<PAGE>
As filed with the Securities and Exchange Commission on December 23, 1997.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FAIRFIELD COMMUNITIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 71-0390438
(State of incorporation) (I.R.S. Employer Identification No.)
11001 Executive Center Drive
Little Rock, Arkansas 72211
(501) 228-2700
(Address and telephone number of Registrant's principal executive offices)
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Marcel J. Dumeny With a copy to:
Senior Vice President and General Counsel Mark V. Minton
11001 Executive Center Drive Jones, Day, Reavis & Pogue
Little Rock, Arkansas 72211 2300 Trammell Crow Center
(501) 228-2700 2001 Ross Avenue
(Name, address, and telephone Dallas, Texas 75201
number of agent for service) (214) 220-3939
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Approximate date of commencement of proposed sale to the public: The securities
being registered on this Form are to be offered and sold from time to time after
the effective date of the Registration Statement by a selling stockholder.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] __________.
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Amount Proposed Maximum Proposed Maximum
Title of Securities to to be Offering Price Aggregate Offering Amount of Registration
be Registered Registered per Share Price Fee (1)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share (2) 4,025,597 (2) $41.59375 $161,370,768.90 $47,604.38
===========================================================================================================================
(1) Estimated solely for the purpose of calculating the registration fee under
Rule 457(c) based upon the average high and low prices of shares of Common
Stock on the Composite Tape of the New York Stock Exchange, Inc. on December
18, 1997 in the case of outstanding shares and pursuant to Rule 457(h) upon
the stated exercise price in the case of shares subject to options.
(2) Includes associated share purchase rights pursuant to a Rights Agreement
adopted by the Registrant.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
============================================================================================================================
</TABLE>
<PAGE>
Subject to Completion, Dated December 23, 1997
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
PROSPECTUS
4,025,597 SHARES
FAIRFIELD COMMUNITIES, INC.
COMMON STOCK
This Prospectus relates to an aggregate of up to 4,025,597 shares (the
"Shares") of Common Stock, par value $0.01 per share ("Common Stock"), of
Fairfield Communities, Inc. (the "Company") that may be offered by Ralph P.
Muller, R & A Partnership, Ltd., a Texas limited partnership ("R&A"), or Kevin
Sheehan (collectively, the "Selling Stockholders") from time to time. The
Company will receive no part of the proceeds from sales of the Shares by the
Selling Stockholders.
The Shares are listed on the New York Stock Exchange (the "NYSE") under the
trading symbol "FFD."
--------------------------------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK.
---------------------------------------------
The Shares will be sold either directly by the Selling Stockholders or
through brokers, dealers, or agents. At the time any particular offer of Shares
is made, if and to the extent required, the specific number of Shares offered,
the offering price, and the other terms of the offering, including the names of
any brokers, dealers, or agents involved in the offering and the compensation,
if any, of such brokers, dealers, or agents, will be set forth in a supplement
to this Prospectus (a "Prospectus Supplement"). Any statement contained in this
Prospectus will be deemed to be modified or superseded by any inconsistent
statement contained in any Prospectus Supplement delivered herewith.
Unless this Prospectus is accompanied by a Prospectus Supplement stating
otherwise, offers and sales may be made pursuant to this Prospectus only in
ordinary broker's transactions made on the NYSE in transactions involving
ordinary and customary brokerage commissions.
The Company will bear all expenses in connection with the registration under
the Securities Act of 1933, as amended (the "Securities Act"), and the listing
on the NYSE of the Shares. The Selling Stockholders will bear all other
expenses in connection with sales of the Shares. The Company and each of the
Selling Stockholders have agreed to indemnify each other against certain
liabilities including liabilities under the Securities Act. See "Selling
Stockholders."
---------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
---------------------------------------------
The date of this Prospectus is , 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The reports, proxy
statements and other information filed by the Company with the Commission may be
inspected and copied at the public reference facilities maintained by the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the public reference facilities maintained by the Commission at The
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661,
and at 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of
such materials may also be obtained at prescribed rates from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission and that is located at http://www.sec.gov.
Documents filed by the Company may also be inspected at the offices of the NYSE,
20 Broad Street, New York, New York 10005, on which exchange the Common Stock
is listed.
The Company has filed a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act. This Prospectus omits
certain of the information contained in the Registration Statement, and
reference is hereby made to the Registration Statement and to the exhibits
relating thereto for further information with respect to the Company and the
securities offered hereby. Any statements contained herein concerning the
provisions of any document are not necessarily complete, and in each instance
reference is made to the copy of such document filed as an exhibit to the
Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Fairfield (Commission
File No. 1-8096) pursuant to the Exchange Act are incorporated by reference into
this Prospectus:
(i) the Company's Annual Report on Form 10-K as amended by Forms 10-K/A for
the year ended December 31, 1996;
(ii) the Company's Quarterly Reports on Form 10-Q for the fiscal quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997;
(iii) the Company's Prospectus dated November 10, 1997, filed pursuant to
Rule 424(b) under the Securities Act; and
(iv) the description of the Company's Common Stock contained in the
Company's Registration Statements on Form 8-A (Commission File No. 1-8096)
filed December 8, 1995.
All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering
made hereby, shall be deemed incorporated by reference in this Prospectus and to
be a part of this Prospectus from the date of the filing of such reports. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
Any person receiving a copy of this Prospectus may obtain, without charge,
upon written or oral request, a copy of any of the documents incorporated by
reference herein, except for the exhibits to such documents (other than the
exhibits expressly incorporated in such documents by reference). Requests should
be directed to: Fairfield Communities, Inc., 11001 Executive Center Drive,
Little Rock, Arkansas 72211, Attention: Investor Relations (telephone: (501)
228-2700).
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<PAGE>
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following risks and investment considerations should be carefully considered in
evaluating the Company and its business before purchasing any of the Shares
offered hereby. Each of the following factors may have a material adverse
effect on the Company's operations, financial results, financial condition,
liquidity, market valuation or market liquidity in future periods.
TIMESHARE INDUSTRY OPERATING RISKS
The Company's business is subject to all of the operating risks inherent in
the timeshare industry. These risks include an oversupply of timeshare units, a
reduction in demand for timeshare units, changes in travel and vacation
patterns, changes in governmental regulations of the timeshare industry and
increases in construction costs or taxes, as well as negative publicity
concerning the industry. The timeshare industry is highly fragmented,
containing a large number of developers. In the past, the timeshare industry as
a whole has experienced a negative image as a result of various developers
employing high pressure sales and marketing tactics, constructing low quality
units and engaging in other potentially misleading practices. Consequently,
negative publicity with respect to any one or more developers in the timeshare
industry could have a disproportionate effect on all of the developers in the
industry.
RISKS RELATED TO VACATION BREAK MERGER
On December 19, 1997, pursuant to the Agreement and Plan of Merger, dated as
of August 8, 1997 (the "Merger Agreement"), among the Company, its wholly owned
subsidiary, FCVB Corp. ("Merger Sub"), and Vacation Break U.S.A., Inc., a
Florida corporation ("Vacation Break"), Merger Sub merged with and into Vacation
Break (the "Merger"), and each issued and outstanding share of common stock, par
value $.01, of Vacation Break ("Vacation Break Common Stock") was converted
into the right to receive .6075 of a share of Fairfield Common Stock and the
existing warrants and options to purchase Vacation Break Common Stock were
assumed by the Company at the same exchange ratio. The Company believes that
the Merger with Vacation Break will offer opportunities for long-term
efficiencies in operations that should positively affect future results of the
combined operations of the Company and Vacation Break. However, the Merger may
adversely affect the Company's financial performance in 1997 and future years
until such time as the Company is able to realize the positive effect of
opportunities for long-term efficiencies in operations. In addition, the
combined companies will be more complex and diverse than the Company
individually, and the combination and continued operation of their distinct
business operations will present difficult challenges for the Company's
management due to the increased time and resources required in the management
effort. While the Company's management and Board of Directors believe that the
combination may be effected in a manner which will realize the value of the
companies, there can be no assurances as to the effect of the Merger.
In order to maintain and increase profitability, the combined companies will
need to successfully integrate and streamline overlapping functions. The
Company and Vacation Break have different systems and procedures in many
operational areas which must be rationalized and integrated. There can be no
assurance that integration will be successfully accomplished. The difficulties
of such integration may be increased by the necessity of coordinating
geographically separate organizations. The integration of certain operations
will require the dedication of management resources which may temporarily
distract attention from the day-to-day business of the combined companies.
Failure to effectively accomplish the integration of the companies' operations
could have an adverse effect on the Company's results of operations and
financial condition.
Transaction costs relating to the negotiation of, preparation for, and
consummation of the Merger and the anticipated combination of certain operations
of the Company and Vacation Break will result in a one-time charge to the
Company's earnings of approximately $16 million in the fourth quarter of 1997.
This charge is expected to include the fees and expenses payable to financial
advisors, legal fees and other transaction expenses related to the Merger. In
addition, there can be no assurance that the Company will not incur additional
charges in subsequent quarters to reflect costs associated with the Merger and
the integration of the Company's and Vacation Break's operations.
The Attorneys General of two states (Michigan and Vermont) have pending
litigation and other actions against Vacation Break relating to its marketing of
vacation packages alleging that Vacation Break violated the consumer protection
or telemarketing laws of such states. Vacation Break is actively attempting to
settle these proceedings with each of the states, and is engaged in settlement
discussions with each of them. The marketing practice in question involves a
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<PAGE>
prior direct mail campaign and telemarketing. The issues raised concern whether
the solicitations of a vacation package properly disclosed that the offers
required the vacation package to be purchased, or whether, if applicable, a tour
of a timeshare resort was required in connection with the purchase of the
vacation package. Vacation Break has represented to the Company that Vacation
Break does not anticipate that the legal and settlement costs it expects to
incur will have a material impact on Vacation Break's results of operations,
liquidity or financial condition. However, there can be no assurance that
settlement of the pending proceedings can be reached on terms acceptable to
Vacation Break, or at all, or that additional states will not commence similar
proceedings. Accordingly, future legal and settlement costs incurred, or fines
assessed if settlement cannot be reached, could be substantially greater than
expected.
RISKS ASSOCIATED WITH ACQUISITIONS AND NEW DEVELOPMENT OF RESORTS
A principal component of the Company's strategy is to acquire and develop
new destination resorts. The Company's future growth and financial success will
depend upon a number of factors, including its ability to identify attractive
resort acquisition and development opportunities, consummate the acquisition or
development of such resorts on favorable terms, profitably sell vacation
ownership interests ("VOIs") at such resorts, and successfully integrate the
newly acquired or developed resorts into the Company's sales and marketing
programs. The Company's ability to execute its growth strategy depends to a
significant degree on the existence of attractive resort acquisition and
development opportunities and its ability to obtain additional debt and equity
capital and to fund such acquisitions and development. There can be no assurance
that the Company will be successful with respect to such factors.
REGULATION OF MARKETING AND SALES OF VOIS
The Company's marketing and sales of VOIs and other operations are subject
to extensive regulation by the federal government and by the states in which the
Company's resorts are located and in which its VOIs are marketed and sold. The
federal government and many states have adopted specific laws and regulations
regarding the sale of timeshares, telemarketing and certain of the Company's
other activities. The Company believes that it is in substantial compliance
with all laws and regulations to which it is currently subject. However, there
is no clear guidance regarding the scope and interpretation of the registration
requirements of various state laws regulating certain types of timeshare
marketing and sales programs.
No assurance can be given that the cost of complying with laws and
regulations in all jurisdictions in which the Company desires to conduct sales
would not be significant, would not impair the cost-effectiveness of its
marketing programs, or that the Company is in fact in compliance with all
applicable laws and regulations. If the Company is not in substantial
compliance with applicable laws and regulations, among other consequences, it
could be subject to regulatory actions and purchasers of VOIs could have certain
rescission rights. In addition, there can be no assurance that laws and
regulations (including existing interpretations thereof) applicable to the
Company in any specific jurisdiction will not be revised or that other laws or
regulations will not be adopted which could increase the Company's cost of
compliance or prevent the Company from selling VOIs or conducting other
operations in a jurisdiction. In particular, the Company has become more
reliant on telemarketing based marketing programs. Regulation of and laws
governing the use of telemarketing have grown in the recent past and additional
laws and regulations governing these activities may be adopted in the future.
Any failure to comply with any applicable law or regulation, or any increases in
the costs of compliance could have a material adverse effect on the Company.
PENDING LITIGATION
The Company has certain lawsuits pending against it, as described in Notes 9
and 11 of the Notes to Consolidated Financial Statements in the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1997,
incorporated by reference herein. Vacation Break also has certain lawsuits
pending against it as described in Note 24 of the Notes to Fiscal Year End
Consolidated Financial Statements and Note 6 of the Notes to Interim Period
Consolidated Condensed Financial Statements of Vacation Break included in the
Company's Prospectus, dated November 10, 1997, incorporated herein. There can be
no assurance that those lawsuits or any other litigation pending against the
Company or Vacation Break previously disclosed will not be decided adversely
and, if decided adversely, will not have a material adverse effect on the
financial condition, liquidity or results of operations of the Company.
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<PAGE>
RISKS ASSOCIATED WITH FINANCING; HEDGING ACTIVITIES
The Company offers financing to buyers of VOIs at the Company's resorts,
which bears interest at fixed rates and is collateralized by a first mortgage
on, or retention of title under an installment sales contract for, the
underlying VOI. The Company and its wholly owned finance subsidiary, Fairfield
Acceptance Corporation ("FAC"), have revolving credit facilities to finance the
Company's contracts receivable. The Company's current credit facilities which
finance contracts receivable are, and are expected to continue to be, at
variable interest rates. The Company presently believes it has adequate
borrowing availability under its credit facilities, however, any significant
increase in interest rates on the Company's financing or prepayment rates on the
contracts receivable could have an adverse effect on the profitability of the
Company's portfolio of contracts receivable or the future availabilities under
its credit facilities or its ability to obtain future financing. The Company
attempts to retain borrowing availability under its revolving credit facility by
periodically selling contracts receivable to FAC. The Company uses the proceeds
from these sales to reduce the outstanding balance under its revolving credit
facility. FAC and its subsidiaries periodically securitize such receivables
through financings with third parties. The proceeds from the securitization
transactions are then used to reduce the balances of FAC's revolving credit
facility. However, there can be no assurance that the Company and FAC will be
able to successfully continue such securitizations, and any failure to continue
such securitizations could result in the Company and FAC having insufficient
borrowing availability under their credit facilities to maintain their
operations at current levels. In connection with certain of FAC's
securitization transactions issued with variable interest rates, FAC has sought
to limit its exposure to possible future increases in interest rates by
purchasing interest rate caps. No assurance can be given that FAC will be able
to obtain interest rate caps or other hedging instruments in connection with
future securitization transactions or that the cost associated with interest
rate caps or other hedging instruments will not increase FAC's operating costs.
In connection with the consummation of the Vacation Break Merger, the Company
will establish a short-term bridge credit facility with the lender for the
Company's and FAC's revolving credit facilities. The proceeds from the bridge
facility will be used primarily to repay Vacation Break's existing lenders whose
borrowing costs exceed the costs Fairfield expects to obtain from its lenders.
The Company expects to restructure and increase its revolving credit facility to
give effect to the combined operations of Fairfield and Vacation Break and to
include Vacation Break's contracts receivable in the collateral securing the
restructured revolving credit facility. However, there can be no assurance that
the bridge facility can be refinanced on more favorable terms or at all.
IMPACT OF ECONOMIC CYCLES
Any substantial downturn in economic conditions or any significant price
increases related to the travel and tourism industry could significantly depress
discretionary consumer spending and have a material adverse effect on the
Company's business. Any such economic conditions, including inflation, may also
affect the future availability of attractive financing rates for the Company or
its customers and may materially adversely affect the Company's business.
Inflation may also affect the Company's income derived from sales of vacation
packages to the extent that the Company's costs of providing vacation packages
increases from the time the vacation package is sold until the time the vacation
is taken. Furthermore, adverse changes in general economic conditions may
adversely affect the collectability of the Company's loans to VOI purchasers.
RISKS ASSOCIATED WITH CUSTOMER DEFAULT
The Company bears the risk of defaults by purchasers of VOIs. Because VOIs
are vacation homes and not primary residences, purchasers of VOIs who finance a
portion of the purchase price present a greater risk of default than typical
borrowers under home mortgages. Private mortgage insurance or its equivalent is
not readily available to cover VOIs. If a purchaser of a VOI defaults on the
loan made by the Company to finance the purchase of such interest during the
early part of the repayment schedule, the associated marketing costs other than
certain sales commissions are not recoverable and they must be incurred again
after the VOI has been returned to the Company's inventory for resale.
Commissions paid in connection with the sale of VOIs may be recoverable from
sales personnel upon default in accordance with contractual arrangements with
the Company, depending upon the amount of time that has elapsed between the sale
and the default and the number of payments made prior to such default. Although
the Company in many cases may have recourse against sales agents for commissions
paid, no assurance can be given that any commissions will be fully recovered in
the event of purchaser defaults.
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<PAGE>
POSSIBLE ENVIRONMENTAL LIABILITIES
Under various federal, state and local laws, ordinances and regulations, the
current or previous owner, manager or operator of real property may be liable
for the costs of removal or remediation of certain hazardous or toxic substances
located on or in, or emanating from, such property, as well as related costs of
investigation and property damage. Such laws often impose such liability
without regard to whether the owner, manager or operator knew of, or was
responsible for, the presence of such hazardous or toxic substances. The
Company believes that it is in compliance in all material respects with all
federal, state and local ordinances and regulations regarding hazardous or toxic
substances, but no assurance can be given that hazardous or toxic substances
will not be found on its properties or properties that it previously owned or
may acquire.
COMPLIANCE WITH LAWS GOVERNING ACCESS
A number of state and federal laws, including the Fair Housing Act and the
Americans with Disabilities Act, impose requirements related to access and use
by disabled persons of a variety of public accommodations and facilities.
Although the Company believes that its resorts are substantially in compliance
with these laws, the Company may incur additional costs of complying with such
laws. The ultimate amount of the cost of compliance with such legislation is
not currently ascertainable, and, while such costs are not expected to have a
material effect on the Company, such costs could be substantial.
UNINSURED LOSS; NATURAL DISASTERS
There are certain types of losses (such as losses arising from acts of war)
that are not generally insured because they are either uninsurable or not
economically insurable and for which the Company does not have insurance
coverage. Should an uninsured loss or a loss in excess of insured limits occur,
the Company could lose its capital invested in a resort, as well as the
anticipated future revenues from such resort, and would continue to be obligated
on any mortgage indebtedness or other obligations related to the resort.
Moreover, if the property owners association fails to adequately insure the
units, any uninsured or underinsured casualty may affect the collectability of
the contracts receivable related to those units. In addition, the Company's
resorts could suffer significant damage as a result of hurricanes, earthquakes,
floods and other natural disasters. Any such damage, as well as adverse weather
conditions generally, could reduce the Company's ability to sell VOIs at its
resorts.
COMPETITION
As the Company develops destination resorts, the Company may experience
significant competition for qualified personnel, favorable sites and customers
at those resorts from other entities engaged in the business of resort
development, sales and operation, including VOI ownership, condominiums, hotels
and motels. Many well-known lodging, hospitality and entertainment companies
have begun to develop and sell VOIs in resort properties. While many of those
companies have targeted a more narrow market segment than the Company's
historical market segment, there can be no assurance that the Company and those
companies will not compete more broadly at destination locations. In such
event, the Company will be required to compete with companies that may have
significantly greater resources.
CONCENTRATION IN FLORIDA MARKET
The Company currently has one resort property under development in Florida,
and all of Vacation Break's resort properties are located in Florida.
Accordingly, based on 1996 operations, approximately 50% of the combined
businesses of the Company and Vacation Break will be concentrated in the Florida
market. The Company believes that certain fundamental aspects of Florida as a
location for resort properties (including climate, quality of life, and
opportunities for sports and leisure activities) have contributed and will
continue to contribute to the Company's and Vacation Break's abilities to sell
VOIs in the Florida market. The Florida market is one of the largest markets for
VOI sales in the United States. However, Florida is also one of the most
competitive markets for VOI sales. In addition, historically, natural disasters
and media coverage of crimes committed in Florida have had significant adverse
effects on tourism in Florida. Accordingly, there can be no assurance that the
Florida market will continue to be favorable for VOI sales or that the
businesses of the Company and Vacation Break will not be adversely affected by
their concentration in the Florida market.
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<PAGE>
APPLICABILITY OF FEDERAL SECURITIES LAWS TO THE SALE OF VOIS
It is possible that the VOIs sold by the Company may be deemed to be
securities as defined in Section 2(1) of the Securities Act. If the VOIs were
determined to be securities for that purpose, their sale would require
registration under the Securities Act. The Company has not registered the sale
of VOIs under the Securities Act and does not intend to do so in the future. If
the sale of VOIs were found to have violated the registration provisions of the
Securities Act, purchasers of VOIs would have the right to rescind their
purchases of those VOIs. If a substantial number of purchasers sought
rescission and were successful, the Company's business, results of operations
and financial conditions could be materially adversely affected.
ANTI-TAKEOVER MATTERS
The Company is subject to various factors that could have the effect of
making it more difficult for a party to acquire control of the Company, which
could adversely affect the market price of the Common Stock. The Company's
Certificate of Incorporation grants the Company's Board of Directors (the
"Board") the authority to issue up to 5,000,000 shares of preferred stock, par
value $0.01 per share ("Preferred Stock"), having such rights, preferences and
privileges as designated by the Board without stockholder approval. The rights
of the holders of the Common Stock will be subject to, and may be adversely
affected by, the rights of the holders of any Preferred Stock that may be issued
in the future. In addition, the Company has adopted a Rights Agreement which
provides for the issuance of a 2/3 right (a "Right") for each outstanding share
of Common Stock. The Rights entitle the holder to purchase, under certain
circumstances, one one-hundredth of a share of the Company's Series A Junior
Participating Preferred Stock at $25.00 per share. The Rights may have the
effect of discouraging an unsolicited takeover proposal. Section 203 of the
Delaware General Corporation Law is also applicable to the Company and contains
provisions that restrict certain business combinations with interested
stockholders. Section 203 may have the effect of inhibiting a non-negotiated
merger or other business combination involving the Company.
THE COMPANY
The Company is one of the largest vacation ownership companies in the United
States in terms of property owners and vacation ownership units constructed. The
Company's 20 resorts are located in 11 states; 10 resorts are in destination
areas with popular vacation attractions and 10 regional resorts are in scenic
locations. The Company's principal business is selling VOIs, commonly known as
timeshares, primarily through its innovative points-based vacation system,
FairShare Plus(R). The Company also offers financing for VOI purchasers through
its wholly owned subsidiary, FAC.
The Company's principal executive offices are located at 11001 Executive
Center Drive, Little Rock, Arkansas 72211 and its telephone number is (501) 228-
2700.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of Shares by
the Selling Stockholders.
SELLING STOCKHOLDERS
Effective upon consummation of the Merger on December 19, 1997, Vacation
Break became a wholly owned subsidiary of the Company. As a result of the
conversion of shares of Vacation Break Common Stock and the assumption of
Vacation Break options in the Merger, the Company (i) issued 3,157,740 shares of
Common Stock to Ralph P. Muller, which includes 3,144,679 shares of Common Stock
owned of record by Mr. Muller and beneficially by R&A and 13,061 shares of
Common Stock owned by Mr. Muller and Alice Muller, his wife, as joint tenants
with rights of survivorship, (ii) issued 761,544 shares of Common Stock to Kevin
Sheehan, and (iii) assumed options exercisable by Mr. Sheehan which are deemed
options to purchase 106,313 shares of Common Stock. Of the shares of Common
Stock issued to Mr. Muller and R&A, Joyce North, the Executive Vice President -
Sales of Vacation Break has an option to acquire 212,625 shares. Of the shares
of Common Stock issued to Kevin Sheehan, Joyce North has an option to acquire
30,375 shares. If Ms. North exercises these options to acquire an aggregate of
136,688 Shares, she has the right to sell those Shares pursuant to this
Prospectus upon her agreement to be bound by the terms of the Registration
Rights Agreement among the Company and the Selling Stockholders, in which event
this Prospectus will be supplemented accordingly. Ralph P. Muller is the former
Chairman of the Board and Chief Executive Officer of Vacation Break and,
effective upon consummation of the Merger, became a director of the Company,
Kevin Sheehan is the former President of Vacation Break and is a consultant to
the Company.
-7-
<PAGE>
The Shares offered by this Prospectus may be offered from time to time by
the Selling Stockholders.
<TABLE>
<CAPTION>
COMMON STOCK NUMBER OF COMMON STOCK
OWNERSHIP SHARES OF OWNERSHIP
PRIOR TO OFFERING (1)(2) COMMON STOCK AFTER OFFERING (2)
------------------------ -------------- ------------------
NAME AND POSITION NUMBER PERCENTAGE OFFERED HEREBY NUMBER PERCENTAGE
- ------------------ --------- ------------- -------------- ------ ----------
<S> <C> <C> <C> <C> <C>
Ralph P. Muller and 3,157,740(3) 14.06% 3,157,740 0 0%
R&A Partnership
Kevin Sheehan 867,857(4) 3.83% 867,857 0 0%
</TABLE>
- ---------------
(1) Based on ownership of Vacation Break Common Stock as of December 18, 1997.
(2) Based on 17,140,585 shares of Common Stock outstanding as of December 18,
1997 and 5,315,764 shares of Common Stock deemed issued and outstanding
which represents the aggregate shares of Common Stock issuable pursuant to
the Merger to the holders of shares of Vacation Break Common Stock that were
issued and outstanding on December 18, 1997.
(3) Includes 3,144,679 shares of Common Stock owned beneficially by R&A. RPM
Investments, Inc., a Texas corporation wholly-owned by Mr. Muller, is the
sole general partner of R&A. Pursuant to a nominee agreement, R&A has the
right to dispose or direct the disposition and the right to vote or to
direct the voting of 3,144,679 shares of Common Stock. Also includes (i)
13,061 shares of Common Stock owned by Mr. Muller and Alice Muller, his
wife, as joint tenants with rights of survivorship and (ii) 212,625 shares
of Common Stock subject to an option granted to Joyce North.
(4) Includes (i) 106,313 shares of Common Stock issuable upon exercise of
options granted pursuant to the Vacation Break U.S.A., Inc. 1995 Stock
Option Plan, as amended, and (ii) 50,000 shares of Common Stock subject to
an option granted to Joyce North.
The Company agreed to register the offering and sale of the Shares under the
Securities Act pursuant to the terms of a Registration Rights Agreement which
the Company and the Selling Stockholders entered into at the effective time of
the Merger. The Company has agreed to bear all expenses incurred in connection
with the registration under the Securities Act and the listing on the NYSE of
the Shares. The Selling Stockholders will bear all other expenses in connection
with sales of the Shares.
Each of the Selling Stockholders has agreed to indemnify the Company, and
its directors, officers and any controlling person of the Company against
certain liabilities based on information furnished for use in this Prospectus,
and the Registration Statement of which this Prospectus is a part, by the
Selling Stockholders. The Company has agreed to indemnify the Selling
Stockholders and any controlling persons of the Selling Stockholders against
certain liabilities based on information contained in this Prospectus, and the
Registration Statement of which this Prospectus is a part, which was not
furnished by the Selling Stockholders.
PLAN OF DISTRIBUTION
Offers and sales of Shares pursuant to this Prospectus may be effected by
the Selling Stockholder from time to time in one or more transactions through
any one or more of the following: (i) through brokers, acting as principal or
agent, in transactions (which may involve block transactions) on one or more
exchanges on which the securities are then listed, including the NYSE, in
special offerings, exchange distributions pursuant to the rules of the
applicable exchanges or in the over-the-counter market, or otherwise, at market
prices prevailing at the time of sale, at prices related to such prevailing
market prices, at negotiated prices or at fixed prices, (ii) directly or through
brokers or agents in private sales at negotiated prices; (iii) by any other
legally available means; or (iv) the pledge of the Shares as security for any
loan or obligation, including pledges to brokers or dealers who may, from time
to time, themselves effect distributions of the Shares or interests therein.
In effecting sales, brokers or dealers may arrange for other brokers or
dealers to participate. The Selling Stockholder or any successor in interest,
and any brokers, dealers or agents that participate in the distribution of the
Shares, may be deemed to be "underwriters" within the meaning of the Securities
Act, and any profit on the sale of the Shares by them and any discounts,
commissions or concessions (which discounts, commissions, or concessions will
not exceed those customary for the types of transactions involved) received by
any such brokers, dealers or agents may be deemed to be underwriting commissions
or discounts under the Securities Act.
In addition, any of the Shares covered by this Prospectus which qualify for
sale pursuant to Rule 144 may be sold under Rule 144 rather than pursuant to
this Prospectus.
-8-
<PAGE>
LEGAL MATTERS
Certain legal matters in connection with the validity of the Common Stock
offered hereby have been passed upon for the Company by Jones, Day, Reavis &
Pogue, Dallas, Texas.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in the Company's Annual Report (Form 10-K as amended by Forms 10-K/A)
for the year ended December 31, 1996, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their reports thereon incorporated by
reference therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
reports given upon the authority of such firms as experts in accounting and
auditing.
The consolidated balance sheets of Vacation Break at December 31, 1995 and
1996 and consolidated statements of operations, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1996,
incorporated by reference in this Prospectus, are incorporated by reference in
reliance on the report of Coopers & Lybrand, L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
FORWARD-LOOKING STATEMENTS
This Prospectus (including the documents incorporated by reference herein)
contains certain forward-looking statements (as such term is defined in the
Private Securities Litigation Reform Act of 1995), including (without
limitation) statements with respect to anticipated future operating and
financial performance, growth and acquisition opportunities and other similar
forecasts and statements of expectation relating to the Company. When used in
this Prospectus, words such as "anticipates," "believes," "estimates,"
"expects," "intends," "should" and variations of these words and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Forward-looking statements made by the
Company and its management are based on estimates, projections and beliefs of
the management of the Company, as well as assumptions made at the time of such
statements by and information then currently available to the management of the
Company, as applicable, and are not guarantees of future performance. The
Company disclaims any obligation to update or revise any forward-looking
statement based on the occurrence of future events, the receipt of new
information or otherwise.
Actual future performance, outcomes and results may differ materially from
those expressed in forward-looking statements made by the Company and its
management as a result of a number of risks, uncertainties and assumptions
relating to the operations and results of operations of the Company following
the Merger. Representative examples of these factors include (without
limitation) general industry and economic conditions; interest rate trends;
regulatory changes; cost of capital and capital requirements; availability of
real estate properties; competition from national hospitality companies and
other competitive factors and pricing pressures; shifts in customer demands;
changes in operating expenses, including employee wages, commission structures,
benefits and training; economic cycles; the continued availability of financing
in the amounts and at the terms necessary to support the Company's future
business, assumed cost savings and other synergistic benefits of the Merger; the
success achieved or problems encountered in integrating the operations of
Vacation Break into the Company and each of the factors identified in the
section "Risk Factors" set forth in this Prospectus. Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results or outcomes may vary materially from those described
herein as anticipated, believed, estimated, expected or intended.
-9-
<PAGE>
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING HEREBY TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES TO ANY PERSON
OR BY ANYONE IN ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
----------------------------------------
TABLE OF CONTENTS
Page
----
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
Risk Factors.............................................................. 3
The Company............................................................... 7
Use of Proceeds........................................................... 7
Selling Stockholders...................................................... 7
Plan of Distribution...................................................... 8
Legal Matters............................................................. 9
Experts................................................................... 9
Forward-Looking Statements................................................ 9
4,025,597 SHARES
FAIRFIELD
COMMUNITIES, INC.
COMMON STOCK
--------------------------------
PROSPECTUS
---------------------------------
__, 1998
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses to be incurred in connection with the issuance and
distribution of the Common Stock covered by this Registration Statement are as
follows:
Securities and Exchange Commission filing fee $ 47,605
Printing expenses 1,000
Accounting fees and expenses 10,000
Legal fees and expenses 15,000
Miscellaneous 395
------------
Total $ 74,000
============
The Company has agreed to bear all expenses incurred in connection with the
registration under the Securities Act and the listing on the NYSE of the Shares.
The Selling Stockholders will bear all other expenses in connection with sales
of the Shares.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Certificate of Incorporation provides that the personal
liability of directors of the Company to the Company is eliminated to the
maximum extent permitted by Delaware law. The Company's Certificate of
Incorporation and Bylaws provide for the indemnification of the directors,
officers, employees and agents of the Company to the fullest extent that may be
permitted by Delaware law from time to time. Certain provisions of the
Company's Certificate of Incorporation protect the Company's directors against
personal liability for monetary damages resulting from breaches of their
fiduciary duty of care, except as set forth below. Under Delaware law, absent
these provisions, directors could be held liable for gross negligence in the
performance of their duty of care, but not for simple negligence. The Company's
Certificate of Incorporation absolves directors of liability for negligence in
the performance of their duties, including gross negligence. However, the
Company's directors remain liable for breaches of their duty of loyalty to the
Company and its stockholders, as well as for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law and
transactions from which a director derives improper personal benefit. The
Company's Certificate of Incorporation also does not absolve directors of
liability under Section 174 of the Delaware General Corporation Law, which makes
directors personally liable for unlawful dividends or unlawful stock repurchases
or redemptions in certain circumstances and expressly sets forth a negligence
standard with respect to such liability.
Under Delaware law, directors, officers, employees, and other individuals
may be indemnified against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement in connection with specified actions,
suits or proceedings, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation -- a "derivative
action") if they acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the Company and, with respect to
any criminal action or proceeding, had no reasonable cause to believe their
conduct was unlawful. A similar standard of care is applicable in the case of a
derivative action, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with defense or settlement of
such an action and Delaware law requires court approval before there can be any
indemnification of expenses where the person seeking indemnification has been
found liable to the Company.
The Company has also entered into indemnification agreements with its
directors and officers pursuant to which the Company is generally obligated to
indemnify its directors and officers to the full extent permitted by Delaware
law.
II-1
<PAGE>
ITEM 16. EXHIBITS
EXHIBIT DESCRIPTION
NUMBER
2.1 Agreement and Plan of Merger, dated as of August 8, 1997, among the
Company, FCVB Corp., and Vacation Break U.S.A., Inc. (previously filed
as Exhibit 2.1 to the Form S-4, filed by the Registrant on November 4,
1997, SEC File No. 333-39615, and incorporated herein by reference).
4.1 Second Amended and Restated Certificate of Incorporation of the Company
(previously filed as Exhibit 3.8 to the Form 8-K, filed by the
Registrant on September 1, 1992, SEC File No. 92-22-6962, and
incorporated herein by reference).
4.2 Certificate of Amendment to Amended and Restated Certificate of
Incorporation of the Company (previously filed on as Exhibit 4.2 to the
Registrant's Registration Statement, SEC File No. 333-42901, on Form
S-8, and incorporated herein by reference).
4.3 Fifth Amended and Restated Bylaws of the Company (previously filed as
Exhibit 3.(ii) to the Form 8-K, filed by the Registrant on May 22,
1996, SEC File No. 001-08096, and incorporated herein by reference).
4.4 Supplemented and Restated Indenture between 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, dated September 1, 1992, related to the Senior Subordinated
Secured Notes (previously filed as Exhibit 3.3 to the Form 8-K filed by
the Registrant on September 24, 1992, SEC File No. 92226962)
4.5 First Supplemental Indenture to the Supplemented and Restated Indenture
referenced in 4.1 above, dated September 1, 1992 (previously filed as
Exhibit 3.4 to the Form 8-K filed by the Registrant on September 24,
1992, SEC File No. 92226962)
4.6 Second Supplemental Indenture to the Supplemented and Restated
Indenture referenced in 4.1 above, dated September 1, 1992 (previously
filed as Exhibit 4.3 to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992, SEC File No. 93083843)
4.7 Third Supplemental Indenture to the Supplemented and Restated Indenture
referenced in 4.1 above, dated March 18, 1993 (previously filed as
Exhibit 4.4 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1993, SEC File No. 93130289)
4.8 Certificate of Designation, Preferences, and Rights of Series A Junior
Participating Preferred Stock, dated September 1, 1992 (previously
filed as Exhibit 3.11 to the Form 8-K filed by the Registrant on
September 24, 1992, SEC File No. 92226962).
5.1 Form of opinion of Jones, Day, Reavis & Pogue (filed herewith).
23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP (filed herewith).
23.3 Consent of Coopers & Lybrand, LLP (filed herewith).
24.1 Powers of attorney (included on the signature page hereof).
II-2
<PAGE>
Item 17. Undertakings
A. The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of a
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Company of expenses incurred or paid
by a director, officer, or controlling person of the Company in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Little Rock, State of Arkansas, on December 23, 1997.
FAIRFIELD COMMUNITIES, INC.
By: /s/ J.W. McConnell
------------------------------------
J.W. McConnell
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints John W.
McConnell, Robert W. Howeth and Marcel J. Dumeny, and each of them acting
individually, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them acting individually, full power and authority to do and
perform each and every act and thing necessary or advisable to be done in and
about the premises, as fully to all intents and purposes as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his substitute or substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on December 23, 1997.
SIGNATURES TITLE
--------- -----
/s/ J.W. McConnell President and Chief Executive Officer; Director
- ---------------------------- (Principal Executive Officer)
J.W. McConnell
/s/ Robert W. Howeth Senior Vice President and Chief Financial Officer
- ---------------------------- (Principal Financial Officer)
Robert W. Howeth
/s/ William G. Sell Vice President/Controller
- ---------------------------- (Principal Accounting Officer)
William G. Sell
/s/ Les R. Baledge Director
- ----------------------------
Les R. Baledge
/s/ Ernest D. Bennett, III Director
- ----------------------------
Ernest D. Bennett, III
/s/ Philip L. Herrington Director
- ----------------------------
Philip L. Herrington
/s/ Gerald Johnston Director
- ----------------------------
Gerald Johnston
II-4
<PAGE>
Director
- ----------------------------
Bryan D. Langton
Director
- ----------------------------
Charles D. Morgan
/s/ William C. Scott Director
- ----------------------------
William C. Scott
Director
- ----------------------------
Ralph P. Muller
II-5
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
NUMBER
2.1 Agreement and Plan of Merger, dated as of August 8, 1997, among the
Company, FCVB Corp., and Vacation Break U.S.A., Inc. (previously filed
as Exhibit 2.1 to the Form S-4, filed by the Registrant on November 4,
1997, SEC File No. 333-39615, and incorporated herein by reference).
4.1 Second Amended and Restated Certificate of Incorporation of the Company
(previously filed as Exhibit 3.8 to the Form 8-K, filed by the
Registrant on September 1, 1992, SEC File No. 92-22-6962, and
incorporated herein by reference).
4.2 Certificate of Amendment to Amended and Restated Certificate of
Incorporation of the Company (previously filed as Exhibit 4.2 to the
Registrant's Registration Statement, SEC File No. 333-42901, on
Form S-8, and incorporated herein by reference).
4.3 Fifth Amended and Restated Bylaws of the Company (previously filed as
Exhibit 3.(ii) to the Form 8-K, filed by the Registrant on May 22,
1996, SEC File No. 001-08096, and incorporated herein by reference).
4.4 Supplemented and Restated Indenture between 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, dated September 1, 1992, related to the Senior Subordinated
Secured Notes (previously filed as Exhibit 3.3 to the Form 8-K filed by
the Registrant on September 24, 1992, SEC File No. 92226962)
4.5 First Supplemental Indenture to the Supplemented and Restated Indenture
referenced in 4.1 above, dated September 1, 1992 (previously filed as
Exhibit 3.4 to the Form 8-K filed by the Registrant on September 24,
1992, SEC File No. 92226962)
4.6 Second Supplemental Indenture to the Supplemented and Restated
Indenture referenced in 4.1 above, dated September 1, 1992 (previously
filed as Exhibit 4.3 to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1992, SEC File No. 93083843)
4.7 Third Supplemental Indenture to the Supplemented and Restated Indenture
referenced in 4.1 above, dated March 18, 1993 (previously filed as
Exhibit 4.4 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1993, SEC File No. 93130289)
4.8 Certificate of Designation, Preferences, and Rights of Series A Junior
Participating Preferred Stock, dated September 1, 1992 (previously
filed as Exhibit 3.11 to the Form 8-K filed by the Registrant on
September 24, 1992, SEC File No. 92226962).
5.1 Form of opinion of Jones, Day, Reavis & Pogue (filed herewith).
23.1 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
23.2 Consent of Ernst & Young LLP (filed herewith).
23.3 Consent of Coopers & Lybrand, LLP (filed herewith).
24.1 Powers of attorney (included on the signature page hereof).
II-6
<PAGE>
Exhibit 5.1
-----------
JONES, DAY, REAVIS & POGUE
2001 Ross Avenue
2300 Trammell Crow Center
Dallas, Texas 75201
December 23, 1997
Fairfield Communities, Inc.
11001 Executive Center Drive
Little Rock, Arkansas 72211
Re: Registration of up to 4,025,597 Shares of Common Stock,
par value $0.01 per share, of Fairfield Communities, Inc.
---------------------------------------------------------
Ladies and Gentlemen:
We are acting as counsel to Fairfield Communities, Inc., a Delaware
corporation (the "Company"), in connection with the offering by three
stockholders of the Company (the "Selling Stockholders") of up to 4,025,597
shares (the "Shares") of common stock, par value $0.01 per share (the "Common
Stock"), of the Company.
We have examined such documents, records, and matters of law as we
have deemed necessary for purposes of this opinion. Based on such examination
and on the assumptions set forth below, we are of the opinion that the Shares
are duly authorized, validly issued, fully paid and nonassessable.
In rendering the foregoing opinion, we have relied as to certain
factual matters upon certificates of officers of the Company and public
officials, and we have not independently checked or verified the accuracy of the
statements contained therein. In addition, our examination of matters of law
has been limited to the General Corporation Law of the State of Delaware and the
federal laws of the United States of America, in each case as in effect on the
date hereof.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement on Form S-3 (the "Registration Statement") filed by the
Company to effect registration of the Shares under the Securities Act of 1933,
as amended, and to the reference to us under the caption "Legal Matters" in the
Prospectus constituting a part of the Registration Statement.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
<PAGE>
Exhibit 23.2
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference of our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Fairfield
Communities, Inc. for the registration of 4,025,597 shares of its common stock
and to the incorporation by reference therein of our report dated January 29,
1997, except for Note 11, as to which the date is February 28, 1997, with
respect to the consolidated financial statements incorporated by reference in
its Annual Report (Form 10-K as amended by Forms 10-K/A) for the year ended
December 31, 1996 and the related financial statement schedule included therein,
filed with the Securities and Exchange Commission.
Ernst & Young LLP
Little Rock, Arkansas
December 18, 1997
<PAGE>
Exhibit 23.3
------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this registration statement
on Form S-3 of our report dated March 14, 1997, except for Notes 22 and 24, as
to which the date is October 9, 1997, on our audits of the financial statements
of Vacation Break U.S.A., Inc. We also consent to the reference to our firm
under the caption "Experts."
Coopers & Lybrand L.L.P.
Ft. Lauderdale, Florida
December 19, 1997
