SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-A/A
AMENDMENT NO. 1
For Registration of Certain Classes of
Securities Pursuant to Section 12(b) or (g) of
the Securities Exchange Act of 1934
FAIRFIELD COMMUNITIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 71-0390438
(State of Incorporation) (IRS Employer Identification No.)
2800 Cantrell Road, Little Rock, Arkansas 72202
(Address of principal executive offices)
Securities to be registered pursuant to
Section 12(b) of the Act:
None
Securities to be registered pursuant to
Section 12(g) of the Act:
Common Stock, $0.01 par value per share
Rights to Purchase Junior
Participating Preferred
Stock, $0.01 par value
per share
<PAGE>
ITEM 1. Description of Registrant's Securities to be Registered.
Fairfield Communities, Inc. (the "Registrant") adopted its Second
Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation") pursuant to its plan of reorganization (the "Plan of
Reorganization") under Chapter 11 of the United States Bankruptcy Code (the
"Bankruptcy Code"), which became effective on September 1, 1992. The
Certificate of Incorporation provides that the authorized capital stock of
the Registrant consists of 25.0 million shares of Common Stock, par value
$0.01 per share ("Common Stock"), and 5.0 million shares of Preferred
Stock, par value $0.01 per share ("Preferred Stock"). Under the Plan of
Reorganization, the Registrant may amend the Certificate of Incorporation
without further action by its Board of Directors (the "Board") or
stockholders in order to increase its authorized shares of Common Stock to
an amount reasonably estimated by the Registrant to be required under the
Plan of Reorganization (rounded up to the nearest whole million) plus 5.0
million shares of Common Stock. In accordance with Section 1123(a) of the
Bankruptcy Code, the Certificate of Incorporation prohibits the issuance by
the Registrant of any nonvoting equity security, except as specifically
provided therein.
A. Common Stock.
Except as may otherwise be provided in a preferred stock designation,
each share of Common Stock will be entitled to one vote, in person or by
proxy, on all matters submitted to a vote of the stockholders. The holders
of Common Stock will vote as a class with the holders of any Series A
Preferred Shares (as defined below) issued under the Rights Agreement (see
Section B below). The shares of Common Stock will not have preemptive
rights or any other subscription rights, and cumulative voting by the
holders of Common Stock will not be allowed. The Common Stock will have no
conversion rights or redemption or sinking fund provisions with respect
thereto. See Section C below for a description of certain preferred share
purchase rights associated with the shares of Common Stock.
Subject to any preferential rights that may be applicable to Preferred
Stock, all shares of Common Stock rank equally as to participation in any
property that may be available for distribution after satisfaction of all
other claims in the event of any liquidation, dissolution or winding up of
the affairs of the Registrant, whether voluntary or involuntary or
otherwise, and as to such dividends, if any, as may be declared from time
to time by the Board in its discretion from funds legally available
therefor.
It is not presently anticipated that any dividends will be paid on the
Common Stock in the foreseeable future, and certain debt instruments of the
Registrant and its subsidiaries expressly limit, or may have the effect of
limiting, the amount of dividends payable by the Registrant. In
particular, no dividends or other distributions may be paid on the Common
Stock, other than dividends payable solely in shares of Common Stock, until
certain loans made to the Registrant by The First National Bank of Boston,
as agent on behalf of itself and such other participating lenders as may
become party to the lending agreement, have been repaid in full, and no
obligation remains to extend future loans. Similarly, under the Plan of
Reorganization, the Registrant has delivered a promissory note to VM
Investors Partnership that restricts the Registrant's ability to pay
dividends or other distributions on the Common Stock during any period when
the Registrant is in default under that promissory note, or the amount
outstanding under that note exceeds the value of the collateral securing
the note.
B. Preferred Stock.
The Board has the authority to issue 5.0 million shares of Preferred
Stock in one or more series and to fix the designations, preferences,
rights, qualifications, limitations and restrictions of the shares of any
such series, including without limitation dividend rates, conversion
rights, voting rights, redemption and sinking fund provisions, liquidation
preferences and the number of shares constituting each such series, without
any further vote or action by the stockholders. The issuance of the
Preferred Stock could decrease the amount of earnings and assets available
for distribution to holders of Common Stock or adversely affect the rights
and powers, including voting rights, of the holders of Common Stock. The
issuance of Preferred Stock could have the effect of delaying, deferring or
preventing a change in control of the Registrant without further action by
the stockholders. As of the date of this Registration Statement, no
Preferred Stock has been issued, and the Registrant has no present plans to
issue any Preferred Stock. The Registrant, however, has reserved 1.0
million shares of Preferred Stock for issuance of the Series A Preferred
Shares described below.
C. Rights.
Each share of Common Stock issued pursuant to the Plan of
Reorganization was accompanied by one share purchase right (a "Right"), and
each share of Common Stock issued thereafter and prior to the Rights
Distribution Date (as defined below), or the earlier redemption or
expiration of the Rights, similarly was or will be accompanied by one Right
(subject to adjustment in certain circumstances). The terms and conditions
of the Rights are as set forth in the Rights Agreement, dated as of
September 1, 1992 (as amended, the "Rights Agreement"), between the
Registrant and Society National Bank, under which The First National Bank
of Boston was appointed as successor Rights Agent (in such capacity the
"Rights Agent") pursuant to an Appointment and Acceptance Agreement, dated
as of March 3, 1994, between the Registrant and the Rights Agent. Each
Right entitles the registered holder thereof to purchase from the
Registrant one one-hundredth of a share of Series A Junior Participating
Preferred Stock, par value $.01 per share (the "Series A Preferred
Shares"), of the Registrant at a price (the "Purchase Price") of $25.00 per
one one-hundredth of a Series A Preferred Share (subject to adjustment in
certain circumstances).
The Rights Agreement provides that the Rights will be evidenced by the
certificates evidencing shares of Common Stock until the earlier to occur
of the following dates (the earlier of such dates being the "Rights
Distribution Date"): (i) the close of business on the tenth business day
following the first date of public announcement by the Registrant that a
person (other than the Registrant or a subsidiary or employee benefit plan
of the Registrant), together with its affiliates and associates, has
acquired, or obtained the right to acquire, beneficial ownership of 20% or
more of the outstanding Common Stock (any such person being an "Acquiring
Person") and (ii) the close of business on the tenth business day (or such
later date as the Board may determine) following the commencement of a tender
offer or exchange offer by a person (other than the Registrant or a
subsidiary or employee benefit plan of the Registrant), the consummation of
which would result in beneficial ownership by such person of 20% or more of
the outstanding Common Stock. The Rights Agreement further provides that,
until the Rights Distribution Date, the Rights may be transferred with and
only with the Common Stock, and that, until the Rights Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for
transfer of any certificates evidencing Common Stock will also constitute
the transfer of the Rights associated with such certificates. As soon as
practicable following the Rights Distribution Date, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed to holders of
record of Common Stock as of the close of business on the Rights
Distribution Date and such separate Rights Certificates alone will evidence
the Rights. No Right is exercisable at any time prior to the Rights
Distribution Date. The Rights will expire on September 1, 2002 (the "Final
Expiration Date") unless earlier redeemed by the Registrant as described
below. Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Registrant, including without limitation
the right to vote or to receive dividends.
The Purchase Price payable, and the number of Series A Preferred
Shares or other securities issuable, upon exercise of a Right are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of,
the Series A Preferred Shares, (ii) upon the grant to holders of the Series
A Preferred Shares of certain rights, options or warrants to subscribe for
or purchase Series A Preferred Shares at a price, or securities convertible
into Series A Preferred Shares with a conversion price, less than the then-
current market price of the Series A Preferred Shares, or (iii) upon the
distribution to holders of the Series A Preferred Shares of evidences of
indebtedness or cash (excluding regular periodic cash dividends), assets
(excluding dividends payable in Series A Preferred Shares) or subscription
rights or warrants (other than those referred to above). The number of
Rights associated with each share of Common Stock is also subject to
adjustment from time to time to prevent dilution in the event of a stock
dividend on the Common Stock payable in shares of Common Stock or a
subdivision or combination of the Common Stock occurring, in any such case,
prior to the Rights Distribution Date.
Subject to certain exceptions, no adjustments in the Purchase Price
will be required until cumulative adjustments require an adjustment in the
Purchase Price of at least 1%. The Registrant is not required to issue
fractional Series A Preferred Shares (other than fractions that are
integral multiples of one one-hundredth of a Series A Preferred Share,
which may, at the option of the Registrant, be evidenced by depositary
receipts) or fractional shares of Common Stock or other securities issuable
upon the exercise of Rights. In lieu of issuing such securities, the
Registrant may make a cash payment, as provided in the Rights Agreement.
The Series A Preferred Shares issuable upon exercise of the Rights
will be redeemable at the option of the Board, in whole or in part, at any
time and from time to time, at a cash price per share equal to the product
of 100 times the average market value (computed as provided in the
Certificate of Designations relating to the Series A Preferred Shares) of
the Common Stock on the date of mailing of the notice of redemption. Each
Series A Preferred Share will be entitled to a minimum preferential
quarterly dividend payment equal to the greater of (i) $0.75 per share or
(ii) an amount equal to 100 times the aggregate dividends declared per
share of Common Stock during the applicable quarter. In the event of
liquidation, the holders of the Series A Preferred Shares will be entitled
(i) to a preferential liquidation payment of $16.50 per share plus accrued
and unpaid dividends to the date of such payment and (ii) after the holders
of shares of Common Stock shall have received an amount per share equal to
the quotient obtained by dividing the per share liquidation preference paid
to holders of Series A Preferred Shares by 100, to receive, together with
holders of Common Stock, their ratable and proportionate share of the
remaining assets to be distributed in the ratio of 100 to one with respect
to the Series A Preferred Shares and shares of Common Stock, on a per share
basis, respectively. Each Series A Preferred Share will have 100 votes,
voting together with the Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which shares of Common Stock
are exchanged, each Series A Preferred Share will be entitled to receive
100 times the amount received per share of Common Stock. These rights will
be protected by customary antidilution provisions.
Rights may be exercised to purchase Series A Preferred Shares only
after the occurrence of the Rights Distribution Date and prior to the
occurrence of a Flip-in Event or Flip-over Event (as such terms are defined
below). A Rights Distribution Date resulting from the commencement of a
tender offer or exchange offer described in clause (ii) of the definition
of "Rights Distribution Date" set forth above could precede the occurrence
of a Flip-in Event or Flip-over Event and thus (subject to the earlier
redemption or expiration of the Rights) result in the Rights being
exercisable to purchase Series A Preferred Shares. A Rights Distribution
Date resulting from any occurrence described in clause (i) of the
definition of "Rights Distribution Date" set forth above would necessarily
follow the occurrence of a Flip-in Event or Flip-over Event and thus
(subject to the earlier redemption or expiration of the Rights) result in
the Rights being exercisable to purchase shares of Common Stock or other
securities as described below.
The Rights Agreement generally provides that, in the event (a "Flip-in
Event") that any person becomes an Acquiring Person, proper provision will
be made so that each holder of a Right, other than Rights that are or were
owned beneficially by the Acquiring Person (which, from and after the date
of the first occurrence of a Flip-in Event, will be void), will thereafter
have the right to receive, upon the exercise thereof at the then-current
Purchase Price, a number of shares of Common Stock (or, under certain
circumstances, an economically equivalent security or securities of the
Registrant) having a market value of two times the Purchase Price.
The Rights Agreement generally provides that, in the event (a "Flip-
over Event") that, following the first date of public announcement by the
Registrant that a person has become an Acquiring Person, (i) the Registrant
merges with or into any person and the Registrant is not the surviving
corporation, (ii) any person merges with or into the Registrant and the
Registrant is the surviving corporation, but all or part of the Common
Stock is changed or exchanged, or (iii) 50% or more of the Registrant's
assets or earning power are sold, proper provision will be made so that
each holder of a Right (other than Rights that previously have become void
upon the occurrence of a Flip-in Event) will thereafter have the right to
receive, upon the exercise thereof at the then-current Purchase Price, a
number of shares of common stock (or, under certain circumstances, an
economically equivalent security or securities) of such other person having
a market value of two times the Purchase Price.
The Board may cause the Registrant to redeem the Rights in whole, but
not in part, at a price of $0.01 per Right, subject to adjustment in
certain circumstances (the "Redemption Price"), at any time prior to the
earlier of (i) the close of business on the tenth day following the first
date of public announcement by the Registrant that a person has become an
Acquiring Person and (ii) the Final Expiration Date. Immediately upon any
redemption of the Rights, the right to exercise the Rights will terminate
and the only right of the holders of Rights will be to receive the
Redemption Price.
Prior to the Rights Distribution Date, except as described in the second
following sentence, the Rights Agreement may be amended by the Registrant,
without the approval of any holders of certificates representing the shares
of Common Stock or Rights, to shorten or lengthen time periods or otherwise
to amend the provisions of the Rights Agreement in any manner which the
Board may determine to be generally consistent with the purposes of the
Rights Agreement. From and after the Rights Distribution Date, except as
described in the next following sentence, the Rights Agreement may be amended
by the Registrant, without the approval of any holders of Rights Certificates,
to cure any ambiguity or defect, shorten or lengthen time periods or change
the provisions of the Rights Agreement in any manner which the Registrant may
deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificate (other than an Acquiring
Person or its affiliates or associates), except that no amendment may
lengthen (a) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable or (b) any other time
period, unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of the holders of the Rights (other than an
Acquiring Person or its affiliates or associates). No amendment may be made
which changes the Redemption Price, the Final Expiration Date, the Purchase
Price or the number of Series A Preferred Shares for which a Right is
exercisable, unless such change is approved at a meeting of stockholders by
the affirmative vote of holders of a majority of the voting power of the
shares entitled to vote and voting (in person or by proxy) for or against
such amendment at such meeting.
The Rights may have the effect of discouraging an unsolicited takeover
proposal. The Rights are intended to, among other objectives, (i) reduce
the Registrant's vulnerability to potentially coercive or unfair takeover
practices and takeover proposals that are inadequate or otherwise
inconsistent with the best interests of the Registrant and it stockholders,
(ii) encourage potential acquirors to negotiate with the Board, acting on
behalf of the Registrant and its stockholders, (iii) enhance the bargaining
position of the Board in such negotiations, (iv) provide additional time to
the Board in which appropriately to evaluate and respond to an unsolicited
takeover proposal, and (v) under appropriate circumstances, provide
additional time to the Board in which to develop or implement alternatives
designed to provide superior value to the Registrant's stockholders. The
Registrant believes that the benefits of the enhancement of the Board's
ability to negotiate with the proponents of unsolicited takeover proposals
and otherwise respond to such proposals outweigh the disadvantages of
potentially discouraging such proposals and the possibility of self-
interest by management.
D. Future Stock Issuances.
As of October 31, 1994, 9,963,742 shares of the Registrant's Common
Stock had been issued and were then outstanding (excluding 2,235,294 shares
held in treasury by Registrant and 160,001 shares held by wholly-owned
subsidiaries of Registrant). The Registrant presently estimates that
approximately 711,000 additional shares of Common Stock will be issued to
holders of unsecured claims in accordance with the Plan of Reorganization.
The foregoing estimate is based upon factors not within the control of the
Registrant, but largely within the control of the bankruptcy court, which
hears unresolved contested claims remaining under Registrant's Plan of
Reorganization. Such estimate may vary materially from the results obtained
in claims hearings. The Registrant has, through the date hereof, granted
stock warrants to purchase an aggregate of 800,000 shares of Common Stock
pursuant to its First Amended and Restated 1992 Warrant Plan (the "Warrant
Plan"). In addition, 588,235 shares of Common Stock have been reserved, but
not issued, for the benefit of the holders of the Registrant's Senior
Subordinated Secured Notes, in the event that the collateral securing such
notes is not sufficient to repay such notes.
The Registrant is also authorized to issue additional shares of
capital stock from time to time. There are no specific restrictions upon
such issuances, except that not more than 1,000,000 shares of Common Stock
may be issued pursuant to the Warrant Plan. Under Delaware law, in the
absence of actual fraud in the transaction, the judgment of the directors
as to the value of consideration received upon the issuance of a
corporation's capital stock is conclusive. In addition, as permitted by
Delaware law, under the Certificate of Incorporation, the Registrant's
stockholders will not have preemptive rights to purchase additional shares
of the Company capital stock upon any issuance of such shares authorized by
the Board.
<PAGE>
ITEM 2. Exhibits.
1.1 Form of Certificate for Common Stock (filed as Exhibit 1.1 to
Registrant's registration statement on Form 8-A dated September 30, 1992
and incorporated herein by reference)
1.2 Form of Rights Certificate, which is attached as Exhibit B to the Rights
Agreement described in Exhibit 2.4 below
2.1 Second Amended and Restated Certificate of Incorporation of the
Registrant, as in effect on September 1, 1992 (incorporated by reference
to Registrant's Current Report on Form 8-K for the event occurring on
September 1, 1992)
2.2 Amended and Restated Bylaws of the Registrant, as in effect on
September 1, 1992 (incorporated by reference to Registrant's Current
Report on Form 8-K for the event occurring on September 1, 1992)
2.3 Certificate of Designations, Preferences and Rights of Series A Junior
Participating Preferred Stock (incorporated by reference to Registrant's
Current Report on Form 8-K for the event occurring on September 1, 1992)
2.4 Rights Agreement, dated September 1, 1992, between the Registrant and
Society National Bank, as Rights Agent (incorporated by reference to
Registrant's Current Report on Form 8-K for the event occurring on
September 1, 1992)
2.4.1 Appointment and Acceptance Agreement, dated as of March 3,
1994, between the Registrant and The First National Bank of
Boston (incorporated by reference to Registrant's Annual
Report on Form 10-K/A (No. 2) for the year ended December 31,
1993)
2.4.2 Amendment to Rights Agreement, dated September 20, 1994,
between the Registrant and The First National Bank of Boston,
as successor Rights Agent (filed herewith)
2.5 Amended and Restated Revolving Credit Agreement, dated as of
September 28, 1993, among the Registrant, Fairfield Myrtle Beach, Inc.,
Suntree Development Company and The First National Bank of Boston, as
agent and lender thereunder (incorporated by reference to Registrant's
Current Report on Form 8-K for the event occurring on September 30, 1993)
2.6 Supplemented and Restated Indenture among the Registrant, Fairfield
River Ridge, Inc., Fairfield St. Croix, Inc. and IBJ Schroder Bank
& Trust Company, as Trustee, and Houlihan Lokey Howard & Zukin, as
Ombudsman, relating to the Senior Subordinated Secured Notes, dated
September 1, 1992 (incorporated by reference to Registrant's Current
Report on Form 8-K for the event occurring on September 1, 1992)
2.6.1 First Supplemental Indenture to the Supplemented and Restated
Indenture referenced in 2.6 above, dated September 1, 1992
(incorporated by reference to Registrant's Current Report on
Form 8-K for the event occurring on September 1, 1992)
2.6.2 Second Supplemental Indenture to the Supplemented and Restated
Indenture referenced in 2.6 above, effective September 1, 1992
(incorporated by reference to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1992)
2.6.3 Third Supplemental Indenture to the Supplemented and Restated
Indenture referenced in 2.6 above, effective March 18, 1993
(incorporated by reference to Registrant's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1993)
2.7 Registrant's First Amended and Restated 1992 Warrant Plan, dated as of
September 29, 1993 (incorporated by reference to Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1993)
2.8 Seventh Amended and Restated Joint Plans of Reorganization (the "Plan
of Reorganization") of Registrant and certain of its subsidiaries
(previously filed as an exhibit to the bankruptcy court order confirming
the Plan of Reorganization, incorporated by reference to Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1992)
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this amendment to registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
FAIRFIELD COMMUNITIES, INC.
By: /s/Marcel J. Dumeny
Marcel J. Dumeny,
Senior Vice President
November 1, 1994
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Page
1.1 Form of Certificate for Common Stock (filed
as Exhibit 1.1 to Registrant's registration
statement on Form 8-A dated September 30, 1992
and incorporated herein by reference)
1.2 Form of Rights Certificate, which is attached
as Exhibit B to the Rights Agreement described
in Exhibit 2.4 below
2.1 Second Amended and Restated Certificate of
Incorporation of the Registrant, as in effect
on September 1, 1992 (incorporated by reference
to Registrant's Current Report on Form 8-K for
the event occurring on September 1, 1992)
2.2 Amended and Restated Bylaws of the Registrant,
as in effect on September 1, 1992 (incorporated
by reference to Registrant's Current Report on
Form 8-K for the event occurring on September 1,
1992)
2.3 Certificate of Designations, Preferences and
Rights of Series A Junior Participating
Preferred Stock (incorporated by reference
to Registrant's Current Report on Form 8-K
for the event occurring on September 1, 1992)
2.4 Rights Agreement, dated September 1, 1992,
between the Registrant and Society National
Bank, as Rights Agent (incorporated by
reference to Registrant's Current Report on
Form 8-K for the event occurring on
September 1, 1992)
2.4.1 Appointment and Acceptance Agreement,
dated as of March 3, 1994, between the
Registrant and The First National Bank
of Boston (incorporated by reference to
Registrant's Annual Report on Form 10-K/A
(No. 2) for the year ended December 31,
1993)
2.4.2 Amendment to Rights Agreement, dated
September 20, 1994, between the
Registrant and The First National Bank
of Boston, as successor Rights Agent
(filed herewith)
2.5 Amended and Restated Revolving Credit
Agreement, dated as of September 28, 1993,
among the Registrant, Fairfield Myrtle Beach,
Inc., Suntree Development Company and The
First National Bank of Boston, as agent and
lender thereunder (incorporated by reference
to Registrant's Current Report on Form 8-K
for the event occurring on September 30,
1993)
2.6 Supplemented and Restated Indenture among
the Registrant, Fairfield River Ridge, Inc.,
Fairfield St. Croix, Inc. and IBJ Schroder
Bank & Trust Company, as Trustee, and
Houlihan Lokey Howard & Zukin, as Ombudsman,
relating to the Senior Subordinated Secured
Notes, dated September 1, 1992 (incorporated
by reference to Registrant's Current Report
on Form 8-K for the event occurring on
September 1, 1992)
2.6.1 First Supplemental Indenture to the
Supplemented and Restated Indenture
referenced in 2.6 above, dated
September 1, 1992 (incorporated by
reference to Registrant's Current
Report on Form 8-K for the event
occurring on September 1, 1992)
2.6.2 Second Supplemental Indenture to the
Supplemented and Restated Indenture
referenced in 2.6 above, effective
September 1, 1992 (incorporated by
reference to Registrant's Annual Report
on Form 10-K for the year ended
December 31, 1992)
2.6.3 Third Supplemental Indenture to the
Supplemented and Restated Indenture
referenced in 2.6 above, effective
March 18, 1993 (incorporated by
reference to Registrant's Quarterly
Report on Form 10-Q for the quarter
ended March 31, 1993)
2.7 Registrant's First Amended and Restated 1992
Warrant Plan, dated as of September 29, 1993
(incorporated by reference to Registrant's
Quarterly Report on Form 10-Q for the quarter
ended September 30, 1993)
2.8 Seventh Amended and Restated Plan of
Reorganization (the "Plan of Reorganization")
of Registrant and certain of its subsidiaries
(previously filed as an exhibit to the
bankruptcy court order confirming the Plan of
Reorganization, incorporated by reference to
Registrant's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1992)
EXHIBIT 2.4.2
FAIRFIELD COMMUNITIES, INC.
2800 Cantrell Road
Little Rock, Arkansas 72202
September 20, 1994
The First National Bank of Boston
P.O. Box 1865
Boston, Massachusetts 02105
Attention: Vice President, Shareholder
Services Division
Re: Amendment to Rights Agreement
Ladies and Gentlemen:
Reference is made to the Rights Agreement, dated as of September 1,
1992 (the "Rights Agreement"), between Fairfield Communities, Inc. (the
"Company") and Society National Bank, under which The First National Bank
of Boston was appointed as successor Rights Agent (in such capacity, the
"Rights Agent") pursuant to an Appointment and Acceptance Agreement, dated
as of March 3, 1994, between the Company and the Rights Agent. Pursuant to
Section 26 of the Rights Agreement, the Company hereby amends, and directs
the Rights Agent to amend, the Rights Agreement as follows:
1. Recital C of the Rights Agreement is hereby deleted in its
entirety.
2. Section 1(a) of the Rights Agreement is hereby amended to
delete the phrase "other than pursuant to a Qualifying Offer"
each time it appears therein.
3. Section 1(q) of the Rights Agreement is hereby amended to delete
the reference to "Section 3(a)" and substitute "Section 11(b)" in
place thereof.
4. Section 1(z) of the Rights Agreement is hereby deleted in its
entirety, and Section 1(aa) through Section 1(oo), inclusive, of
the Rights Agreement are hereby renumbered as Section 1(z)
through Section 1(nn), inclusive.
5. Renumbered Section 1(hh) of the Rights Agreement is hereby
amended in its entirety to read as follows:
"(hh) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company that an Acquiring Person has
become such."
6. The first sentence of Section 3(b) of the Rights Agreement is
hereby deleted in its entirety.
7. Section 7(a) of the Rights Agreement is hereby amended in its
entirety to read as follows:
"(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided therein including, without
limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in
whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to
purchase set forth on the reverse side thereof and the
certificate contained therein duly executed, to the Rights Agent
at the office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with
respect to the total number of Units (or other shares,
securities, cash or other assets, as the case may be) as to which
such surrendered Rights are then exercisable, at or prior to the
earlier of (i) the Final Expiration Date and (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof
(the earlier of (i) and (ii) being herein referred to as the
"Expiration Date")."
8. Section 11(a)(ii) of the Rights Agreement is hereby amended in
its entirety to read as follows:
"(ii) In the event any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan), alone or together with
any of its Affiliates and Associates, shall, at any time after
the Effective Date, become the Beneficial Owner of 20% or more of
the shares of Common Stock then outstanding, unless the event
causing the 20% threshold to be crossed is a transaction set
forth in Section 13(a) hereof (provided, however, that if such
Person shall have become the Beneficial Owner of 20% or more of
the shares of Common Stock then outstanding solely as a result of
(y) a reduction in the number of shares of Common Stock
outstanding due to the repurchase of shares of Common Stock by
the Company, or (z) such Person, and the Affiliates and
Associates of such Person, receiving, or having the right to
receive Common Stock pursuant to the Plan of Reorganization, then
such Person shall not be deemed the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding and this
Section 11(a)(ii) shall not apply unless and until such Person
shall purchase or otherwise become (as a result of actions taken
by such Person or its Affiliates or Associates) the Beneficial
Owner of additional shares of Common Stock constituting 1% or
more of the then outstanding shares of Common Stock), then,
immediately upon the first occurrence of a Section 11(a)(ii)
Event, proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at
the then current Purchase Price in accordance with the terms of
this Agreement, in lieu of a number of Units, such number of
shares of Common Stock of the Company as shall equal the result
obtained by (1) multiplying the then current Purchase Price by
the then number of Units for which a Right was or would have been
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, whether or not such Right was then
exercisable, and (2) dividing that product (which, following such
first occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price per share of Common
Stock on the date of such first occurrence (such number of shares
being referred to as the "Adjustment Shares").
9. Section 13(a) of the Rights Agreement is hereby amended to delete
the first parenthetical appearing therein and the parenthetical
"(except as may be contemplated by Section 13(d) hereof)".
10. Section 13(d) of the Rights Agreement is hereby deleted in its
entirety.
11. The first sentence of Section 18(a) of the Rights Agreement is
hereby amended in its entirety to read as follows:
"The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, reimburse its
reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder."
12. The first sentence of Section 23(a) of the Rights Agreement is
hereby amended in its entirety to read as follows:
"The Board may, at its option, at any time prior to the earlier
of (i) the Close of Business on the tenth day following the Stock
Acquisition Date and (ii) the Final Expiration Date, redeem all
but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price")."
13. The second sentence of Section 23(a) of the Rights Agreement is
hereby deleted in its entirety.
14. Section 25 of the Rights Agreement is hereby amended to delete
the address of Society National Bank and substitute the following
in place thereof:
"The First National Bank of Boston
P.O. Box 1865
Boston, Massachusetts 02105
Attention: Vice President, Shareholder
Services Division"
15. The fourth sentence of Section 26 of the Rights Agreement is
hereby amended to delete the phrase "requirements which must be
met for a cash tender offer to constitute a Qualifying Offer
pursuant to Section 11(a)(ii) hereof or which changes the".
16. The Form of Rights Certificate attached as Exhibit B to the
Rights Agreement is hereby amended to (a) delete the
parenthetical "(the "Rights Agent")" and substitute the phrase ",
under which The First National Bank of Boston has been appointed
as successor Rights Agent (in such capacity, the "Rights Agent")"
in place thereof and (b) delete reference to "SOCIETY NATIONAL
BANK" at the bottom thereof and substitute "THE FIRST NATIONAL
BANK OF BOSTON" in place thereof.
17. The Form of Summary of Rights attached as Exhibit C to the Rights
Agreement is hereby deleted in its entirety.
The foregoing amendments, to the extent required by Section 26 of the
Rights Agreement, have been approved at a meeting of the Company's
stockholders at which a quorum was present by the affirmative vote of the
holders of a majority of the voting power of the shares entitled to vote
and voting (in person or by proxy) for or against such amendments at such
meeting.
The foregoing amendments are effective as of the date first above
written and all references to the Rights Agreement shall, as of and after
such date, be deemed to be references to the Rights Agreement as amended
hereby. Except as specifically amended hereby, the Rights Agreement shall
remain in full force and effect.
A composite copy of the Rights Agreement incorporating the foregoing
amendments is enclosed herewith for your information.
Very truly yours,
FAIRFIELD COMMUNITIES, INC.
By: /s/Marcel J. Dumeny
Marcel J. Dumeny,
Senior Vice President
Accepted and Agreed to as of
the date first above written:
THE FIRST NATIONAL BANK OF BOSTON
By: /s/Gordon C. Stevenson
Name: Gordon C. Stevenson
Title: Administration Manager
