SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13D-2(A)
(AMENDMENT NO. ____ )*
FAIRFIELD COMMUNITIES, INC.
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(Name of Issuer)
Common Stock, Par Value $0.01 Per Share
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(Title of Class of Securities)
304231202
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(CUSIP Number)
Eric J. Bock
Senior Vice President - Law and Corporate Secretary
Cendant Corporation
9 West 57th Street
New York, NY 10019
Telephone: (212) 431-1836
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 1, 2000
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(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule 13D, and
is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g),
check the following box ( ).
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See Rule
13d-7(b) for other parties to whom copies are sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing
information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all other
provisions of the Act (however, see the Notes).
CUSIP NO. 304231202 13D PAGE 2 OF 11 PAGES
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
CENDANT CORPORATION (I.R.S. IDENTIFICATION NO. 06-0918165)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ( )
(b) ( )
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS ( )
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 8,448,027 (See Items 3 and 5)
OWNED BY --------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 7,696,644 (See Items 3 and 5) (1) (2)
WITH --------------------------------------------
9 SOLE DISPOSITIVE POWER
8,448,027 (See Items 3 and 5)
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10 SHARED DISPOSITIVE POWER
- 0 -
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,144,671 (See Items 3 and 5) (2)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES |_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
31.4% (3)
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14 TYPE OF REPORTING PERSON
CO
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(1) The reporting person disclaims beneficial ownership of these shares
pursuant to Rule 13d-4 under the Securities Exchange Act of 1934, as
amended.
(2) Includes the 510,000 shares that are issuable upon the
exercise of outstanding options which are either vested or will vest and
are exercisable within 60 days of November 1, 2000.
(3) Assumes that the 8,448,027 shares subject to the Option (as defined
herein) and the 510,000 shares described in footnote (2) above are issued
and outstanding.
ITEM 1. SECURITY AND ISSUER.
The class of securities to which this statement relates is the
common stock, par value $0.01 per share ("Fairfield Common Stock"), of
Fairfield Communities, Inc., a Delaware corporation ("Fairfield"), whose
principal executive offices are located at 8669 Commodity Circle, Suite
200, Orlando, Florida 32819.
ITEM 2. IDENTITY AND BACKGROUND.
(a) This statement is filed by Cendant Corporation, a Delaware
corporation ("Cendant").
(b) Cendant's principal executive offices are at 6 Sylvan Way,
Parsippany, New Jersey 07054.
(c) Cendant and its subsidiaries are global providers of real
estate, travel and direct marketing related consumer and business services.
Cendant's core competencies include building franchise systems, providing
outsourcing solutions and direct marketing.
The name, business address, present principal occupation or
employment, the name and principal business of any corporation or other
organization in which such employment is conducted and the citizenship of
each director and executive officer of Cendant is set forth in Annex A
hereto which is incorporated herein by reference.
(d) On June 14, 2000 the Securities and Exchange Commission (the
"SEC") instituted and simultaneously settled an administrative proceeding,
Administrative Proceeding File No. 3- 10225, against Cendant in connection
with certain accounting irregularities at the former CUC International
Inc., which merged with HFS Incorporated in December 1997 to form Cendant.
The SEC found that, as a result of such accounting irregularities, Cendant
violated the periodic reporting, corporate record-keeping and internal
controls provisions of the federal securities laws. Without admitting or
denying the findings contained in the SEC's administrative order, Cendant
consented to the issuance of an SEC order directing Cendant to cease and
desist from committing or causing any violation, and any future violation,
of the periodic reporting, corporate record-keeping and internal controls
provisions of the federal securities laws.
Except as set forth in response to this Item 2(d), during the last
five years neither Cendant nor, to the best of Cendant's knowledge, any of
the individuals referred to in Annex A, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years neither Cendant nor, to the best of
Cendant's knowledge, any of the individuals referred to in Annex A, has
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws, or finding violations with
respect of such laws.
(f) Cendant is a Delaware corporation.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Cendant, Fairfield and Grand Slam Acquisition Corp., a Delaware
corporation and a subsidiary of Cendant ("Merger Sub"), entered into an
Agreement and Plan of Merger dated as of November 1, 2000 (the "Merger
Agreement"). Pursuant to the Merger Agreement, Merger Sub will merge with
and into Fairfield (the "Merger"), with Fairfield continuing as the
surviving corporation. Following the Merger, Fairfield will be a
wholly-owned subsidiary of Cendant. The Merger Agreement provides for
Cendant to acquire all of the issued and outstanding shares of Fairfield
Common Stock at $15 per share, subject to certain adjustments (the "Merger
Consideration").
Fairfield stockholders will have the right to elect to receive the
Merger Consideration either in cash or in shares of common stock, par value
$0.01 per share, of Cendant ("Cendant Common Stock"). If the Total Cash
Potential (as defined in the Merger Agreement) is greater than the Total
Cash Actual (as defined in the Merger Agreement), then each share of
Fairfield Common Stock for which a Cash Election (as defined in the Merger
Agreement) has been made shall be entitled to receive less than $15 in
cash, on a pro rata basis, with the balance of the Merger Consideration
paid in Cendant Common Stock (the "Proration Balance").
The Merger Consideration, which is based on the Average Trading
Price (as defined in the Merger Agreement) of Cendant Common Stock, may
increase to a maximum of $16 per share. If the Merger Consideration does
increase, then each share of Fairfield Common Stock for which a Cash
Election has been made, shall be entitled to receive $15 in cash plus
Additional Stock Consideration (as defined in the Merger Agreement). If the
Average Trading Price of Cendant Common Stock is $7 or less, then (i) each
share of Fairfield Common Stock for which a Stock Election has been made
shall be entitled to receive 2.1428 shares of Cendant Common Stock, which
may result in the Merger Consideration being less than $15, and (ii) each
share of Fairfield Common Stock for which a Cash Election has been made,
shall be entitled to receive $15.
Cendant will have the right, at its sole discretion, to
substitute, on a pro rata basis, cash for any Stock Election Consideration
(as defined in the Merger Agreement), Proration Balance and Additional
Stock Consideration in an amount equal to the Average Trading Price
multiplied by the Exchange Ratio (as defined in the Merger Agreement).
Prior to Cendant exercising its substitution right with respect to the
Stock Election Consideration, it will first be required to pay in cash for
all shares for which a Cash Election has been made and which were not fully
converted into the right to receive the Cash Election Consideration (as
defined in the Merger Agreement).
The Merger is subject to customary closing conditions, including
the approval and adoption of the Merger Agreement by Fairfield's
stockholders, the expiration of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the
receipt of approvals, consents or exemptions under various state timeshare
registration laws, and the satisfaction or waiver of certain other
conditions as more fully described in the Merger Agreement. There can be no
assurance that the required approvals will be obtained in a timely fashion,
if at all, or, in the case of regulatory approvals, if obtained, will not
contain certain conditions.
As an inducement and a condition to Cendant entering into the
Merger Agreement, Fairfield entered into a Stock Option Agreement (the
"Option Agreement"), dated November 1, 2000, with Cendant. Pursuant to the
Option Agreement, Fairfield granted to Cendant an irrevocable option (the
"Option") to purchase up to 8,448,027 shares of Fairfield Common Stock,
subject to customary adjustments, together with the rights associated with
such shares issued pursuant to the Rights Agreement (as defined in the
Option Agreement) at a purchase price per share equal to the Exercise Price
(as defined in the Option Agreement). In no event will the number of shares
of Fairfield Common Stock for which the Option is exercisable exceed 19.9%
of the total number of shares of Fairfield Common Stock issued and
outstanding after any adjustment is made.
The Option is exercisable, in whole or in part, at any time and
from time to time, subject to certain closing conditions described in the
Option Agreement. In addition, at any time during which the Option is
exercisable, upon demand by Cendant, Cendant will have the right to sell to
Fairfield and Fairfield will be obligated to repurchase from Cendant (the
"Put Right") all or any portion of the Option. If the Put Right becomes
exercisable, Fairfield will be obligated to repurchase all or any portion
of the Option at a price equal to the product of multiplying (i) the
difference between the Market/Offer Price (defined as the higher of (x) the
highest price per share offered as of the Notice Date (as defined herein)
pursuant to any tender or exchange offer or other Company Takeover Proposal
(as defined in the Merger Agreement) which was made prior to the Notice
Date and not terminated or withdrawn as of the Notice Date (the "Offer
Price") and (y) the average of the closing prices of shares of Fairfield
Common Stock on the New York Stock Exchange for the five trading days
immediately preceding the Notice Date (the "Market Price") for shares of
Fairfield Common Stock as of the date notice of exercise of the Put Right
is given to Fairfield (the "Notice Date")), and the Exercise Price, by (ii)
the number of shares of Fairfield Common Stock purchasable pursuant to the
Option (or portion thereof). If the Put Right becomes exercisable, and all
or any portion of the Option has already been exercised, Fairfield would be
obligated to repurchase all or any portion of the shares of Fairfield
Common Stock issued pursuant to the Option at a price equal to the product
of multiplying (i) the Exercise Price paid by Cendant for the shares of
Fairfield Common Stock acquired pursuant to the Option plus, assuming the
Market/Offer Price is greater than the Exercise Price, the difference
between the Market/Offer Price and the Exercise Price, by (ii) the number
of shares of Fairfield Common Stock so purchased. In addition, the Option
Agreement grants certain registration rights to Cendant with respect to
shares of Fairfield Common Stock issued pursuant to the Option.
Notwithstanding Cendant's right to exercise the Option and the Put Right,
if the Total Payment (as defined in the Option Agreement) exceeds $32
million, then Cendant must make certain adjustments as set forth in the
Option Agreement so that its actual realized Total Payment will not exceed
$32 million.
Cendant anticipates that should it determine to exercise the
Option, in whole or in part, any funds to be paid by it upon exercise of
the Option would be provided from cash on hand and cash available from
external sources.
As further inducement to Cendant entering into the Merger
Agreement, Cendant entered into a Voting Agreement (the "Voting
Agreement"), dated as of November 1, 2000, with various holders of
Fairfield Common Stock listed on Schedule A to the Voting Agreement (the
"Stockholders"). The total number of shares of Fairfield Common Stock owned
of record and/or beneficially owned by the Stockholders is 7,696,644 (which
includes 510,000 shares that are issuable upon the exercise of outstanding
options which are either vested or will vest and are exercisable within 60
days of November 1, 2000) (the "Stockholders Shares"). Pursuant to the
Voting Agreement, the Stockholders agreed, severally and not jointly, to
vote or cause to be voted (including by written consent, if applicable) all
of the Stockholders Shares (i) in favor of the Merger, the execution and
delivery by Fairfield of the Merger Agreement, the approval and adoption of
the Merger and the terms thereof, the approval of each of the other actions
contemplated by the Merger Agreement and the Voting Agreement and any other
actions that could be required in furtherance thereof and (ii) against any
proposals presented for a vote to prevent or thwart the Merger or any of
the transactions contemplated by the Merger Agreement or the Voting
Agreement.
References to, and descriptions of, the Merger Agreement, the
Option Agreement and the Voting Agreement as set forth above in this Item 3
are qualified in their entirety by reference to the copies of the Merger
Agreement, the Option Agreement and the Voting Agreement attached as
Exhibits 1, 2 and 3, respectively, to this Schedule 13D, and are
incorporated in this Item 3 in their entirety where such references and
descriptions appear.
ITEM 4. PURPOSE OF TRANSACTION.
The information set forth or incorporated by reference in Item 3
is hereby incorporated herein by reference.
The Option is exercisable, in whole or in part, at any time and
from time to time, subject to certain closing conditions described in the
Option Agreement. The Option will terminate upon the earlier of: (i) the
Effective Time (as defined in the Merger Agreement) of the Merger; (ii) the
termination of the Merger Agreement pursuant to Section 7.1 thereof (other
than a termination in connection with which Cendant is or may be entitled
to the payment specified in Section 5.8 thereof); and (iii) 5:00 p.m., New
York City time, on the date that is the one year anniversary of the
termination of the Merger Agreement in connection with which Cendant is or
may be entitled to the payment specified in Section 5.8 thereof, or if, at
the expiration of such one year period, the Option cannot be exercised by
reason of any applicable judgment, decree, order, law or regulation, ten
business days after such impediment to exercise will have been removed or
has become final and not subject to appeal.
Until the Option is exercised, Cendant does not have any right to
vote (or direct the vote of) or dispose (or to direct the disposition of)
any shares of Fairfield Common Stock that may be purchased upon exercise of
the Option.
References to, and descriptions of, the Merger Agreement and the
Option Agreement as set forth above in this Item 4 are qualified in their
entirety by reference to the copies of the Merger Agreement and the Option
Agreement listed as Exhibits 1 and 2, respectively, to this Schedule 13D,
and are incorporated in this Item 4 in their entirety where such references
and descriptions appear.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth or incorporated by reference in Items 3
and 4 is hereby incorporated herein by reference.
The number of shares of Fairfield Common Stock covered by the
Option is 8,448,027 (representing approximately 19.9% of the 42,382,655
shares of Fairfield Common Stock issued and outstanding as of October 29,
2000, as represented by Fairfield in the Merger Agreement). Until the
Option is exercised, Cendant does not have any right to vote (or direct the
vote of) or dispose (or to direct the disposition of) any shares of
Fairfield Common Stock that may be purchased upon exercise of the Option.
As a result of the Voting Agreement, Cendant may be deemed to have
the right to direct the vote of the Stockholders Shares, which constitute
approximately 18.2% of the issued and outstanding shares of Fairfield
Common Stock based on the number of shares of Fairfield Common Stock
outstanding as of October 29, 2000, with respect to those matters described
in Item 3, however, Cendant (i) is not entitled to any rights as a
stockholder of Fairfield as to Stockholders Shares and (ii) expressly
disclaims any beneficial ownership of the Stockholders Shares.
Other than as set forth in this Schedule 13D, as of the date
hereof (i) neither Cendant nor any subsidiary of Cendant nor, to the best
of Cendant's knowledge, any of Cendant's executive officers or directors
beneficially owns any shares of Fairfield Common Stock and (ii) there have
been no transactions in shares of Fairfield Common Stock effected during
the past 60 days by Cendant or by any subsidiary of Cendant or, to the best
of Cendant's knowledge, by any of Cendant's executive officers or
directors.
No other person is known by Cendant to have the right to receive
or the power to direct the receipt of dividends from, or the proceeds from
the sale of, the shares of Fairfield Common Stock obtainable by Cendant
upon exercise of the Option.
Reference to, and descriptions of, the Merger Agreement, Option
Agreement and the Voting Agreement as set forth in this Item 5 are
qualified in their entirety by reference to the copies of the Merger
Agreement, the Option Agreement and the Voting Agreement listed as Exhibits
1, 2 and 3, respectively, to this Schedule 13D, and incorporated in this
Item 5 in their entirety where such references and descriptions appear.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
The information set forth, or incorporated by reference, in Items
3 through 5 is hereby incorporated by reference.
Copies of the Merger Agreement, the Option Agreement and the
Voting Agreement are incorporated by reference as Exhibits 1, 2 and 3,
respectively, to this Schedule 13D. To the best of Cendant's knowledge,
except as described in this Schedule 13D, there are at present no other
contracts, arrangements, understandings or relationships among the persons
named in Item 2 above, and between any such persons and any person, with
respect to any securities of Fairfield.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit Description
1. Agreement and Plan of Merger, dated as of November 1,
2000, by and among Cendant Corporation, Grand Slam
Acquisition Corp. and Fairfield Communities, Inc.
2. Stock Option Agreement, dated November 1, 2000, by and
between Cendant Corporation and Fairfield Communities,
Inc.
3. Voting Agreement, dated as of November 1, 2000, by and
between Cendant Corporation and the various holders of
Fairfield Common Stock listed on Schedule A to the Voting
Agreement.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: November 13, 2000
CENDANT CORPORATION
By: /s/ Eric J. Bock
--------------------------------
Name: Eric J. Bock
Title: Senior Vice President - Law
and Corporate Secretary
ANNEX A
DIRECTORS AND EXECUTIVE OFFICERS
OF CENDANT
The name, business address, present principal occupation
or employment and name, principal business and address of any corporation
or other organization in which such employment is conducted of each of the
directors and executive officers of Cendant are set forth below. All of the
persons listed below are citizens of the United States.
<TABLE>
<CAPTION>
DIRECTORS
(INCLUDING DIRECTORS WHO ARE EXECUTIVE OFFICERS)
Name, Principal Business and
Address of Corporation of
Present Principal Organization in which such
Name Occupation or Employment Employment is Conducted
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<S> <C> <C>
Henry R. Silverman President, Chairman and Chief Cendant Corporation
Executive Officer 9 West 57th Street
37th Floor
New York, NY 10019
James E. Buckman Vice Chairman, General Counsel and Cendant Corporation
Assistant Secretary 6 Sylvan Way
Parisppany, New Jersey 07054
Stephen P. Holmes Vice Chairman, Chairman and Chief Cendant Corporation
Executive Officer, Cendant Travel 6 Sylvan Way
Division Parisppany, New Jersey 07054
Martin Edelman Counsel Hastings, Janofsky & Walker LLP
399 Park Avenue
New York, NY 10022
Myra J. Biblowit Vice Dean for External Affairs, Senior New York University School of
Vice President of Mount Sinai-NYU Medicine
Health Systems 550 First Avenue
New York, New York 10016
The Rt. Hon. Mulroney, Partner Ogilvy Renault
P.C., L.L.D. 1981 McGill College Avenue
Suite 1110
Montreal, Quebec H3A 3C1
Robert W. Pittman President and Chief Operating-Officer America Online, Inc.
22000 AOL Way
Dulles, Virginia 20166
Sheli Z. Rosenberg Vice Chairwomen Equity Group Investments, Inc.
N. Riverside Plaza
Suite 600
Chicago, Illinois 60606
Leonard S. Coleman Senior Advisor, Major-League- Cendant Corporation
Baseball 9 West 57th Street
37th Floor
New York, NY 10019
Dr. John C. Malone Chairman Liberty Media Corporation
9197 South Pioria Street
Englewood, Colorado 80112
Robert E. Nederlander President and Director Nederlander Organization, Inc.
1450 Broadway
20th Floor
New York, New York 10018
Cheryl D. Mills Senior Vice President, Corporate Oxygen Media, Inc.
Policy and Public Programing 75 Ninth Avenue
New York, New York 10011
Robert F. Smith Senior Managing Director Car Component Technologies, Inc.
10 Ironhorse Drive
Bedford, New Hamshire 03110
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
Name, Principal Business and
Address of Corporation of
Present Principal Organization in which such
Name Occupation or Employment Employment is Conducted
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David M. Johnson Senior Executive Vice Cendant Corporation
President and Chief 6 Sylvan Way
Financial Officer Parsippany, NJ 07054
Richard A. Smith Chairman and Chief Cendant Corporation
Executive Officer, Real 6 Sylvan Way
Estate Division Parsippany, NJ 07054
John W. Chidsey Chairman and Chief Cendant Corporation
Executive Officer, Direct 6 Sylvan Way
Marketing Division Parsippany, NJ 07054
Samuel L. Katz Chief Executive Officer, Cendant Corporation
Cendant Internet Group 6 Sylvan Way
Parsippany, NJ 07054
John McClain Senior Vice President, Cendant Corporation
Controller 6 Sylvan Way
Parsippany, NJ 07054
</TABLE>
