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Rule 424(b)(3)
Registration No. 333-33776
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Prospectus
FAIRFIELD COMMUNITIES, INC.
25,000 Shares of Common Stock
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This prospectus relates to 25,000 shares of our common stock that may be
offered for sale and otherwise transferred from time to time by the selling
stockholder. The aggregate net proceeds to the selling stockholder from the
sale of the shares will equal the sales price of the shares, less any
commissions. We will not receive any of the proceeds from the sale of the
selling stockholder's shares. We will pay the expenses incurred in registering
the shares, including legal and accounting fees.
Our common stock is traded on the New York Stock Exchange under the symbol
"FFD". On March 27, 2000, the closing price of one share of our common stock on
the New York Stock Exchange was $ 8.375. Our mailing address is 8669 Commodity
Circle, Suite 200, Orlando, Florida 32819 and our telephone number is (407) 370-
5200.
Investing in our common stock involves certain risks. See "Risk Factors"
on page 3.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
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The date of this prospectus is April 25, 2000
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TABLE OF CONTENTS
Page
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Risk Factors...................................... 3
Fairfield......................................... 8
Statement Concerning Forward Looking Information.. 9
About This Prospectus............................. 9
Where You Can Find More Information.............. 9
Use of Proceeds................................... 10
Selling Stockholders.............................. 10
Plan of Distribution.............................. 10
Legal Matters..................................... 12
Experts........................................... 12
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No dealer, salesperson or other person has been authorized to give any
information or make any representations not contained or incorporated by
reference in this prospectus in connection with the offering covered by this
prospectus. If given or made, such information or representations must not be
relied upon as having been authorized by us. This prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the common
stock in any jurisdiction where, or to any person to whom, it is unlawful to
make such offer or solicitation. Neither the delivery of this prospectus nor
any sale made hereunder shall, under any circumstances, create any implication
that there has not been any change in the facts set forth in this prospectus or
our affairs since the date thereof.
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RISK FACTORS
Our Marketing and Sales of Vacation Ownership Interests and Other Operations Are
Subject to Extensive Government Regulations That Could Adversely Affect Our
Business
Our marketing and sales of vacation ownership interests and other
operations are subject to extensive regulation by the federal government and the
states in which our resorts are located and in which we market and sell vacation
ownership interests. On a federal level, the Federal Trade Commission has taken
the most active regulatory role through the Federal Trade Commission Act, which
prohibits unfair or deceptive acts or competition in interstate commerce. Other
federal legislation to which we are or may be subject include the Truth-in-
Lending Act and Regulation Z, the Equal Credit Opportunity Act and Regulation B,
the Interstate Land Sales Full Disclosure Act, the Telephone Consumer Protection
Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Fair
Housing Act and the Civil Rights Acts of 1964 and 1968. In addition, many
states have adopted specific laws and regulations regarding the sale of vacation
ownership interests. The laws of most states require us to file with a
designated state authority for its approval a detailed offering statement
describing our company, all material aspects of the project and our sale of
vacation ownership interests. Laws in each state where we sell vacation
ownership interests generally grant the purchaser the right to cancel a contract
of purchase at any time within a period ranging from three to fifteen calendar
days following the earlier of the date the contract was signed or the date the
purchaser has received the last of the documents required to be provided by us.
Most states have other laws which regulate our activities, such as real estate
licensure; travel agent licensure; anti-fraud laws; telemarketing laws; price,
gift and sweepstakes laws and labor laws.
The cost of complying with laws and regulations in all jurisdictions in
which we desire to conduct sales may be significant and may impair the cost-
effectiveness of our marketing programs. Other laws or regulations may be
adopted which could increase our cost of compliance or prevent us from selling
vacation ownership interests or conducting other operations in a jurisdiction.
If we are not in substantial compliance with applicable laws and regulations, we
could be subject to regulatory actions and purchasers of vacation ownership
interests or lots could have rescission rights. Any material failure to comply
with any applicable law or regulation, or any increases in the costs of
compliance, could have a material adverse effect on us.
Defaults by Vacation Ownership Interest Purchasers Can Result in Additional
Marketing Costs
Because timeshares are vacation homes and not primary residences,
purchasers of vacation ownership interests 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 vacation ownership interests. If a vacation ownership
interest purchaser defaults on the loan made by us to finance the purchase of
the vacation ownership 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 vacation ownership
interest has been returned to our inventory for resale.
Our Sales Are Concentrated in the State of Florida and May Be Impacted by
Increased Competition and Natural Disasters
Approximately 32% of our vacation ownership interest revenues will be
concentrated in the Florida market. Florida is one of the most competitive
markets for vacation ownership interest sales. In addition, historically,
natural disasters in Florida have had significant adverse effects on tourism.
Accordingly, the Florida market could become less favorable for vacation
ownership interest sales or our business could be adversely affected by
concentration in the Florida market.
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We Are Competing with Established Lodging, Hospitality and Entertainment
Companies that Are Entering Into the Vacation Ownership Interest Market
As we develop destination resorts, we 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 timeshares, condominiums, hotels and motels. Many
well-known lodging, hospitality and entertainment companies have begun to
develop and sell vacation ownership interests in resort properties. Thus, we
are required to compete with companies that have significantly greater
financial, marketing, personnel and other resources.
Our Growth Strategy Depends on the Availability of Attractive Resort Development
Opportunities and on Our Ability to Obtain Capital to Fund Expansion Projects
A principal component of our strategy is to acquire and develop new
destination resorts. Our future growth and financial success will depend upon a
number of factors, including our ability to identify attractive resort
acquisition and development opportunities, acquire or develop new resorts on
favorable terms, profitably sell vacation ownership interests at new resorts,
and successfully integrate the newly acquired or developed resorts into our
sales and marketing programs. Our ability to execute our growth strategy
depends to a significant degree on the existence of attractive resort
acquisition and development opportunities and our ability to obtain additional
debt and equity capital to fund these opportunities.
Unforeseen Costs Are Inherent in the Development of Our Resorts
Our strategy to expand our resort portfolio involves certain inherent risks
including the following:
. we must make material capital expenditures to develop our six new
resorts under development and future resorts;
. planned development may be delayed or abandoned and development and
carrying costs may exceed those anticipated, possibly making a project
uneconomical or unprofitable;
. we may experience a fluctuation in quarterly results due to an increase
or decrease in the number of projects under development subject to
percentage of completion accounting which requires net profit on such
projects to be recognized on a pro rata basis as development is
completed;
. we may experience delays in bringing inventories to market due to
delays in obtaining required regulatory approvals to sell vacation
ownership interests or otherwise, resulting in decreased revenues and
increased interest expense and carrying charges; and
. inventories may decline in value due to changing market and economic
conditions.
Construction Risks Are Involved in the Development of Our Resorts
We contract with third-party contractors to construct our resorts, and,
accordingly, the timing, quality and completion of our construction cannot be
controlled by us. Nevertheless, claims may be asserted against us for
construction defects and may give rise to liabilities. In addition, state and
local laws may impose liability on property developers with respect to
construction defects discovered or repairs required to be made by future owners
of a property.
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Our construction activities are also subject to risks relating to:
. the inability to obtain, or delays in obtaining, all necessary zoning,
land-use, building, occupancy, sales and other required governmental
permits and authorizations;
. the ability to coordinate construction activities with the process of
obtaining all necessary permits and authorizations; and
. the ability to obtain adequate financing to complete the acquisition,
construction, and/or conversion work at projects and resorts.
Any of the above risks, should they occur, could have a material adverse
effect on our business, results of operations and financial condition.
The Resale Market for Vacation Ownership Interests Could Adversely Affect Our
Sales
We sell vacation ownership interests to buyers for leisure purposes and not
for investment. We believe that the market for resale of vacation ownership
interests by buyers is presently limited and that any sales of vacation
ownership interests are typically at prices substantially less than the original
purchase price. These factors may make ownership of vacation ownership
interests less attractive to prospective buyers.
As the timeshare industry grows, the number of private resales of vacation
ownership interests may also increase. The increased supply of vacation
ownership interests available for sale as owners attempt to resell their
vacation ownership interests may compete with our sales of vacation ownership
interests and could depress the market price of vacation ownership interests we
sell.
Seasonality of the Resort Business May Cause Fluctuations in Our Earnings
We experience seasonal fluctuations in gross revenues and net earnings from
the sale of vacation ownership interests, which have been generally higher in
the second and third quarters. This seasonality may cause significant
fluctuations in our quarterly operating results. Additionally, as we open new
resorts and expand into new markets and geographical locations, we may
experience increased or different seasonality dynamics creating fluctuations in
operating results that are different from those experienced in the past.
We May be Liable in the Future for Environmental Clean-up if Hazardous or Toxic
Substances Are Found on Our Properties or Properties that We Previously Owned or
May Acquire
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. We
believe that we are in compliance in all material respects with all federal,
state and local ordinances and regulations regarding hazardous or toxic
substances, but we can give no assurance that hazardous or toxic substances will
not be found on our properties or properties that we previously owned or may
acquire.
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We May Be Required to Incur Substantial Costs in Order to Comply with Laws
Governing Access for Disabled Persons
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. While
our new resorts are being developed in compliance with these laws, we may incur
additional costs of complying with the laws at our other resorts. We cannot
reasonably ascertain the ultimate amount of the cost of compliance with these
laws and they could be substantial.
Our Business Depends on the Availability of Adequate Debt Financing, Which
Indebtedness May Limit Our Financial and Operational Flexibility
We obtain a significant portion of our operational funds by borrowing
against the contracts receivable that are created when we finance our customers'
purchases of vacation ownership interests. As our sales of vacation ownership
interests increase, we must obtain additional indebtedness to finance our
operations. Consequently, we have significant debt service obligations and
expect our debt service obligations to increase as we expand our vacation
ownership sales and receive additional contracts receivable.
Our level of debt has several important effects on future operations,
including but not limited to:
. increasing our vulnerability to general adverse economic and industry
conditions;
. limiting our ability to obtain additional financing to fund future
working capital, capital expenditures and other general corporate
requirements;
. requiring the dedication of a substantial portion of our cash flow from
our contracts receivable to the payment of our indebtedness, thereby
reducing the availability of cash flow to fund working capital, capital
expenditures or other operating needs and uses;
. placing us at a competitive disadvantage vis-a-vis less leveraged
competitors; and
. exposing us to the risk of increased interest rates to the extent that
any of our borrowings are at variable rates of interest.
Our existing credit facilities contain a number of restrictive covenants.
These covenants require us to maintain compliance with certain specified
financial ratios and tests, including minimum net worth, maximum capital
expenditures, a minimum operating margin requirement, a minimum interest
coverage ratio and a maximum amount of debt incurrence. In addition, these
covenants limit our ability to, among other things:
. borrow money or grant guaranties;
. make capital expenditures;
. pay dividends or make certain other restricted payments or investments;
. sell certain assets;
. enter into certain transactions with affiliates;
. prepay, redeem or terminate debt;
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. use the proceeds of the indebtedness;
. create liens;
. merge or consolidate with any other person;
. sell all or substantially all of our assets; or
. change lines of business.
Among other effects, these covenants may limit our financial and
operational flexibility, including our ability to take advantage of significant
business opportunities that may arise. Our ability to comply with these
covenants and other restrictions may be affected by events beyond our control,
including prevailing economic, financial and industry conditions.
A breach of a restrictive covenant would permit the lenders to declare all
amounts outstanding to be due, together with accrued and unpaid interest, and
terminate their commitments to make further extensions of credit and could
result in a default under our indebtedness.
Our Future Performance and the Performance of Our Contracts Receivable Will
Affect Our Ability to Make Interest Payments on or to Refinance Our Indebtedness
and to Fund Our Operations
Our ability to make interest payments on or to refinance our indebtedness,
and to obtain adequate financing to fund our operations, including planned
capital expenditures, depends on our future performance and the performance of
our contracts receivable. Our financial results are subject to general
economic, financial, competitive, legislative, regulatory and many other factors
that are beyond our control. We cannot provide you any assurance that our
contracts receivable and our other operations will continue to generate cash
flow at or above current levels. If we are unable to generate sufficient cash
flow in the future to service our debt and operate our business, including
making necessary capital expenditures, we may be required to refinance all or a
portion of our existing debt, to sell assets or to obtain additional financing.
We cannot provide you any assurance that we could successfully accomplish any
such action.
Economic Downturns Can Depress Sales, Negatively Impact Financing Rates, Reduce
Profit and Affect Our Ability to Collect on Our Contracts Receivable
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 our sales.
Economic downturns, including inflation, may also affect the future availability
of attractive financing rates for us or our customers. Inflation may also
affect our income derived from sales of vacation packages to the extent that our
costs of providing vacation packages increase 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 collectibility of our
contracts receivable.
Our Financial Results From Our Contracts Receivable Are Dependent on Favorable
Interest Rates and on the Availability of Third Party Financings
When we finance the sale of a vacation ownership interest, we receive a
fixed interest rate contract receivable. The contract receivable is
collateralized by a first mortgage or, alternatively, we retain the title to the
vacation interest under an installment sales contract. We and our wholly owned
finance subsidiary, Fairfield Acceptance Corporation - Nevada, have revolving
credit facilities in the
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maximum principal amounts of $100 million. We use these revolving credit
facilities to finance the contracts receivable until they qualify for the
securitization financing we have established in our two qualified special
purpose entities. When the contracts receivable satisfy these qualifications, we
sell the contracts receivable to our two qualified special purpose entities. We
use the sale proceeds to repay our revolving credit facilities and thereby
retain our borrowing availability to finance new contracts receivable. The
qualified special purpose entities securitize the contracts receivable with
third parties.
Our revolving credit facilities are, and are expected to continue to be, at
variable interest rates. Any significant increase in interest rates on our
financing or prepayment rates on the current contracts could have a material
adverse effect on the profitability of our portfolio of contracts receivable
financed under those facilities or the future availabilities under our revolving
credit facilities. Similarly, any adverse change in the securitization markets
could result in our having insufficient borrowing availability under our credit
facilities to maintain our operations at current levels.
FAIRFIELD
We are one of the largest vacation ownership companies in the United States
in terms of property owners, vacation units constructed and revenues from sales
of vacation ownership interests. We market vacation products and manage resort
properties that provide quality recreational experiences to our more than
278,000 property owners. At December 31, 1999, our portfolio of resorts
consisted of 33 resorts located in 12 states and the Bahamas. During 1999, we
began sales operations on a start-up basis for our six newest destination
resorts to be developed in Sedona, Arizona; Durango, Colorado; Daytona Beach,
Florida; Destin, Florida; Las Vegas, Nevada and Gatlinburg, Tennessee.
Our primary business is the sale of vacation ownership interests through
our innovative points-based vacation system, FairShare Plus(R). The vacation
ownership interests offered by us consist of either undivided fee simple
interests or specified fixed week interval ownership in fully furnished vacation
homes. Our vacation ownership interests are in resort locations that feature
one or more amenities such as swimming pools, restaurants, and access to golf
courses, marinas, beaches, tennis courts or other recreational facilities.
We offer financing to the purchasers of our vacation ownership interests,
which results in the creation of high-quality, medium-term contracts receivable.
We initially hold these contracts receivable and either securitize them or sell
them to our special purpose finance entities. During 1998, we initiated a
program whereby we sell contracts receivable to our two special purpose
entities, which are wholly owned but unconsolidated subsidiaries of Fairfield
Acceptance Corporation - Nevada one of our wholly owned subsidiaries. Due to
favorable interest rates available through the credit facilities of the special
purpose entities, we intend to sell contracts receivable to these entities until
these credit facilities are fully utilized. Additionally, this will also
provide us with additional borrowing availability under our existing credit
facilities. At December 31, 1999, our contracts receivable portfolio totaled
$225.1 million, with outstanding borrowings of $39.6 million collateralized by
the contracts receivable. At December 31, 1999, the contracts receivable
portfolio had a weighted average maturity of approximately five years, a
weighted average interest rate of 14.0% and a weighted average stated interest
rate on associated debt of 6.4%.
We serve as property manager at most of our resorts, allowing us to
maintain close contact with the owners of vacation ownership interests and to
ensure that the quality of the resorts is well maintained. In addition, by
being the on-site manager at our resorts and other resorts, we are presented
with additional sales and marketing opportunities to the persons using the
resorts.
We operate one reportable business segment, which includes the marketing,
sales and financing of our vacation ownership interests. Our revenues in this
segment are derived from the sale of vacation
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ownership interests and from the associated interest income on contracts
receivable generated by our financing of vacation ownership interests.
Fairfield was incorporated in Delaware in 1969. Our principal executive
office is located at 8669 Commodity Circle, Suite 200, Orlando, Florida 32819,
and our telephone number is (407) 370-5200. At December 31, 1999, we had
approximately 5,500 full-time employees.
STATEMENT CONCERNING FORWARD LOOKING INFORMATION
Statements in this prospectus include certain forward-looking statements,
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. Words such as "expects,"
"anticipates," "intends," "plans," "believes," "seeks," "estimates," and
"should," and variations of these words and similar expressions, are intended to
identify these forward-looking statements. Such forward-looking statements made
by us and our management are based on estimates, projections, beliefs and
assumptions of management at the time of such statements and are not guarantees
of future performance. We disclaim 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 us and our management as a result of a number of risks, uncertainties
and assumptions including those detailed below and set forth generally in this
prospectus.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission (the "Commission") utilizing a "shelf"
registration process. Under this shelf process, the selling stockholder may,
from time to time, sell shares of the common stock described in this prospectus.
We may prepare a prospectus supplement at any time to add, update or change
information contained in this prospectus. Except for those instances in which a
specific date is referenced, the information in this prospectus is accurate as
of March 31, 2000. You should read both this prospectus and any prospectus
supplement together with additional information described under the heading
"Where You Can Find More Information."
This prospectus does not include all of the information contained in the
registration statement. We believe that we have included or incorporated by
reference all information material to investors in this prospectus, but certain
details that may be important for specific investment purposes have not been
included. To see more detail, you should read the exhibits filed with or
incorporated by reference into the registration statement.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the information requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and therefore, we file annual,
quarterly and current reports, proxy statements and other information with the
Commission. You can inspect and copy any document we file with the Commission
at the public reference facility maintained by the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, or the Commission's Regional Offices at
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World
Trade Center, 13th Floor, New York, New York 10048. Please call the Commission
at 1-800-SEC-0330 for further information on the public reference rooms. Our
filings are also available at the Commission's web site at http://www.sec.gov.
In addition, our common stock is listed on the New York Stock Exchange ("NYSE")
and reports, proxy statements and
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other information concerning us are available for inspection at the offices of
the NYSE located at 20 Broad Street, New York, New York 10005.
The Commission allows us to incorporate by reference the information we
file with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the Commission will automatically update and supersede the information in
this prospectus. Accordingly, we incorporate by reference the documents listed
below and any future filings we make with the Commission under Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act until the registration statement of which
this prospectus is a part is not longer effective:
1. Our annual report on Form 10-K for the year ended December 31, 1999;
and
2. The description of our common stock contained in our registration
statements on Form 8-A filed with the Commission (File No. 1-8096).
Any person receiving a copy of this prospectus may obtain, without charge,
upon written or oral request, a copy of any documents that have been
incorporated into this prospectus by reference, other than exhibits to such
documents unless those exhibits are specifically incorporated by reference into
the documents that this prospectus incorporates. Requests should be directed to
Investor Relations, Fairfield Communities, Inc., 8669 Commodity Circle, Suite
200, Orlando, Florida 32819, telephone (407) 370-5200. Persons requesting
copies of exhibits that were not specifically incorporated by reference in such
documents will be charged the costs of reproduction.
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares of common
stock by the selling stockholder.
SELLING STOCKHOLDERS
The shares of common stock offered by this prospectus may be sold from time
to time by Mr. James G. Berk, the selling stockholder. As of March 27, 2000,
the selling stockholder beneficially owns 25,000 shares of our common stock.
All of those shares may be offered for sale pursuant to this prospectus. If the
selling stockholder sells all 25,000 shares, he would own less than 1% of the
our common stock outstanding as of March 27, 2000. The selling stockholder has
served as our President and Chief Executive Officer since October 1, 1999.
PLAN OF DISTRIBUTION
The purpose of this prospectus is to permit the selling stockholder to sell
shares of common stock at such time and at such prices as he, in his sole
discretion, chooses. We will not receive any of the proceeds from these
offerings or sales.
The shares of common stock offered in this prospectus may be sold from time
to time by the selling stockholder. The methods by which the shares may be sold
include:
. a block trade in which the broker-dealer so engaged will attempt to
sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transaction;
. purchases by a broker-dealer as principal and resale by such broker-
dealer for its account pursuant to this prospectus;
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. ordinary brokerage transactions and transactions in which the broker
solicits purchasers;
. an exchange distribution in accordance with the rules of the NYSE or
other exchange or trading system on which the shares are admitted for
trading privileges;
. privately negotiated transactions;
. sales "at the market" to or through a market maker or into an existing
trading market on an exchange or otherwise, for the shares;
. sales in other ways not involving market makers or established trading
markets;
. by pledging the shares to a broker or dealer or others;
. through put or call transactions relating to the shares; and
. pursuant to Rule 144 or otherwise.
The shares of common stock may be sold from time to time in one or more
transactions at:
. a fixed price or prices, which may be changed;
. market prices prevailing at the time of sale;
. prices related to such prevailing market prices; or
. negotiated prices.
The selling stockholder and any such brokers, dealers or other agents that
participate in such distribution may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"), and
any discounts, commissions or concessions received by any such brokers, dealers
or other agents might be deemed to be underwriting discounts and commissions
under the Securities Act. To the extent required, we will file, during any
period in which offers or sale are being made, one or more supplements to this
prospectus to set forth any other material information with respect to the plan
of distribution not previously disclosed.
In connection with the offer and sale of the shares of common stock by the
selling stockholder, various state securities laws and regulations require that
any such offer and sale should be made only through the use of a broker-dealer
registered as such in any state where a selling stockholder engages such broker-
dealer and in any state where such broker-dealer intends to offer and sell
shares.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the shares of common stock offered hereby may not
simultaneously engage in market activities with respect to common stock for the
applicable period under Regulation M prior to the commencement of such
distribution. In addition, the selling stockholder will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including without limitation Rule 10B-5 and Regulation M, which
provisions may limit the timing of purchases and sale of any of the shares by
the selling stockholder. All of the foregoing may affect the marketability of
the shares offered hereby.
We will pay all of the expenses incident to this offering of the shares by
the selling stockholder other than commissions, concessions and discounts of
brokers, dealers or other agents. The selling stockholder may indemnify any
broker, dealer, or other agent that participates in transactions involving
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sales of the shares against certain liabilities, including liabilities arising
under the Securities Act. We may agree to indemnify the selling stockholder and
any such statutory "underwriters" and controlling persons of such "underwriters"
against certain liabilities, including certain liabilities under the Securities
Act.
We have agreed, subject to certain suspensions of effectiveness and
adjustments to the period of effectiveness, to keep the registration statement
continuously effective until all the shares of common stock offered hereby are
sold. We and the selling stockholder have agreed to indemnify each other
against certain liabilities, including liabilities arising under the Securities
Act, in connection with the registration of the shares.
LEGAL MATTERS
The validity, authorization and issuance of the shares offered hereby will
be passed upon by Jones, Day, Reavis & Pogue, 2727 N. Harwood Street, Dallas,
Texas 75201.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 1999, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
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25,000 SHARES
FAIRFIELD COMMUNITIES, INC.
COMMON STOCK
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PROSPECTUS
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April 25, 2000
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