U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 6, 1998
( ) TRANSITION REPORT UNDER SECTION 13 OF 15(D) OF THE EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM TO
----- ------
COMMISSION FILE NO. 0-15030
WINTER SPORTS, INC.
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
MONTANA 81-0221770
- -------------------- ----------------------
(STATE OF INCORPORATION) (I.R.S. EMPLOYER I.D. NO.)
P.O. BOX 1400, WHITEFISH, MONTANA 59937
----------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE (406) 862-1900
FORMER NAME, FORMER ADDRESS & FORMER FISCAL YEAR, IF CHANGED SINCE LAST REPORT
CHECK WHETHER THE ISSUER (1) FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION
13 OR 15(D) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS, AND (2) HAS BEEN
SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
----- ----
AS OF JANUARY 15, 1999 THE NUMBER OF SHARES OUTSTANDING OF THE ISSUER'S COMMON
STOCK, NO PAR VALUE, WAS 1,008,368.
TRANSITION SMALL BUSINESS DISCLOSURE FORMAT YES NO X
----- ----
WINTER SPORTS, INC.
INDEX
PAGE NO.
PART I.FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
AT:
DECEMBER 6, 1998
DECEMBER 7, 1997
MAY 31, 1998
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS:
SEPTEMBER 14, 1998 - DECEMBER 6, 1998
SEPTEMBER 15, 1998 - DECEMBER 7, 1997
JUNE 1, 1998 - DECEMBER 6, 1998
JUNE 1, 1997 - DECEMBER 7, 1997
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE PERIODS:
JUNE 1, 1998 - DECEMBER 6, 1998
JUNE 1, 1997 - DECEMBER 7, 1997
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ITEM 5. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
WINTER SPORTS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
12/6/98 12/7/97 5/31/98
(UNAUDITED) (UNAUDITED) SEE NOTE 2
----------- ----------- ----------
ASSETS
CURRENT ASSETS
CASH AND CASH EQUIVALENTS $ 790,200 $ 294,122 $ 150,005
CERTIFICATES OF DEPOSIT 0 249,000 249,000
RECEIVABLES (NET OF RESERVE FOR
BAD DEBTS OF $11,090, $16,539
AND $14,690, RESPECTIVELY) 70,351 101,834 67,197
RECEIVABLES - RELATED PARTY 25,007 18,845 5,432
INCOME TAX REFUND RECEIVABLE 1,087,805 651,418 275,615
CURRENT DEFERRED TAX ASSET 51,767 55,020 51,767
INVENTORIES 627,932 651,362 405,566
PREPAID EXPENSES 208,167 152,679 163,567
----------- ---------- ----------
TOTAL CURRENT ASSETS 2,861,229 2,174,280 1,368,149
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT, AT COST 22,451,483 18,931,439 22,465,183
ACCUMULATED DEPRECIATION
AND AMORTIZATION (10,846,353) (9,760,145) (10,823,047)
----------- ---------- -----------
11,605,130 9,171,294 11,642,136
CONSTRUCTION IN PROGRESS 5,762,571 5,280,679 2,645,350
LAND AND DEVELOPMENT COSTS 2,217,268 2,193,210 2,115,106
----------- ---------- ----------
NET PROPERTY AND EQUIPMENT 19,584,969 16,645,183 16,402,592
OTHER ASSETS 279,643 296,440 282,044
----------- ---------- ----------
TOTAL ASSETS $ 22,725,841 $19,115,903 $18,052,785
=========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 1,388,053 $ 1,339,234 $ 1,044,474
ACCOUNTS PAYABLE -
RELATED PARTIES 0 18,531 79,065
EMPLOYEE COMPENSATION AND
RELATED EXPENSES 267,484 236,058 174,998
TAXES OTHER THAN PAYROLL
AND INCOME 8,968 152,517 120,140
INCOME TAXES PAYABLE 0 0 50
INTEREST PAYABLE 13,129 0 0
CURRENT PORTION OF
LONG-TERM DEBT 2,768,639 7,616 0
DEPOSITS AND OTHER
UNEARNED INCOME 1,657,812 2,353,322 451,507
OTHER CURRENT LIABILITIES 1,871 1,740 5,583
----------- ---------- ----------
TOTAL CURRENT LIABILITIES 6,105,956 4,109,018 1,875,817
LONG-TERM DEBT, LESS CURRENT
PORTION 8,000,000 5,814,192 6,334,945
DEFERRED INCOME TAXES 1,361,554 1,343,227 1,361,554
----------- ---------- ----------
TOTAL LIABILITIES 15,467,510 11,266,437 9,572,316
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
PREFERRED STOCK (950 SHARES
AUTHORIZED; $100 PAR VALUE;
4% CUMULATIVE; 0, 245 AND
0 SHARES OUTSTANDING) $ 0 $ 24,500 $ 0
COMMON STOCK (5,000,000 SHARES
AUTHORIZED; NO PAR VALUE;
1,008,368, 1,008,368 AND
1,008,368 SHARES OUTSTANDING) 4,099,174 4,099,174 4,099,174
ADDITIONAL PAID-IN CAPITAL 20,519 20,519 20,519
RETAINED EARNINGS 3,138,638 3,705,273 4,360,776
----------- ---------- ----------
TOTAL SHAREHOLDERS' EQUITY 7,258,331 7,849,466 8,480,469
TOTAL LIABILITIES AND EQUITY $ 22,725,841 $19,115,903 $18,052,785
=========== ========== ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
WINTER SPORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
SECOND QUARTER YEAR TO DATE
9/14/98 9/15/97 6/1/98 6/1/97
TO TO TO TO
12/6/98 12/7/97 12/6/98 12/7/97
----------- --------- ----------- ------------
REVENUE
LIFTS $ 226,804 $ 308,354 $ 461,837 $ 546,451
FOOD, BEVERAGE & RETAIL 86,892 68,443 445,457 413,172
EQUIPMENT RENTAL & REPAIR 16,899 16,015 37,530 29,610
LODGING 10,963 10,499 66,634 62,711
LEASE, MANAGEMENT AND
OTHER FEES 94,911 91,418 281,221 225,646
LEASE, MANAGEMENT AND OTHER
FEES- RELATED PARTIES 14,667 14,182 35,214 40,636
REAL ESTATE SALES 0 0 0 582,792
--------- --------- ---------- --------
TOTAL REVENUE 451,136 508,911 1,327,893 1,901,018
COSTS AND EXPENSES
DIRECT EXPENSES - LIFTS 301,569 340,647 514,635 595,380
COST OF FOOD, BEVERAGE
AND RETAIL 35,444 21,329 173,686 154,286
COST OF REAL ESTATE SALES 0 0 0 137,116
PAYROLL & RELATED
EXPENSES 537,280 463,615 1,142,049 1,033,552
DIRECT EXPENSES 232,018 215,229 517,095 497,013
DIRECT EXPENSES -
RELATED PARTIES 1,347 0 1,347 0
MARKETING 357,999 191,303 588,835 418,887
MARKETING -
RELATED PARTIES 468 3,788 1,059 3,788
DEPRECIATION & AMORTIZATION 11,446 15,441 26,706 30,989
GENERAL & ADMINISTRATIVE 190,654 225,327 444,703 449,891
GENERAL & ADMINISTRATIVE
- RELATED PARTIES 2,861 2,913 15,527 5,424
--------- -------- ------------ --------
TOTAL COSTS AND EXPENSES 1,671,086 1,479,592 3,425,642 3,326,326
OPERATING (LOSS) (1,219,950) (970,681) (2,097,749) (1,425,308)
OTHER INCOME (EXPENSE)
INTEREST INCOME 3,872 0 9,322 1,246
INTEREST EXPENSE (129,261) (82,650) (273,761) (144,360)
GAIN (LOSS) ON
DISPOSAL OF ASSETS 24,899 (8,391) 24,899 (8,391)
OTHER INCOME (EXPENSE) 200,111 (48,254) 300,418 (48,088)
--------- -------- -------------- --------
TOTAL OTHER INCOME
(EXPENSE) 99,621 (139,295) 60,878 (199,593)
(LOSS) BEFORE
INCOME TAXES (1,120,329)(1,109,976) (2,036,871) (1,624,901)
(RECOVERY OF)
INCOME TAXES (448,076) (447,547) (814,733) (650,566)
--------- ---------- -------------- -------------
NET (LOSS) $ (672,253) $(662,429) $ (1,222,138) $ (974,335)
========= ======== ============ =========
NET(LOSS)PER COMMON SHARE $ (0.67) $ (0.66) $ (1.22) $ (0.97)
======== ========== ============ =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
WINTER SPORTS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
6/1/98 6/1/97
TO TO
12/6/98 12/7/97
--------- ----------
NET CASH (USED IN) OPERATING ACTIVITIES: $(3,642,217) $ 57,905
CASH FLOWS FROM INVESTING ACTIVITIES:
PURCHASE OF CERTIFICATES OF DEPOSIT 0 (249,000)
REDEMPTION OF CERTIFICATES OF DEPOSIT 249,000 0
PROCEEDS FROM SALE OF ASSETS 34,899 1,324
PROPERTY AND EQUIPMENT ACQUISITIONS (434,521) (2,808,571)
--------- -----------
NET CASH (USED IN) INVESTING ACTIVITES (150,622) (3,056,247)
CASH FLOWS FROM FINANCING ACTIVITIES:
PROCEEDS FROM DRAWS ON LONG-TERM REVOLVER 3,370,132 5,152,691
PROCEEDS FROM DRAWS ON CONSTRUCTION LOAN 2,606,915 0
PRINCIPAL PAYMENTS ON LONG-TERM REVOLVER (1,544,013) (1,982,549)
---------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 4,433,034 3,170,142
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 640,195 171,800
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 150,005 122,322
--------- ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 790,200 $ 294,122
========= ==========
SUPPLEMENTAL DISCLOSURES OF CASH PAID YEAR-TO-DATE FOR:
INTEREST (NET OF CAPITALIZED INTEREST) $ 263,135 $ 136,166
INCOME TAXES (NET OF REFUNDS) $ (1,875) $ 157,532
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
WINTER SPORTS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
THE FINANCIAL STATEMENTS INCLUDED HEREIN ARE CONDENSED ACCORDING TO 10-QSB
REPORTING REQUIREMENTS. THEY DO NOT CONTAIN ALL INFORMATION REQUIRED BY
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES TO BE INCLUDED IN A SET OF AUDITED
FINANCIAL STATEMENTS. ACCORDINGLY, THE FINANCIAL STATEMENTS SHOULD BE READ IN
CONJUNCTION WITH THE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTAINED IN THE
COMPANY'S ANNUAL REPORT FOR THE YEAR ENDED MAY 31, 1998.
IN THE OPINION OF MANAGEMENT, THE ACCOMPANYING CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS CONTAIN ALL ADJUSTMENTS (CONSISTING OF NORMAL RECURRING ACCRUALS)
NECESSARY FOR A FAIR PRESENTATION OF THE INTERIM PERIODS PRESENTED.
CERTAIN AMOUNTS IN THE DECEMBER 7, 1997 FINANCIAL STATEMENTS HAVE BEEN
RECLASSIFIED TO CONFORM WITH THE DECEMBER 6, 1998 PRESENTATION.
NOTE 2 - MAY 31, 1998
THE BALANCE SHEET AT MAY 31, 1998 HAS BEEN CONDENSED FROM THE AUDITED FINANCIAL
STATEMENTS AT THAT DATE.
NOTE 3 - (LOSS) PER COMMON SHARE
(LOSS) PER COMMON SHARE IS BASED ON NET INCOME (LOSS) AFTER DEDUCTING DIVIDENDS
PAID ON PREFERRED STOCK OF $0 FOR BOTH THE QUARTER AND TWO QUARTERS ENDED
DECEMBER 6, 1998 AND DECEMBER 7, 1997. THE WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING WERE 1,008,368 AND 1,008,368 FOR THE QUARTERS ENDED DECEMBER
6, 1998 AND DECEMBER 7, 1997.
NOTE 4 - SEASONAL NATURE OF OPERATIONS
THE COMPANY'S OPERATIONS ARE HIGHLY SEASONAL IN NATURE. REVENUES, EARNINGS AND
CASH FLOW ARE GENERATED PRINCIPALLY FROM THE WINTER OPERATIONS OF LIFTS AND
RELATED FACILITIES. IT IS THE COMPANY'S PRACTICE TO RECOGNIZE SUBSTANTIALLY ALL
OF THE YEAR'S DEPRECIATION EXPENSE IN THE THIRD AND FOURTH QUARTERS IN ORDER TO
BETTER MATCH EXPENSES INCURRED IN GENERATING REVENUES DURING THE COMPANY'S MAIN
PERIODS OF BUSINESS. THE COMPANY ALSO GENERATES REVENUES FROM THE SALE OF REAL
ESTATE WHICH IS ONGOING THROUGHOUT THE FISCAL YEAR. THEREFORE, THE RESULTS OF
OPERATIONS FOR THE INTERIM AND YEAR-TO-DATE PERIODS ENDED DECEMBER 6, 1998 AND
DECEMBER 7, 1997 ARE NOT NECESSARILY INDICATIVE OF THE RESULTS TO BE EXPECTED
FOR THE FULL YEAR.
NOTE 5 - LEGAL PROCEEDINGS AND CONTINGENCIES
THE COMPANY IS A DEFENDANT IN A LAWSUIT FILED BY AN INDIVIDUAL WHO IS SEEKING
DAMAGES OF AN UNSPECIFIED AMOUNT, FOR ALLEGED PERSONAL INJURIES RESULTING FROM
AN ACCIDENT OCCURRING ON THE COMPANY'S PROPERTY. THE COMPANY INTENDS TO
VIGOROUSLY DEFEND THE CLAIM. THE COMPANY'S INSURANCE CARRIER PROVIDES DEFENSE
AND COVERAGE FOR THIS CLAIM AND THE COMPANY'S PARTICIPATION HAS BEEN LIMITED TO
ITS POLICY DEDUCTIBLE. SUCH AMOUNTS ARE CHARGED TO GENERAL AND ADMINISTRATIVE
EXPENSE UPON SETTLEMENT.
NOTE 6 - NOTES PAYABLE
THE COMPANY CURRENTLY HAS A LOAN AGREEMENT WITH BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, DOING BUSINESS AS SEAFIRST BANK (SEAFIRST). THE
AGREEMENT PROVIDES FOR A $9,750,000 REVOLVING REDUCING LINE OF CREDIT WHICH
MATURES ON JUNE 1, 2008. THE AGREEMENT CONTAINS COVENANTS THAT REQUIRE MINIMUM
NET WORTH, A FIXED CHARGE COVERAGE RATIO AND RESTRICTS INVESTMENT, DISPOSITION
OF ASSETS, CAPITAL EXPENDITURES, OUTSIDE BORROWING AND PAYMENT OF DIVIDENDS.
EACH JUNE 1, THE AMOUNT AVAILABLE UNDER THE LINE REDUCES BY $750,000. AT
DECEMBER 6, 1998 $1,750,000 WAS UNUSED OF THE $9,750,000 AVAILABLE UNDER THE
INSTRUMENT. AT DECEMBER 7, 1997 $2,935,808 WAS UNUSED OF THE $8,750,000
AVAILABLE UNDER THE INSTRUMENT. THE LOAN BEARS INTEREST AT OR BELOW SEAFIRST'S
PRIME RATE.
THE COMPANY ALSO HAS A LOAN AGREEMENT WITH WHITEFISH CREDIT UNION FOR FINANCING
OF THE CONSTRUCTION OF A MIXED-USE CONDOMINIUM PROJECT. THE AGREEMENT PROVIDES
FOR A $3,900,000 LINE OF CREDIT WHICH IS DUE AND PAYABLE ON SEPTEMBER 1, 1999.
AT DECEMBER 6, 1998 $1,132,020 WAS UNUSED AND AVAILABLE FOR BORROWING UNDER THE
INSTRUMENT. THE LOAN BEARS INTEREST AT PRIME PLUS 0.5%.
NOTE 7 - BUSINESS SEGMENT INFORMATION
THE COMPANY OPERATES PRINCIPALLY IN TWO INDUSTRIES: THE OPERATION OF A SKI AREA
AND THE SALE OF REAL ESTATE. FINANCIAL INFORMATION BY INDUSTRY SEGMENT FOR THE
FIRST QUARTERS OF 1998 AND 1999 IS SUMMARIZED AS FOLLOWS:
SKI AREA REAL ESTATE CONSOLIDATED
-------- ----------- ------------
QUARTER ENDED 12/6/98
TOTAL REVENUE $ 451,136 $ 0 $ 451,136
OPERATING PROFIT (LOSS) $(1,152,513) $ (67,437) $ (1,219,950)
DEPRECIATION AND AMORTIZATION $ 7,633 $ 3,813 $ 11,446
IDENTIFIABLE ASSETS $16,034,969 $ 6,690,872 $ 22,725,841
CAPITAL EXPENDITURES $ 186,412 $ 0 $ 186,412
QUARTER ENDED 12/7/97
TOTAL REVENUE $ 505,411 $ 3,500 $ 508,911
OPERATING PROFIT (LOSS) $ (931,001) $ (39,679) $ (970,680)
DEPRECIATION AND AMORTIZATION$ $ 11,010 $ 4,431 $ 15,441
IDENTIFIABLE ASSETS $16,145,299 $ 2,970,605 $ 19,115,904
CAPITAL EXPENDITURES $ 912,403 $ 0 $ 912,403
6/1/98 TO 12/6/98
TOTAL REVENUE $ 1,327,893 $ 0 $ 1,327,893
OPERATING PROFIT (LOSS) $ (1,942,092) $ (155,657) $ (2,097,749)
DEPRECIATION AND AMORTIZATION $ 17,809 $ 8,897 $ 26,706
IDENTIFIABLE ASSETS $ 16,034,969 $ 6,690,872 $ 22,725,841
CAPITAL EXPENDITURES$ $ 434,521 $ 0 $ 434,521
6/1/97 TO 12/7/97
TOTAL REVENUE $ 1,312,725 $ 588,292 $ 1,901,017
OPERATING PROFIT (LOSS) $ (1,778,051) $ 352,742 $ (1,425,309)
DEPRECIATION AND AMORTIZATION $ 20,650 $ 10,339 $ 30,989
IDENTIFIABLE ASSETS $ 16,145,299 $ 2,970,605 $ 19,115,904
CAPITAL EXPENDITURES $ 2,808,571 $ 0 $ 2,808,571
WINTER SPORTS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
FOR THE PERIOD
6/ 1/98 6/ 1/97
TO TO
12/6/98 12/7/97
----------- -----------
GROSS REVENUES $ 1,327,893 $ 1,901,018
NET LOSS $(1,222,138) $ (974,335)
LOSS PER COMMON SHARE $ (1.21) $ (0.97)
TOTAL ASSETS $22,725,841 $ 19,115,903
LONG-TERM DEBT LESS CURRENT PORTION $ 8,000,000 $ 5,814,192
RESULTS OF OPERATIONS, SECOND QUARTER AND YEAR-TO-DATE
REVENUES
REVENUES FOR THE SECOND QUARTER ENDING DECEMBER 6, 1998 WERE $451,136, A DECLINE
OF $57,775 OR 11% OVER THE SAME QUARTER OF THE PRIOR YEAR. THE DECLINE IS DUE
PRIMARILY TO A CHANGE IN THE TIMING OF RECOGNITION OF REVENUE FROM THE SALE OF
THE COMPANY'S FREQUENT SKIER CARD. THE RECOGNITION OF THE DEFERRED REVENUE WILL
TAKE PLACE IN THE THIRD AND EARLY FOURTH QUARTERS OF THE COMPANY'S FISCAL YEAR.
REVENUE FROM FOOD, BEVERAGE & RETAIL AS WELL AS LEASE, MANAGEMENT AND OTHER FEES
ALL SHOWED INCREASES FROM THE PRIOR YEAR DUE TO BETTER SNOW CONDITIONS AT THE
START OF THE COMPANY'S WINTER OPERATING SEASON.
THE COMPANY EXPERIENCED NO REAL ESTATE SALES IN THE FIRST QUARTER OF THE YEAR.
THE COMPANY DOES EXPECT REAL ESTATE SALES IN ITS THIRD QUARTER WHEN IT COMPLETES
CONSTRUCTION OF ITS KINTLA LODGE CONDOMINIUM PROJECT.
YEAR TO DATE REVENUES DECLINED 30% OR $573,125 FROM THE PRIOR YEAR. THE LACK OF
REAL ESTATE SALES IN THE CURRENT FISCAL YEAR ALONG WITH THE DEFERRAL OF REVENUE
FROM THE COMPANY'S FREQUENT SKIER CARD ACCOUNT FOR THIS DECLINE.
OPERATING EXPENSES
OPERATING COSTS AND EXPENSES INCREASED IN THE SECOND QUARTER BY $191,494 OR 13%
FROM THE PRIOR YEAR. THE INCREASE IS A RESULT OF INCREASED EXPENDITURES FOR
MARKETING AND PAYROLL & RELATED EXPENSES. THE COMPANY EXPECTS TO SEE INCREASED
MARKETING EXPENDITURES FOR THE REMAINDER OF THIS FISCAL YEAR.
EXCLUDING COSTS OF REAL ESTATE SALES, THE COMPANY'S YEAR-TO-DATE OPERATING
EXPENSES HAVE INCREASED BY 7% OVER THE PRIOR YEAR.
OTHER INCOME
OTHER INCOME IN THE SECOND QUARTER AND YEAR-TO-DATE REFLECT REVENUES EARNED FROM
SALES OF TIMBER ON THE COMPANY'S BASE AREA LANDS. THE REVENUE RECEIVED IS OF A
ONE-TIME NATURE AS THE COMPANY DOES NOT EXPECT TO HARVEST ANY MORE TIMBER IN THE
NEAR FUTURE.
OTHER EXPENSES
INTEREST EXPENSE FOR THE QUARTER ENDED DECEMBER 6, 1998 WAS $129,261, AN
INCREASE OF $46,612 OR 56% HIGHER THAN THE SECOND QUARTER LAST YEAR. INTEREST
EXPENSE ROSE BY $129,401 OR 90% OVER THE FIRST TWO QUARTERS VERSUS THE SAME
QUARTERS OF THE PRIOR YEAR. THESE INCREASES ARE DUE TO HIGHER LEVELS OF
BORROWING ON THE COMPANY'S LINE OF CREDIT DUE TO THE COMPANY'S LARGE CAPITAL
EXPANSION PROGRAM DURING THE FIRST TWO QUARTERS OF THE PRIOR FISCAL YEAR COUPLED
WITH THE NEGATIVE CASH FLOW GENERATED FROM OPERATIONS IN THE PRIOR FISCAL YEAR.
THE YEAR TO DATE INTEREST EXPENSE OF $273,761 FOR FISCAL 1999 AND $144,360 FOR
FISCAL 1998 IS NET OF CONSTRUCTION PERIOD INTEREST OF $59,530 AND $19,323 IN THE
RESPECTIVE PERIODS.
THE SECOND QUARTER NET LOSS OF $672,253 WAS $9,824 OR 1% MORE THAN THE SAME
QUARTER LAST YEAR. THE YEAR TO DATE NET LOSS OF $1,222,138 WAS $247,803 OR 25%
MORE THAN DURING THE SAME TIME PERIOD LAST YEAR.
A LOSS FOR THIS INTERIM PERIOD IN ANY YEAR IS NOT NECESSARILY INDICATIVE OF THE
RESULTS TO BE EXPECTED FOR THE ENTIRE YEAR, BUT INSTEAD REFLECTS THE SEASONAL
NATURE OF THE COMPANY'S BUSINESS. THE COMPANY'S MAIN PERIODS OF BUSINESS ARE
FROM MID-NOVEMBER THROUGH MID-APRIL. HISTORICALLY, THE FIRST AND SECOND
QUARTERS, ESPECIALLY TAKEN INDIVIDUALLY, BEAR LITTLE COMPARATIVE VALUE.
LIQUIDITY AND CAPITAL RESOURCES
WORKING CAPITAL OF $(3,244,727) AT THE END OF THE SECOND QUARTER OF FISCAL 1999
INCREASED FROM WORKING CAPITAL OF $(1,934,738) AT DECEMBER 7, 1997. THE
INCREASE IS DUE PRIMARILY TO THE ADDITION OF THE CONSTRUCTION LOAN FOR THE
COMPANY'S CONDOMINIUM PROJECT. THE CONSTRUCTION LOAN IS DUE ON SEPTEMBER 1,
1999.
THE COMPANY IS STILL AWAITING THE INCOME TAX REFUNDS DUE FROM THE FISCAL YEAR
ENDED MAY 31, 1998. THE REFUNDS ACCOUNT FOR $273,690 OF THE $1,087,805 OF
INCOME TAX REFUND RECEIVABLE.
THE COMPANY HAS NOT DECLARED ANY TYPE OF DIVIDEND IN FISCAL 1999.
DEPOSITS AND OTHER UNEARNED INCOME IS $969,200 LOWER THAN AT THE END OF THE
SECOND QUARTER OF THE PRIOR YEAR. THE DECREASE IS DUE TO THE COMPANY'S
ELIMINATION OF ITS PRESEASON LIFT TICKET VOUCHERS IN THE CURRENT FISCAL YEAR.
TOTAL LIABILITIES OF $15,467,510 REPRESENTS 213% OF STOCKHOLDERS' EQUITY AT
DECEMBER 6, 1998, UP FROM $11,266,437 OR 144% OF STOCKHOLDERS' EQUITY AT
DECEMBER 7, 1997.
MANAGEMENT CONTINUALLY EVALUATES THE COMPANY'S CASH AND FINANCING REQUIREMENTS.
OVER THE YEARS, THE COMPANY HAS OBTAINED FAVORABLE FINANCING FROM FINANCIAL
INSTITUTIONS WHEN NECESSARY TO FUND OFF-SEASON REQUIREMENTS AND CAPITAL
ACQUISITIONS. THE COMPANY HAS A REVOLVING, REDUCING CREDIT AGREEMENT WHICH
PROVIDES FINANCIAL RESOURCES ALLOWING THE COMPANY TO MEET SHORT-TERM OPERATING
NEEDS AND FUND CAPITAL EXPENDITURES. THE $9.75 MILLION AGREEMENT REDUCES
AVAILABLE CAPACITY BY $750,000 EACH JUNE 1. AT DECEMBER 6, 1998, THERE WAS
$8,000,000 BORROWED WITH $1,750,000 OF UNUSED CAPACITY ON THE $9,750,000 LINE OF
CREDIT. IN ORDER TO FINANCE THE CONSTRUCTION OF A CONDOMINIUM PROJECT THE
COMPANY HAS OBTAINED A CONSTRUCTION LOAN IN THE FORM OF A LINE OF CREDIT. THE
$3,900,000 LINE OF CREDIT MATURES ON SEPTEMBER 1, 1999. AT DECEMBER 13, 1998,
THERE WAS $2,767,980 BORROWED WITH $1,132,020 OF UNUSED CAPACITY ON THE
$3,900,000 CONSTRUCTION LOAN.
YEAR 2000
THE YEAR 2000 ("Y2K") PROBLEM RELATES TO COMPUTER SYSTEMS AND EMBEDDED CHIPS
WITH PROGRAMMING CODES IN WHICH CALENDAR YEAR DATA IS ABBREVIATED TO ONLY TWO
DIGITS. AS A RESULT OF THIS DESIGN, SOME SYSTEMS COULD FAIL TO OPERATE OR FAIL
TO PRODUCE CORRECT RESULTS IN THE YEAR 2000 IF "00" IS INTERPRETED TO MEAN THE
YEAR 1900, RATHER THAN THE YEAR 2000. AS A RESULT, COMPANIES ARE AT RISK FOR
POSSIBLE MISCALCULATIONS OR FAILURES IN EITHER THEIR OWN SYSTEMS OR THE SYSTEMS
OF THIRD PARTIES WHICH COULD CAUSE DISRUPTION IN BUSINESS OPERATIONS.
THE COMPANY HAS IMPLEMENTED A PROJECT (THE "PROJECT") TO ADDRESS THE Y2K ISSUES
THAT COULD AFFECT THE COMPANY'S BUSINESS, RESULTS OF OPERATIONS OR FINANCIAL
CONDITION. THE PROJECT ADDRESSES INFORMATION TECHNOLOGY ("IT") SYSTEMS AND
SOFTWARE APPLICATIONS AS WELL AS NON-IT SYSTEMS, INCLUDING BOTH THOSE USED
INTERNALLY BY THE COMPANY AND THOSE USED BY CERTAIN THIRD PARTIES WITH WHOM THE
COMPANY DOES BUSINESS. THE PROJECT IS ORGANIZED INTO SIX PHASES: (1) INVENTORY
OF ALL SYSTEMS AND APPLICATIONS OF THE COMPANY AS WELL AS THOSE OF CERTAIN
THIRD-PARTY SUPPLIERS AND SERVICE PROVIDERS TO IDENTIFY ALL POTENTIAL Y2K
PROBLEMS; (2) ASSESSMENT OF Y2K COMPLIANCE FOR EACH SYSTEM AND APPLICATION SO
IDENTIFIED; (3) CORRECTION/REMEDIATION OF THOSE SYSTEMS AND APPLICATIONS
DETERMINED NOT TO BE Y2K COMPLIANT; (4) TESTING OF CORRECTED/REMEDIATED SYSTEMS
AND APPLICATIONS; (5) IMPLEMENTATION OF NEW AND/OR CORRECTED SYSTEMS AND
APPLICATIONS; AND (6) CONTINGENCY PLANNING. THE COMPANY EXPECTS ALL OF ITS
INTERNAL SYSTEMS AND SOFTWARE APPLICATIONS TO BE Y2K COMPLIANT BEFORE JANUARY 1,
2000.
THE INVENTORY AND ASSESSMENT PHASES OF THE PROJECT WERE COMPLETED AS OF OCTOBER
21, 1998 FOR ALL OF THE COMPANY'S INTERNAL SYSTEMS AND SOFTWARE APPLICATIONS.
THE COMPANY HAS DETERMINED THAT CERTAIN OF ITS SYSTEMS AND APPLICATIONS ARE
ALREADY Y2K COMPLIANT, AND THE COMPANY HAS BEGUN THE CORRECTION/REMEDIATION
PHASE WITH RESPECT TO ITS OTHER SYSTEMS AND APPLICATIONS. THE TESTING PHASE WILL
BE ONGOING AS HARDWARE OR SYSTEM SOFTWARE IS ADDED, REMEDIATED, UPGRADED OR
REPLACED.
THE COMPANY IS ALSO IN THE PROCESS OF IDENTIFYING AND CONTACTING THIRD PARTIES
WITH WHOM THE COMPANY HAS MATERIAL RELATIONSHIPS IN ORDER TO VERIFY THEIR Y2K
READINESS. THESE THIRD PARTIES INCLUDE UTILITY PROVIDERS, TELECOMMUNICATIONS
PROVIDERS, MANUFACTURERS OF SKI LIFTS, AS WELL AS SERVICE PROVIDERS SUCH AS
FINANCIAL INSTITUTIONS AND COMPANIES WHICH PROVIDE EMPLOYEE BENEFITS SERVICES TO
THE COMPANY. THE FAILURE OF SUCH THIRD PARTIES TO CORRECT MATERIAL Y2K PROBLEMS
COULD RESULT IN AN INTERRUPTION IN, OR A FAILURE OF, CERTAIN NORMAL BUSINESS
ACTIVITIES OR OPERATIONS OF THE COMPANY, AND SUCH FAILURES COULD MATERIALLY AND
ADVERSELY AFFECT THE COMPANY'S RESULTS OF OPERATIONS, LIQUIDITY AND FINANCIAL
CONDITION.
THE COMPANY CURRENTLY ESTIMATES THE ENTIRE PROJECT WILL BE COMPLETED BY MAY 31,
1999. IN THE EVENT THAT UNFORESEEN CIRCUMSTANCES PREVENT THE COMPANY FROM
COMPLETING THE PROJECT BY THIS DATE, THE PROJECT TIMETABLE ALLOWS SUFFICIENT
TIME FOR THE COMPANY TO CONCLUDE THE PROJECT PRIOR TO JANUARY 1, 2000.
THE TOTAL COST ASSOCIATED WITH THE PROJECT, INCLUDING THE REPLACEMENT COST OF
ANY NON-Y2K COMPLIANT SYSTEMS, SOFTWARE OR HARDWARE, IS NOT EXPECTED TO BE
MATERIAL TO THE COMPANY'S BUSINESS, RESULTS OF OPERATIONS OR FINANCIAL
CONDITION. COSTS INCURRED IN CONNECTION WITH THE PROJECT ARE EXPENSED AS
INCURRED, EXCEPT FOR THE COST OF REPLACEMENT SYSTEMS OR HARDWARE WHICH WILL BE
CAPITALIZED AND DEPRECIATED OVER THEIR ESTIMATED USEFUL LIVES. PROJECT COSTS ARE
BEING FUNDED THROUGH OPERATING CASH FLOWS.
DUE TO THE GENERAL UNCERTAINTY INHERENT IN THE Y2K PROBLEM, RESULTING IN PART
FROM THE UNCERTAINTY OF THE Y2K READINESS OF THIRD-PARTY SUPPLIERS AND SERVICE
PROVIDERS, THE COMPANY IS UNABLE TO DETERMINE AT THIS TIME WHETHER THE
CONSEQUENCES OF Y2K FAILURES WILL HAVE A MATERIAL IMPACT ON THE COMPANY'S
RESULTS OF OPERATIONS, LIQUIDITY OR FINANCIAL CONDITION. HOWEVER, THE COMPANY
COULD BE MATERIALLY ADVERSELY AFFECTED BY A TEMPORARY INABILITY TO CONDUCT
BUSINESS IN THE ORDINARY COURSE FOR A PERIOD OF TIME AFTER JANUARY 1, 2000
THROUGH A FAILURE TO IDENTIFY AND REMEDIATE ALL ITS SUSCEPTIBLE SYSTEMS OR IF
THIRD-PARTY VENDORS AND SUPPLIERS WHOSE SYSTEMS AND OPERATIONS IMPACT THE
COMPANY DID NOT BECOME Y2K COMPLIANT IN TIME. THIS COULD RESULT IN THE INABILITY
TO OPERATE SKI LIFTS OR PROVIDE ESSENTIAL GUEST SERVICES ON SCHEDULE WHICH COULD
CAUSE A DECREASE IN THE COMPANY'S REVENUES. COMPLETION OF THE ASSESSMENT PHASE
OF THE PROJECT IN PARTICULAR, THE ASSESSMENT OF THE Y2K READINESS OF ITS
CRITICAL VENDORS AND SERVICE PROVIDERS IS EXPECTED TO SIGNIFICANTLY REDUCE THE
COMPANY'S LEVEL OF UNCERTAINTY ABOUT THE Y2K PROBLEM. TO THE EXTENT THAT THIRD-
PARTY RESPONSES TO THE COMPANY'S Y2K COMPLIANCE QUESTIONNAIRES OR THE COMPANY'S
TESTING OF SUCH RESPONSES ARE UNSATISFACTORY, THE COMPANY WILL CREATE
CONTINGENCY PLANS WHICH COULD INCLUDE CHANGING VENDORS OR SERVICE PROVIDERS TO
THOSE WHO HAVE DEMONSTRATED Y2K READINESS.
THE PROJECT IS AN ONGOING PROCESS AND THE ESTIMATES OF COSTS AND COMPLETION
DATES DESCRIBED ABOVE ARE SUBJECT TO CHANGE.
INFORMATION AND STATEMENTS CONTAINED HEREIN REGARDING THE COMPANY'S Y2K PROJECT
ARE "YEAR 2000 READINESS DISCLOSURES" AS DEFINED BY THE YEAR 2000 INFORMATION
AND READINESS DISCLOSURES ACT OF 1998, ENACTED ON OCTOBER 19, 1998.
FORWARD-LOOKING STATEMENTS
THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS REGARDING MATTERS THAT ARE
SUBJECT TO RISKS AND UNCERTAINTIES. FOR SUCH STATEMENTS, THE COMPANY CLAIMS THE
PROTECTION OF THE SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS CONTAINED IN
SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. THE COMPANY'S
RESULTS COULD DIFFER MATERIALLY FROM THOSE DISCUSSED IN EACH FORWARD-LOOKING
STATEMENT DUE TO VARIOUS FACTORS WHICH ARE OUTSIDE THE COMPANY'S CONTROL.
WINTER SPORTS, INC.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
REFERENCE IS MADE TO NOTE 5 OF THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS OF THIS FORM 10-QSB, WHICH IS INCORPORATED
HEREIN BY REFERENCE.
ITEM 5. OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
3.1 ARTICLES OF INCOPORATION
3.2 BY-LAWS
NO REPORTS ON FORM 8-K WERE FILED DURING THE QUARTER ENDED
DECEMBER 6, 1998.
WINTER SPORTS, INC.
FORM 10-QSB
SIGNATURES
IN ACCORDANCE WITH THE REQUIREMENTS OF THE EXCHANGE ACT, THE REGISTRANT CAUSED
THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED.
WINTER SPORTS, INC.
--------------------
(REGISTRANT)
DATE: JANUARY 15, 1999 /S/MICHAEL J. COLLINS
MICHAEL J. COLLINS
PRESIDENT & CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
DATE: JANUARY 15, 1999 /S/JOANN M. GOULD
JOANN M. GOULD
CONTROLLER & ASSISTANT SECRETARY
(PRINCIPAL ACCOUNTING OFFICER)
DATE: JANUARY 15, 1999 /S/THOMAS E. CULLEN
THOMAS E. CULLEN
TREASURER
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from 10-QSB dated
December 6,1998 and is qualified in its entirety by reference to such 10-QSB.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAY-31-1999
<PERIOD-END> DEC-06-1998
<CASH> 790,200
<SECURITIES> 0
<RECEIVABLES> 106,448
<ALLOWANCES> 11,090
<INVENTORY> 627,932
<CURRENT-ASSETS> 2,861,229
<PP&E> 30,431,322
<DEPRECIATION> 10,846,353
<TOTAL-ASSETS> 22,725,841
<CURRENT-LIABILITIES> 6,105,956
<BONDS> 8,000,000
0
0
<COMMON> 4,099,174
<OTHER-SE> 3,159,157
<TOTAL-LIABILITY-AND-EQUITY> 7,258,331
<SALES> 445,457
<TOTAL-REVENUES> 1,327,893
<CGS> 173,686
<TOTAL-COSTS> 3,425,642
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 273,761
<INCOME-PRETAX> (2,036,871)
<INCOME-TAX> (814,733)
<INCOME-CONTINUING> (1,222,138)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,222,138)
<EPS-PRIMARY> (1.21)
<EPS-DILUTED> (1.21)
</TABLE>
RESTATED ARTICLES OF INCORPORATION
Pursuant to the provisions of Section 35-1-213, MCA, the undersigned
Corporation adopts the following Restated Articles of Incorporation.
ARTICLE I
The name of the Corporation is:
WINTER SPORTS, INC.
ARTICLE II
The Corporation shall have perpetual existence.
ARTICLE III
The purpose or purposes for which the Corporation is organized are:
A. To carry on the business of a year-round resort and recreational
center, including, but not restricted to, a winter sports recreational area.
B. The construction, installation and operation of ski lifts and all
facilities reasonably required in the operation of a year-round recreational
area.
C. To engage in the business of operating motels, hotels, and other types
of public accommodations; to construct such facilities as may be necessary in
connection therewith.
D. To erect, construct, establish, purchase, lease, and otherwise
acquire, and to hold, use, equip, supply, service, maintain, operate, sell and
otherwise dispose of, restaurants and food service facilities of all types, and
in connection therewith, to engage in the business of dispensing alcoholic
beverages and the operation of cocktail lounges and any type of alcoholic
beverage dispensing facility appropriate to the operation of resort and
recreational centers.
E. To acquire by purchase, lease or otherwise, lands and interests in
lands and to own, hold, improve, develop and manage any real estate so acquired,
and to erect or cause to be erected on any lands owned, held or occupied by the
Corporation, buildings or other structures with their appurtenances and to
manage, operate, lease, rebuild, enlarge, alter or improve any buildings or
other structures now or hereafter erected on any lands owned, held or occupied
and to encumber or dispose of any lands or interests in lands in any buildings
or other structures, or part of any buildings or other structures at any time
owned or held by the Corporation.
F. To acquire by purchase, lease, manufacture or otherwise, any personal
property deemed necessary or useful in the equipment, furnishing, improvement,
development or management of any property, real or personal, at any time owned,
held, or occupied by the Corporation, and to invest, trade and deal in any
personal property deemed beneficial to the Corporation and to encumber or
dispose of any personal property at any time owned or held by the Corporation
G. To enter into any kind of contract or agreement, cooperative, pension
plan, deferred compensation plan or profit sharing plan with its officers or
employees that the Corporation may deem advantageous or expedient or otherwise
to pay such persons for their services as the directors may deem fit.
H. To purchase, lease or otherwise acquire, own, lease as lessor, sell or
exchange residences, dwelling houses or living quarters for its officers and
employees, to rent, lease or sell said residences, dwelling houses or living
quarters to its employees on such terms as the directors may deem proper.
I. Every director, officer, or employee of the Corporation shall be
indemnified by the Corporation against all expenses and liabilities, including
counsel fees, reasonably incurred by or imposed upon him in connection with any
proceeding to which he may be made a party, or in which he may become involved,
by reason of his being or having been a director, officer or employee of the
Corporation, or any settlement thereof, whether or not he is a director, officer
or employee at the time such expenses are incurred, except in such cases wherein
the director, officer or employee is adjudged guilty of willful misfeasance or
malfeasance in the performance of his duties; provided that in the event of a
settlement the indemnification herein shall apply only when the Board of
Directors approves such settlement and reimbursement as being for the best
interests of the Corporation. The foregoing right of indemnification shall be
in addition to and not exclusive of all other rights to which such director,
officer or employee may be entitled.
J. To borrow money, issue bonds, debentures, notes and any other
obligations of this Corporation from time to time, for any of the objects or
purposes of this Corporation and to mortgage, pledge, hypothecate or convey in
trust any and all of its property to secure the payment thereof.
K. To purchase, lease, or otherwise acquire in whole or in part, the
business, goodwill, rights, franchises, patents or patent rights, trademarks or
trademark rights, and privileges and property of every kind, and to undertake
the whole or any part of the assets or liabilities of any firm, person,
association, or corporation, engaged in or authorized to conduct any business
similar to any business authorized to be conducted by this Corporation, or
owning property necessary or suitable to its purposes and to pay for the same in
cash, in stock of this Corporation, or otherwise; to hold, use, operate, or in
any manner dispose of the whole or any part of the business or property so
acquired and to exercise all the powers necessary or incidental to the conduct
of such business.
L. To enter into, make, perform, and carry out, contracts of every kind
and for any lawful purpose, with any person, firm, association, corporation,
municipality, state or government, or any subdivision, district or department
thereof.
M. To purchase, hold, cancel, reissue, sell, exchange, transfer or
otherwise deal in its own shares from time to time to such an extent and in such
manner and upon such terms as the Board of Directors of the Corporation shall
determine; provided that this Corporation shall not use its funds or property
for the purchase of its own shares when such use would cause an impairment of
its capital, except to the extent permitted upon the law of the State of
Montana; and provided, further, that shares of the Corporation belonging to it
shall not be voted upon directly or indirectly.
N. To accumulate and loan money by lending the capital of the Corporation
and such other funds as it may from time to time lawfully acquire, upon such
personal security, or security of personal property, or other securities as may
be agreed upon between the Corporation and the borrower, and by relending in
like manner the funds arising from such loans when paid.
O. To organize or cause to be organized under the laws of any state of
the United States or of any territory, dependency or possession of the United
States or of any foreign country, a corporation or corporations for the purpose
of transacting, promoting or carrying on any or all of the objects or purposes
for which this Corporation is organized, and to dissolve, windup, liquidate,
merge or consolidate any such corporation or corporations or cause the same to
be dissolved, wound-up, liquidated, merged or consolidated.
P. To enter into any partnership, limited or general as limited or
general partner or both and to enter into any other arrangement for sharing
profits, union of interest, reciprocal concession or cooperation with any
corporation, association, partnership, syndicate, entity, person or
governmental, municipal, or public authority, domestic or foreign, in the
carrying out of any business which this Corporation is authorized to carry on or
any business or transaction deemed necessary, convenient, or incidental to
carrying out any of the purposes of this Corporation.
Q. To acquire by purchase, lease, gift, device or otherwise and to own,
use, develop, subdivide, and sell, exchange, convey, lease and otherwise handle
and deal in real property and any interests or rights therein whether as
principal, agent or otherwise.
R. The several clauses contained in the State of Purpose shall be
construed as both powers and purposes, and the statements contained in each
clause shall be in nowise limited or restricted by reference to or inference
from the terms of any other clause, but shall be regarded as independent
purposes and powers; and no recitation, expression, or declaration of specific
or special powers or purposes shall be deemed to be exclusive, but it is hereby
expressly declared that all other lawful powers not inconsistent herewith are
hereby included.
ARTICLE IV
The amount of capital stock and the aggregate number of shares which the
Corporation has authority to issue is $600,000, which aggregate number of shares
shall be divided as follows:
(a) 1,262,500 shares without nominal or par value, all of which stock
shall be designated as common stock;
(b) 950 shares of preferred stock, without voting rights, at the par
value of $100.00 per share, which stock shall be designated as preferred stock;
The preferred stock shall have the same preferences, limitations,
restrictions, terms and conditions established by the Board of Directors of the
Corporation under the terms of an amendment to the Articles of Incorporation
dated March 18, 1948, under the terms of which 950 shares of non-voting
preferred stock of the par value of $100.00 per share was authorized and under
the terms of which the power was delegated through the Board of Directors of the
Corporation to designate and describe the manner of issuing, preferences,
limitations, restrictions and other terms and conditions of or on said stock.
No shareholder of the Corporation shall have any pre-emptive or
preferential right of subscription to any shares of the Corporation, whether now
or hereafter authorized, nor any right of subscription to any thereof other than
such right, if any, and at such price as the Board of Directors, in its
discretion from time to time may determine, and the Board of Directors may issue
shares of the Corporation or obligations convertible into shares without
offering such issue either in whole or in part to the shareholders of the
Corporation and no holder of preferred shares of the Corporation shall have any
pre-emptive or preferential right to receive any such shares or obligations
declared by way of dividend. Should the Board of Directors, as to any portion
of the shares of the Corporation, whether now or hereafter authorized, or any
obligation convertible in the shares of the Corporation, offer the same to the
shareholders, such offer shall not in any way constitute a waiver or release of
the right of the Board of Directors subsequently to dispose of other portions of
such shares or obligations without so offering the same to the shareholders.
ARTICLE V
The address of the registered office of the Corporation is Big Mountain,
Whitefish, Montana, and the name of its registered agent at such address is
Sandra K. Unger.
ARTICLE VI
The number of directors of the Corporation shall be as specified in the By-
Laws of the Corporation, and the number of directors may be increased or
decreased from time to time by an amendment to the By-Laws; but in no case shall
the number be less than three (3). The number of Directors at the time of the
adoption of these Restated Articles is five (5).
ARTICLE VII
The amount of the stated capital of the Corporation to the date of the
adoption of these Restated Articles is $182,900.00.
ARTICLE VIII
The Restated Articles of Incorporation supersede the original Articles of
Incorporation and all amendments thereto.
DATED: 22nd day of July, 1981.
WINTER SPORTS, INC.
By: Russell Street, President
Robert M. Sullivan, Secretary
STATE OF MONTANA
County of Flathead
Russell C. Street, being first duly sworn upon oath, deposes and says:
That he is the President of WINTER SPORTS, INC., named in the foregoing
instrument; that he has read said instrument, knows the contents thereof, and
the same is true of his own knowledge.
Russell C. Street
Subscribed and sworn to before me this 22nd day of July, 1981.
Sandra K. Unger
Notary Public for the State of Montana
Residing at Whitefish, Montana
My Commission Expires 6/15/82
ARTICLES OF AMENDMENT TO THE
ARTICLES OF INCORPORATION
OF
WINTER SPORTS, INC.
Pursuant to the provisions of the Montana Business Corporation Act, the
undersigned corporation adopts the following Articles of Amendment to the
Articles of Incorporation:
ARTICLE I
The name of the corporation is: WINTER SPORTS, INC.
ARTICLE II
The following amendment to the Articles of Incorporation was adopted by the
directors and shareholders of the corporation on the 11th day of October, 1994,
in the manner prescribed by the Business Corporation Act:
1. The first paragraph of Article IV of the Restated Articles of
Incorporation is amended to read as follows:
ARTICLE IV
The amount of capital stock and the aggregate number of shares which the
corporation has authority to issue is as follows:
a. 5,000,000 shares without nominal or par value, all of which stock
shall be designated as common stock;
b. 950 shares of preferred stock, without voting rights, at the par value
of $100.00 per share, which stock shall be designated as preferred stock.''
ARTICLE III
The number of shares of the corporation issued and outstanding at the time
of such adoption was 897,399 common shares and 245 non-voting preferred shares.
The number of votes entitled to be cast by the holders of the common shares is
897,399. The holders of the preferred shares are not entitled to vote. The
number of votes represented at the meeting of shareholders on October 11, 1994,
was 705,536. A proper quorum was present at the meeting.
ARTICLE IV
The number of votes cast in favor of the amendment was 587,199 and the
number of votes cast against the amendment was 102,267. The number of votes
cast in favor of the amendment was sufficient for approval of the amendment.
ARTICLE V
The amendment does not effect any exchange, reclassification or
cancellation of issued shares.
DATED this 12th day of October, 1994.
WINTER SPORTS, INC.
By: Dennis L. Green, Chairman of the
Board of Directors
Attest: Darrel R. Martin, Secretary
SECOND ARTICLES OF AMENDMENT TO THE
RESTATED ARTICLES OF INCORPORATION
OF
WINTER SPORTS, INC.
Pursuant to the provisions of the Montana Business Corporation Act, the
undersigned corporation adopts the following Second Articles of Amendment to the
Restated Articles of Incorporation of WINTER SPORTS, INC.:
ARTICLE I
The name of the corporation is: `WINTER SPORTS, INC.''
ARTICLE II
The following amendment to the Restated Articles of Incorporation was
adopted by the shareholders and directors of the corporation on the 13th day of
October, 1998, in the manner prescribed by the Business Corporation Act:
1. Article III, Section I is hereby repealed.
2. Article IX is hereby adopted, to read as follows:
ARTICLE IX
A. To the fullest extent permitted by applicable law, the corporation
shall indemnify any director, officer, or employee who is made a party to any
legal, regulatory or other proceeding because he or she is or was a director,
officer or employee of the corporation.
B. No director shall be liable to the corporation or its shareholders for
any actions taken or any failure to take any action, as a director, except
liability for:
(1) the amount of a financial benefit received by a director to
which the director is not entitled;
(2) an intentional infliction of harm on the corporation or the
shareholders;
(3) a violation of MCA 35-1-712; and
(4) an intentional violation of criminal law.
C. No officer shall be liable to the corporation or its shareholders if
the officer acts:
(1) in good faith;
(2) with the care an ordinarily prudent person in a similar
position would exercise under similar circumstances; and
(3) in a manner the officer reasonably believes to be in the best
interests of the corporation;
ARTICLE III
The number of shares of the corporation issued and outstanding at the time
of such adoption was 1,008,368 shares of common stock. The preferred shares
previously outstanding have been redeemed and are no longer outstanding. The
number of shares entitled to vote thereon was 1,008,368. The number of shares
represented at the meeting of shareholders on October 13, 1998, was 850,748. A
proper quorum was present at the meeting.
ARTICLE IV
The number of shares voted for such amendment was 795,120; the number of
shares voted against such amendment was 12,744; and the number of shares
abstaining was 42,884. The number of votes cast in favor of the amendment was
sufficient for approval of the amendment.
ARTICLE V
The amendment does not provide for any exchange, reclassification or
cancellation of issued shares, and does not affect the amount of stated capital.
DATED this 27th day of October, 1998.
WINTER SPORTS, INC.
By: Michael J. Collins
Its: President
Attest By: Sandra K. Unger
AMENDED BY-LAWS
OF
WINTER SPORTS, INC.
ARTICLE I. OFFICES
The principal office of the Corporation shall be located at the offices of
Winter Sports, Inc., Big Mountain, Whitefish, Montana. The Corporation may have
such other offices either within or without the State of Montana as the Board of
Directors may designate from time to time.
The registered office of the Corporation as required by the Montana
Business Corporation Act is to be maintained in the State of Montana and may be,
but need not be, identical with the principal office in the State of Montana,
and the registered agent and the address of the registered office may be changed
from time to time by the Board of Directors.
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders of the
Corporation shall be held at the principal office of the Corporation, Big
Mountain, Whitefish, Montana, or at such other place within the Whitefish,
Montana, area, as shall be designated by the Board of Directors from time to
time.
The meeting shall be held on the third Tuesday of July of each year at 6:30
o'clock P.M. (M.D.T.). If the date fixed for the annual meeting shall be a
legal holiday in the State of Montana, such meeting shall be held on the next
succeeding business day. This meeting shall be for the election of directors
and for the transaction of such other business as may properly come before the
meeting. If the election of directors shall not be held on the day designated
herein for any annual meeting of the shareholders, or at any adjournment
thereof, the Board of Directors shall cause the election to be held at a special
meeting of the shareholders as soon thereafter as conveniently may be, subject
to the notice provisions of the statutes of the State of Montana applicable
thereto.
Nominations for election to the Board of Directors may be made by the Board
of Directors or by a Nominating Committee appointed by the Board of Directors
for that purpose, or by any shareholder of common stock of the Corporation
entitled to vote for the election of Directors. Nominations, other than those
made by or on behalf of the Board of Directors, either by the Board of Directors
or by the Nominating Committee appointed by the Board of Directors, shall be
made in writing and shall be delivered or mailed to the President of the
Corporation, not less than fifteen (15) days nor more than fifty (50) days prior
to any meeting of shareholders called for the election of Directors; provided,
however, that if less than twenty (20) days' notice of the meeting is given to
shareholders, such nomination shall be mailed or delivered to the President of
the Corporation not later than the close of business on the fifth day following
the day on which the notice of meeting was mailed. Such notification shall
contain the following information to the extent known to the notifying
shareholder: (a) the name and address of each proposed nominee; (b) the
principal occupation of such nominee; (c) the name and resident address of the
notifying shareholder, and (d) the number of shares of common stock of the
Corporation owned by the notifying shareholder. Nominations not made in
accordance here-with may, in his discretion, be disregarded by the Chairman of
the meeting, and upon his instructions, the vote tellers may disregard all votes
cast for each such nominee. This provision does not prohibit nor prevent write-
in votes by stockholders entitled to vote at the election of directors for
candidates of their choice.
Section 2. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes, may be called by the President, Vice President, Board
of Directors, or by the holders of not less than one-half of all the shares
entitled to vote at the meeting.
Section 3. Place of Meeting. The persons calling the special meeting may
designate any place, provided it must be held within Flathead County, Montana.
If no designation is made, the place of the meeting shall be the principal
office of the Corporation at Big Mountain, Whitefish, Montana.
Section 4. Notice of Meeting. Written notice stating the place, day and
hour of the special meeting and the purpose or purposes for which the meeting is
called, shall be delivered, personally or by mail, not less than ten (10) nor
more than fifty (50) days before the date of the meeting, by or at the direction
of the President or the Secretary or the officer or persons calling the meeting,
to each shareholder of record entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States Mail,
addressed to the shareholder at his address as it appears on the stock transfer
books of the Corporation, with postage thereon, prepaid.
Section 5. Closing of Transfer Books and Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the stock transfer
books shall be closed for the purpose of determining shareholders entitled to
notice of or to vote at a meeting of the shareholders, such books shall be
closed for at least ten days immediately preceding such meeting. In lieu of
closing the stock transfer books, the Board of Directors may fix in advance a
date as the record date for any such determination of shareholders, such date in
any case to be not more than fifty days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which the particular
action, requiring such determination of shareholders, is to be taken. If the
stock transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders, or shareholders entitled to receive payment of a dividend, the
date on which notice of the meeting is mailed or the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, such determination shall
apply to any adjournment thereof.
Section 6. Voting Lists. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make a complete list of the
shareholders entitled to vote at such meeting, or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of shares
held by each, which list, for a period of ten days prior to such meeting, shall
be kept on file at the registered office of the Corporation and shall be subject
to inspection by any shareholder at any time during usual business hours. Such
lists shall be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any shareholder during the whole time of
the meeting. The original stock transfer book shall be prima facie evidence as
to who are the shareholders entitled to examine such list or transfer books or
to vote at any meeting of shareholders.
Section 7. Quorum. A majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of the shareholders. If a meeting cannot be
organized because a quorum has not attended, those present may adjourn the
meeting from time to time until a quorum is present, at which time any business
may be transacted that may have been transacted at the meeting as originally
called. The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
Section 8. Voting of Shares. Subject to the provisions of Section 10 of
this Article II, each outstanding share shall be entitled to one vote on each
matter submitted to a vote at a meeting of shareholders.
Neither treasury shares nor shares of its own stock held by the Corporation
in a fiduciary capacity, nor shares held by another Corporation if a majority of
the shares entitled to vote for the election of directors of such other
Corporation is held by the Corporation, shall be voted at any meeting or counted
in determining the total number of outstanding shares at any given time.
Shares held by an administrator, executor, guardian or conservator may be
voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of the trustee may be voted by him,
either in person or by proxy, not no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to the Corporation or held by it in a
fiduciary capacity shall not be voted, directly or indirectly, at any meeting,
and shall not be counted in determining the total number of outstanding shares
at any given time.
All shares held in a joint tenancy, tenancy by the entirety relationship,
or tenancy in common relationship, shall be entitled to only one vote per share.
The first named joint tenant shall be presumed to have the voting power of the
shares held in said joint tenancy or tenancy by the entirety relationship,
unless a proxy to the contrary has been filed prior to the meeting with the
Secretary.
Shares standing in the name of another corporation, domestic or foreign,
may be voted by such officer, agent or proxy of such shareholding corporation as
the by-laws of such shareholding corporation may prescribe, or in the absence of
such provision as the Board of Directors of such shareholding corporation may
determine. Such shareholding corporation, in the absence of the use of a proxy
for its officer or agent to vote, must file with the Secretary of the
Corporation either a certified copy of that portion of its by-laws authorizing
such vote by such officer or agent or a certified copy of a resolution of the
Board of Directors of such shareholding corporation authorizing the specific
officer or agent to vote the shares held by the shareholding corporation.
Section 9. Proxies. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his duly authorized
attorney in fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise provided in the
proxy.
Section 10. Cumulative Voting. At each election for directors every
shareholder entitled to at such election shall have the right to vote, in person
or by proxy, the number of shares owned by him for as many persons as there are
directors to be elected and for whose election he has a right to vote, or to
cumulate his votes by giving a candidate as many votes as the number of such
directors multiplied by the number of his shares shall equal, or by distributing
such votes on the same principle among any number of candidates.
ARTICLE III. BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors.
Section 2. Number, Tenure and Qualifications. The number of directors of
the Corporation shall be five (5). Each director shall hold office until the
next annual meeting of shareholders and until his successor shall have been
elected and qualified. Directors must be shareholders of the Corporation.
Section 3. Regular Meetings. The annual meeting of the Board of Directors
shall be held without other notice than this By-Law, immediately following and
at the same place as the annual meeting of shareholders.
The Board of Directors may provide, by resolution, the time and place for
the holding of additional regular meetings, without other than such resolution.
Section 4. Special Meetings. Special meetings of the Board of Directors
shall be held at the principal office of the Corporation, Big Mountain,
Whitefish, Montana, or at such other place as designated by the Board of
Directors, and may be called by or at the request of the President, or by any
three (3) directors. The Secretary shall give notice of the time and place of
each special meeting, but need not set forth the business to be transacted nor
the purpose of such special meeting.
Section 5. Notice. Notice of any special meeting shall be given at least
three (3) days before the meeting by written notice delivered personally, mailed
or by telegram to each director at his business address. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail so
addressed, with postage prepaid thereon. If notice be given by telegram, such
notice shall be deemed to be delivered when the telegram is delivered to the
telegraph company. The attendance of a director at a meeting and the signature
of the director on the minutes of said meeting, shall constitute a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
Section 6. Quorum. A majority of the number of directors fixed by Section
2 of this Article III, as amended from time to time, shall constitute a quorum
for the transaction of business at any meeting of the Board of Directors. But
if less than such majority is present at a meeting a majority of the directors
present may adjourn the meeting from time to time without further notice until a
quorum shall be present, whereupon the meeting at which every director shall be
present, even though without any notice, any business may be transacted.
Any director shall be considered present, with his consent, at any meeting
of the Board even though he is not physically present but is in communication
with at least a majority of the Board as established by Section 2 of this
Article III, by telephone, telegraph or radio, and both the directors actually
present at the meeting and the director not physically present at the meeting
are both capable of receiving and transmitting messages for prompt and current
receipt and understanding by each other.
At all meetings of the Board of Directors, each director shall have one
vote. The concurrence of a majority of the directors fixed by Section 2 of this
Article III shall be required in order to constitute an act of the Board of
Directors.
Section 7. Vacancies. Any vacancy occurring the in the Board of Directors
may be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors.
Any directorship to be filled by reason of the removal of one or more of
the directors by the shareholders may be filled by election by the shareholders
at the same meeting at which the director or directors are removed.
Section 8. Presumption of Assent. A director of the Corporation who is
present at a meeting of the Board of Directors at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his dissent shall be entered in the minutes of the meeting or unless he shall
file his written dissent to such action with the person acting as the Secretary
of the meeting within twenty-four (24) hours after the adjournment thereof with
the Secretary of the Corporation. Such right to dissent shall not apply to a
director who voted in favor of such action.
Section 9. Compensation. By resolution of the Board of Directors, the
directors may be paid their expenses, if any, of attendance at each meeting of
the Board of Directors, and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
Section 10. Emergency Power. When, due to a national disaster, a majority
of the directors are incapacitated or otherwise unable to attend the meetings
and function as directors, the remaining members of the Board of Directors shall
have all the powers necessary to function as a complete Board, and for the
purpose of doing business and filling vacancies shall constitute a quorum, until
such time as all directors can attend or vacancies can be filled pursuant to
these By-Laws, and the statutes of the State of Montana.
ARTICLE IV. OFFICERS
Section 1. Number. The officers of the Corporation shall be a President,
one or more Vice Presidents (the number thereof to be determined by the Board of
Directors), a Secretary, and a Treasurer, each of whom shall be elected by the
Board of Directors. Such other officers, assistant officers, and agents as may
be deemed necessary may be elected or appointed by the Board of Directors. Any
two or more offices may be held by the same person, except the offices of
President and Secretary and except for the offices of Vice President and
Secretary. Officers need not be directors or shareholders of the Corporation.
Section 2. Election and Term of Office. The officers of the Corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the annual meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his successor shall
have been duly elected and shall have qualified or until his death or until he
shall resign or shall have been removed in the manner hereinafter provided.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the Corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Election or appointment of an officer or agent shall not in itself
create contract rights.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.
Section 5. President. The President shall be the principal executive and
administrative officer of the Corporation and, subject to the control of the
Board of Directors, shall in general supervise and control all of the business
and affairs of the Corporation. He shall, when present, preside at the meetings
of the shareholders and of the Board of Directors. He may sign, with the
Secretary or any other proper officer of the Corporation thereunto authorized by
the Board of Directors, certificates for shares of the Corporation, any deeds,
mortgages, bonds, contracts, or other instruments which the Board of Directors
has authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by these By-
Laws to some other officer or agent of the Corporation, or shall be required by
law to be otherwise signed or executed; and in general shall perform all duties
incident to the office of President and such other duties as may be prescribed
by the Board of Directors from time to time.
Section 6. The Vice Presidents. In the absence of the President or in the
event of his death, inability or refusal to act, the Vice President (or in the
event there be more than one Vice President, the Vice Presidents in the order
designated at the time of their election, or in the absence of any designation,
then in the order of their election) shall perform the duties of the President,
and when so acting, shall have all the powers of and be subject to all the
restrictions upon the President.
Section 7. The Secretary. The Secretary shall: (a) keep the minutes of
the shareholders' and the Board of Directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these By-Laws or as required by law; (c) be custodian of
the corporate records and of the seal of the Corporation and see that the seal
of the Corporation is affixed to all documents the execution of which on behalf
of the Corporation under its seal is duly authorized; (d) keep a register of the
post office address of each shareholder which shall be furnished to the
Secretary by such shareholder; (e) sign with the President, or a Vice President,
certificates for shares of the Corporation, the issuance of which shall have
been authorized by resolution of the Board of Directors; (f) have general charge
of the stock transfer books of the Corporation; and (g) in general perform all
duties incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the President or by the Board of Directors.
Section 8. The Treasurer. The Treasurer shall have charge and supervision
and be responsible for all funds and securities of the Corporation and shall
have charges and supervision of the deposits of all monies due and payable to
the Corporation from any source whatsoever in such banks or depositories as
shall be selected by the Board of Directors, and shall in general perform all
the duties incident to the office of Treasurer and such other duties as from
time to time may be assigned to him by the President or by the Board of
Directors. He shall give bond for the faithful performance of his duties in
such sum as shall be required and approved by the Board of Directors. He has
authority to employ independent accountants, subject, however, to the approval
of the Board of Directors.
Section 9. Assistant Secretaries and Assistant Treasurers. The Assistant
Secretaries shall exercise the duties of the Secretary and those duties incident
to the office of Secretary when the Secretary is absent or not available and
such other duties as shall be assigned by the President or by the Board of
Directors. The Assistant Treasurers shall perform those duties incident to the
office of Treasurer and those assigned to the Treasurer in the absence or
unavailability of the Treasurer and such other duties as from time to time may
be assigned to him by the President or by the Board of Directors.
Section 10. General Manager. The Board of Directors may employ and
appoint a General Manager who need not be an officer or director. He shall be
the chief operating officer of the Corporation and, subject to the directions of
the Board of Directors and President, shall have the general charge of the
business operations of the Corporation and general supervision over its
employees and agents. He shall be charged with the management of the business
and of the Corporation and of all of its dealings, but at all times subject to
the control of the Board of Directors.
Section 11. Salaries. The salaries or other compensation of the officers
of the Corporation shall be fixed, by contract or otherwise, from time to time
by the Board of Directors, except that the Board of Directors may delegate to
any person or group of persons the power to fix the salaries or other
compensation of any subordinate officers or agents. No officer shall be
prevented from receiving any such salary or compensation by reason of the fact
that he is also a Director of the Corporation.
ARTICLE V. COMMITTEES
Section 1. Executive and Other Committees. The Board of Directors by
resolution adopted by a majority of the full Board of Directors may designate
from among its members and Executive Committee and one or more other committees,
each of which, to the extent provided in such resolution, shall have and may
exercise the authority of the Board of Directors. No such committee shall have
the authority of the Board of Directors in reference to amending the Articles of
Incorporation, adopting a plan of merger or consolidation, recommending to the
shareholders the sale, lease, exchange, or other disposition of all or
substantially all the property and assets of the Corporation, otherwise and in
the usual and regular course of business, recommending to the shareholders a
voluntary dissolution of the Corporation or revocation thereof, amending the By-
Laws of the Corporation, declaration of dividends, issuance of stock,
recommending to shareholders any other action requiring their approval. The
designation of any such committee and the delegation thereto of authority shall
not operate to relieve the Board of Directors or any member thereof of any
responsibility imposed by law.
ARTICLE VI. CONTRACTS, LOAN, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.
Section 2. Loans. No loan shall be contracted on behalf of the
Corporation and no evidence of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
Section 3. Checks, Drafts, Etc. All notes, drafts, acceptances, checks,
endorsements and evidences of indebtedness of the Corporation shall be signed by
such officer or officers or such agent or agents of the Corporation and in such
manner as the Board of Directors from time to time may determine.
Section 4. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositories as the Board of Directors may
select, or as may be selected by any officer or agent authorized to do so by the
Board of Directors.
Endorsements for deposit to the credit of the Corporation in any of its
duly authorized depositories shall be made in such manner as the Board of
Directors from time to time may determine.
Section 5. Facsimile Signatures. Every evidence of indebtedness issued by
the Corporation shall be evidenced by an appropriate instrument which shall be
signed by the President and attested by the Secretary and sealed with the seal
of the Corporation. The seal may be facsimile, engraved or printed. Where such
evidence of indebtedness is authenticated with the manual signature of an
authorized officer of the Corporation or trustee designated by any indenture of
trust or under any other agreement under which the evidence of indebtedness is
issued, the signature of any of the Corporation's officers named thereon may be
facsimile. In case any officer who signed, or whose facsimile signature has
been used on any such bond or debenture, shall cease to be an officer of the
Corporation for any reason before the same has been delivered by the
Corporation, such bond or debenture may nevertheless be adopted by the
Corporation and issued and delivered as though the person who signed it or whose
facsimile signature has been used thereon had not ceased to be such officer.
ARTICLE VII. CERTIFICATE FOR SHARES AND THEIR TRANSFER
Section 1. Certificate for Shares. Certificates representing shares of
the Corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President or a Vice
President and by the Secretary or an Assistant Secretary. The name and address
of the person to whom the shares represented thereby are issued, with the number
of shares and date of issue, shall be entered on the stock transfer books of the
Corporation. All certificates surrendered to the Corporation for transfer shall
be canceled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and canceled, except
that in case of a lost, destroyed or mutilated certificate a new one may be
issued therefor upon such terms and indemnity to the Corporation as the Board of
Directors may prescribe.
The signatures of such officers upon a certificate may be facsimiles if the
certificate is countersigned on behalf of a transfer agent or registrar other
than the Corporation itself or one of its employees. Each certificate for
shares shall be consecutively numbered or otherwise identified.
No fractional shares, nor any evidences of fractional shares shall be
issued by the Corporation.
Section 2. Transfer of Shares. Transfer of shares of the Corporation shall
be made only on the stock transfer books of the Corporation by the holder of
record thereof or by his legal representative, who shall furnish proper evidence
of authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation, and on
surrender for cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the Corporation shall be deemed by the
Corporation to be the owner thereof for all purposes.
The Board of Directors may appoint, from time to time, a transfer agent and
may require all certificates of shares to require the signature of the transfer
agent, or as the Board may otherwise direct.
Section 3. Lost or Destroyed Certificates. The Corporation may issue a
new certificate to replace any certificate theretofore issued by it alleged
under oath to have been lost, stolen or destroyed. The Board of Directors may
require the owner of such certificate or his legal representative or other
appropriate person to give the Corporation a bond or other indemnity
satisfactory to the Board of Directors in such sum and with such sureties as the
Board of Directors may direct to indemnify the Corporation against claims that
may be made on account of the issuance of such new certificates or the fact that
more than one certificate may be outstanding. A new certificate may be issued
without requiring any bond.
Section 4. Consideration for Shares. The capital stock of the Corporation
shall be issued for such consideration as shall be fixed from time to time by
the Board of Directors, but not less than the par value thereof. In the absence
of fraud, the determination of the Board of Directors as to the value of any
property or services received in full or partial payment of shares shall be
conclusive. Neither promissory notes nor future services shall constitute
payment or part payment for capital stock of the Corporation.
ARTICLE VIII. FISCAL YEAR
The fiscal year of the Corporation shall begin on the lst day of June and
end on the 31st day of May in each year.
ARTICLE IX. DIVIDENDS
The Board of Directors may from time to time declare, and the Corporation
may pay, dividends on its issued and outstanding shares, in cash or property,
but only out of the unreserved and unrestricted earned surplus of the
Corporation or out of the unreserved and unrestricted net earnings of the
current fiscal year and the next preceding fiscal year taken as a single period
and upon such other terms and conditions as are provided under the statutes of
the State of Montana applicable thereto.
ARTICLE X. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the Corporation
and the state of incorporation and the words `Corporate Seal''.
ARTICLE XI. WAIVER OF NOTICE
Whenever any notice is required to be given to any shareholder or director
of the Corporation under the provisions of these By-Laws, or under the
provisions of the Articles of Incorporation, or under the provisions of the
Montana Business Corporation Act, a waiver thereof in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice and
shall constitute a release of any claim based upon or arising out of the failure
to give or receive such notice. Attendance at any meeting, in person or by
proxy, shall constitute a waiver of notice of such meeting, except where
attendance is for the express purpose of objecting to the legality of that
meeting.
ARTICLE XII. INDEMNIFICATION
The Corporation shall indemnify every director or officer, his heirs,
executors and administrators, against expenses reasonably incurred by him in
connection with any action, suit or proceeding to which he may be made a party
by reason of his being or having been a director or officer of the Corporation,
or at its request of any other corporation of which it is a stockholder or
creditor and from which he is not entitled to be indemnified, except in relation
to matters as to which he shall be finally adjudged in such action, suit or
proceeding to be liable for negligence or misconduct; in the event of a
settlement, indemnification shall be provided only in connection with such
matters covered by the settlement as to which the Corporation is advised by
counsel that the person to be indemnified did not commit such a breach of duty.
The foregoing right of indemnification shall not be exclusive of other rights to
which he may be entitled.
ARTICLE XIII. INTEREST OF DIRECTOR
No member of the Board shall vote on questions in which he is interested,
otherwise than as a stockholder, except the election of officers, or be present
at the Board meeting while the same is being considered. But if his retiring
from the Board in such cased reduces the number below a quorum, the question may
be decided by those who remain.
ARTICLE XIV. CONTRACTS WITH ADVERSE INTEREST
No contract or other transaction between this Corporation and one or more
of its directors, officers or stockholders or between this Corporation and any
other corporation, firm or association in which one or more of its officers,
directors or stockholders are officers, directors or stockholders shall be
either void or voidable (1) if at a meeting of the Board of Directors or
committee authorizing or ratifying the contract or transaction there is a quorum
of persons not so interested and the contract or other transaction is approved
by a majority of such quorum, or (2) if the contract or other transaction is
ratified at an annual or special meeting of stockholders, or (3) if the contract
or other transaction is just and reasonable to the Corporation at the time it is
made, authorized or ratified.
ARTICLE XV. DISALLOWANCE OF EXPENSES
Any payments made to an officer of the Corporation, such as a salary,
commission, bonus, interest, or rent, or entertainment expense incurred by him,
which shall be disallowed in whole or in part as a deductible expense by the
Internal Revenue Service, shall be reimbursed by such officer to the Corporation
to the full extent of such disallowance. It shall be the duty of the directors,
as a Board, to enforce payment of each such amount disallowed. In lieu of
payment by the officer, subject to the determination of the directors,
proportionate amounts may be withheld from his future compensation payments
until the amount owned to the Corporation has been recovered.
ARTICLE XVI. ALL REMAINING POWERS
In addition to the powers and authorities by these By-Laws expressly
conferred upon it, the Board may exercise all such powers of the Corporation and
do all such lawful acts and things as are not by statute or by the Certificate
of Incorporation or by these By-Laws directed or required to be exercised or
done by the stockholders.
ARTICLE XVII. AMENDMENTS
These By-Laws may be altered, amended or repealed and new By-Laws may be
adopted by the Board of Directors at any regular or special meeting of the Board
of Directors.
We the undersigned, being all of the duly elected and acting Directors of
Winter Sports, Inc., do hereby formally and regularly adopt, ratify and sign the
foregoing Amended By-Laws as the By-Laws of this Corporation for the guidance of
this Corporation and regulation of its business and as evidence of such adoption
and ratification of these Amended By-Laws, we do hereby set our hands this 30th
day of June, 1981.
SIGNED:
R. GENE JELLISON
DARREL R. MARTIN
GARY G. HARDING
ROY M. DUFF
RUSSELL STREET
FIRST AMENDMENT TO THE
AMENDED BY-LAWS
OF
WINTER SPORTS, INC.
I, the undersigned, being the duly elected and acting Secretary of WINTER
SPORTS, INC., do hereby certify that the Directors of the Corporation at a
Directors' meeting held on the 11th day of August, 1981, amended by By-Laws to
read as follows:
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meeting. The Annual Meeting date shall be changed to
the second Tuesday of August of each year, at a time to be determined each year
by the Board of Directors. If the date fixed for the annual meeting shall be a
legal holiday in the State of Montana, such meeting shall be held on the next
succeeding business day.
ARTICLE III. BOARD OF DIRECTORS
Section 2. Number, Tenure and Qualifications. The number of Directors of
the Corporation shall be seven (7). Each director shall hold office until the
next annual meeting of shareholders and until his successor shall have been
elected and qualified. Directors must be shareholders of the Corporation.
DATED: August 11, 1981
Robert M. Sullivan
Secretary
SECOND AMENDMENT TO THE
AMENDED BY-LAWS
OF
WINTER SPORTS, INC.
I, the undersigned, being the duly elected and acting Secretary of WINTER
SPORTS, INC., do hereby certify that the Directors of the Corporation at a
Directors' meeting held on the 9th day of August, 1983, amended by By-Laws to
read as follows:
ARTICLE III. BOARD OF DIRECTORS
Section 2. Number, Tenure and Qualifications. The number of Directors of
the Corporation shall be nine (9). Each director shall hold office until the
next annual meeting of shareholders and until his successor shall have been
elected and qualified. Directors must be shareholders of the Corporation.
DATED: August 9, 1983
Robert M. Sullivan
Secretary
THIRD AMENDMENT TO THE
AMENDED BY-LAWS
OF
WINTER SPORTS, INC.
I, the undersigned, being the duly elected and acting Secretary of WINTER
SPORTS, INC., do hereby certify that the Directors of the Corporation at a
Directors' meeting held on the 18th day of June, 1987, amended Article II,
Section 1, of the By-Laws to read as follows:
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meeting. The Annual Meeting date shall be changed to
the second Tuesday of October of each year, at a time to be determined each year
by the Board of Directors. If the date for the annual meeting shall be a legal
holiday in the State of Montana, such meeting shall be held on the next
succeeding business day.
DATED: June 18, 1987
Calvin S. Robinson
Secretary
FOURTH AMENDMENT TO THE
AMENDED BY-LAWS
OF
WINTER SPORTS, INC.
Article IV, Section 1, of the By-Laws of Winter Sports, Inc. is amended to
read as follows:
Section 1. Number. The officers of the Corporation shall be chairman of
the Board, a President, one or more Vice Presidents (the number thereof to be
determined by the Board of Directors), a Secretary, and a Treasurer, each of
whom shall be elected by the Board of Directors.
Article IV of the By-Laws of Winter Sports, Inc. shall be further amended
by inserting between Section 4 and Section 5 of Article IV, Section 4(a), and
Section 4(a) shall read as follows:
Section 4(a). Chairman. The Chairman of the Board of Directors (in case
of his absence, the President, or in his absence, a Vice President) shall
preside at and act as Chairman of each meeting of the Board of Directors. The
Chairman shall perform such other duties as may be prescribed from time to time
by the Board of Directors or by the By-Laws.
This amendment was adopted by the Board of Directors of Winter Sports, Inc.
and effective August 18, 1988 at 10:30 o'clock a.m., MDT.
Calvin S. Robinson
Secretary
APPROVED:
Dennis L. Green, Chairman of the Board
Michael J. Collins, President
FIFTH AMENDMENT TO THE
AMENDED BY-LAWS
OF
WINTER SPORTS, INC.
Article III, Section 2, of the By-Laws of Winter Sports, Inc. is amended to
read as follows:
ARTICLE III. BOARD OF DIRECTORS
Section 2. Number, Tenure and Qualifications. The number of directors of
the Corporation shall be nine (9). Each director shall hold office until the
next annual meeting of shareholders and until his successor shall have been
elected and qualified. Directors must be shareholders of the Corporation.
Lessees of the Corporation are not eligible to serve on the Board of Directors.
With the exception of the President/CEO, employees of the Corporation are not
eligible to serve on the Board of Directors.
This amendment was adopted by the Board of Directors of Winter Sports, Inc.
at a Directors' meeting held the 17th day of January, 1991.
Calvin S. Robinson
Secretary/Treasurer
APPROVED:
Dennis L. Green, Chairman of the Board
Michael J. Collins, President
Russell Street, Vice President
SIXTH AMENDMENT OF THE
AMENDED BY-LAWS
OF
WINTER SPORTS, INC.
Article III, Section 3, of the By-Laws of Winter Sports, Inc. is amended to
read as follows:
ARTICLE III. BOARD OF DIRECTORS
Section 3. Regular Meetings. The annual meeting of the Board of Directors
shall be held within 48 hours of the close of the annual Stockholders' meeting,
at a time and place to be set by the Chairman of the Board or President/CEO, and
notice to Directors shall be given pursuant to Section 5 of this Article.
The Board of Directors may provide, by resolution, the time and place for
the holding of additional regular meetings, without notice other than such
resolution.
This amendment was adopted by the Board of Directors of Winter Sports, Inc.
at a Directors' meeting held the 17th day of January, 1991.
Calvin S. Robinson
Secretary/Treasurer
APPROVED:
Dennis L. Green, Chairman of the Board
Michael J. Collins, President
Russell Street, Vice President
SEVENTH AMENDMENT
TO THE BYLAWS OF WINTER SPORTS, INC.
ARTICLE XII IS HEREBY AMENDED TO READ AS FOLLOWS:
ARTICLE XII
A. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE CORPORATION SHALL
INDEMNIFY ANY DIRECTOR, OFFICER, OR EMPLOYEE WHO IS MADE A PARTY TO ANY LEGAL,
REGULATORY OR OTHER PROCEEDING BECAUSE HE OR SHE IS OR WAS A DIRECTOR, OFFICER
OR EMPLOYEE OF THE CORPORATION.
B. NO DIRECTOR SHALL BE LIABLE TO THE CORPORATION OR ITS SHAREHOLDERS
FOR ANY ACTIONS TAKEN OR ANY FAILURE TO TAKE ANY ACTION, AS A DIRECTOR, EXCEPT
LIABILITY FOR:
(1) THE AMOUNT OF A FINANCIAL BENEFIT RECEIVED BY A DIRECTOR TO WHICH THE
DIRECTOR IS NOT ENTITLED;
(2) AN INTENTIONAL INFLICTION OF HARM ON THE CORPORATION OR THE
SHAREHOLDERS;
(3) A VIOLATION OF MCA 35-1-713; AND
(4) AN INTENTIONAL VIOLATION OF CRIMINAL LAW.
C. NO OFFICER SHALL BE LIABLE TO THE CORPORATION OR ITS SHAREHOLDERS IF THE
OFFICER ACTS:
(1) IN GOOD FAITH;
(2) WITH THE CARE AN ORDINARILY PRUDENT PERSON IN A SIMILAR POSITION WOULD
EXERCISE UNDER SIMILAR CIRCUMSTANCE; AND
(3) IN A MANNER THE OFFICER REASONABLY BELIEVES TO BE IN THE BEST
INTERESTS OF THE CORPORATION.
THIS AMENDMENT WAS ADOPTED BY THE BOARD OF DIRECTORS OF WINTER SPORTS, INC.
AT A DIRECTORS' MEETING HELD THE 23RD DAY OF JULY, 1998.
/S/ SANDRA K. UNGER
SANDRA K. UNGER, SECRETARY
APPROVED:
/S/ MICHAEL J. COLLINS
MICHAEL J. COLLINS, PRESIDENT
EIGHTH AMENDMENT
TO THE BYLAWS OF WINTER SPORTS, INC.
ARTICLE III, SECTION 3, IS HEREBY AMENDED TO READ AS FOLLOWS:
ARTICLE III. BOARD OF DIRECTORS
SECTION 3. REGULAR MEETINGS. THE ANNUAL MEETING OF THE BOARD OF
DIRECTORS SHALL BE HELD WITHIN SEVEN (7) DAYS OF THE ANNUAL SHAREHOLDERS'
MEETING, AT A TIME AND PLACE TO BE SET BY THE CHAIRMAN OF THE BOARD OR
PRESIDENT/CEO, AND NOTICE TO DIRECTORS SHALL BE GIVEN PURSUANT TO SECTION 5 OF
THE ARTICLE.
THE BOARD OF DIRECTORS MAY PROVIDE, BY RESOLUTION, THE TIME AND PLACE
FOR THE HOLDING OF ADDITIONAL REGULAR MEETINGS, WITHOUT NOTICE OTHER THAN SUCH
RESOLUTION.
THIS AMENDMENT WAS ADOPTED BY THE BOARD OF DIRECTORS OF WINTER SPORTS, INC.
AT A DIRECTORS' MEETING HELD THE 6TH DAY OF NOVEMBER, 1998.
/S/ SANDRA K. UNGER
SANDRA K. UNGER, SECRETARY
APPROVED:
/S/ MICHAEL J. COLLINS
