for subsequent ten-year periods by the consent of
Western Standard Corporation and Mr. Lopez.
Accrued Vacation:
Accrued expenses include accrued vacation liability of
$111,042 and $94,062 at December 31, 1999 and 1998, respectively,
for the employees of Snow King Resort, Inc.
F-15
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Continued:
Retirement Plan:
Snow King Resort, Inc. adopted a 401(k) retirement plan for
its employees in 1994. Employees are covered by the plan after 12
months of full time employment. Employees contribute part of their
salary to the plan. The Resort may match some portion of the
employee contributions. At December 31, 1999 and 1998, the Resort
had a liability for matching contributions of $8,035 and $7,753.
Use of Estimates:
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Concentrations of Risk:
Western Standard and its subsidiaries maintain cash in bank
deposit accounts which, at times, may exceed federally insured
limits. The Company has not experienced any losses in such
accounts.
NOTE 3: OTHER ASSETS:
Other assets include:
1999 1998
Investment in stock (Snow King Resort
Center and other) $ 12,002 $ 11,902
Prepaid loan fees, net of
amortization 44,030 46,845
Incorporation costs 1,163 1,163
Account receivable, Love Ridge
Development 36,637 -0-
Account receivable, Forest Service and
Town of Jackson -0- 26,714
$ 93,832 $ 86,624
F-16
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 4: LONG AND SHORT TERM DEBT:
1999: Portion
due Long
Interest within term
Security rate Balance one year portion
Leases:
Xerox Corp.
Leases Copiers Various $ 6,522 $ 3,057 $ 3,465
Notes Payable:
First Interstate
Bank, monthly
payments Real
interest only estate,
until June furn.
15, 2000, and
then payments fixt.
of $107,847, leases
monthly & permits 7.98% $8,592,540 $283,678 $8,308,862
First Interstate
Bank, line of
credit,
maximum Real Prime
$630,000 estate .375% 230,000 230,000 -0-
Total notes payable $8,822,540 $ 513,678 $8,308,862
TOTAL LONG AND SHORT TERM DEBT $8,829,062 $ 516,735 $8,312,327
Snow King Resort, Inc. refinanced its ORIX mortgage with First
Interstate Bank of Casper, Wyoming on March 23, 1999. The maximum
amount of the new First Interstate Bank of Casper loan is
$9,370,000. The proceeds were used to pay off the ORIX and Jackson
State Bank loans, exercise the Love Land Option, pay accounts
payable, and make renovations to the hotel. A line of credit of
$630,000 was also obtained. All real estate, furniture, equipment
and leases are pledged as security for these notes. A $1,000,000
life insurance policy on Manuel Lopez has been assigned as
collateral on these notes.
The terms of the new loan allow Snow King Resort, Inc. to draw
on the loan up to March 15, 2000. Interest only payments are due
through June 15, 2000, then interest and principal payments of
$107,847 per month are due. No monthly payments are due for the
months of November, April and May of each year. The interest rate
will be adjusted March 15, 2002 to the Wall Street Journal prime
rate plus .375 percent.
F-17
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 4: LONG AND SHORT TERM DEBT: Continued:
Principal payments due on these notes for the next five years
are as follows:
2000 $ 513,678
2001 319,467
2002 345,914
2003 374,550
2004 420,068
Future years 6,848,863
$ 8,822,540
ORIX charged Snow King Resort, Inc. a prepayment premium of
$62,347 and a swap breakage fee of $190,441 to pay off the loan
before its maturity date.
1998: Portion
due Long
Interest within term
Security rate Balance one year portion
Leases:
Xerox Corp.
Leases Copiers Various $ 6,938 $ 5,005 $ 1,933
Notes Payable:
ORIX/Jackson
State Bank, Land,
monthly bldgs.,
payments furn.
$66,559 & fixt. 10.125% $5,613,701 $ 241,318 $5,372,383
AICCO Ins.
financing 7% 123,675 123,675 -0-
Bank of
Jackson Hole,
monthly
payments
$4,831 Equipment 9.5% 150,000 45,680 104,320
Bank of
Jackson Hole,
line of
credit,
maximum Shareholder Prime
$850,000 guarantees +.5% 600,000 600,000 -0-
Total notes payable $6,487,376 $1,010,673 $5,476,703
TOTAL LONG & SHORT TERM DEBT $6,494,314 $1,015,678 $5,478,636
F-18
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 4: LONG AND SHORT TERM DEBT: Continued:
Manuel B. and Deborah Lopez are guarantors on the debt to the
extent of one million dollars. Snow King Resort pays them
guarantor's fees of $1,000 per month.
Short term borrowings information:
1999 1998
Balance at end of year $ 230,000 $ 723,675
Range of interest rates 7% - 8.25% 7% - 9%
Maximum outstanding $ 758,52 $ 911,923
Average outstanding, computed
by weighted average of end
of month balances $ 465,945 $ 668,328
Weighted average interest rate
computed by weighted average
interest due, divided by average
note balance 7% 7.6%
Loans included in this computation were the Bank of Jackson
Hole line of credit, AICCO Insurance financing, and First
Interstate line of credit.
NOTE 5: OPTIONS ON LOVE LAND:
During 1995, the Resort entered into an option agreement with
J. David Love and Jane M. Love to purchase approximately one-half
acre of land. Option payments of $9,000 every three months after
1995 were made to enable the Resort to purchase the land for
$396,800 on or before July 15, 1997. The option agreement was
modified in 1997. Payments of $66,200 extended the option term and
lowered the land price to $346,800. Payments of $7,800 every three
months enabled the Resort to exercise the option at any time
before October 15, 1999. The Resort has paid $184,900 in option
payments which have been recorded as land cost. The option was
exercised in March 1999, and the land was purchased for $346,800,
for a total cost of $531,700.
NOTE 6: STOCK OPTION AND STOCK BONUS PLAN:
During 1972, the Board of Directors approved a Stock Bonus
Plan of indefinite term whereby certain officers and key employees
were granted shares of the Company's common stock for services
rendered during the year, based on their salaries and in some cases
their length of service with the Company.
Under this Plan, shares have been granted in prior years. No
stock bonuses were issued in 1999 or 1998. The Plan provides that,
at the discretion of the Executive Committee of the Board of
F-19
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 6: STOCK OPTION AND STOCK BONUS PLAN:
Directors, a cash bonus in the approximate amount of the income tax
related to the stock bonus may be paid to such employees. No such
cash bonuses have been paid as of December 31, 1999.
Snow King Resort, Inc. has granted an option to purchase up to
3,000 shares of Class B common stock of Snow King Resort, Inc. to
Manuel and Deborah Lopez. The option price has been set at $140
per share. The option was not exercised in 1999 or 1998.
NOTE 7: FEDERAL INCOME TAXES:
Western Standard Corporation and its subsidiaries filed
consolidated income tax returns in 1993 and prior years. Since
Western Standard's ownership in Snow King Resort, Inc. dropped
below 80% in 1994, separate income tax returns for Snow King
Resort, Inc. were filed after that year. Western Standard's net
operating loss carryover at December 31, 1999 is approximately
$471,000, which will begin to expire in 2001 if not used.
Snow King Resort, Inc. succeeded to the net operating loss of
Snow King, Incorporated of approximately $999,000. The net
operating loss carryovers from Snow King, Incorporated have limited
deductibility of approximately $84,000 per year. These allowed
carryovers and Snow King's losses have accumulated to $1,756,000 at
December 31, 1999. Snow King Resort, Inc. also acquired the
investment credit and jobs credit carryovers of Snow King,
Incorporated. Investment credit carryovers of $3,544 remained at
December 31, 1999, which will expire in 2000, if not used. Tip
credit carryovers of $10,900 have also been earned, which will
begin to expire in 2009 if not used.
Western Standard has provided for income taxes on its income
statement at statutory rates. Its net operating loss carryovers
eliminate any tax liability.
A deferred income tax asset has been established to reflect
the tax consequences for future years of temporary timing
differences of revenue and expense items for financial statement
and income tax reporting purposes.
F-20
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 7: FEDERAL INCOME TAXES: Continued:
The deferred income tax asset account consists of the income
tax effect at 34% of the following items:
For the years ended
December 31,
1999 1998
Net operating loss carryovers $ 757,029 $ 452,560
Depreciation difference ( 80,380) ( 36,118)
Credit carryovers 14,444 12,534
Other ( 1,013) 1,923
$ 690,080 $ 430,899
Less valuation allowance ( 690,080) ( 430,899)
Deferred tax asset $ -0- $ -0-
A valuation allowance equal to the balance of the account has
been established due to the uncertainty of realizing the future
benefit of these credit and loss carryforwards. The future benefit
is dependent upon future profitability of the company.
The provision for income taxes is different from that which
would be obtained by applying the statutory federal income tax rate
of 34% to income (loss) items before income taxes. The items
causing this difference are as follows:
1999 1998
Tax at statutory rate ($ 240,674) $ 108,611
Depreciation difference ( 44,262) -0-
Provision for Center
collectibility 88,400 -0-
Patronage capital discount 65,500 -0-
Nondeductible expense 3,703 -0-
Loss on discarded assets ( 18,345) -0-
Other net ( 2,117) ( 777)
($ 147,795) $ 107,834
Change in valuation allowance 147,795 -0-
Provision for income tax $ -0- $ 107,834
Western Standard's income tax returns through 1976 were
examined by the Internal Revenue Service in 1978, and were accepted
as filed.
The federal tax loss for Western Standard and Western
Recreation is approximately $17,000 for 1999. The tax loss for
Snow King Resort, Inc. for 1999 is approximately $404,000. The
federal tax return income for 1998 was $23,562 for Western Standard
and Western Recreation; and a $358,362 net income for Snow King
Resort, Inc. The federal tax return loss differs from net
financial loss because of depreciation differences and differences
in deductions.
F-21
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 8: RELATED PARTY TRANSACTIONS:
The Resort is managed by a corporation, Snow King Resort
Management, Inc., which is controlled by two officers and directors
of Western Standard. The Resort pays a management fee of 2% of
sales to Snow King Resort Management, Inc. At December 31, 1999,
Snow King Resort, Inc. owed the management company $26,267 in
management fees. Snow King Resort, Inc. incurred management fees
totalling $171,973 in 1999.
An officer of Western Standard Corporation owes a note payable
to Western Standard which carries an interest rate of 8%. This
note has a balance of $10,000 at December 31, 1999.
Western Standard agreed to pay a fee of $100,000 to the
officer for structuring the Snow King Resort, Inc. asset purchase.
$10,000 of this fee was paid in 1992, and the remaining $90,000 is
shown as a noncurrent liability on the financial statements.
The shareholders of Snow King Resort, Inc. formed a related
corporation, Snow King Resort Center, Inc., to operate and lease
the Town of Jackson's skating rink facility. The facility can be
used to house conventions, exhibitions, and large banquets. The
facility is operated in conjunction with the Resort. Western
Standard owns 49% of Snow King Resort Center, Inc. Since Western
Standard does not own a controlling interest in Snow King Resort
Center, Inc., that corporation's transactions are not included in
these consolidated statements. During 1998, Snow King Resort, Inc.
advanced $120,081 to Snow King Resort Center, Inc. During 1999,
Snow King Resort, Inc. advanced $190,174 to Snow King Resort
Center, Inc. The total amount receivable from Snow King Resort
Center, Inc. at December 31, 1999 is $1,446,151. An allowance for
collectibility of $1,260,000 has been established to reduce the
advances to a net realizable value equal to Snow King Resort
Center's book value of assets.
NOTE 9: LEASEHOLD INTEREST:
Snow King Resort, Inc. acquired the leases of Snow King,
Incorporated on March 13, 1992. One lease was with the Town of
Jackson for an old ski shelter. The Town demolished the old ski
shelter and replaced it with a larger structure housing both a ski
shelter and a large skating rink. Snow King Resort, Inc. paid
costs of demolition and excavation in the amount of $21,414. Snow
King Resort, Inc. transferred 1.3 acres of land costing $21,124 to
the Town upon which to build the facility. These items were
capitalized as leasehold costs. The lease agreement was dated
April 22, 1994.
F-22
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 9: LEASEHOLD INTEREST: Continued:
The lease calls for monthly payments of $2,800 to the Town of
Jackson, and supplemental rent based on gross revenues generated by
the facility. Leasehold costs are being amortized over the 30 year
original term of the lease at the rate of $1,418 per year. During
1999, the Resort prepaid $82,400 of its lease liability, reducing
its monthly payments to $900 per month. This $82,400 was recorded
as prepaid lease. This amount is being amortized over the
remaining life of this part of the lease which is 50 months.
Minimum lease payments will be $10,800 per year or a total of
$54,000 over the next five years.
NOTE 10: OIL AND GAS DISCLOSURES:
Western Standard's percentage royalty ownership in its oil
production wells is very small. The production from the producing
wells is nominal and has now exceeded their original reserve
estimates. Management believes that the cost of obtaining the
information for oil and gas disclosure exceeds the benefits.
Therefore, the reserve information for the required oil and gas
disclosure is not available. Western Standard is not the operator
of any of the producing wells or properties and has no control over
any of them.
All of Western Standard's oil and gas properties are located
in central Wyoming. No costs related to exploration and
development of these properties have been incurred over the past
three years. The capitalized costs for the last three years is
nil. Western Standard sold its wells in the Kaye Field, Converse
County, Wyoming, in 1997, for $70,000. In 1998, Western Standard
sold coalbed methane gas drilling rights to the first 2,500 feet of
its wells in the Grady Unit for $12,838. In 1999, Western Standard
sold coalbed methane gas drilling rights to the first 2,500 feet of
its wells in the Daly lease for $10,000.
Western Standard's oil and gas revenues have been dominated by
two buyers, KN Energy and 88 Oil. These buyers purchased the
following amounts of oil and gas in the following years:
88 Oil KN Energy
1997 $ 13,149 $ 13,953
1998 $ 7,779 $ 9,350
1999 $ 8,739 $ 14,664
F-23
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 11: LEASES:
Snow King Resort, Inc. had several lease agreements for hotel
assets. All of these agreements were classified as capital leases.
The leases had terms of 36 to 60 months. The following costs of
equipment are included in property and equipment in accordance with
these leases in 1999 and 1998:
1999 1998
Total lease-purchased assets $ 345,967 $ 420,433
Accumulated depreciation ( 259,706)( 362,574)
Net assets $ 86,261 $ 57,859
Most of the leases were paid off in 1998, refinanced with a
loan from Bank of Jackson Hole.
Presented below is a schedule by years of future minimum lease
payments under the remaining capital leases with the principal
amount net minimum lease payments as of December 31, 1999.
Year ended December 31, 2000 $ 3,057
2001 2,137
2002 1,328
Principal amount of minimum
lease payments $ 6,522
Current portion of principal
amount $ 3,057
Long term portion of principal
amount $ 3,465
NOTE 12: CONTINGENT LIABILITIES AND COMMITMENTS:
The Resort had guaranteed payment of Snow King Resort Center,
Inc.'s payment of additional rent on the ice skating rink to the
Town of Jackson. These payments are $2,155 per month. During
1999, the Resort prepaid this portion of the lease.
Snow King Resort, Inc. is renovating its guest rooms and
public areas. At December 31, 1999, it had spent approximately
$1,575,200 of its budgeted $2,370,000 for renovations.
NOTE 13: LIQUIDITY:
At December 31, 1999 and 1998, Snow King Resort, Inc. had
negative working capital which caused difficulties in paying its
current operating obligations. The cash flow shortfalls arose in
F-24
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 13: LIQUIDITY: Continued:
part because of seasonal fluctuations in sales. Other factors
contributing to the cash flow problems were cash advances to Snow
King Resort Center, Inc., debt service costs, unprofitable
operations, and purchases of fixed assets. These expenditures used
cash that was therefore unavailable for payment of trade creditors.
The refinancing of Snow King's mortgage and line of credit have
made it possible to pay creditor bills on a more timely basis in
1999.
Collection of the $1,446,151 advanced to the Snow King Resort
Center, Inc. over the last several years is dependent on future
profitable operation of that facility or future sale. It is
doubtful that the amount receivable will be collectible in the next
year. A merger of Snow King Resort Center, Inc. into Snow King
Resort, Inc. is planned. An allowance of $1,260,000 has been
established to reduce this account receivable to its estimated
realized value.
NOTE 14: INDUSTRY SEGMENT INFORMATION:
Western Standard Corporation's major operations are in oil and
gas working interests and, through Snow King Resort, Inc. its 76%
owned subsidiary, the resort industry. Selected information
concerning those industry segments is presented below:
1999 1998 1997
REVENUE - oil and gas
interests $ 23,055 $ 18,383 $ 27,880
PRODUCTION COSTS ( 11,660)( 10,749)( 16,555)
OPERATING INCOME -
oil and gas $ 11,395 $ 7,634 $ 11,325
IDENTIFIABLE ASSETS
(at net book value) $ 28,716 $ 28,716 $ 28,716
CAPITAL EXPENDITURES $ -0- $ -0- $ -0-
REVENUE - Snow King
Hotel Segment $ 8,591,377 $ 9,434,701 $ 8,522,295
OPERATING INCOME $ 919,973 $ 1,662,845 $ 1,633,190
DEPRECIATION $ 566,509 $ 650,129 $ 622,970
IDENTIFIABLE ASSETS (at
net book value) $ 10,640,038 $ 8,736,273 $ 9,047,605
CAPITAL EXPENDITURES $ 2,050,297 $ 421,635 $ 289,356
F-25
WESTERN STANDARD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 14: INDUSTRY SEGMENT INFORMATION: Continued:
A reconciliation from the segment information to the
consolidated balances for net loss and assets is set forth below.
1999 1998 1997
Segment income from
operations:
Oil and gas $ 11,395 $ 7,634 $ 11,325
Snow King Hotel 919,973 1,662,845 1,633,190
Other income 253,523 66,441 124,337
Expenses:
Depreciation ( 566,509)( 650,129)( 622,970)
Amortization ( 36,974)( 22,761)( 24,586)
Interest ( 964,127)( 686,238)( 700,956)
Other expenses ( 325,145)( 58,347)( 1,507,514)
Consolidated net
income (loss) ($ 707,864) $ 319,445 ($ 1,087,174)
Segment assets:
Oil and gas $ 28,716 $ 28,716 $ 28,716
Snow King Hotel 10,640,038 8,736,273 9,047,605
Cash 160,097 161,288 127,606
Property and
equipment 2,258 2,258 14,758
Other assets 22,033 22,149 21,511
Consolidated total assets $ 10,853,142 $ 8,950,684 $ 9,240,196
NOTE 15: PATRONAGE CAPITAL-LOWER VALLEY POWER AND LIGHT:
During 1999, Snow King Resort, Inc. recorded as an asset
patronage capital allocated to it by Lower Valley Power and Light.
Lower Valley Power and Light is a customer owned power cooperative.
Each year, Lower Valley Power allocates to its customers a share of
its net margins. This patronage capital is refundable to the
customers of Lower Valley, at the discretion of its Board of
Directors, after a fifteen year period. Snow King Resort, Inc.'s
share of Lower Valley Power's patronage capital for the period 1984
through 1998 totalled $439,211. $17,065 of this total was received
in cash by Snow King Resort, Inc. in 1999.
It will require many years for this asset to be converted to
cash. Because of this, the patronage capital total has been
discounted to the estimated net value of its future cash flows
using Snow King Resort, Inc.'s current borrowing interest rate.
This discounted amount has been recorded as extraordinary income
for 1999.
F-26
Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
WSC has not experienced a change in its independent
accountants during the two most recent fiscal years, or had
disagreements with them.
PART III.
Item 9. Directors, Executive Officers, Promoters and Control
Persons; Compliance with Section 16(a) of the Exchange Act.
Information concerning each director and executive officer of
WSC, including business experience for at least the past five
years, is as follows:
Stanford E. Clark, age 82, currently President, Treasurer,
Comptroller and a director, has been President, Vice President,
Treasurer, Comptroller and a Director of WSC from 1957 through 1969
and from 1974 to present. He has also been Vice President and a
Director of Snow King Resort Management, Inc. since 1986 and
Treasurer and a Director of Snow King Resort, Inc. since February,
1992.
Manuel B. Lopez, age 56, currently Vice President and a
director, has been a Vice President and Director of WSC since 1979.
He is also an owner of management companies, manager of Snow King
Complex, President and a Director of Snow King Resort Management,
Inc. since 1986, and President and a Director of Snow King Resort,
Inc. since February, 1992.
Richard G. Roylance, age 82, currently Secretary and a
director, has been Secretary and a Director of WSC from 1969. He
was formerly a maintenance manager. Mr Roylance died on February
11, 1999.
James M. Peck, age 35, currently a director and Corporate
Secretary, has been a director of WSC since January 1, 1988. Prior
to such time, he was primarily a student and had no other business
experience. Mr. Peck also owns and operates a miniature golf
course in Jackson, Wyoming. He recently acquired a company that
provides float trips on the Snake River near Jackson. He has been
a Director and employee of SKRI since February, 1992. On March 2,
1999, the Board of Directors unanimously voted Mr. Peck to be the
Corporate Secretary to replace Mr. Roylance.
No family relationships exist between or among any of the
directors and executive officers. No director serves as a director
of any other company with a class of equity securities registered
under the Securities Exchange Act of 1934 or a company registered
as an investment company under the Investment Company Act of 1940.
No director, officer, or beneficial owner of more than ten
percent of the outstanding shares of WSC common stock failed to
file on a timely basis, as disclosed in Forms 3, 4, and 5, and any
amendments thereto, reports required by Section 16(a) of the
Securities and Exchange Act of 1934 during the fiscal year ended
December 31, 1999, or prior fiscal years, which are required to be
disclosed herein.
Item 10. Executive Compensation.
The following table sets forth cash compensation paid by WSC,
its subsidiaries and associated companies to its executive
officers; one of which received in excess of $100,000 during the
year ended December 31, 1999:
Summary Compensation Table
Other All
Name and Fiscal Annual Annual Other
Principal Position Year Salary Compensation Compensation
Stanford E. Clark 1999 $28,800 $ 600 $39,690 (1)
Chief Executive
Officer 1998 $28,800 $ 600 $45,095 (1)
Manuel B. Lopez 1999 $36,000 $8,335 (2) $262,389 (3)
Vice President of
WSC and Chief
Executive Officer
of SKRI 1998 $35,686 $ 5,603 (2) $252,969 (4)
_______________
(1) Amounts paid to Mr. Clark by SKRMI from fees paid to SKRMI
by SKRI.
(2) Incidental fringe benefits.
(3) Includes (i) $99,288 paid to Mr. Lopez by SKRMI from fees
paid to SKRMI by SKRI; (ii) $12,000 paid to Mr. Lopez by SKRI
for guaranteeing the ORIX Loan and the First Interstate Bank
loans; and (iii) $150,501 in fees and commissions paid to Mr.
Lopez by SKRMI, and $600 in Director's fees paid by WSC.
(4) Includes (i) $112,745 paid to Mr. Lopez by SKRMI from fees
paid to SKRMI by SKRI; (ii) $12,000 paid to Mr. Lopez by SKRI
for guaranteeing the ORIX loan; and (iii) $127,624 in fees and
commissions paid to Mr. Lopez by SKRMI, and $600 in
Director's fees paid by WSC.
The Company pays directors $50 per meeting attended or $600
per year, whichever is greater. Directors are also reimbursed for
reasonable out-of-pocket expenses incurred in connection with their
duties.
Item 11. Security Ownership of Certain Beneficial Owners and
Management.
As of March 20, 2000, the only persons known by WSC to own
beneficially more than 5% of the issued and outstanding common
stock of WSC were:
Amount and Nature Percent
Name and Address of Beneficial Ownership of
of Beneficial Owner Direct (1) Indirect Class
Stanford E. Clark 1,817,118 29,900(2) 18.54%
2205 West Main
Riverton, Wyoming 82501
Manuel B. Lopez 2,235,104 -- 22.43%
P.O. Box 928
Jackson, Wyoming 83001
_______________
(1) Represents shares over which the named individuals have sole
voting and investment powers.
(2) These shares are owned by the Merrial K. Clark Living Trust
of which Mr. Clark is the Trustee. He may be deemed to have
shared voting and/or investment power over the shares.
The following sets forth information as of March 20, 2000,
concerning each director's and executive officer's ownership of
common stock (WSC's only class of voting securities), on an
individual basis and ownership by all directors and executive
officers of WSC as a group:
Amount and Nature of Percent
Beneficial Ownership of
Name Direct Indirect Class
Stanford E. Clark 1,817,118 29,900(1) 18.54%
Manuel B. Lopez 2,235,104 -- 22.43%
James M. Peck 20,000 -- .2%
Directors and Executive
Officers as a Group
(3 persons) 4,072,222
_______________
(1) These shares are owned by the Merrial K. Clark Living Trust
of which Mr. Clark is the Trustee. He may be deemed to have
shared voting and/or investment power over the shares.
WSC is not aware of any arrangement which may result in a
change in control.
Item 12. Certain Relationships and Related Transactions.
The following describes each significant transaction or series
of similar transactions since January 1, 1991, or currently
proposed transaction, to which WSC was or is a party in which any
director or officer or affiliate of such person had or has a direct
or indirect interest.
Stanford E. Clark, President and a director of WSC, and Manuel
B. Lopez, Vice President and a director of WSC, control and
collectively own all of the outstanding capital stock of SKRMI.
SKRMI presently manages the Hotel, the Ski Area, and the Snow King
Resort Center pursuant to a management agreement with SKRI
providing for a management fee equal to 2% of gross revenues.
During 1992, Mr. Lopez borrowed $31,602 from SKRI. Of this
amount, $11,602 was repaid by Mr. Lopez and the remaining $20,000
was repaid by WSC, all in January, 1993. Upon payment of the
$20,000 by WSC, Mr. Lopez executed a note in the amount of $20,000
payable to WSC due October 16, 1993, and bearing interest at the
rate of 6.5% per annum. At December 31, 1993, $15,000 remained
unpaid along with $1,300 unpaid interest. In February, 1994, WSC
received a principal payment of $7,500. At December 31, 1995,
there remained a balance due in the amount of $10,062.01, including
interest. The balance of this note was extended to June 30, 1996.
On March 14, 1997, Mr. Lopez paid interest in the amount of
$732.14 through December 31, 1996. A new note was issued in the
amount of $10,000, to mature October 31, 1997, with interest
increased to 9%. Interest was paid to 12/31/97 and a new note in
the amount of $10,000 was signed by Mr. Lopez, effective 1/1/98,
bearing 9% interest and matured December 31, 1998. A new note in
the amount of $10,000 to mature December 31, 1999 at 8%, replaced
the note that matured December 31, 1998. A new note in the amount
of $10,000 at 8% to mature December 31, 2000 replaces the note that
matured December 31, 1999. Interest for 1999 at 8% was paid in
January, 2000.
In November, 1995, Mr. Lopez loaned $30,000 to SKRI. This
note bears interest at the rate of 9% per annum and matures March
31, 1996. This note was paid in full on February 20, 1996.
On December 28, 1995, SKRI borrowed $15,000 from WSC. This
unsecured note bears interest at the rate of 9% per annum and
matures March 31, 1996. On February 12, 1997, the interest was
paid and the maturity date extended to October 31, 1997 by a new 9%
note. Interest was paid to 12/31/97 and a new note in the amount
of $15,000 effective 1/1/98 was signed by Mr. Lopez for Snow King
Resort, bearing 9% interest and matures December 31, 1998.
Interest in the amount of $1,350 was paid in March 1999 for the
year 1998. A new note was signed effective January 1, 1999 at 8%
for $15,000. This note and interest was paid in January, 1999.
In connection with the Restructuring, Manuel Lopez (along with
his wife, Deborah), and Margaret Peck each purchased 10% of the
securities sold in the Offering. Also in connection with the
Restructuring, Manuel Lopez and his wife personally guaranteed
$1,000,000 of the Loan and, pursuant to the terms of a voting
trust, Mr. Lopez has the sole right to vote the shares of SKRI
owned by WSC for a period of at least ten years. As compensation
for personally guaranteeing the Loan, Mr. Lopez and his wife
receive $1,000 per month for so long as the guarantee is in effect.
In addition, in April, 1992, SKRI granted to Mr. Lopez and his wife
an option to purchase 3,000 shares of Class B Common Stock for a
period of ten years at a price of $140 per share.
In March, 1992, SKI paid SKRMI $75,000 as a cash bonus to be
paid to Mr. Lopez. This Bonus was granted to Mr. Lopez by SKRMI in
1990 and was ratified by SKI in 1991, and was originally to be paid
on July 5, 1990. It was paid in full March 26, 1992.
On April 5, 1991, SKP entered into a lease agreement with Wind
River Ventures, Inc. ("Wind River"), a corporation owned and
controlled by James M. Peck, a director of WSC, providing for the
lease of property later owned by SKRI, to Wind River, for the
purpose of conducting a miniature golf course business (the
"Business") on such property. The initial term of the lease is
from April 1, 1991 through March 31, 1997. The terms of the lease
have been changed; the maturity date is March 31, 2008.
On March 10, 1992, WSC granted Mr. Lopez a bonus of $100,000
in recognition of his efforts in successfully completing the
Restructuring. The bonus is payable in two increments, $10,000,
which was paid in 1992 and $90,000 in the future, if and when WSC
is in a position to pay him such amount in a lump sum. The unpaid
portions of the bonus will not accrue interest.
Mr. Lopez and his wife, Deborah, are cosigners on the $630,000
at 8.125% interest line of credit of SKRI at First Interstate Bank
of Casper, Wyoming. As such, they are personally liable for the
outstanding amount of such line of credit. As of December 31,
1999, the outstanding principal amount of such line of credit was
$230,000. For this guarantee, Mr. and Mrs. Lopez are paid $1,000
per month. During the past several years, Messrs. Clark and Lopez
have each been personally liable for certain of SKI's borrowings.
In March 1993, additional shares of Class A Common Stock in
SKRI were offered for sale to the investors in SKRI at $140.00 per
share. Mr. Lopez and Margaret Peck each purchased 135 shares. A
total of 1,350 shares were sold at $140.00 per share for a total of
$189,000.00, in this offering.
In 1992, the shareholders of SKRI formed a new corporation,
Snow King Resort Center, Inc. ("SKRC"), to lease and operate the
new skating rink being built by the town of Jackson on land donated
by SKRI. WSC owns 49.0% of the outstanding common equity of SKRC.
Also, see auditor's Note number 8.
In 1992, the shareholders of SKRI, other than WSC, formed a
new limited liability company, SK Land Limited Liability Company
(SKLLC), to acquire and develop approximately five acres of land
adjacent to the Hotel (the "Project"). SKLLC has agreed to grant
an option to SKRI to acquire the Project at SKLLC's cost. WSC
declined to participate in the Project.
Item 13. Exhibits.
(a) Exhibits:
The following exhibits are filed herewith or incorporated by
reference to previously filed documents:
(3) Articles of Incorporation and Bylaws (A)
(4) Instruments defining the rights of
security holders, including indentures (B)
(9) Voting trust agreement (C)
(10) Material contracts (D)
(11) Statement re: computation of per share earnings (E)
(13) Annual or quarterly reports, Form 10-Q None
(16) Letter on change in Certifying Accountant None
(18) Letter re: change in accounting principles None
(19) Previously unfiled documents None
(22) Subsidiaries of the Registrant (F)
(23) Published report regarding matters
submitted to vote None
(24) Consents of experts and counsel None
(25) Power of Attorney None
(28) Additional exhibits (G)
(29) Information from reports furnished to
State Insurance authorities None
_______________
(A) Filed as Exhibits 90.3.1 and 90.3.2 to the Registrant's
Annual Report on From 10-K for the year ended December 31,
1990, and hereby incorporated by reference thereto.
(B) A copy of the form of Convertible Subordinated Debentures
of Snow King Resort, Inc. was filed as Exhibit 4.1 to the
Registrant's Current Report on Form 8-K, dated March 13,
1992, and is hereby incorporated by reference thereto.
Copies of the following documents were filed as exhibits to
the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1991, and are hereby incorporated by
reference thereto.
Exhibit
Exhibit numbers 91.4.1 through 91.4.15 no longer apply as ORIX
has been paid in full.
(C) A copy of the Voting Trust Agreement, dated March 12, 1992, by
and among the Registrant, Snow King, Incorporated, and Manuel
B. Lopez, as Trustee, was filed as Exhibit 91.9.1 to the
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1991, and is hereby incorporated by reference
thereto.
(D) The following material contracts are incorporated herein by
reference thereto.
Exhibit
- Lease Agreement, dated August 9, 1990, by
between Snow King, Incorporated and Telerent
Leasing Corporation (filed as Exhibit 90.10.3
to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1990, and
hereby incorporated by reference thereto)
- Snow King Resort Operating Agreement, dated
March 12, 1992, by and between Snow King Resort,
Inc. and Snow King Resort Management, Inc. (filed
as Exhibit 91.10.1 to the Registrant's Annual
Report on Form 10-K for the year ended December 31,
1991, and hereby incorporated by reference thereto).
- Purchase and Sale Agreement of SKI Leasehold
Interest and Assets, dated December 31, 1991,
by and between Snow King Resort, Inc., Snow
King, Incorporated, and Snow King Resort
Management, Inc. (filed as Exhibit 2.2 to the
Registrant's Current Report on Form 8-K, dated
March 13, 1992 and hereby incorporated by
reference thereto)
- Purchase and Sale Agreement of WSC
Partnership Interest, dated December 31, 1991, by
and between Snow King Resort, Inc., the Registrant,
and Snow King Resort Management, Inc. (filed
as Exhibit 2.3 to the Registrant's Current
Report on Form 8-K, dated March 13, 1992, and
hereby incorporated by reference thereto).
(E) Not required, since information is ascertainable from the
Financial Statements.
(F) Filed with form 10KSB for 1997 as Exhibit 92.22.1
_______________
(b) No reports on Form 8-K have been filed by the
registrant during the fourth quarter of the year
ended December 31, 1999.
Exhibit 92.22.1
SUBSIDIARIES OF WESTERN STANDARD CORPORATION
Name State of Incorporation
Western Recreation Corporation Wyoming
Snow King Resort, Inc. Wyoming
dba Snow King Resort
(G) Exhibits 93.8.1 and 94.9.1 through 94.9.10 were attached
and filed with Form 10KSB for the year 1994. They are
incorporated herein by reference thereto.
Exhibits 94.4.11 and 94.4.12 were inadvertently not filed
with Form 10KSB for the year 1994, but are filed herewith.
Exhibit
Exhibits 93.8.1 through 94.4.14, except for 94.4.11, 12 & 14,
do not apply any more.
94.4.11 Lease Agreement - Ski
Shelter, Ski Lift and
Mountain Tract
94.4.12 Lease Agreement - Ice Rink
Tract
94.4.14 Ski Area Term Special Use
Permit to expire 12/31/2039
between the U.S. Forest
Service and Snow King
Resort, Inc.
EXHIBIT 94.4.14
USDA Forest Service
SKI AREA TERM SPECIAL USE PERMIT
as of October 22, 1986
(Ref. FSM 2710)
Holder No. Use Code Authority Authority Type
4154-01 161 545 18
Issue Date Expir. Date Location Sequence No.
03/11/99 12/31/2039
Stat. Ref. Latitude Longitude LOS Case
43-27-10N 110-45-50W
Snow King Resort, Inc. of P.O. Box SKI
(Holder Name) (Billing Address - 1)
of Jackson, Wyoming 83001
(Billing Address - 2) (City, State, Zip Code)
(hereafter called the holder) is hereby authorized to use National
Forest System lands, on the BRIDGER-TETON National Forest, for the
purposes of constructing, operating, and maintaining winter sports
resort including food service, retail sales, and other ancillary
facilities, described herein, known as the SNOW KING RESORT ski
area and subject to the provisions of this term permit. This
permit covers 369.51 acres described here and as shown on the
attached map dated 02/20/92 (EXHIBIT A). This lease has been
extended to December 31, 2039.
Portions of Section 33 and 34, T41N, R116W; and Section 4, T40N,
R116W; on the attached map designated Snow King, Inc. dated July 7,
1990, which is expressly made a part of this permit.
The following improvements, whether on or off the site, are
authorized:
Ski lifts, tows, buildings, ski trails, summer trails, access and
work roads, Alpine Slide, utilities and other approved improvements
on the ski area.
Attached Clauses. This term permit is accepted subject to the
conditions set forth herein on pages 2 through 12, and to exhibits
A to B attached or referenced hereto and made a part of this
permit.
THIS PERMIT IS ACCEPTED SUBJECT TO ALL OF ITS TERMS AND CONDITIONS.
ACCEPTED:
/s/ Manuel Lopez President March 11, 1999
Holder's Name and Signature Title Date
APPROVED:
/s/ Thomas Puchlerz Forest Supervisor March 11, 1999
Authorized officer's name Title Date
and signature
TERMS AND CONDITIONS
1. AUTHORITY AND USE AND TERM AUTHORIZED.
A. Authority. This term permit is issued under the authority of
the Act of October 22, 1986, (Title 16, United States Code, Section
497b), and Title 36, Code of Federal Regulations, Sections 251.50-
251.64.
B. Authorized Officer. The authorized officer is the Forest
Supervisor. The authorized officer may designate a representative
for administration of specific portions of this authorization.
C. Rules, Laws and Ordinances. The holder, in exercising the
privileges granted by this term permit, shall comply with all
present and future regulations of the Secretary of Agriculture and
federal laws; and all present and future, state, county, and
municipal laws, ordinances, or regulations which are applicable to
the area or operations covered by this permit to the extent they
are not in conflict with federal law, policy or regulation. The
Forest Service assumes no responsibility for enforcing laws,
regulations, ordinances and the like which are under the
jurisdiction of other government bodies.
D. Term.
1. This authorization is for a term of five years to provide
for the holder to prepare a Master Development Plan. Subject to
acceptance of the Master Development Plan by the authorized
officer, this authorization shall be extended for an additional
five years, for a total of 10 years, to provide the holder
sufficient time to construct facilities approved in the Master
Development Plan within the schedule outlined in clause II. B.
(Site Development Schedule), so that the area may be used by the
public. Further Provided; This authorization shall be extended by
its terms for an additional 30 years, for a total of 40 years, if
it is in compliance with the site development schedule in the
Master Development Plan and being in operation by the 10 year
anniversary date of the issuance of this authorization. Failure of
the holder to comply with all or any provisions of this clause
shall cause the authorization to terminate under its terms.
2. Unless sooner terminated or revoked by the authorized
officer, in accordance with the provisions of the authorization,
this permit shall terminate on December 31, 2039, but a new
special-use authorization to occupy and use the same National
Forest land may be granted provided the holder shall comply with
the then-existing laws and regulations governing the occupancy and
use of National Forest lands. The holder shall notify the
authorized officer in writing not less than six months prior to
said date that such new authorization is desired.
E. Nonexclusive Use. This permit is not exclusive. The Forest
Service reserves the right to use or permit others to use any part
of the permitted area for any purpose, provided such use does not
materially interfere with the rights and privileges hereby
authorized.
F. Area Access. Except for any restrictions as the holder and the
authorized officer may agree to be necessary to protect the
installation and operation of authorized structures and
developments, the lands and waters covered by this permit shall
remain open to the public for all lawful purposes. To facilitate
public use of this area, all existing roads or roads as may be
constructed by the holder, shall remain open to the public, except
for roads as may be closed by joint agreement of the holder and the
authorized officer.
G. Master Development Plan. In consideration of the privileges
authorized by this permit, the holder agrees to prepare and submit
changes in the Master Development Plan encompassing the entire
winter sports resort presently envisioned for development in
connection with the National Forest lands authorized by this
permit, and in a form acceptable to the Forest Service. Additional
construction beyond maintenance of existing improvements shall not
be authorized until this plan has been amended. Planning should
encompass all the area authorized for use by this permit. The
accepted Master Development Plan shall become a part of this
permit. For planning purposes, a capacity for the ski area in
people-at-one time shall be established in the Master Development
Plan and appropriate National Environmental Policy Act (NEPA)
document. The overall development shall not exceed that capacity
without further environmental analysis documentation through the
appropriate NEPA process.
H. Periodic Revision.
1. The terms and conditions of this authorization shall be
subject to revision to reflect changing times and conditions so
that land use allocation decisions made as a result of revision to
Forest Land and Resource Management Plan may be incorporated.
2. At the sole discretion of the authorized officer this term
permit may be amended to remove authorization to use any National
Forest System lands not specifically covered in the Master
Development Plan and/or needed for use and occupancy under this
authorization.
II. IMPROVEMENTS.
A. Permission. Nothing in this permit shall be construed to imply
permission to build or maintain any improvement not specifically
named in the Master Development Plan and approved in the annual
operating plan, or further authorized in writing by the authorized
officer.
B. Site Development Schedule. As part of this permit, a schedule
for the progressive development of the permitted area and
installation of facilities shall be prepared jointly by the holder
and the Forest Service. Such a schedule shall be prepared within
90 days of notifying the holder of acceptance of the Master
Development Plan, and shall set forth an itemized priority list of
planned improvements and the due date for completion. This
schedule shall be made a part of this permit. The holder may
accelerate the scheduled date for installation of any improvement
authorized, provided the other scheduled priorities are met; and
provided further, that all priority installations authorized are
completed to the satisfaction of the Forest Service and ready for
public use prior to the scheduled due date.
1. All required plans and specifications for site
improvements, and structures included in the development schedule
shall be properly certified and submitted to the Forest Service at
least forty-five (45) days before the construction date stipulated
in the development schedule.
2. In the event there is an agreement with the Forest Service
to expand the facilities and services provided on the areas covered
by this permit, the holder shall jointly prepare with the Forest
Service a development schedule for the added facilities prior to
any construction and meet requirements of paragraph II.D. of this
section. Such schedule shall be made a part of this permit.
C. Plans. All plans for development, layout, construction,
reconstruction or alteration of improvements on the site, as well
as revisions of such plans, must be prepared by a licensed
engineer, architect, and/or landscape architect (in those states in
which such licensing is required) or other qualified individual
acceptable to the authorized officer. Such plans must be accepted
by the authorized officer before the commencement of any work. A
holder may be required to furnish as-built plans, maps, or surveys
upon the completion of construction.
D. Amendment. This authorization may be amended to cover new,
changed, or additional use(s) or area not previously considered in
the approved Master Development plan. In approving or denying
changes in modifications, the authorized officer shall consider
among other things, the findings or recommendations of other
involved agencies and whether their terms and conditions of the
existing authorization may be continued or revised, or a new
authorization issued.
E. Ski Lift Plans and Specifications. All plans for uphill
equipment and systems shall be properly certified as being in
accordance with the American National Standards Safety Requirements
for Aerial Passenger Tramways (B77.1). A complete set of drawings,
specifications, and records for each lift shall be maintained by
the holder and made available to the Forest Service upon request.
These documents shall be retained by the holder for a period of
three (3) years after the removal of the system from National
Forest land.
III. OPERATIONS AND MAINTENANCE.
A. Conditions of Operations. The holder shall maintain the
improvements and premises to standards of repair, orderliness,
neatness, sanitation, and safety acceptable to the authorized
officer. Standards are subject to periodic change by the
authorized officer. This use shall normally be exercised at least
225 days each year or season. Failure of the holder to exercise
this minimum use may result in termination pursuant to VIII.B.
B. Ski Lift, Holder Inspection. The holder shall have all
passenger tramways inspected by a qualified engineer or tramway
specialist. Inspections shall be made in accordance with the
American National Standard Safety Requirements for Aerial Passenger
Tramways (B77.1). A certificate of inspection, signed by an
officer of the holder's company, attesting to the adequacy and
safety of the installations and equipment for public use shall be
received by the Forest Service prior to public operation stating as
a minimum:
"Pursuant to our special use permit, we have had an inspection to
determine our compliance with the American National Standard B77.1.
We have received the results of that inspection and have made
corrections of all deficiencies noted. The facilities are ready
for public use."
C. Operating Plan. The holder or designated representative shall
prepare and annually revise by OCTOBER 15 an Operating Plan. The
plan shall be prepared in consultation with the authorized officer
or designated representative and cover winter and summer operations
as appropriate. The provisions of the Operating Plan and the
annual revisions shall become a part of this permit and shall be
submitted by the holder and approved by the authorized officer or
their designated representatives. This plan shall consist of at
least the following sections:
1. Ski patrol and first aid.
2. Communications.
3. Signs.
4. General safety and sanitation.
5. Erosion control.
6. Accident reporting.
7. Avalanche control.
8. Search and rescue.
9. Boundary management.
10. Vegetation management.
11. Designation of representatives.
12. Trail routes for nordic skiing.
The authorized officer may require a joint annual business
meeting agenda to:
a. Update Gross Fixed Assets and lift-line proration when the
fee is calculated by the Graduated Rate Fee System.
b. Determine need for performance bond for construction
projects, and amount of bond.
c. Provide annual use reports.
D. Cutting of Trees. Trees or shrubbery on the permitted area may
be removed or destroyed only after the authorized officer has
approved and marked, or otherwise designated, that which may be
removed or destroyed. Timber cut or destroyed shall be paid for by
the holder at appraisal value, provided that the Forest Service
reserves the right to dispose of the merchantable timber to others
than the holder at no stumpage cost to the holder.
E. Signs. Signs or advertising devices erected on National Forest
lands, shall have prior approval by the Forest Service as to
location, design, size, color, and message. Erected signs shall be
maintained or renewed as necessary to neat and presentable
standards, as determined by the Forest Service.
F. Temporary Suspension. Immediate temporary suspension of the
operation, in whole or in part, may be required when the authorized
officer, or designated representative, determines it to be
necessary to protect the public health or safety, or the
environment. The order for suspension may be given verbally or in
writing. In any such case, the superior of the authorized officer,
or designated representative, shall, within ten days of the request
of the holder, arrange for an on the ground review of the adverse
conditions with the holder. Following this review the superior
shall take prompt action to affirm, modify or cancel the temporary
suspension.
IV. NONDISCRIMINATION. During the performance of this permit, the
holder agrees:
A. In connection with the performance of work under this permit,
including construction, maintenance, and operation of the facility,
the holder shall not discriminate against any employee or applicant
for employment because of race, color, religion, sex, national
origin, age, or handicap. (Ref. Title VII of the Civil Rights Act
of 1964 as amended).
B. The holder and employees shall not discriminate by segregation
or otherwise against any person on the basis of race, color,
religion, sex, national origin, age or handicap, by curtailing or
refusing to furnish accommodations, facilities, services, or use
privileges offered to the public generally. (Ref. Title VI of the
Civil Rights Act of 1964 as amended, Section 504 of the
Rehabilitation Act of 1973, Title IX of the Education Amendments,
and the Age Discrimination Act of 1975).
C. The holder shall include and require compliance with the above
nondiscrimination provisions in any subcontract made with respect
to the operations under this permit.
D. Signs setting forth this policy of nondiscrimination to be
furnished by the Forest Service will be conspicuously displayed at
the public entrance to the premises, and at other exterior or
interior locations as directed by the Forest Service.
E. The Forest Service shall have the right to enforce the
foregoing nondiscrimination provisions by suit for specific
performance or by any other available remedy under the laws of the
United States of the State in which the breach or violation occurs.
V. LIABILITIES.
A. Third Party Rights. This permit is subject to all valid
existing rights and claims outstanding in third parties. The
United States is not liable to the holder for the exercise of any
such right or claim.
B. Indemnification of the United States. The holder shall hold
harmless the United States from any liability from damage to life
or property arising from the holder's occupancy or use of National
Forest lands under this permit.
C. Damage to United States Property. The holder shall exercise
diligence in protecting from damage the land and property of the
United States covered by and used in connection with this permit.
The holder shall pay the United States the full cost of any damage
resulting from negligence or activities occurring under the terms
of this permit or under any law or regulation applicable to the
national forest, whether caused by the holder, or by any agents or
employees of the holder.
D. Risks. The holder assumes all risk of loss to the improvements
resulting from natural or catastrophic events, including but not
limited to, avalanches, rising waters, high winds, falling limbs or
trees, and other hazardous events. If the improvements authorized
by this permit are destroyed or substantially damaged by natural or
catastrophic events, the authorized officer shall conduct an
analysis to determine whether the improvements can be safely
occupied in the future and whether rebuilding should be allowed.
The analysis shall be provided to the holder within six months of
the event.
E. Hazards. The holder has the responsibility of inspecting the
area authorized for use under this permit for evidence of hazardous
conditions which could affect the improvements or pose a risk of
injury to individuals.
F. Insurance. The holder shall have in force public liability
insurance covering: (1) property damage in the amount of fifty
thousand dollars ($50,000), and (2) damage to persons in the
minimum amount of five hundred thousand dollars ($500,000) in the
event of death or injury to one individual, and the minimum amount
of one million dollars ($1,000,000) in the event of death or injury
to more than one individual. These minimum amounts and terms are
subject to change at the sole discretion of the authorized officer
at the five-year anniversary date of this authorization. The
coverage shall extend to property damage, bodily injury, or death
arising out of the holder's activities under the permit including,
but not limited to, occupancy or use of the land and the
construction, maintenance, and operation of the structures,
facilities, or equipment authorized by this permit. Such insurance
shall also name the United States as an additionally insured. The
holder shall send an authenticated copy of its insurance policy to
the Forest Service immediately upon issuance of the policy. The
policy shall also contain a specific provision or rider to the
effect that the policy shall not be cancelled or its provisions
changed or deleted before thirty days written notice to the Forest
Supervisor, Bridger-Teton National Forest; Box 1888; Jackson,
Wyoming 83001, by the insurance company.
Rider Clause (for insurance companies)
"It is understood and agreed that the coverage provided under this
policy shall not be cancelled or its provisions changed or deleted
before thirty days of receipt of written notice to the Forest
Supervisor, Bridger-Teton National Forest; Box 1888; Jackson,
Wyoming 83001, by the insurance company."
VI. FEES.
A-9. Ski Area Permit Fees. The Forest Service shall adjust and
calculate permit fees authorized by this permit to reflect any
revisions to permit fee provisions in 16 U.S.C. 497c or to comply
with any new permit fee system based on fair market value that may
be adopted by statute or otherwise after issuance of this permit.
A. Fee Calculation. The annual fee due the United States for the
activities authorized by this permit shall be calculated using the
following formula:
SAPF = (.015xAGR in bracket 1)+(.025xAGR in bracket 2)+
(.0275xAGR in bracket 3)+(.04xAGR in bracket 4)
Where:
AGR = [(LT+SS)x(proration %)]+GRAF
AGR is adjusted gross revenue;
LT is revenue from sales of alpine and nordic lift tickets and
passes;
GRAF is gross year round revenue from ancillary facilities;
Proration % is the factor to apportion revenue attributable to use
of National Forest System lands;
SAPF is the ski area permit fee for use of National Forest System
lands; and
SS is revenue from alpine and nordic ski school operations.
1. SAPF shall be calculated by summing the results of multiplying
the indicated percentage rates by the amount of the holder's
adjusted gross revenue (AGR), which falls into each of the four
brackets. Follow direction in paragraph 2 to determine AGR. The
permit fee shall be calculated based on the holder's fiscal year,
unless mutually agreed otherwise by the holder and the authorized
officer.
The four revenue brackets shall be adjusted annually by the
consumer price index issued in FSH 2709.11, chapter 30. The
revenue brackets shall be indexed for the previous calendar year.
The holder's AGR for any fiscal year shall not be split into more
than one set of indexed brackets. Only the levels of AGR defined
in each bracket are updated annually. The percentage rates do not
change.
The revenue brackets and percentages displayed in Exhibit 01 shall
be used as shown in the preceding formula to calculate the permit
fee.
Exhibit 01
Adjusted Gross Revenue (AGR) Brackets and Associated Percentage
Rates for Use in Determining Ski Area Permit Fee (SAPF)
___________________________________________________________________
Revenue Brackets (updated annually by CPI*) and Percentage Rates
Holder FY Bracket 1 Bracket 2 Bracket 3 Bracket 4
(1.5%) (2.5%) (2.75%) (4%)
___________________________________________________________________
FY 1996 All revenue $3,000,000 $15,000,000 All revenue
CPI: below to to over
N/A $3,000,000 <$15,000,000 $50,000,000 $50,000,000
FY 1997 All revenue $3,090,000 $15,450,000 All revenue
CPI: below to to over
1.030 $3,090,000 <$15,450,000 $51,500,000 $51,500,000
FY 1998 All revenue $3,158,000 $15,790,000 All revenue
CPI: below to to over
1.022 $3,158,000 <$15,790,000 $52,633,000 $52,633,000
FY 1999 All revenue $3,212,000 $16,058,000 All revenue
CPI: below to to over
1.017 $3,212,000 <$16,058,000 $53,528,000 $53,528,000
FY 2000 BRACKETS WILL BE UPDATED ANNUALLY BY CPI*
and beyond
__________________________________________________________________
*The authorized officer shall notify the holder of the updated
revenue brackets based on the Consumer Price Index (CPI) which is
revised and issued annually in FSH 2709.11, Chapter 30.
__________________________________________________________________
2. AGR shall be calculated by summing the revenue from lift
tickets and ski school operations prorated for use of National
Forest System lands and from ancillary facility operations
conducted on National Forest System lands. Revenue inclusions
shall be income from sales of alpine and nordic tickets and ski
area passes; alpine and nordic ski school operations; gross revenue
from ancillary facilities; the value of bartered goods and
complimentary lift tickets (such as lift tickets provided free of
charge to the holder's friends or relatives); and special event
revenue. Discriminatory pricing, a rate based solely on race,
color, religion, sex, national origin, age, disability, or place of
residence, is not allowed, but if it occurs, include the amount
that would have been received had the discriminatory pricing
transaction been made at the market price, the price generally
available to an informed public, excluding special promotions.
Revenue exclusions shall be income from sales of operating
equipment; refunds; rent paid to the holder by subholders; sponsor
contributions to special events; any amount attributable to
employee gratuities or employee lift tickets; discounts; ski area
tickets or passes provided for a public safety or public service
purpose (such as for National Ski Patrol or for volunteers to
assist on the slope in the Special Olympics); and other goods or
services (except for bartered goods and complimentary lift tickets)
for which the holder does not receive money.
Include the following in AGR:
a. Revenue from sales of year-round alpine and nordic ski
area passes and tickets and revenues from alpine and nordic ski
school operations prorated according to the percentage of use
between National Forest System lands and private land in the ski
area;
b. Gross year-round revenue from temporary and permanent
ancillary facilities located on National Forest System lands;
c. The value of bartered goods and complimentary lift
tickets, which are goods, services, or privileges that are not
available to the general public (except for employee gratuities,
employee lift tickets, and discounts, and except for ski area
tickets and passes provided for a public safety or public service
purpose) and that are donated or provided without charge in
exchange for something of value to organizations or individuals
(for example, ski area product discounts, service discounts, or
lift tickets that are provided free of charge in exchange for
advertising).
Bartered goods and complimentary lift tickets (except for employee
gratuities, employee lift tickets, discounts, and except for ski
area tickets and passes provided for a public safety or public
service purpose) valued at market price shall be included in the
AGR formula as revenue under LT, SS, or GRAF, depending on the type
of goods, services, or privileges donated or bartered; and
d. Special event revenue from events, such as food festivals,
foot races, and concerts. Special event revenue shall be included
in the AGR formula as revenue under LT, SS, or GRAF, as applicable.
Prorate revenue according to the percentage of use between National
Forest System lands and private land as described in the following
paragraphs 5 and 6.
3. LT is the revenue from sales of alpine and nordic lift
tickets and passes purchased for the purpose of using a ski area
during any time of the year, including revenue that is generated on
private land (such as from tickets sold on private land).
4. SS is the revenue from lessons provided to teach alpine or
nordic skiing or other winter sports activities, such as racing,
snowboarding, or snowshoeing, including revenue that is generated
on private land (such as from tickets sold on private land).
5. Proration % is the method used to prorate revenue from the
sale of ski area passes and lift tickets and revenue from ski
school operations between National Forest System lands and private
land in the ski area. Separately prorate alpine and nordic revenue
with an appropriate proration factor. Add prorated revenues
together; then sum them with GRAF to arrive at AGR. Use one or
both of the following methods, as appropriate:
a. STFP shall be the method used to prorate alpine
revenue. The STFP direction contained in FSM 2715.11c effective in
1992 shall be used. Include in the calculation only uphill devices
(lifts, tows, and tramways) that are fundamental to the winter
sports operation (usually those located on both Federal and private
land). Do not include people movers whose primary purpose is to
shuttle people between parking areas or between parking areas and
lodges and offices.
b. Nordic trail length is the method used to prorate
nordic revenue. Use the percentage of trail length on National
Forest System lands to total trail length.
6. GRAF is the revenue from ancillary facilities, including
all of the holder's or subholder's lodging, food service, rental
shops, parking, and other ancillary operations located on National
Forest System lands. Do not include revenue that is generated on
private land. For facilities that are partially located on
National Forest System lands, calculate the ratio of the facility
square footage located on National Forest System lands to the total
facility square footage. Special event revenue allocatable to GRAF
shall be prorated by the ratio of use on National Forest System
lands to the total use.
7. In cases when the holder has no AGR for a given fiscal
year, the holder shall pay a permit fee of $2 per acre for National
Forest System lands under permit or a percentage of the appraised
value of National Forest System lands under permit, at the
discretion of the authorized officer.
B. Fee Payments. Reports and deposits shall be tendered in
accordance with the following schedule. They shall be sent or
delivered to the collection officer, USDA, Forest Service, at the
address furnished by the authorized officer. Checks or money
orders shall be made payable to: USDA, Forest Service.
1. The holder shall calculate and submit an advance payment
which is due by the beginning of the holder's payment cycle. The
advance payment shall equal 20 percent of the holder's average
permit fee for 3 operating years, when available. When past permit
fee information is not available, the advance payment shall equal
20 percent of the permit fee, based on the prior holder's average
fee or projected AGR. For ski areas not expected to generate AGR
for a given payment cycle, advance payment of the permit fee as
calculated in item A, paragraph 7 ($2 per acre for National Forest
System lands under permit or a percentage of the appraised value of
National Forest System lands under permit, at the discretion of the
authorized officer) shall be made. The advance payment shall be
credited (item B, paragraph 3) toward the total ski area permit fee
for the payment cycle.
2. The holder shall report sales, calculate fees due based on
a tentative percentage rate, and make interim payments each
calendar MONTH, except for periods in which no sales take place and
the holder has notified the authorized officer that the operation
has entered a seasonal shutdown for a specific period. Reports and
payments shall be made by the end of the month following the end of
each reportable period. Interim payments shall be credited (item
B, paragraph 3) toward the total ski area permit fee for the
payment cycle.
3. Within 90 days after the close of the ski area's payment
cycle, the holder shall provide a financial statements, including
a completed permit fee information form, Form FS-2700-19a,
representing the ski area's financial condition at the close of its
business year and an annual operating statement reporting the
results of operations, including a final payment which includes
year end adjustments for the holder and each subholder for the same
period. Any balance that exists may be credited and applied
against the next payment due or refunded, at the discretion of the
permit holder.
4. Within 30 days of receipt of a statement from the Forest
Service, the holder shall make any additional payment required to
ensure that the correct ski area permit fee is paid for the past
year's operation.
5. Payments shall be credited on the date received by the
designated collection officer. If the due date for the fee or fee
calculation financial statement falls on a non-workday, the charges
shall not accrue until the close of business on the next workday.
6. All permit fee calculations and records of sales are
subject to review or periodic audit as determined by the authorized
officer. Errors in calculation or payment shall be corrected as
needed for conformance with those reviews or audits. In accordance
with the Interest and Penalties clause contained in this
authorization, interest and penalties shall be assessed on
additional fees due as a result of reviews or audits.
7. Correction of errors includes any action necessary to
calculate the holder's sales or slope transport fee percentage or
to make any other determination required to calculate permit fees
accurately. For fee calculation purposes, an error may include:
a. Misreporting or misrepresentation of amounts;
b. Arithmetic mistakes;
c. Typographic mistakes; or
d. Variation from generally accepted accounting
principles (GAAP), when such variations are inconsistent with the
terms of this permit.
Correction of errors shall be made retroactively to the date the
error was made or to the previous audit period, whichever is more
recent, and past fees shall be adjusted accordingly.
C. Interest and Penalties.
1. Pursuant to 31 USC 3717 and 7 CFR Part e, Subpart B, or
subsequent changes thereto, interest shall be charged on any fee
not paid by the date the fee or fee calculation financial
statements specified in this permit was due.
2. Interest shall be assessed using the higher of (1) the
most current rate prescribed by the United States Department of the
Treasury Financial Manual (TFM-6-8025.40) or (2) the prompt payment
rate prescribed by the United States Department of the Treasury
under section 12 of the Contract Disputes Act of 1978 (41 USC 611).
Interest shall accrue from the date the fee or fee calculation
financial statement is due. In the event the account becomes
delinquent, administrative costs to cover processing and handling
of the delinquent debt may be assessed.
3. A penalty of 6 percent per year shall be assessed on any
fee overdue in excess of 90 days, and shall accrue from the due
date of the first billing or the date the fee calculation financial
statement was due. The penalty is in addition to interest and any
other charges specified in item 2.
4. Delinquent fees and other charges shall be subject to all
the rights and remedies afforded the United States pursuant to
federal law and implementing regulations. (31 U.S.C. 3711 et seq.).
D. Nonpayment. Failure of the holder to make timely payments, pay
interest charges or any other charges when due, constitutes breach
and shall be grounds for termination of this authorization. This
permit terminates for nonpayment of any monies owed the United
States when more than 90 days in arrears.
E. Access to Records. For the purpose of administering this
permit (including ascertaining that fees paid were correct and
evaluating the propriety of the fee base), the holder agrees to
make all of the accounting books and supporting records to the
business activities, as well as those of sublessees operating
within the authority of this permit, available for analysis by
qualified representatives of the Forest Service or other Federal
agencies authorized to review the Forest Service activities.
Review of accounting books and supporting records shall be made at
dates convenient to the holder and reviewers. Financial
information so obtained shall be treated as confidential as
provided in regulations issued by the Secretary of Agriculture.
The holder shall retain the above records and keep them available
for review for 5 years after the end of the year involved, unless
disposition is otherwise approved by the authorized officer in
writing.
F. Accounting Records. The holder shall follow Generally Accepted
Accounting Principles or Other Comprehensive Bases of Accounting
acceptable to the Forest Service in recording financial
transactions and in reporting results to the authorized officer.
When requested by the authorized officer, the holder at own
expense, shall have the annual accounting reports audited or
prepared by a licensed independent accountant acceptable to the
Forest Service. The holder shall require sublessees to comply with
these same requirements. The minimum acceptable accounting system
shall include:
1. Systematic internal controls and recording by kind of
business the gross receipts derived from all sources of business
conducted under this permit. Receipts should be recorded daily
and, if possible, deposited into a bank account without reduction
by disbursements. Receipt entries shall be supported by source
documents such as cash register tapes, sale invoices, rental
records, and cash accounts from other sources.
2. A permanent record of investments in facilities
(depreciation schedule), and current source documents for
acquisition costs of capital items.
3. Preparation and maintenance of such special records and
accounts as may be specified by the authorized officer.
VII. TRANSFER AND SALE.
A. Subleasing. The holder may sublease the use of land and
improvements covered under this permit and the operation of
concessions and facilities authorized upon prior written notice to
the authorized officer. The Forest Service reserves the right to
disapprove subleases. In any circumstance, only those facilities
and activities authorized by this permit may be subleased. The
holder shall continue to be responsible for compliance with all
conditions of this permit by persons to whom such premises may be
sublet. The holder may not sublease direct management
responsibility without prior written approval by the authorized
officer.
B. Notification of Sale. The holder shall immediately notify the
authorized officer when a sale and transfer of ownership of the
permitted improvements is planned.
C. Divestiture of Ownership. Upon change in ownership of the
facilities authorized by this permit, the rights granted under this
authorization may be transferred to the new owner upon application
to and approval by the authorized officer. The new owner must
qualify and agree to comply with, and be bound by the terms and
conditions of the authorization. In granting approval, the
authorized officer may modify the terms, conditions, and special
stipulations to reflect any new requirements imposed by current
Federal and state land use plans, laws, regulations or other
management decisions.
VIII. TERMINATION.
A. Termination for Higher Public Purpose. If, during the term of
this permit or any extension thereof, the Secretary of Agriculture
or any official of the Forest Service acting by or under his or her
authority shall determine by his or her planning for the uses of
the National Forest that the public interest requires termination
of this permit, this permit shall terminate upon one hundred eighty
(180) days written notice to the holder of such determination, and
the United States shall have the right thereupon, subject to
Congressional authorization and appropriation, to purchase the
holder's improvements, to remove them, or to require the holder to
remove them, at the option of the United States. The United States
shall be obligated to pay an equitable consideration for the
improvements or for removal of the improvements and damages to the
improvements resulting from their removal. The amount of the
consideration shall be fixed by mutual agreement between the United
States and the holder and shall be accepted by the holder in full
satisfaction of all claims against the United States under this
clause: Provided, that if mutual agreement is not reached, the
Forest Service shall determine the amount, and if the holder is
dissatisfied with the amount thus determined to be due him may
appeal the determination in accordance with the Appeal Regulations,
and the amount as determined on appeal shall be final and
conclusive on the parties hereto; Provided further, that upon the
payment to the holder of 75% of the amount fixed by the Forest
Service, the right of the United States to remove or require the
removal of the improvements shall not be stayed pending the final
decision on appeal.
B. Termination, Revocation and Suspension. The authorized officer
may suspend, revoke, or terminate this permit for (1) noncompliance
with applicable statutes, regulations, or terms and conditions of
the authorization; (2) for failure of the holder to exercise the
rights and privileges granted; (3) with the consent of the holder
or (4) when, by its terms, a fixed agreed upon condition, event, or
time occurs. Prior to suspension, revocation, or termination, the
authorized officer shall give the holder written notice of the
grounds for such action and reasonable time to correct curable
noncompliance.
IX. RENEWAL.
A. Renewal. The authorized use may be renewed. Renewal requires
the following conditions: (1) the land use allocation is compatible
with the Forest Land and Resource Management Plan; (2) the site is
being used for the purposes previously authorized and; (3) the
enterprise is being continually operated and maintained in
accordance with all the provisions of the permit. In making a
renewal, the authorized officer may modify the terms, conditions,
and special stipulations.
X. RIGHTS AND RESPONSIBILITIES UPON TERMINATION OR NONRENEWAL.
A. Removal of Improvements. Except as provided in Clause VIII.A,
upon termination or revocation of this special use permit by the
Forest Service, the holder shall remove within a reasonable time as
established by the authorized officer, the structures and
improvements, and shall restore the site to a condition
satisfactory to the authorized officer, unless otherwise waived in
writing or in the authorization. If the holder fails to remove the
structures or improvements within a reasonable period, as
determined by the authorized officer, they shall become the
property of the United States without compensation to the holder,
but that shall not relieve the holder's liability for the removal
and site restoration costs.
XI. MISCELLANEOUS PROVISIONS.
A. Members of Congress. No Member of or Delegate to Congress, or
Resident Commissioner shall be admitted to any share or part of
this agreement or to any benefit that may arise herefrom unless it
is made with a corporation for its general benefit.
B. Inspection, Forest Service. The Forest Service shall monitor
the holder's operations and reserves the right to inspect the
permitted facilities and improvements at any time for compliance
with the terms of this permit. Inspection s by the Forest Service
do not relieve the holder of responsibilities under other terms of
this permit.
C. Regulating Services and Rates. The Forest Service shall have
the authority to check and regulate the adequacy and type of
services provided the public and to require that such services
conform to satisfactory standards. The holder may be required to
furnish a schedule of prices for sales and services authorized by
the permit. Such prices and services may be regulated by the
Forest Service: Provided, that the holder shall not be required to
charge prices significantly different than those charged by
comparable or competing enterprises.
D. Advertising. The holder, in advertisements, signs, circulars,
brochures, letterheads, and like materials, as well as orally,
shall not misrepresent in any way either the accommodations
provided, the status of the permit, or the area covered by it or
the vicinity. The fact that the permitted area is located on the
National Forest shall be made readily apparent in all of the
holder's brochures and print advertising regarding use and
management of the area and facilities under permit.
E. Bonding. The authorized officer may require the holder to
furnish a bond or other security to secure all or any of the
obligations imposed by the terms of the authorization or any
applicable law, regulation, or order.
Bonds, Performance. Use the following text, when bonding is called
for: As a further guarantee of the faithful performance of the
provisions of terms and conditions set forth on pages 2-12 of this
permit, the holder agrees to deliver and maintain a surety bond or
other acceptable security in the amount of that which is reasonable
for protecting the Environment, the United States, and the Public
Interest. Should the sureties or the bonds delivered under this
permit become unsatisfactory to the Forest Service, the holder
shall, within thirty days of demand, furnish a new bond surety,
solvent and satisfactory to the Forest Service. In lieu of a
surety bond, the holder may deposit into a Federal depository, as
directed by the Forest Service, and maintain therein, cash in the
amounts provided for above, or negotiable securities of the United
States having a market value at the time of deposit of not less
than the dollar amounts provided above.
The holder's surety bond shall be released, or deposits in lieu of
a bond, shall be returned thirty days after certification by the
Forest Service that priority installations under the development
plan are complete, and upon furnishing by the holder of proof
satisfactory to the Forest Service that all claims for labor and
material on said installations have been paid or released and
satisfied. The holder agrees that all moneys deposited under this
permit may, upon failure on his or her part to fulfill all and
singular the requirements herein set forth or made a part hereof,
be retained by the United States to be applied to satisfy
obligations assumed hereunder, without prejudice whatever to any
rights and remedies of the United States.
Prior to undertaking additional construction or alteration work not
provided for in the above terms and conditions or when the
improvements are to be removed and the area restored, the holder
shall deliver and maintain a surety bond in an amount set by the
Forest Service, which amount shall not be in excess of the
estimated loss which the Government would suffer upon default in
performance of this work.
F. Water Rights. This authorization confers no rights to the use
of water by the holder. Such rights must be acquired under State
law.
G. Current Addresses. The holder and the Forest Service shall
keep each informed of current mailing addresses including those
necessary for billing and payment of fees.
H. Identification of Holder. Identification of the holder shall
remain sufficient so that the Forest Service shall know the true
identity of the entity.
Corporation Status Notification:
1. The holder shall notify the authorized officer within
fifteen (15) days of the following changes:
a. Names of officer appointed or terminated.
b. Names of stockholders who acquire stock shares causing
their ownership to exceed 50 percent of shares issued or otherwise
acquired, resulting in gaining controlling interest in the
corporation.
2. The holder shall furnish the authorized officer:
a. A copy of the articles of incorporation and bylaws.
b. An authenticated copy of a resolution of the board of
directors specifically authorizing a certain individual or
individuals to represent the holder in dealing with the Forest
Service.
c. A list of officers and directors of the corporation
and their addresses.
d. Upon request, a certified list of stockholders and
amount of stock owned by each.
e. The authorized officer may require the holder to
furnish additional information as set forth in 36 CFR
251.54(e)(1)(iv).
Partnership Status Notification:
The holder shall notify the authorized officer within fifteen
(15) days of the following changes. Names of the individuals
involved shall be included with the notification.
1. Partnership makeup changes due to death, withdrawal, or
addition of a partner.
2. Party or parties assigned financed interest in the
partnership by existing partner(s).
3. Termination, reformation, or revision of the partnership
agreement.
4. The acquisition of partnership interest, either through
purchase of an interest from an existing partner or partners, or
contribution of assets, that exceeds 50 percent of the partnership
permanent investment.
I. Archaeological-Paleontological Discoveries. The holder shall
immediately notify the authorized officer of any and all
antiquities or other objects of historic or scientific interest.
These include, but ar not limited to historic or prehistoric ruins,
fossils, or artifacts discovered as the result of operations under
this permit, and shall leave such discoveries intact until
authorized to proceed by the authorized officer. Protective and
mitigative measures specified by the authorized officer shall be
the responsibility of the permit holder.
J. Protection of Habitat of Endangered, Threatened, and Sensitive
Species. Location of areas needing special measures for protection
of plants or animals listed as threatened or endangered under the
Endangered Species Act (ESA) of 1973, as amended, or listed as
sensitive by the Regional Forester under authority of FSM 2670,
derived from ESA Section 7 consultation, may be shown on a separate
may, hereby made a part of this permit, or identified on the
ground. Protective and mitigative measures specified by the
authorized officer shall be the responsibility of the permit
holder.
If protection measures prove inadequate, if other such areas are
discovered, or if new species are listed as Federally threatened or
endangered or as sensitive by the Regional Forester, the authorized
officer may specify additional protection regardless of when such
facts become known. Discovery of such areas by either party shall
be promptly reported to the other party.
K. Superior Clauses. In the event of any conflict between any of
the preceding printed clauses or any provision thereof, and any of
the following clauses or any provision thereof, the preceding
clauses shall control.
L. Superseded Permit. This permit replaces a special use permit
issued to:
SNOW KING RESORT, INC. on March 12, 1992.
M. Disputes. Appeal of any provisions of this authorization or
any requirements thereof shall be subject to the appeal regulations
at 36 CFR 251, subpart C, or revisions thereto. The procedures for
these appeals are set forth in 36 CFR 251 published in the Federal
Register at 54 FR 3362, January 23, 1989.
N. X-99. Water Rights Acquired in the Name of the United States.
All water rights obtained by the holder for use on the area
authorized must be acquired in the name of the United States.
Note: Additional provisions may be added by the authorized officer
to reflect local conditions.
(R4-B2) Liability Waiver. The holder will not request or require
persons served to sign a liability waiver which releases the
outfitter from responsibility for injury or damage resulting from
the outfitter's negligence for activities authorized by this
permit. The holder may, however, advise such persons of the risks
involved and have them sign a Visitor's Acknowledgement of Risk,
provided a copy of the proposed form has been submitted to and
approved by the issuing Forest Officer.
VISITOR'S ACKNOWLEDGMENT OF RISK
(SAMPLE)
I recognize that there is an element of risk in any adventure,
sport, or activity associated with the outdoors. I am fully
cognizant of the risks and dangers inherent in (activity) and
have been informed of known special hazards in such activity. A
copy of a notice of such hazards is attached hereto and made a part
hereof, and I, and the adult members of my family, have read the
same. I certify that my family and I, including minor children,
are fully capable of participating in the said activity.
Therefore, I assume full responsibility for personal injury to
myself and/or to members of my family, or for loss or damage to my
personal property and expenses thereof as a result of my negligence
or the negligence of my family participating in said activity
except to the extent such damage or injury may be due to the
negligence of (concessionaire). I further understand that
(concessionaire) reserves the right to refuse any person it judges
to be incapable of meeting the rigors and requirements of
participating in (activity) .
Self: ___________________ Spouse: ____________________
Minor Children: __________________ ______________ ___________
I have read, understand, and accept the terms and conditions stated
herein and acknowledge that this agreement shall be effective and
binding upon the parties during the entire period of participation
of the said activity.
Parent/Guardian: ____________________ _________________________
Customer Signature: ______________________ Date: ____________
(if both parents are in attendance, both should sign.)
(Form may be modified to provide for the signature of each
individual member of a group.)
EXHIBIT A
(map of SNOW KING RESORT SKI AREA PERMIT prepared by Dale
Dawson 03/11/1999)
EXHIBIT B - Master Development Plan (Date)
The Master Development Plan upon completion and acceptance by
the Forest Supervisor shall be included in Exhibit B.
94.4.15 Use and Indemnity Agreement
between the Town of
Jackson, Wyoming and Snow
King Resort, Inc.
USE AND INDEMNITY AGREEMENT
This Use and Indemnity Agreement is granted to be effective as
of the 30th day of December, 1998, by and between Snow King Resort,
Inc., a Wyoming Corporation, as Indemnitor, and the Town of
Jackson, a Municipal Corporation of the State of Wyoming, as
Indemnitee. For and in consideration of the use of the leasehold
property known generally as the parking lot and ski hill parcels
and a portion of that parcel of real property known generally as
Snow King Ballpark, situated on the southeast corner of the
intersection of Snow King Avenue and Cache Drive in the Town of
Jackson, Teton County, Wyoming, as a tubing park and a "run-slow
lane" or "run-out lane" for a tubing park (to be operated in
conjunction with Indemnitor's lease and with rental payments to be
made pursuant to said lease between Indemnitor and Indemnitee for
the adjacent parking lot and ski hill areas) which right of use is
hereby granted by Indemnitee, Indemnitor hereby agrees to
indemnify, save and hold harmless Indemnitee from and against any
and all liability, cause, claim, right-of-action, or damage for
which a claim may be made against Indemnitee arising from and out
of the use of the property, including the leasehold property
described herein, by Indemnitor. This Indemnity shall include
indemnification against property damage including damage to fences,
sprinkler systems and sod and shall extend to removal and
replacement of the fence, maintenance of the entire area subject to
the Agreement by Indemnitee in a clean, trash-free condition, and
maintenance and control of all animals to avoid encounters with
dogs or any other animals. It s the intent of this Agreement that
the Indemnitor, as user of the property and facilities, shall be
fully and totally responsible for removal of fences for use by
Indemnitor and returning the property to its current condition or
better for utilization for park and ball field premises, not later
than the 15th day of May of each year during the continuation of
this Agreement, all at the sole cost and expense of Indemnitor.
This Indemnification shall extend to and include the cost of any
and all legal defense of any action that might arise from
Indemnitor's use of the property, specifically including a
reasonable sum as and for attorney's fees.
This Agreement shall continue in effect from year to year for
so long as Snow King Resort, Inc., the Indemnitor, or its successor
and assigns, continue to be the Lessee in the Snow King Mountain
tract and parking lot adjacent to the Snow King ballpark provided,
however, that either party hereto may cancel the Agreement on
ninety (90) days written notice to the other party and provided
further that such cancellation shall not become effective during
the winter operation season; that is, December through March,
unless the termination shall be for good cause arising from the
actions or inactions of the Indemnitor with respect to the
Agreement or the operation, in which event, the termination may
become effective immediately.
IN WITNESS WHEREOF, the parties have here unto set their hands
to be effective as of the day and year first above written.
INDEMNITOR:
SNOW KING RESORT, INC.
a Wyoming Corporation
By /s/ Manuel Lopez
President
INDEMNITEE:
TOWN OF JACKSON, a Municipal
Corporation of the State of Wyoming
By /s/ Barney Oldfield
Mayor
STATE OF WYOMING )
) ss.
COUNTY OF TETON )
The foregoing instrument was acknowledged before me by Manuel
Lopez as President, of Snow King Resort, Inc., a Wyoming
Corporation, and acknowledged that he/she executed the foregoing as
such officer in the name of and on behalf of said Corporation this
30th day of December, 1998.
Witness my hand and official seal.
/s/ Carolyn M. Douglas
Notary Public
My commission expires: November 1, 2001
STATE OF WYOMING )
) ss.
COUNTY OF TETON )
The foregoing instrument was acknowledged before me by Barney
Oldfield, Mayor of the Town of Jackson, a Municipal Corporation of
the State of Wyoming, and acknowledged that he/she executed the
foregoing as such officer in the name of and on behalf of said
Corporation this 30th day of December, 1998.
Witness my hand and official seal.
/s/ Michelle A. Weber
Notary Public
My commission expires: February 23, 2002
94.4.16 ADDENDUM AND MODIFICATION
OF LEASE AGREEMENT dated
November 16, 1998 between
the Town of Jackson,
Wyoming and Snow King
Resort, Inc.
ADDENDUM AND MODIFICATION
OF LEASE AGREEMENT
SKI SHELTER, SKI LIFT AND MOUNTAIN TRACT
THIS ADDENDUM AND MODIFICATION OF LEASE AGREEMENT is made and
entered into to be effective as of the 16th day of November, 1998,
by and between the Town of Jackson, a Municipal Corporation of the
State of Wyoming, of P.O. Box 1687, Jackson, Wyoming, 83001, herein
and in the Lease to which this Addendum is attached referred to as
"Landlord," and Snow King Resort, Inc. a Wyoming Corporation, of
P.O. Box SKI, Jackson, Wyoming, 83001, herein and in the Lease to
which this Addendum is attached referred to as "Tenant," to modify
and become a part of that certain Lease Agreement between Landlord
and Tenant dated the 22nd day of April, 1994, and to which this
Addendum is attached.
WITNESSETH:
WHEREAS, the parties entered into a Lease Agreement dated the
22nd day of April, 1994, for the purpose of providing a ski shelter
and community facilities; and
WHEREAS, the Tenant has requested an extension of the term of
the Lease in order to have the opportunity to more completely
amortize investments and improvements to the leasehold estate; and
WHEREAS, the Landlord has agreed to such an extension and to
a minor correction as hereinafter set forth;
NOW, THEREFORE, the parties for and in consideration of the
mutual agreements set forth herein and the consideration provided
for and set forth in the Lease Agreement, which this Addendum is
attached, agree as follows:
1. Section 2 Term of Lease is amended to read as follows:
2. Term of Lease. The term of the Lease shall be for
a term of forty (40) years, commencing on the 1st day of June,
1993, and terminating on the 1st day of May, 2033, unless sooner
terminated or extended under the provisions of the Lease.
2. Section 3(a) Base Rent is modified to read as follows:
3(a). Base Rent. The base rent for the Lease Agreement
through the 31st day of May, 2033 shall be Ten Thousand Eight
Hundred Dollars ($10,800.00) per annum payable in twelve (12) equal
monthly installments of Nine Hundred Dollars ($900.00) per month on
the first day of each month of each year of the term hereof. The
base rent for the period commencing June 1, 2023 shall be Twelve
Thousand Dollars ($12,000.00) per annum payable in twelve (12)
equal monthly installments of One Thousand Dollars ($1,000.00) per
month on the first day of each month of each year of the term
hereof and shall be increased for each year thereafter by an amount
equal to the percentage increase in the Consumer Price Index
Universal for the previous twelve (12) months or its most
comparable index published by the United States Department of Labor
or other federal entity publishing such indexes and schedules.
3. The reference in Section 3(c) to the section reserving
rents is changed from 33 to 3(a) and (b).
4. There is hereby added to Section 3, a new subsection (d)
entitled Rental Payment Deferrals.
3(d). Rental Payment Deferrals. The Tenant shall have the
option, upon written notice given the Landlord, for any lease year
to change monthly payment dates from the first (1st) day of the
month to the twentieth (20th) day of the month and to reduce the
number of rental payment installments from twelve (12) to six (6)
with the payment dates to be as follows: January 20, February 20,
March 20, July 20, August 20, and September 20. In the event
Tenant elects to exercise its right to consolidate payments, then
the payments due on the six (6) elected payment dates shall be
double the then effective payment amount together with interest for
the period from the first (1st) day of the month to the twentieth
(20th) day of the month at the rate of eight and one-half percent
(8 1/2%) interest and interest on the deferred payment for the
entire payment of deferral at the rate of eight and one-half
percent (8 1/2%) per annum. This paragraph shall not apply to
supplemental rent due and payable pursuant to paragraph 3(b) above.
5. Section 5(c) is corrected to refer to Snow King Resort,
Inc., as the Tenant rather than Snow King, Inc.
6. All of the rest and remainder of the terms and conditions
of the Lease to which this Addendum is attached shall remain
unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties have hereunto set their hands
to be effective as of the day and year first above written.
LANDLORD:
TOWN OF JACKSON, a Municipal
Corporation of the State of Wyoming
By /s/ Barney Oldfield, Mayor
ATTEST:
By /s/ Robinson, Town Clerk
TENANT:
SNOW KING RESORT, INC., a
Wyoming Corporation
By /s/ Manuel Lopez, President
ATTEST:
By /s/ Creed Law, Secretary
EXHIBIT 94.4.17
PROMISSORY NOTE
Borrower: Snow King Resort, Inc. Lender: First Interstate Bank
P.O. Box SKI 104 South Wolcott
Jackson, WY 83001 P.O. Box 40
Casper, WY 82601
Principal Amount: $9,370,000 Interest Rate: 7.980%
Date of Note: March 23, 1999
Loan No. 85010528
PROMISE TO PAY. Snow King Resort, Inc. ("Borrower") promises to
pay to First Interstate Bank ("Lender"), or order, in lawful money
of the United States of America, the principal amount of Nine
Million Three Hundred Seventy Thousand & 00/100 Dollars
($9,370,000.00) or so much as may be outstanding, together with
interest at the rate of 7.980% per annum on the unpaid outstanding
principal balance of each advance. Interest shall be calculated
from the date of each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in accordance with the
following payment schedule:
Borrower will pay regular monthly payments of accrued and
unpaid interest at the rate of 7.98% beginning April 15,
1999 and all subsequent interest payments are due on the
same day after that. Commencing June 15, 2000, Borrower
will make principal including interest payments of
$107,846.99, and all subsequent principal including
interest payments shall be due on the same day of each
month after that, except for the months of November, April
and May when no payment shall be due. Effective March 15,
2002, the interest rate will be adjusted to the Wall Street
Journal Prime Rate plus .375%.
The annual interest rate for this Note is computed on a 365/360
basis; that is, by applying the ratio of the annual interest rate
over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal
balance is outstanding. Borrower will pay Lender at Lender's
address shown above or at such other place as Lender may designate
in writing. Unless otherwise agreed or required by applicable law,
payments will be applied first to accrued unpaid interest, then to
principal, and any remaining amount to any unpaid collection costs
and late charges.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid
finance charges are earned fully as of the date of the loan and
will not be subject to refund upon early payment (whether voluntary
or as a result of default), except as otherwise required by law.
Except for the foregoing, Borrower may pay without penalty all or
a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve
Borrower of Borrower's obligation to continue to make payments of
accrued unpaid interest. Rather, they will reduce the principal
balance due.
DEFAULT. Borrower will be in default if any of the following
happens: (a) Borrower fails to make any payment when due. (b)
Borrower breaks any promise Borrower has made to Lender, or
Borrower fails to comply with or to perform when due any other
term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or
loan Borrower has with Lender, (c) Borrower defaults under any
loan, extension of credit, security agreement, purchase or sales
agreement, or any other agreement, in favor of any other creditor
or person that may materially affect any of Borrower's properly or
Borrower's ability to repay this Note or perform Borrower's
obligations under this Note or any of the Related Documents. (d)
Any representation or statement made or furnished to Lender by
Borrower or on Borrower's behalf is false or misleading in any
material respect either now or at the time made or furnished. (e)
Borrower becomes insolvent, a receiver is appointed for any part of
Borrower's property, Borrower makes an assignment for the benefit
of creditors, or any preceding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any
creditor tries to take any of Borrower's property on or in which
Lender has a lien or security interest. This includes a
garnishment of any of Borrower's accounts with Lender. (g) Any
guarantor dies or any of the other events described in this default
section occurs with respect to any guarantor of this Note. (h) A
material adverse change occurs in Borrower's financial condition,
or Lender believes the prospect of payment or performance of the
indebtedness is impaired. (i) Lender in good faith deems itself
insecure.
If any default, other than a default in payment, is curable and if
Borrower has not been given a notice of a breach of the same
provision of this Note within the preceding twelve (12) months, it
may be cured (and no event of default will have occurred) if
Borrower, after receiving written notice from Lender demanding cure
of such default: (a) cures the default within fifteen (15) days;
or (b) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonable practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire
unpaid principal balance on this Note and all accrued unpaid
interest immediately due, without notice, and then Borrower will
pay that amount. Lender may hire or pay someone else to collect
this Note if Borrower does not pay. Borrower also will pay Lender
that amount. This includes, subject to any limits under applicable
law, Lender's reasonable attorneys' fees and Lender's legal
expenses whether or not there is a lawsuit, including reasonable
attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection
services. If not prohibited by applicable law, Borrower also will
pay any court costs, in addition to all other sums provided by law.
This Note has been delivered to Lender and accepted by Lender in
the State of Wyoming. If there is a lawsuit, Borrower agrees upon
Lender's request to submit to the jurisdiction of the courts of
Natrona County, the State of Wyoming. Subject to the provisions on
arbitration, this Note shall be governed by and construed in
accordance with the laws of the State of Wyoming.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security
interest in, and hereby assigns, conveys, delivers, pledges, and
transfers to Lender all Borrower's right, title and interest in and
to, Borrower's accounts with Lender (whether checking, savings, or
some other account), including without limitation all accounts held
jointly with someone else and all accounts Borrower may open in the
future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent
permitted by applicable law, to change or setoff all sums owing on
this Note against any and all such accounts.
COLLATERAL. This Note is secured by 1) Construction Mortgage
dated March 23, 1999 covering the real property owned by the Snow
King Resort, Inc.
2) Commercial Security Agreement dated March 23, 1999 covering
Furniture, Fixtures, Equipment, Inventory, Chattel Paper, Accounts
and General Intangibles.
3) Collateral Assignment of Liquor License dated March 23, 1999,
covering Resort Liquor License #301 issued by the Town of Jackson.
4) Assignment of Life Insurance Policy as Collateral dated March
23, 1999 covering the life of Manuel Lopez.
5) Assignment of Interest-Forest Service Permit dated March 23,
1999.
6) Assignment of Town Lease dated March 23, 1999.
7) Assignment of Town Ice Skating Rink lease dated March 23, 1999.
8) Assignment, Subordination and Attornment Agreement dated March
23, 1999.
9) Assignment of Condominium Unit Maintenance and Rental Agreement
dated March 23, 1999.
10) Assignment of Leases and Rents dated March 23, 1999.
LINE OF CREDIT. This Note evidences a straight line of credit.
Once the total amount of principal has been advanced, Borrower is
not entitled to further loan advances. Advances under this Note
may be requested orally by Borrower or as provided in this
paragraph. Lender may, but need not, require that all oral
requests be confirmed in writing. All communications,
instructions, or directions by telephone or otherwise to Lender are
to be directed to Lender's office shown above. The following party
or parties are authorized as provided in this paragraph to request
advances under the line of credit until Lender receives from
Borrower at Lender's address shown above written notice of
revocation of their authority: Manuel B. Lopez, President; Stan
Clark, Treasurer; and Ron Doscher. No advances on this Line of
Credit will be permitted after March 15, 2000.
Advances will be limited to the following uses:
Payoff ORIX Note $5,825,000.00
Payoff other Leases and Loans $650,000.00
Pay accounts payable as of February 28, 1999 $295,000.00
Purchase Love Land $346,800.00
Payoff Ice Rink additional rent $180,000.00
Closing costs $53,000.00
100% of the documented costs of Hotel renovations $2,020,200.00
Total of all listed above $9,370,000.00
Advances for the payment of Hotel Renovations must be accompanied
by invoices for the work performed or material purchased. Borrower
agrees to be liable for all sums either: (a) advanced in
accordance with the instructions of an authorized person or (b)
credited to any of Borrower's accounts with Lender. The unpaid
principal balance owing on this Note at any time may be evidenced
by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender will have no
obligation to advance funds under this Note if: (a) Borrower or
any guarantor is in default under the terms of this Note or any
agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (b)
Borrower or any guarantor ceases doing business or is insolvent;
(c) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any
other loan with Lender; (d) Borrower has applied funds provided
pursuant to this Note for purposes other than those authorized by
Lender; or (e) Lender in good faith deems itself insecure under
this Note or any other agreement between Lender and Borrower.
ARBITRATION. Lender and Borrower agree that all disputes, claims
and controversies between them, whether individual, joint, or class
in nature, arising from this Note or otherwise, including without
limitation contract and tort disputes, shall be arbitrated pursuant
to the Rules of the American Arbitration Association, upon request
of either party. No act to take or dispose of any collateral
securing this Note shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This
includes, without limitation, obtaining injunctive relief or a
temporary restraining order; invoking a power of sale under any
deed of trust or mortgage; obtaining a writ of attachment or
imposition of a receiver; or exercising any rights relating to
personal property, including taking or disposing of such property
with or without judicial process pursuant to Article 9 of the
Uniform Commercial Code. Any disputes, claims, or controversies
concerning the lawfulness or reasonableness of any act, or exercise
of any right, concerning any collateral securing this Note,
including any claim to rescind, reform, or otherwise modify any
agreement relating to the collateral securing this Note, shall also
be arbitrated, provided however that no arbitrator shall have the
right or the power to enjoin or restrain any act of any party.
Judgment upon any award rendered by any arbitrator may be entered
in any court having jurisdiction. Nothing in this Note shall
preclude any party from seeking equitable relief from a court of
competent jurisdiction. The statue of limitations, estoppel,
waiver, laches, and similar doctrines which would otherwise be
applicable in an action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for these
purposes. The Federal Arbitration Act shall apply to the
construction, interpretation, and enforcement of this arbitration
provision.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower
and any other person who signs, guarantees or endorses this Note,
to the extent allowed by law, waive presentment, demand for
payment, protest and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other
action deemed necessary by lender without the consent of or notice
to anyone. All such parties also agree that Lender may modify this
loan without the consent of or notice to anyone other than the
party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE
AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
Snow King Resort, Inc.
By: /s/ Manuel B. Lopez By: /s/ Creed Law
Manuel B. Lopez, President Creed Law, Secretary
LENDER:
First Interstate Bank
By: /s/ Officer's signature
Authorized Officer
EXHIBIT 94.4.18
PROMISSORY NOTE
Principal: $630,000.00
Loan Date: 03-23-1999
Maturity: 09-15-2000
Loan No.: 85010529
Call: 51
Collateral: 0022
Officer: 802
Borrower: Snow King Resort, Inc. Lender: First Interstate Bank
P.O. Box SKI 104 South Wolcott
Jackson, WY 83001 P.O. Box 40
Casper, WY 82601
Principal Amount: $630,000 Interest Rate: 8.125%
Date of Note: March 23, 1999
PROMISE TO PAY. Snow King Resort, Inc. ("Borrower") promises to
pay to First Interstate Bank ("Lender"), or order, in lawful money
of the United States of America, the principal amount of Six
Hundred Thirty Thousand & 00/100 Dollars ($630,000.00) or so much
as may be outstanding, together with interest on the unpaid
outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each
advance. The interest rate will not increase above 21.000%.
PAYMENT. Borrower will pay this loan in one payment of all
outstanding principal plus accrued unpaid interest on September 15,
2000. In addition, Borrower will pay regular monthly payments of
accrued unpaid interest beginning April 15, 1999, and all
subsequent interest payments are due on the same day of each month
after that. The annual interest rate for this Note is computed on
a 365/360 basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of
days the principal balance is outstanding. Borrower will pay
Lender at Lender's address shown above or at such other place as
Lender may designate in writing. Unless otherwise agreed or
required by applicable law, payments will be applied first to
accrued unpaid interest, then to principal, and any remaining
amount to any unpaid collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject
to change from time to time based on changes in an independent
index which is the Prime Rate as published in the "Money Rates"
section of the Wall Street Journal, Western Edition (the "index").
The index is not necessarily the lowest rate charged by Lender on
its loans. If the index becomes unavailable during the term of
this loan, Lender may designate a substitute index after notice to
Borrower. Lender will tell Borrower the current index rate upon
Borrower's request. Borrower understands that Lender may make
loans based on other rates as well. The interest rate change will
not occur more often than each day. The index currently is 7.750%
per annum. The interest rate to be applied to the unpaid principal
balance of this Note will be at a rate of 0.375 percentage points
over the index, adjusted if necessary for the maximum rate
limitation described below, resulting in an initial rate of 8.125%
per annum. Notwithstanding any other provision of this Note, the
variable interest rate or rates provided for in this Note will be
subject to the following maximum rate. NOTICE: Under no
circumstances will the interest rate on this Note be more than the
lesser of 21.000% per annum or the maximum rate allowed by
applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments of accrued
unpaid interest. Rather, they will reduce the principal balance
due.
DEFAULT. Borrower will be in default if any of the following
happens: (a) Borrower fails to make any payment when due. (b)
Borrower breaks any promise Borrower has made to Lender, or
Borrower fails to comply with or to perform when due any other
term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or
loan Borrower has with Lender, (c) Any representation or statement
made or furnished to Lender by Borrower or on Borrower's behalf is
false or misleading in any material respect either now or at the
time made or furnished. (d) Borrower becomes insolvent, a receiver
is appointed for any part of Borrower's property, Borrower makes an
assignment for the benefit of creditors, or any preceding is
commenced either by Borrower or against Borrower under any
bankruptcy or insolvency laws. (e) Any creditor tries to take any
of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's
accounts with Lender. (f) Any guarantor dies or any of the other
events described in this default section occurs with respect to any
guarantor of this Note. (g) A material adverse change occurs in
Borrower's financial condition, or Lender believes in good faith
the prospect of payment or performance of the indebtedness is
impaired. (h) Lender in good faith deems itself insecure.
If any default, other than a default in payment, is curable and if
Borrower has not been given a notice of a breach of the same
provision of this Note within the preceding twelve (12) months, it
may be cured (and no event of default will have occurred) if
Borrower, after receiving written notice from Lender demanding cure
of such default: (a) cures the default within fifteen (15) days;
or (b) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonable practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire
unpaid principal balance on this Note and all accrued unpaid
interest immediately due, without notice, and then Borrower will
pay that amount. Lender may hire or pay someone else to collect
this Note if Borrower does not pay. Borrower also will pay Lender
that amount. This includes, subject to any limits under applicable
law, Lender's reasonable attorneys' fees and Lender's legal
expenses whether or not there is a lawsuit, including reasonable
attorneys' fees and legal expenses for bankruptcy proceedings
(including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection
services. If not prohibited by applicable law, Borrower also will
pay any court costs, in addition to all other sums provided by law.
This Note has been delivered to Lender and accepted by Lender in
the State of Wyoming. If there is a lawsuit, Borrower agrees upon
Lender's request to submit to the jurisdiction of the courts of
Natrona County, the State of Wyoming. Subject to the provisions on
arbitration, this Note shall be governed by and construed in
accordance with the laws of the State of Wyoming.
RIGHT OF SETOFF. Borrower grants to Lender a contractual security
interest in, and hereby assigns, conveys, delivers, pledges, and
transfers to Lender all Borrower's right, title and interest in and
to, Borrower's accounts with Lender (whether checking, savings, or
some other account), including without limitation all accounts held
jointly with someone else and all accounts Borrower may open in the
future, excluding however all IRA and Keogh accounts, and all trust
accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent
permitted by applicable law, to change or setoff all sums owing on
this Note against any and all such accounts.
COLLATERAL. This Note is secured by 1) Construction Mortgage
dated March 23, 1999 covering the real property owned by the Snow
King Resort, Inc.
2) Commercial Security Agreement dated March 23, 1999 covering
Furniture, Fixtures, Equipment, Inventory, Chattel Paper, Accounts
and General Intangibles.
3) Collateral Assignment of Liquor License dated March 23, 1999,
covering Resort Liquor License #301 issued by the Town of Jackson.
4) Assignment of Life Insurance Policy as Collateral dated March
23, 1999 covering the life of Manuel Lopez.
5) Assignment of Interest-Forest Service Permit dated March 23,
1999.
6) Assignment of Town Lease dated March 23, 1999.
7) Assignment of Town Ice Skating Rink lease dated March 23, 1999.
8) Assignment, Subordination and Attornment Agreement dated March
23, 1999.
9) Assignment of Condominium Unit Maintenance and Rental Agreement
dated March 23, 1999.
10) Assignment of Leases and Rents dated March 23, 1999.
LINE OF CREDIT. This Note evidences a revolving line of credit.
Advances under this Note may be requested orally by Borrower or by
an authorized person. Lender may, but need not, require that all
oral requests be confirmed in writing. All communications,
instructions, or directions by telephone or otherwise to Lender are
to be directed to Lender's office shown above. The following party
or parties are authorized as provided in this paragraph to request
advances under the line of credit until Lender receives from
Borrower at Lender's address shown above written notice of
revocation of their authority: Manuel B. Lopez, President; Creed
Law, Secretary; Stan Clark, Vice President; and Ron Doscher.
Borrower agrees to be liable for all sums either: (a) advanced in
accordance with the instructions of an authorized person or (b)
credited to any of Borrower's accounts with Lender. The unpaid
principal balance owing on this Note at any time may be evidenced
by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender will have no
obligation to advance funds under this Note if: (a) Borrower or
any guarantor is in default under the terms of this Note or any
agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (b)
Borrower or any guarantor ceases doing business or is insolvent;
(c) any guarantor seeks, claims or otherwise attempts to limit,
modify or revoke such guarantor's guarantee of this Note or any
other loan with Lender; (d) Borrower has applied funds provided
pursuant to this Note for purposes other than those authorized by
Lender; or (e) Lender in good faith deems itself insecure under
this Note or any other agreement between Lender and Borrower.
ARBITRATION. Lender and Borrower agree that all disputes, claims
and controversies between them, whether individual, joint, or class
in nature, arising from this Note or otherwise, including without
limitation contract and tort disputes, shall be arbitrated pursuant
to the Rules of the American Arbitration Association, upon request
of either party. No act to take or dispose of any collateral
securing this Note shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This
includes, without limitation, obtaining injunctive relief or a
temporary restraining order; invoking a power of sale under any
deed of trust or mortgage; obtaining a writ of attachment or
imposition of a receiver; or exercising any rights relating to
personal property, including taking or disposing of such property
with or without judicial process pursuant to Article 9 of the
Uniform Commercial Code. Any disputes, claims, or controversies
concerning the lawfulness or reasonableness of any act, or exercise
of any right, concerning any collateral securing this Note,
including any claim to rescind, reform, or otherwise modify any
agreement relating to the collateral securing this Note, shall also
be arbitrated, provided however that no arbitrator shall have the
right or the power to enjoin or restrain any act of any party.
Judgment upon any award rendered by any arbitrator may be entered
in any court having jurisdiction. Nothing in this Note shall
preclude any party from seeking equitable relief from a court of
competent jurisdiction. The statue of limitations, estoppel,
waiver, laches, and similar doctrines which would otherwise be
applicable in an action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of an action for these
purposes. The Federal Arbitration Act shall apply to the
construction, interpretation, and enforcement of this arbitration
provision.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its
rights or remedies under this Note without losing them. Borrower
and any other person who signs, guarantees or endorses this Note,
to the extent allowed by law, waive presentment, demand for
payment, protest and notice of dishonor. Upon any change in the
terms of this Note, and unless otherwise expressly stated in
writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly
and for any length of time) this loan, or release any party or
guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any other
action deemed necessary by lender without the consent of or notice
to anyone. All such parties also agree that Lender may modify this
loan without the consent of or notice to anyone other than the
party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE. BORROWER AGREES TO THE TERMS OF THE NOTE
AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
Snow King Resort, Inc.
By: /s/ Manuel B. Lopez By: /s/ Creed Law
Manuel B. Lopez, President Creed Law, Secretary
LENDER:
First Interstate Bank
By: /s/ Officer's signature
Authorized Officer
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
WESTERN STANDARD CORPORATION
Date: March 30, 2000 By:/s/ Stanford E. Clark
Stanford E. Clark, President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
Date: March 30, 2000 /s/ Stanford E. Clark
Stanford E. Clark
President, Treasurer (Principal
Executive, Financial and
Accounting Officer) Comptroller
and Director
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 293,861
<RECEIVABLES> 1,785,526
<ALLOWANCES> 1,260,000
<INVENTORY> 66,741
<CURRENT-ASSETS> 840,423
<PP&E> 9,374,111
<DEPRECIATION> 4,833,463
<TOTAL-ASSETS> 10,853,142
<CURRENT-LIABILITIES> 2,010,700
<COMMON> 401,201
<TOTAL-LIABILITY-AND-EQUITY> 10,853,142
<SALES> 8,660,995
<TOTAL-REVENUES> 8,660,995
<TOTAL-COSTS> 9,325,701
<LOSS-PROVISION> -0-
<INTEREST-EXPENSE> 711,339
<INCOME-PRETAX> 707,864
<INCOME-CONTINUING> 707,864
<NET-INCOME> (545,043)
<EPS-DILUTED> (.05)
