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As filed with the Securities and Exchange Commission on March 31, 2000
Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________
FAIRFIELD COMMUNITIES, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware 8669 Commodity Circle, #200 71-0390438
(State or Other Jurisdiction Orlando, Florida 32819 (I.R.S. Employer
of Incorporation or Organization) (Address, Including Zip Code, and Telephone Number, Including Identification Number)
Area Code, of Registrant's Principal Executive Offices)
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Marcel J. Dumeny, Esq.
Executive Vice President and General Counsel
Fairfield Communities, Inc.
8669 Commodity Circle, #200
Orlando, Florida 32819
(407) 370-5200
(Name, Address and Telephone Number of Agent for Service)
Copy to:
Mark V. Minton, Esq.
Jones, Day, Reavis & Pogue
2727 N. Harwood Street
Dallas, Texas 75201
(214) 220-3939
_________
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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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Title of Amount Proposed Maximum Proposed Maximum Amount of
Securities to To be Offering Price per Aggregate Offering Registration
Be Registered Registered Share (1) Price (1) Fee(1)
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Common Stock, par value $0.01 per share (2). . . 25,000 shares (3) $8.50 $212,500 $56.10
. . . . . . . .
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(1) The registration fee has been computed in accordance with paragraphs (c)
and (h) of Rule 457, based upon the average of the reported high and low
sales prices of shares of the common stock on the Composite Tape of the New
York Stock Exchange, Inc. on March 27, 2000.
(2) Includes associated share purchase rights pursuant to a Rights Agreement
adopted by the registrant.
(3) Pursuant to Rule 416, this registration statement also covers an
indeterminate number of shares of common stock of the registrant as may be
issued as a result of stock dividends, stock splits or similar transactions
prior to the termination of this registration statement.
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.
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The information in this prospectus is not complete and may be changed. The
selling stockholder may not sell these securities until the registration
statement we filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell these securities and is not soliciting
an offer to buy these securities in any state where the offer or sale if not
permitted.
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SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MARCH ___, 2000
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Prospectus
FAIRFIELD COMMUNITIES, INC.
25,000 Shares of Common Stock
________________________
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, #200, Orlando, Florida 32819 and our telephone number is (407) 370-5200.
Investing in our common stock involves certain risks. See "risk factors"
beginning on page 3.
________________________
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.
________________________
The date of this Prospectus is March _____, 2000
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TABLE OF CONTENTS
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Risk Factors...................................... 3
Fairfield......................................... 7
Statement Concerning Forward Looking Information.. 8
About This Prospectus............................. 8
Where You Can Find More Information.............. 8
Use of Proceeds................................... 9
Selling Stockholders.............................. 9
Plan of Distribution.............................. 9
Legal Matters..................................... 10
Experts........................................... 10
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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.
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.
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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.
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.
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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.
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.
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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;
. 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.
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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 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 ownership interests and from the
associated interest income on contracts receivable generated by our financing of
vacation ownership interests.
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Fairfield was incorporated in Delaware in 1969. Our principal executive
office is located at 8669 Commodity Circle, #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 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 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
statement on Form 8-A filed with the Commission on December 8,
1995 (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
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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, #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;
. 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.
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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 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.
10
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
25,000 SHARES
FAIRFIELD COMMUNITIES, INC.
COMMON STOCK
================================================================================
PROSPECTUS
================================================================================
March ____, 2000
================================================================================
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth expenses in connection with the issuance of
the shares of common stock being registered. All of the amounts shown are
estimates, except the registration fee:
<TABLE>
<S> <C>
SEC registration fee.......................................... $ 56.10
Accounting fees and expenses.................................. 1,000.00
Legal fees and expenses....................................... 2,500.00
Miscellaneous expenses........................................ 500.00
Total.................................................... $4,056.10
=========
</TABLE>
Item 15. Indemnification of Directors and Officers
Our Certificate of Incorporation provides that the personal liability of
our directors to us is eliminated to the maximum extent permitted by Delaware
law. Our Certificate of Incorporation and Bylaws provide for the
indemnification of the our directors, officers, employees and agents to the
fullest extent permitted by Delaware law . Certain provisions of our
Certificate of Incorporation protect our 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, our
directors could be held liable for gross negligence in the performance of their
duty of care, but not for simple negligence. Our Certificate of Incorporation
absolves our directors of liability for negligence in the performance of their
duties, including gross negligence. However, our directors remain liable for
breaches of their duty of loyalty to us and our 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. Our 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 proceedings
(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 our best interests. With respect to any criminal action
or proceeding, the same standard of care applies, however, such person also must
have no reasonable cause to believe his 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. Delaware law requires
court approval before there can be any indemnification of expenses where the
person seeking indemnification has been found liable to us.
We have also entered into indemnification agreements with our directors and
officers pursuant to which we are generally obligated to indemnify our directors
and officers to the fullest extent permitted by Delaware law.
II-1
<PAGE>
Item 16. Exhibits.
<TABLE>
<C> <S>
4.1 Second Amended and Restated Certificate of Incorporation of the
Company (previously filed as Exhibit 3.8 to the Company's Current
Report on Form 8-K, filed by the Company 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
Company's Registration Statement on Form S-8, SEC File No. 333-42901,
and incorporated herein by reference).
4.3 Fifth Amended and Restated By-Laws of the Company (previously filed as
Exhibit 3.(ii) to the Company's Current Report on Form 8-K dated May
22, 1996, SEC File No. 001-08096, and incorporated herein by
reference).
5.1 Opinion of Jones, Day, Reavis & Pogue (filed herewith).
10.1 Restricted Stock Agreement between the Company and James G. Berk,
entered into on October 1, 1990 (previously filed as Exhibit 10.67 to
the Company's Annual Report on Form 10-K dated March 27, 2000, and
incorporated herein by reference).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.3 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
24.1 Power of Attorney (included on the signature page hereof).
</TABLE>
Item 17. Undertakings
(a) The undersigned registrant 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
20 percent 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 with or furnished
to the Commission by the registrant 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.
(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.
II-2
<PAGE>
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to 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 registrant pursuant to the foregoing provisions, or otherwise, the
registrant 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 registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
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 registrant 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 Registrant
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 on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Orlando, State of Florida on this 31st day of
March, 2000.
FAIRFIELD COMMUNITIES, INC.
By: /s/ JAMES G. BERK
-------------------------------------
James G. Berk
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints James G.
Berk, 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 on Form S-3 has been signed below by the following
persons in the capacities indicated on March 31, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ JAMES G. BERK President and Chief Executive Officer; Director
- --------------------------------- (Principal Executive Officer)
James G. Berk
/s/ ROBERT W. HOWETH Executive 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/ ERNEST D. BENNETT, III Director
- ---------------------------------
Ernest D. Bennett, III
/s/ PHILIP L. HERRINGTON Director
- ---------------------------------
Philip L. Herrington
/s/ GERALD M. JOHNSTON Director
- ---------------------------------
Gerald M. Johnston
/s/ BRYAN D. LANGTON Director
- ---------------------------------
Bryan D. Langton
/s/ CHARLES D. MORGAN Director
- ---------------------------------
Charles D. Morgan
/s/ WILLIAM C. SCOTT Director
- ---------------------------------
William C. Scott
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<C> <S>
4.1 Second Amended and Restated Certificate of Incorporation of the
Company (previously filed as Exhibit 3.8 to the Company's Current
Report on Form 8-K, filed by the Company 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
Company's Registration Statement on Form S-8, SEC File No. 333-42901,
and incorporated herein by reference).
4.3 Fifth Amended and Restated By-Laws of the Company (previously filed as
Exhibit 3.(ii) to the Company's Current Report on Form 8-K dated May
22, 1996, SEC File No. 001-08096, and incorporated herein by
reference).
5.1 Opinion of Jones, Day, Reavis & Pogue (filed herewith).
10.1 Restricted Stock Agreement between the Company and James G. Berk,
entered into on October 1, 1990 (previously filed as Exhibit 10.67 to
the Company's Annual Report on Form 10-K dated March 27, 2000, and
incorporated herein by reference).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.3 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
24.1 Power of Attorney (included on the signature page hereof).
</TABLE>
<PAGE>
Exhibit 5.1
JONES, DAY, REAVIS & POGUE
2727 North Harwood Street
Dallas, Texas 75201-1515
March 31, 2000
Fairfield Communities, Inc.
8669 Commodity Circle
Orlando, Florida 32819
Re: Registration on Form S-3 of 25,000 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 registration of 25,000
shares (the "Shares") of Common Stock, par value $0.01 per share, of the Company
previously issued to the selling stockholder.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion. Based upon such examination and
the assumptions set forth below, we are of the opinion that the Shares have been
duly authorized and validly issued, and are fully paid and nonassessable.
In rendering the foregoing opinion, we have (i) assumed and have not
independently verified (a) that all signatures on all certificates and other
documents examined by us are genuine, and that, where any such signature
purports to have been in a corporate, governmental or other capacity, the person
who affixed such signature to such certificate or other document had authority
to do so, and (b) the authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents submitted to us as
copies, and (ii) as to certain factual matters, relied upon certificates of
officers of the Company and public officials and 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 federal laws of the United
States of America and the General Corporation Law of the State of Delaware, 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, filed by the Company to effect the
registration of the Shares under the Securities Act of 1933, as amended.
Very truly yours,
/s/ Jones, Day, Reavis & Pogue
Jones, Day, Reavis & Pogue
<PAGE>
Exhibit 23.1
Consent of Ernst & Young LLP, Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Fairfield
Communities, Inc. for the registration of 25,000 shares of its Common Stock and
to the incorporation by reference therein of our report dated February 14, 2000,
with respect to the consolidated financial statements of Fairfield Communities,
Inc. incorporated by reference in its Annual Report (Form 10-K) for the year
ended December 31, 1999, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Little Rock, Arkansas
March 27, 2000
