<PAGE>
As filed with the Securities and Exchange Commission on May 18, 2000
Registration No. 333-______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
_________
FAIRFIELD COMMUNITIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 71-0390438
(State of Incorporation) (I.R.S. Employer
Identification Number)
8669 Commodity Circle, Suite 200
Orlando, Florida 32819
(Address of Principal Executive Offices)
FAIRFIELD COMMUNITIES, INC.
2000 INCENTIVE STOCK PLAN
(Full Title of the Plan)
Marcel J. Dumeny, Esq.
Executive Vice President and General Counsel
Fairfield Communities, Inc.
8669 Commodity Circle, Suite 200
Orlando, Florida 32819
(407) 370-5200
(Name, Address and Telephone Number of Agent for Service)
_________
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================================
Title of Proposed Maximum Proposed Maximum Amount of
Securities to Amount To be Offering Price per Aggregate Offering Registration
Be Registered Registered (1) Share (3) Price (3) Fee(3)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $0.01 per share (2)............... 1,500,000 shares $8.46875 $12,703,125 $3,353.63
====================================================================================================================================
</TABLE>
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, this registration
statement also covers an indeterminate number of additional shares that may
become subject to the Fairfield Communities, Inc. 2000 Incentive Stock Plan
as a result of anti-dilution provisions of the plan.
(2) Includes associated share purchase rights pursuant to a Rights Agreement
adopted by the registrant.
(3) 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 May 15, 2000.
================================================================================
<PAGE>
EXPLANATORY NOTES
The information called for by Part I of Form S-8 is included in the
description of the Fairfield Communities, Inc. 2000 Incentive Stock Plan to be
delivered to persons purchasing shares pursuant to the plan. Pursuant to the
Note to Part I of Form S-8, this information is not being filed with or included
in this Form S-8.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents, which we have filed with the Securities and
Exchange Commission, are incorporated by reference, as of their respective
dates, in this Form S-8:
. Annual Report on Form 10-K for the fiscal year ended December 31, 1999;
. Quarterly Report on Form 10-Q for the period ended March 31, 2000; and
. The description of our common stock contained in our registration
statements on Form 8-A (File No. 1-8096).
In addition, all documents we file subsequently pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended,
prior to the filing of a post-effective amendment which indicates that all
securities offered under this Registration Statement have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part of
this Registration Statement from the date of filing of such documents. Any
statement contained in this Registration Statement or in a document incorporated
or deemed to be incorporated by reference in this Registration Statement shall
be deemed to be modified or superseded for all purposes of this Registration
Statement to the extent that a statement contained in this Registration
Statement or therein or in any other subsequently filed document that also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. 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 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.
2
<PAGE>
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.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
4.1 Second Amended and Restated Certificate of Incorporation of
Fairfield (previously filed as Exhibit 3.8 to Fairfield's Current
Report on Form 8-K, filed by Fairfield 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 Fairfield (previously filed as Exhibit 4.2 to
Fairfield'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 Fairfield (previously filed
as Exhibit 3(ii) to Fairfield's Current Report on Form 8-K dated
May 22, 1996, SEC File No. 001-08096, and incorporated herein by
reference).
4.4 Fairfield Communities, Inc. 2000 Incentive Stock Plan (filed
herewith).
5.1 Opinion of Jones, Day, Reavis & Pogue (filed herewith).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.2 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
24.1 Power of Attorney (included on the signature page hereof).
Item 9. 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 of 1933;
(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
3
<PAGE>
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 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 Securities Exchange Act of 1934 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934)
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 of 1933 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 of 1933 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 of 1933 and will be governed by the final adjudication
of such issue.
4
<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-8 and has duly caused this Registration
Statement on Form S-8 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Orlando, State of Florida, on this 18th day of
May, 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-8 has been signed below by the following
persons in the capacities indicated on May 18, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ James G. Berk President and Chief Executive Officer; Director
- ---------------------------------
James G. Berk (Principal Executive Officer)
/s/ Robert W. Howeth Executive Vice President and Chief Financial Officer
- -------------------------------
Robert W. Howeth (Principal Financial Officer)
/s/ William G. Sell Vice President, Controller and Chief Accounting Officer
- -------------------------------
William G. Sell (Principal Accounting Officer)
/s/ Ernest D. Bennett, III
- -------------------------------
Ernest D. Bennett, III Director
/s/ Philip A. Clement
- -------------------------------
Philip A. Clement Director
/s/ John D. Hayes
- -------------------------------
John D. Hayes Director
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
/s/ Philip L. Herrington
- --------------------------------
Philip L. Herrington Director
/s/ Gerald M. Johnston
- --------------------------------
Gerald M. Johnston Director
/s/ Ilan Kaufthal
- -------------------------------
Ilan Kaufthal Director
/s/ Bryan D. Langton
- -------------------------------
Bryan D. Langton Director
/s/ William C. Scott
- -------------------------------
William C. Scott Director
</TABLE>
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- ------------
4.1 Second Amended and Restated Certificate of Incorporation of
Fairfield previously filed as Exhibit 3.8 to Fairfield's Current
Report on Form 8-K, filed by Fairfield 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 Fairfield (previously filed as Exhibit 4.2 to
Fairfield'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 Fairfield (previously filed
as Exhibit 3(ii) to Fairfield's Current Report on Form 8-K dated
May 22, 1996, SEC File No. 001-08096, and incorporated herein by
reference).
4.4 Fairfield Communities, Inc. 2000 Incentive Stock Plan (filed
herewith).
5.1 Opinion of Jones, Day, Reavis & Pogue (filed herewith).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.2 Consent of Jones, Day, Reavis & Pogue (included in Exhibit 5.1).
24.1 Power of Attorney (included on the signature page hereof).
<PAGE>
Exhibit 4.4
FAIRFIELD COMMUNITIES, INC.
2000 INCENTIVE STOCK PLAN
-------------------------
1. Purpose. The purpose of the 2000 Incentive Stock Plan is to attract
and retain the best available talent and encourage the highest level of
performance by directors, consultants, advisers, officers and other key
employees for Fairfield Communities, Inc., a Delaware corporation, and its
Subsidiaries and to provide to such persons incentives to put forth maximum
efforts for the success of the Company's business, in order to serve the best
interests of the Company and its stockholders.
2. Definitions. As used in this Plan,
"Appreciation Right" means a right granted pursuant to Section 5 of
this Plan.
"Base Price" means the price to be used as the basis for determining
the Spread upon the exercise of an Appreciation Right.
"Board" means the Board of Directors of the Company and, to the extent
of any delegation by the Board to a committee (or subcommittee thereof) pursuant
to Section 13 of this Plan, such committee (or subcommittee).
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Common Shares" means the Common Shares, par value $0.01 per share, of
the Company or any security into which such Common Shares may be changed by
reason of any transaction or event of the type referred to in Section 10 of this
Plan.
"Company" means Fairfield Communities, Inc., a Delaware corporation.
"Covered Employee" means a Participant who is, or is determined by the
Board to be likely to become, a "covered employee" within the meaning of Section
162(m) of the Code (or any successor provision).
"Date of Grant" means the date specified by the Board on which a grant
of Option Rights, Appreciation Rights, Performance Shares or Performance Units
or a grant or sale of Restricted Shares shall become effective (which date shall
not be earlier than the date on which the Board takes action with respect
thereto).
"Director" means a member of the Board of Directors of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder, as such law, rules and regulations may
be amended from time to time.
"Immediate Family" has the meaning ascribed thereto in General
Instruction A to Form S-8 under the Exchange Act (or any successor rule to the
same effect) as in effect from time to time.
"Incentive Stock Options" means Option Rights that are intended to
qualify as "incentive stock options" under Section 422 of the Code or any
successor provision.
"Management Objectives" means the measurable performance objective or
objectives established pursuant to this Plan for Participants who have received
grants of Performance Shares or Performance Units or, when so determined by the
Board, Option Rights, Appreciation Rights and Restricted Shares pursuant to this
Plan. Management Objectives may be described in terms of Company-wide
objectives or objectives that are related to the performance of the individual
Participant or of the Subsidiary, division, department, region or function
within the Company or Subsidiary in which the Participant is employed. The
Management Objectives may be made relative to
<PAGE>
the performance of other corporations. The Management Objectives applicable to
any award to a Covered Employee shall be based on specified levels of or growth
in one or more of the following criteria:
1. cash flow/net assets ratio;
2. debt/capital ratio;
3. return on total capital;
4. return on equity;
5. earnings per share;
6. revenue; and
7. total return to shareholders.
If the Board determines that a change in the business, operations,
corporate structure or capital structure of the Company, or the manner in which
it conducts its business, or other events or circumstances render the Management
Objectives unsuitable, the Board may in its discretion modify such Management
Objectives or the related minimum acceptable level of achievement, in whole or
in part, as the Board deems appropriate and equitable, except in the case of a
Covered Employee where such action would result in the loss of the otherwise
available exemption of the award under Section 162(m) of the Code. In such
case, the Board shall not make any modification of the Management Objectives or
minimum acceptable level of achievement.
"Market Value per Share" means, as of any particular date, the fair
market value of the Common Shares as determined by the Board.
"Non-Employee Director" means a Director who is not an employee of the
Company or any Subsidiary.
"Optionee" means the optionee named in an agreement evidencing an
outstanding Option Right.
"Option Price" means the purchase price payable on exercise of an
Option Right.
"Option Right" means the right to purchase Common Shares upon exercise
of an option granted pursuant to Section 4 or Section 8 of this Plan.
"Participant" means a person who is selected by the Board to receive
benefits under this Plan and who is at the time a consultant, an officer, or
other key employee of the Company or any one or more of its Subsidiaries, or who
has agreed to commence serving in any of such capacities within 90 days of the
Date of Grant, and shall also include each Non-Employee Director who receives an
award of Option Rights or Restricted Shares.
"Performance Period" means, in respect of a Performance Share or
Performance Unit, a period of time established pursuant to Section 7 of this
Plan within which the Management Objectives relating to such Performance Share
or Performance Unit are to be achieved.
"Performance Share" means a bookkeeping entry that records the
equivalent of one Common Share awarded pursuant to Section 7 of this Plan.
"Performance Unit" means a bookkeeping entry that records a unit
equivalent to $1.00 awarded pursuant to Section 7 of this Plan.
"Plan" means this 2000 Incentive Stock Plan.
"Restricted Shares" means Common Shares granted or sold pursuant to
Section 6 or Section 8 of this Plan as to which neither the substantial risk of
forfeiture nor the prohibition on transfers referred to in such Section 6 has
expired.
2
<PAGE>
"Spread" means the excess of the Market Value per Share on the date
when an Appreciation Right is exercised, or on the date when Option Rights are
surrendered in payment of the Option Price of other Option Rights, over the
Option Price or Base Price provided for in the related Option Right or
Appreciation Right, respectively.
"Subsidiary" means a corporation, company or other entity (i) more
than 50 percent of whose outstanding shares or securities (representing the
right to vote for the election of directors or other managing authority) are, or
(ii) which does not have outstanding shares or securities (as may be the case in
a partnership, joint venture or unincorporated association), but more than 50
percent of whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by the Company except that for purposes of determining
whether any person may be a Participant for purposes of any grant of Incentive
Stock Options, "Subsidiary" means any corporation in which at the time the
Company owns or controls, directly or indirectly, more than 50 percent of the
total combined voting power represented by all classes of stock issued by such
corporation.
"Voting Power" means at any time, the total votes relating to the
then-outstanding securities entitled to vote generally in the election of
Directors.
3. Shares Available Under the Plan. (a) Subject to adjustment as
provided in Section 3(b) and Section 10 of this Plan, the number of Common
Shares that may be issued or transferred (i) upon the exercise of Option Rights
or Appreciation Rights, (ii) as Restricted Shares and released from substantial
risks of forfeiture thereof, (iii) in payment of Performance Shares or
Performance Units that have been earned or (iv) as awards to Non-Employee
Directors shall not exceed in the aggregate 1,500,000 Common Shares, plus any
shares described in Section 3(b). Such shares may be shares of original issuance
or treasury shares or a combination of the foregoing.
(b) The number of shares available in Section 3(a) above shall be
adjusted to account for shares relating to awards that expire, are forfeited or
are transferred, surrendered or relinquished upon the payment of any Option
Price by the transfer to the Company of Common Shares or upon satisfaction of
any withholding amount. Upon payment in cash of the benefit provided by any
award granted under this Plan, any shares that were covered by that award shall
again be available for issue or transfer hereunder.
(c) Notwithstanding anything in this Section 3, or elsewhere in this
Plan, to the contrary and subject to adjustment as provided in Section 10 of
this Plan, (i) the aggregate number of Common Shares actually issued or
transferred by the Company upon the exercise of Incentive Stock Options shall
not exceed 1,500,000 Common Shares; (ii) no Participant shall be granted Option
Rights and Appreciation Rights under this Plan and the Company's Fourth Amended
and Restated Stock Option Plan, as may be further amended and/or restated, in
the aggregate, for more than 600,000 Common Shares during any calendar year;
(iii) the number of shares issued as Restricted Shares shall not in the
aggregate exceed 500,000 Common Shares; and (iv) no Non-Employee Director shall
be granted Option Rights, Appreciation Rights and Restricted Shares, in the
aggregate, for more than 25,000 Common Shares during any fiscal year of the
Company.
(d) Notwithstanding any other provision of this Plan to the contrary,
in no event shall any Participant in any calendar year receive an award of
Performance Shares or Performance Units having an aggregate maximum value as of
their respective Dates of Grant in excess of $1,000,000.
4. Option Rights. The Board may, from time to time and upon such terms
and conditions as it may determine, authorize the granting to Participants of
options to purchase Common Shares. Each such grant may utilize any or all of the
authorizations, and shall be subject to all of the requirements contained in the
following provisions:
(a) Each grant shall specify the number of Common Shares to which it
pertains subject to the limitations set forth in Section 3 of this Plan.
(b) Each grant shall specify an Option Price per share, which may not
be less than the Market Value per Share on the Date of Grant or less than the
par value of the Common Shares.
3
<PAGE>
(c) Each grant shall specify whether the Option Price shall be
payable (i) in cash or by check acceptable to the Company, (ii) by the actual or
constructive transfer to the Company of Common Shares owned by the Optionee that
were acquired pursuant to open market purchases or owned by the Optionee for at
least six months (or other consideration authorized pursuant to Section 4(d))
having a value at the time of exercise equal to the total Option Price, or (iii)
by a combination of such methods of payment.
(d) The Board may determine, at or after the Date of Grant, that
payment of the Option Price of any Option Right (other than an Incentive Stock
Option) may also be made in whole or in part in the form of Restricted Shares or
other Common Shares that are forfeitable or subject to restrictions on transfer,
Performance Shares (based, in each case, on the Market Value per Share on the
date of exercise), other Option Rights (based on the Spread on the date of
exercise) or Performance Units. Unless otherwise determined by the Board at or
after the Date of Grant, whenever any Option Price is paid in whole or in part
by means of any of the forms of consideration specified in this Section 4(d),
the Common Shares received upon the exercise of the Option Rights shall be
subject to such risks of forfeiture or restrictions on transfer as may
correspond to any that apply to the consideration surrendered, but only to the
extent, determined with respect to the consideration surrendered, of (i) the
number of shares or Performance Shares, (ii) the Spread of any unexercisable
portion of Option Rights, or (iii) the stated value of Performance Units.
(e) Any grant may provide for deferred payment of the Option Price
from the proceeds of sale through a third party on a date satisfactory to the
Company of some or all of the shares to which such exercise relates.
(f) Successive grants may be made to the same Participant whether or
not any Option Rights previously granted to such Participant remain unexercised.
(g) Each grant shall specify the period or periods of continuous
service by the Optionee with the Company or any Subsidiary that is necessary
before the Option Rights or installments thereof will become exercisable and may
provide for the earlier exercise of such Option Rights in the event of a change
in control.
(h) Any grant of Option Rights may specify Management Objectives that
must be achieved as a condition to the exercise of such rights.
(i) Option Rights granted under this Plan may be (i) options,
including, without limitation, Incentive Stock Options, that are intended to
qualify under particular provisions of the Code, (ii) options that are not
intended so to qualify, or (iii) combinations of the foregoing.
(j) The exercise of an Option Right shall result in the cancellation
on a share-for-share basis of any Appreciation Right authorized under Section 5
of this Plan.
(k) No Option Right shall be exercisable more than 10 years from the
Date of Grant.
(l) Each grant of Option Rights shall be evidenced by an agreement
executed on behalf of the Company by an officer and delivered to the Optionee
and containing such terms and provisions, consistent with this Plan, as the
Board may approve.
5. Appreciation Rights. The Board may authorize the granting to any
Optionee of Appreciation Rights in respect of Option Rights granted hereunder.
An Appreciation Right shall be a right of the Optionee, exercisable by surrender
of the related Option Right, to receive from the Company an amount determined by
the Board, which shall be expressed as a percentage of the Spread (not exceeding
100 percent) at the time of exercise. Appreciation Rights may be granted at any
time prior to the exercise or termination of the related Option Rights;
provided, however, that an Appreciation Right awarded in relation to an
Incentive Stock Option must be granted concurrently with such Incentive Stock
Option. Each grant of Appreciation Rights may utilize any or all of the
authorizations, and shall be subject to all of the requirements, contained in
the following provisions:
4
<PAGE>
(a) Any grant may specify that the amount payable on exercise of an
Appreciation Right may be paid by the Company in cash, in Common Shares or in
any combination thereof and may either grant to the Participant or retain in the
Board the right to elect among those alternatives.
(b) Any grant may specify that the amount payable on exercise of an
Appreciation Right may not exceed a maximum specified by the Board at the Date
of Grant.
(c) Any grant may specify waiting periods before exercise and
permissible exercise dates or periods.
(d) Any grant may specify that such Appreciation Right may be
exercised only in the event of, or earlier in the event of, a change in control.
(e) Any grant of Appreciation Rights may specify Management
Objectives that must be achieved as a condition of the exercise of such Rights.
(f) Each grant of Appreciation Rights shall provide that such Rights
may be exercised only at a time when the related Option Right is also
exercisable and at a time when the Spread is positive, and by surrender of the
related Option Right for cancellation.
(g) Each grant of Appreciation Rights shall be evidenced by an
agreement executed on behalf of the Company by an officer and delivered to and
accepted by the Participant, which agreement shall describe such Appreciation
Rights, identify the related Option Rights, state that such Appreciation Rights
are subject to all the terms and conditions of this Plan, and contain such other
terms and provisions, consistent with this Plan, as the Board may approve.
6. Restricted Shares. The Board may also authorize the grant or sale of
Restricted Shares to Participants. Each such grant or sale may utilize any or
all of the authorizations, and shall be subject to all of the requirements,
contained in the following provisions:
(a) Each such grant or sale shall constitute an immediate transfer of
the ownership of Common Shares to the Participant in consideration of the
performance of services, entitling such Participant to voting, dividend and
other ownership rights, but subject to the substantial risk of forfeiture and
restrictions on transfer hereinafter referred to.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than Market Value per Share at the Date of Grant.
(c) Each such grant or sale shall provide that the Restricted Shares
covered by such grant or sale shall be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code to be determined by the
Board at the Date of Grant and may provide for the earlier lapse of such
substantial risk of forfeiture in the event of a change in control.
(d) Each such grant or sale shall provide that during the period for
which such substantial risk of forfeiture is to continue, the transferability of
the Restricted Shares shall be prohibited or restricted in the manner and to the
extent prescribed by the Board at the Date of Grant (which restrictions may
include, without limitation, rights of repurchase or first refusal in the
Company or provisions subjecting the Restricted Shares to a continuing
substantial risk of forfeiture in the hands of any transferee).
(e) Any grant of Restricted Shares may specify Management Objectives
that, if achieved, will result in termination or early termination of the
restrictions applicable to such shares. Each grant may specify in respect of
such Management Objectives a minimum acceptable level of achievement and may set
forth a formula for determining the number of Restricted Shares on which
restrictions will terminate if performance is at or above the minimum level, but
falls short of full achievement of the specified Management Objectives.
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(f) Any such grant or sale of Restricted Shares may require that any
or all dividends or other distributions paid thereon during the period of such
restrictions be automatically deferred and reinvested in additional Restricted
Shares, which may be subject to the same restrictions as the underlying award.
(g) Each grant or sale of Restricted Shares shall be evidenced by an
agreement executed on behalf of the Company by any officer and delivered to and
accepted by the Participant and shall contain such terms and provisions,
consistent with this Plan, as the Board may approve. Unless otherwise directed
by the Board, all certificates representing Restricted Shares shall be held in
custody by the Company until all restrictions thereon shall have lapsed,
together with a stock power or powers executed by the Participant in whose name
such certificates are registered, endorsed in blank and covering such Shares.
7. Performance Shares and Performance Units. The Board may also
authorize the granting of Performance Shares and Performance Units that will
become payable to a Participant upon achievement of specified Management
Objectives. Each such grant may utilize any or all of the authorizations, and
shall be subject to all of the requirements, contained in the following
provisions:
(a) Each grant shall specify the number of Performance Shares or
Performance Units to which it pertains, which number may be subject to
adjustment to reflect changes in compensation or other factors; provided,
however, that no such adjustment shall be made in the case of a Covered Employee
where such action would result in the loss of the otherwise available exemption
of the award under Section 162(m) of the Code.
(b) The Performance Period with respect to each Performance Share or
Performance Unit shall be such period of time, commencing with the Date of Grant
as shall be determined by the Board at the time of grant which may be subject to
earlier lapse or other modification in the event of a change in control as set
forth in the agreement specified in Section 7(f).
(c) Any grant of Performance Shares or Performance Units shall
specify Management Objectives which, if achieved, will result in payment or
early payment of the award, and each grant may specify in respect of such
specified Management Objectives a minimum acceptable level of achievement and
shall set forth a formula for determining the number of Performance Shares or
Performance Units that will be earned if performance is at or above the minimum
level, but falls short of full achievement of the specified Management
Objectives. The grant of Performance Shares or Performance Units shall specify
that, before the Performance Shares or Performance Units shall be earned and
paid, the Board must certify that the Management Objectives have been satisfied.
(d) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that have been earned. Any grant may
specify that the amount payable with respect thereto may be paid by the Company
in cash, in Common Shares or in any combination thereof and may either grant to
the Participant or retain in the Board the right to elect among those
alternatives.
(e) Any grant of Performance Shares may specify that the amount
payable with respect thereto may not exceed a maximum specified by the Board at
the Date of Grant. Any grant of Performance Units may specify that the amount
payable or the number of Common Shares issued with respect thereto may not
exceed maximums specified by the Board at the Date of Grant.
(f) Each grant of Performance Shares or Performance Units shall be
evidenced by an agreement executed on behalf of the Company by any officer and
delivered to and accepted by the Participant, which agreement shall state that
such Performance Shares or Performance Units are subject to all the terms and
conditions of this Plan, and contain such other terms and provisions, consistent
with this Plan, as the Board may approve.
8. Awards to Non-Employee Directors. The Board may, from time to time
and upon such terms and conditions as it may determine, authorize the granting
to Non-Employee Directors of Option Rights and may also authorize the grant or
sale of Restricted Shares to Non-Employee Directors.
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(a) Each grant of Option Rights awarded pursuant to this Section 8
shall be upon terms and conditions consistent with Section 4 of this Plan and
shall be evidenced by an agreement in such form as shall be approved by the
Board. Each grant shall specify an Option Price per share, which shall not be
less than the Market Value per Share on the Date of Grant. Each such Option
Right granted under the Plan shall expire not more than 10 years from the Date
of Grant.
(b) Each grant or sale of Restricted Shares pursuant to this Section
8 shall be upon terms and conditions consistent with Section 6 of this Plan.
9. Transferability. (a) Subject to Section 9(c), no Option Right,
Appreciation Right or other derivative security granted under the Plan shall be
transferable by a Participant other than by will or the laws of descent and
distribution. Except as otherwise determined by the Board, Option Rights and
Appreciation Rights shall be exercisable during the Optionee's lifetime only by
him or her or by his or her guardian or legal representative.
(b) The Board may specify at the Date of Grant that part or all of
the Common Shares that are (i) to be issued or transferred by the Company upon
the exercise of Option Rights or Appreciation Rights or upon payment under any
grant of Performance Shares or Performance Units or (ii) no longer subject to
the substantial risk of forfeiture and restrictions on transfer referred to in
Section 6 of this Plan, shall be subject to further restrictions on transfer.
(c) Notwithstanding the provisions of Section 9(a), Option Rights
(other than Incentive Stock Options), Appreciation Rights, Restricted Shares,
Performance Shares and Performance Units shall be transferable by a Participant,
without payment of consideration therefor by the transferee, to any one or more
members of the Participant's Immediate Family (or to one or more trusts
established solely for the benefit of one or more members of the Participant's
Immediate Family or to one or more partnerships in which the only partners are
members of the Participant's Immediate Family); provided, however, that (i) no
such transfer shall be effective unless reasonable prior notice thereof is
delivered to the Company and such transfer is thereafter effected in accordance
with any terms and conditions that shall have been made applicable thereto by
the Company or the Board and (ii) any such transferee shall be subject to the
same terms and conditions hereunder as the Participant.
10. Adjustments. The Board may make or provide for such adjustments in
the numbers of Common Shares covered by outstanding Option Rights, Appreciation
Rights and Performance Shares granted hereunder, in the Option Price and in the
Base Price provided in outstanding Appreciation Rights, and in the kind of
shares covered thereby, as the Board, in its sole discretion, exercised in good
faith, may determine is equitably required to prevent dilution or enlargement of
the rights of Participants or Optionees that otherwise would result from (a) any
stock dividend, stock split, combination of shares, recapitalization or other
change in the capital structure of the Company, or (b) any merger,
consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of rights or
warrants to purchase securities, or (c) any other corporate transaction or event
having an effect similar to any of the foregoing. Moreover, in the event of any
such transaction or event, the Board, in its discretion, may provide in
substitution for any or all outstanding awards under this Plan such alternative
consideration as it, in good faith, may determine to be equitable in the
circumstances and may require in connection therewith the surrender of all
awards so replaced. The Board may also make or provide for such adjustments in
the numbers of shares specified in Section 3 of this Plan as the Board in its
sole discretion, exercised in good faith, may determine is appropriate to
reflect any transaction or event described in this Section 10; provided,
however, that any such adjustment to the number specified in Section 3(c)(i)
shall be made only if and to the extent that such adjustment would not cause any
Option intended to qualify as an Incentive Stock Option to fail so to qualify.
11. Fractional Shares. The Company shall not be required to issue any
fractional Common Shares pursuant to this Plan. The Board may provide for the
elimination of fractions or for the settlement of fractions in cash.
12. Withholding Taxes. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Company for such withholding are insufficient, it
shall be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make
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arrangements satisfactory to the Company for payment of the balance of such
taxes required to be withheld, which arrangements (in the discretion of the
Board) may include relinquishment of a portion of such benefit or satisfaction
from the proceeds of sale through a third party on a date satisfactory to the
Company of some or all of the shares to which the exercise of Option Rights
relates. In no event, however, shall the Company accept Common Shares for
payment of taxes in excess of required tax withholding rates, except that, in
the discretion of the Board, a Participant or such other person may surrender
Common Shares owned for more than six months to satisfy any tax obligations
resulting from any such transaction.
13. Administration of the Plan. (a) This Plan shall be administered by
the Board, which may from time to time delegate all or any part of its authority
under this Plan to a committee of the Board (or subcommittee thereof) consisting
of not less than two Non-Employee Directors appointed by the Board. A majority
of the committee (or subcommittee) shall constitute a quorum, and the action of
the members of the committee (or subcommittee) present at any meeting at which a
quorum is present, or acts unanimously approved in writing, shall be the acts of
the committee (or subcommittee). To the extent of any such delegation,
references in this Plan to the Board shall be deemed to be references to any
such committee or subcommittee.
(b) The interpretation and construction by the Board of any provision
of this Plan or of any agreement, notification or document evidencing the grant
of Option Rights, Appreciation Rights, Restricted Shares, Performance Shares or
Performance Units and any determination by the Board pursuant to any provision
of this Plan or of any such agreement, notification or document shall be final
and conclusive. No member of the Board shall be liable for any such action or
determination made in good faith.
14. Amendments, Etc. (a) The Board may at any time and from time to time
amend the Plan in whole or in part; provided, however, that any amendment which
must be approved by the shareholders of the Company in order to comply with
applicable law or the rules of the New York Stock Exchange or, if the Common
Shares are not traded on the New York Stock Exchange, the principal national
securities exchange upon which the Common Shares are traded or quoted, shall not
be effective unless and until such approval has been obtained. Presentation of
this Plan or any amendment hereof for shareholder approval shall not be
construed to limit the Company's authority to offer similar or dissimilar
benefits under other plans without shareholder approval.
(b) The Board shall not, without the further approval of the
shareholders of the Company, authorize the amendment of any outstanding Option
Right to reduce the Option Price. Furthermore, no outstanding Option Right
shall be canceled in consideration for awards having a lower Option Price
without further approval of the shareholders of the Company. This Section 14(b)
is intended to prohibit the repricing of "underwater" Option Rights and shall
not be construed to prohibit the adjustments provided for in Section 10 of this
Plan.
(c) The Board also may permit Participants to elect to defer the
issuance of Common Shares or the settlement of awards in cash under the Plan
pursuant to such rules, procedures or programs as it may establish for purposes
of this Plan. The Board also may provide that deferred issuances and
settlements include the payment or crediting of dividend equivalents or interest
on the deferral amounts.
(d) The Board may condition the grant of any award or combination of
awards authorized under this Plan on the surrender or deferral by the
Participant of his or her right to receive a cash bonus or other compensation
otherwise payable by the Company or a Subsidiary to the Participant.
(e) In case of termination of employment by reason of death,
disability or normal or early retirement, or in the case of hardship or other
special circumstances, of a Participant who holds an Option Right or
Appreciation Right not immediately exercisable in full, or any Restricted Shares
as to which the substantial risk of forfeiture or the prohibition or restriction
on transfer has not lapsed, or any Performance Shares or Performance Units which
have not been fully earned, or who holds Common Shares subject to any transfer
restriction imposed pursuant to Section 9(b) of this Plan, the Board may, in its
sole discretion, accelerate the time at which such Option Right or Appreciation
Right may be exercised, the time at which such substantial risk of forfeiture or
prohibition or restriction on transfer will lapse, the time at which such
Performance Shares or Performance Units will be deemed to have been fully earned
or the time when such transfer restriction will terminate or may waive any other
limitation or requirement under any such award.
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(f) This Plan shall not confer upon any Participant any right with
respect to continuance of employment or other service with the Company or any
Subsidiary, nor shall it interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate such Participant's employment or
other service at any time.
(g) To the extent that any provision of this Plan would prevent any
Option Right that was intended to qualify as an Incentive Stock Option from
qualifying as such, that provision shall be null and void with respect to such
Option Right. Such provision, however, shall remain in effect for other Option
Rights and there shall be no further effect on any provision of this Plan.
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Exhibit 5.1
JONES, DAY, REAVIS & POGUE
2727 North Harwood Street
Dallas, Texas 75201-1515
May 18, 2000
Fairfield Communities, Inc.
8669 Commodity Circle, Suite 200
Orlando, Florida 32819
Re: Registration on Form S-8 of 1,500,000 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 1,500,000
shares (the "Shares") of Common Stock, par value $0.01 per share, of the Company
under the Securities Act of 1933, as amended, pursuant to the Company's
Registration Statement on Form S-8 (the "Registration Statement").
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 that may
be issued or transferred or sold pursuant to the Fairfield Communities, Inc.
2000 Incentive Stock Plan (the "Plan") and the agreements contemplated
thereunder (the "Agreements") have been duly authorized, and will be, when
issued or transferred or sold in accordance with the Plan and such Agreements,
validly issued, 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.
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 incorporation by reference in the Registration Statement
(Form S-8) for the registration of 1,500,000 shares of Fairfield Communities,
Inc. Common Stock pertaining to the Fairfield Communities, Inc. 2000 Incentive
Stock Plan 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
May 18, 2000
