As filed with the Securities and Exchange Commission on February 6, 2004
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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VAIL RESORTS, INC.
(Exact name of registrant as specified in its charter)
Delaware 7990 51-0291762
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification Number)
incorporation or organization) Classification Code Number)
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Post Office Box 7
Vail, Colorado 81658
(970) 845-2500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
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Martha D. Rehm, Esq.
Senior Vice President and General Counsel
Vail Resorts, Inc.
Post Office Box 7
Vail, Colorado 81658
(970) 845-2500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copy to:
James J. Clark, Esq.
Luis R. Penalver, Esq.
Cahill Gordon & Reindel LLP
80 Pine Street
New York, New York 10005
(212) 701-3000
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Approximate date of commencement of proposed issuance of the securities to
the public: From time to time after the effective date of this Registration
Statement as determined in light of market and other conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
to be Registered Registered (1) Offering Price Per Share Aggregate Offering Price (1) Registration Fee
(1)
Debt Securities (1) (1) (1) N/A
Preferred Stock (1) (1) (1) N/A
Common Stock (1) (1) (1) N/A
Total $100,000,000 (1) $100,000,000 $12,670(2)
(1) There are being registered hereunder such indeterminate principal amount of
debt securities, such indeterminate number of shares of preferred stock and
such indeterminate number of shares of common stock as shall have an
aggregate initial offering price not to exceed $100,000,000. If any debt
securities are issued at an original issue discount, then the securities
registered shall include such additional debt securities as may be
necessary such that the aggregate initial public offering price of all
securities issued pursuant to this Registration Statement will equal
$100,000,000. The proposed maximum initial offering price per security will
be determined, from time to time, by the Registrant in connection with the
issuance by the Registrant of the securities registered hereunder. There
are also being registered hereunder an indeterminate number of shares of
common stock as shall be issuable upon conversion or exercise of any debt
securities or preferred stock that provide for that issuance or issuable as
payment of dividends on, or redemption or repurchase of, preferred stock.
(2) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
The information in this preliminary prospectus is not complete and may be
changed. We may not sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This preliminary
prospectus is not an offer to sell these securities nor does it seek an offer to
buy these securities in any jurisdiction where the offer or sale is not
permitted.
Subject to Completion. Dated February 6, 2004.
VAIL RESORTS, INC.
$100,000,000
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
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Vail Resorts, Inc. from time to time may offer to sell debt securities,
preferred stock or common stock, including common stock issuable upon the
conversion of debt securities or preferred stock or as payment of dividends on,
or redemption or repurchase of, preferred stock, or any combination of the
foregoing. The total amount of these securities will have an initial aggregate
offering price of up to $100,000,000, or the equivalent amount in other
currencies, currency units or composite currencies. Our common stock is listed
on the New York Stock Exchange and trades under the symbol "MTN".
We may offer and sell these securities to or through one or more underwriters,
dealers and agents, or directly to purchasers, on a continuous or delayed basis.
This prospectus describes some of the general terms that may apply to these
securities and the general manner in which they may be offered. The specific
terms of any securities to be offered, and the specific manner in which they may
be offered, will be described in the applicable prospectus supplement. You
should read this prospectus and the applicable prospectus supplement carefully
before you invest.
An investment in the debt securities, preferred stock or common stock involves a
high degree of risk. You should carefully consider the risk factors beginning on
page 4 of this prospectus and any other information in this prospectus or any
prospectus supplement before deciding to purchase the debt securities, preferred
stock or common stock.
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Neither the Securities and Exchange Commission nor any other regulatory body has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a criminal
offense.
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This prospectus is dated , 2004.
TABLE OF CONTENTS
Page
ABOUT THIS PROSPECTUS........................................................1
FORWARD-LOOKING STATEMENTS...................................................1
VAIL RESORTS, INC............................................................3
RISK FACTORS.................................................................4
RATIO OF EARNINGS TO FIXED CHARGES..........................................14
USE OF PROCEEDS.............................................................14
PLAN OF DISTRIBUTION........................................................14
DESCRIPTION OF DEBT SECURITIES WE MAY OFFER.................................15
DESCRIPTION OF PREFERRED STOCK WE MAY OFFER.................................26
DESCRIPTION OF COMMON STOCK WE MAY OFFER....................................29
LEGAL OWNERSHIP AND BOOK-ENTRY ISSUANCE.....................................32
VALIDITY OF SECURITIES......................................................33
EXPERTS.....................................................................33
WHERE YOU CAN FIND MORE INFORMATION.........................................33
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.............................34
ABOUT THIS PROSPECTUS
This document is called a prospectus and is part of a registration statement
that we filed with the Securities and Exchange Commission, or SEC, using a
"shelf" registration or continuous offering process. Under this shelf process,
we may from time to time sell any combination of the securities described in
this prospectus in one or more offerings up to a total U.S. dollar equivalent of
$100,000,000.
This prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement
containing specific information about the terms of the securities being offered.
That prospectus supplement may include a discussion of any risk factors or other
special considerations that apply to those securities. The prospectus supplement
may also add, update or change information in this prospectus. If there is any
inconsistency between the information in this prospectus and a prospectus
supplement, you should rely on the information in that prospectus supplement.
You should read both this prospectus and any prospectus supplement together with
the additional information described under the heading "Where You Can Find More
Information."
The registration statement containing this prospectus, including exhibits to the
registration statement, provides additional information about us and the
securities offered under this prospectus. The registration statement can be read
at the SEC web site or at the SEC office mentioned under the heading "Where You
Can Find More Information."
When acquiring any securities discussed in this prospectus, you should rely only
on the information provided in this prospectus and the prospectus supplement,
including the information incorporated by reference. Neither we, nor any
underwriters or agents have authorized anyone to provide you with different
information. We are not offering the securities in any state where such an offer
is prohibited. You should not assume that the information in this prospectus,
any prospectus supplement, or any document incorporated by reference, is
truthful or complete at any date other than the date mentioned on the cover page
of those documents.
Unless otherwise mentioned or unless the context requires otherwise, all
references in this prospectus to "Vail Resorts," "we," "us," "our" or similar
references mean Vail Resorts, Inc. together with its subsidiaries.
FORWARD-LOOKING STATEMENTS
This prospectus contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). All statements other than statements
of historical fact are "forward-looking statements" for purposes of federal and
state securities laws. Forward-looking statements may include the words "may,"
"will," "plans," "estimates," "anticipates," "believes," "expects," "intends"
and similar expressions. Although we believe that such statements are based on
reasonable assumptions, these forward-looking statements are subject to numerous
factors, risks and uncertainties that could cause actual outcomes and results to
be materially different from those projected or assumed in our forward-looking
statements. These factors, risks and uncertainties include, among others, the
following:
o the existing SEC formal investigation of us;
o economic downturns;
o terrorist acts upon the United States;
o threat of or actual war;
o unfavorable weather conditions;
o our ability to obtain financing on terms acceptable to us to finance
our capital expenditure and growth strategy;
o our ability to develop our resort and real estate operations;
o competition in our Mountain and Lodging businesses;
o our reliance on government permits for our use of federal land;
o our ability to integrate and successfully operate future acquisitions;
o adverse consequences of current or future legal claims; and
o adverse changes in the real estate market.
Our actual results, performance or achievements could differ materially from
those expressed in, or implied by, the forward-looking statements. We can give
no assurances that any of the events anticipated by the forward-looking
statements will occur or, if any of them do, what impact they will have on our
results of operations and financial condition. We do not intend, and we
undertake no obligation, to update any forward-looking statement. We urge you to
review carefully "Risk Factors" in this prospectus for a more complete
discussion of the risks of an investment in our securities.
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VAIL RESORTS, INC.
We were organized as a holding company in 1997 and operate through various
subsidiaries. Our operations are grouped into three segments: Mountain, Lodging
and Real Estate, which represented approximately 66.2%, 22.5% and 11.3%,
respectively, of our revenues for the 2003 fiscal year. Our Mountain segment
owns and operates five premier ski resort properties which provide a
comprehensive resort experience throughout the year to a diverse clientele with
an attractive demographic profile. Our Lodging segment owns and/or manages a
collection of luxury hotels, a destination resort at Grand Teton National Park
and a series of strategic properties located in proximity to our mountain
operations. Our Real Estate segment holds, develops, buys and sells real estate
in and around our resort communities.
Our principal office is located at Vail Resorts, Inc., 137 Benchmark Road, Avon,
Colorado 81620, and our telephone number is (970) 845-2500. Our Internet website
address is www.vailresorts.com.
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RISK FACTORS
In addition to the other information in this prospectus and the documents
incorporated and deemed to be incorporated herein, you should carefully consider
the following risks before making an investment decision. Our business,
financial condition and results of operations could be harmed were any of the
following risks or uncertainties to develop into actual events. In such case,
the value of our securities could decline and you might lose all or part of your
investment. The risks and uncertainties described below are not the only ones
facing us. Additional risks and uncertainties not presently known to us, or that
we currently see as immaterial, may also harm our business.
Risks Related to Our Business
Our business is seasonal. Our Mountain and Lodging operations are seasonal in
nature. In particular, revenues and profits for all of our Mountain and most of
our Lodging operations are substantially lower, and historically result in
losses, from late spring to late fall. Conversely, Grand Teton Lodge Company
("GTLC") and certain managed properties' peak operating seasons occur during the
summer months while the winter season generally results in operating losses.
However, revenues and profits generated by GTLC's summer operations and
management fees from those managed properties are not sufficient to fully offset
our off-season losses from our Mountain and other Lodging operations. During the
2003 fiscal year, 76% of total Resort (Mountain and Lodging combined) revenues
were earned during the second and third fiscal quarters. Quarterly results may
also be materially affected by the timing of snowfall and other unforeseen
external factors. Therefore, the operating results for any three-month period
are not necessarily indicative of the results that may be achieved for any
subsequent fiscal quarter or for a full fiscal year.
We are subject to unfavorable weather conditions. The ability to attract
visitors to ski resorts is influenced by weather conditions and by the amount
and timing of snowfall during the ski season. Unfavorable weather conditions can
adversely affect skier visits, and adversely affect our revenues and profits. In
the past 20 years, our Colorado ski resorts have averaged between 20 and 30 feet
of annual snowfall and our California ski resort receives average yearly
snowfall of between 25 and 35 feet, significantly in excess of the average for
U.S. ski resorts. However, there is no assurance that our resorts will receive
seasonal snowfalls near the historical average in the future. Also, the early
season snow conditions and skier perceptions of early season snow conditions
influence the momentum and success of the overall season. In addition, a severe
and prolonged drought could affect our otherwise adequate snowmaking water
supplies. Unfavorable weather conditions such as drought, hurricanes, tropical
storms and tornadoes can adversely affect our other resorts and lodging
properties as vacationers tend to delay or postpone vacations if weather
conditions differ from those that typically prevail at such resorts for a given
season. There is no way for us to predict future weather patterns or the impact
that weather patterns may have on results of operations or visitation.
We depend on a seasonal workforce. Our Mountain and Lodging operations are
largely dependent on a seasonal workforce. We recruit worldwide to fill staffing
needs each season and utilize visas to enable the use of foreign workers. In
addition, we manage seasonal wages and the timing of the hiring process to
ensure the appropriate workforce is in place. While we do not currently foresee
the need to increase seasonal wages to attract employees, we cannot guarantee
that such an increase will not be necessary in the future. In addition, we
cannot guarantee that we will be able to obtain the visas necessary to hire
foreign workers who are an important source for the seasonal workforce.
Increased seasonal wages or an inadequate workforce could have an adverse impact
on our results of operations; however, we are unable to predict with any
certainty whether such situations will arise or the potential impact on results
of operations.
We are currently the subject of an SEC investigation. In October 2002, after
voluntary consultation with the SEC staff on the appropriate accounting for
recognizing revenue on initiation fees related to the sale of memberships in
private clubs, we restated and reissued our historical financial statements for
fiscal 1999 through fiscal 2001, primarily to reflect a revision in the
accounting treatment for recognizing revenue on initiation fees related to the
sale of memberships in private clubs. In 2002, we engaged our new auditors to do
a complete re-audit of the fiscal years 1999-2001 and filed an amended 10-K for
fiscal 2001 reflecting all adjustments made as a result of the re-audit, in
addition to the revision in accounting for the club fees. In February 2003, the
SEC informed us that it had issued a
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formal order of investigation with respect to us. At that time, the inquiry
related to our previous accounting treatment for the private club initiation
fees.
In October 2003, the SEC issued a subpoena to us to produce documents related to
several matters, including the sale of memberships in private clubs. In November
2003, the SEC issued an additional subpoena to us to produce documents related
primarily to the additional Restatement items included in our Form 10-K for the
year ended July 31, 2003. We are fully cooperating with the SEC in its
investigation. We are unable to predict the outcome of the investigation or any
action that the SEC might take, including the imposition of fines and penalties,
or other available remedies. Any adverse development in connection with the
investigation, including any expansion of the scope of the investigation, could
have a material adverse effect on us, including diverting the efforts and
attention of our management team from our business operations.
We are subject to economic downturns. Skiing, travel and tourism are
discretionary recreational activities that can be impacted by a significant
economic slowdown, which, in turn, could impact our operating results. The
recent extended economic downturn has negatively impacted our operating results
although we had historically been relatively unaffected by economic downturns.
There can be no assurance that a continued or future decrease in the amount of
discretionary spending by the public would not have an adverse effect on us.
Our cost reduction plan might fail to achieve anticipated cost savings and
operational efficiencies. We implemented a plan for fiscal 2004 to achieve
approximately $25 million in year-over-year cost savings and improved profits.
We cannot assure you that this plan will be successful in achieving the
anticipated cost savings, operational efficiencies or profit improvements. We
also cannot assure you that the cost savings will not cause unanticipated
negative impacts to guest services, which could lead to adverse effects on us.
We face significant competition. The ski resort and lodging industries are
highly competitive. The number of people who ski in the United States (as
measured in skier visits) has generally ranged between 52 million and 57 million
annually over the last decade, with 57.6 million for the 2002/03 ski season. The
factors that we believe are important to customers include:
o proximity to population centers;
o availability and cost of transportation to ski areas;
o ease of travel to ski areas (including direct flights by major
airlines);
o pricing of products and services;
o snowmaking facilities;
o type and quality of skiing offered;
o duration of the ski season;
o weather conditions;
o number, quality and price of related services and lodging; and
o reputation.
We have many competitors for our ski vacationers, including other major resorts
in Colorado and throughout North America. Our destination guests can choose from
any of these alternatives, as well as non-skiing vacation destinations around
the world. Our Colorado day skier customers can choose from a number of nearby
competitors, including Copper Mountain, Winter Park, Arapahoe Basin and Loveland
ski areas. In addition, other forms of leisure such
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as attendance at movies, sporting events and participation in other indoor and
outdoor recreational activities are available to potential guests.
RockResorts International, LLC ("RockResorts") hotels and our other hotels
compete with numerous other hotel companies that may have greater financial
resources than we do. Many of our competitors in both the mountain and lodging
segments may be able to adapt more quickly to changes in customer requirements
or devote greater resources to promotion of their offerings than we can. We
believe that developing and maintaining a competitive advantage will require
continued investment by us in our resorts and in our sales and marketing
efforts. We cannot assure you that we will have sufficient resources to make the
necessary investments to do so, and we cannot assure you that we will be able to
compete successfully in this market or against such competitors.
In addition, each of our hotels competes with other hotels in its geographic
area. A number of additional hotel rooms have been or may be built in the
geographic areas in which our hotels are located, which could adversely affect
the results of operations of these hotels. An oversupply of hotel rooms could
adversely affect both occupancy and rates in the markets in which our hotels are
located. A significant increase in the supply of mid-price, upscale, and
upper-upscale hotel rooms and suites, if demand fails to increase
proportionately, could have an adverse effect on our business, financial
condition and results of operations.
We have identified a material weakness and certain significant deficiencies in
our internal controls over financial reporting. In connection with the issuance
of our audited financial statements for fiscal 2003, we identified issues with
our internal financial control structure and restated our historical financial
statements. While we have implemented a specific action plan to address the
internal control weaknesses and to enhance the reliability and effectiveness of
our control procedures, we cannot guarantee that similar or other internal
control weaknesses will not be identified in the future.
Additionally, we are currently reviewing and testing our material internal
control systems, processes and procedures in compliance with the requirements of
Sarbanes-Oxley Regulation 404. There can be no assurances that such a review
will not result in the identification of significant control deficiencies or
that our auditors will be able to attest to the adequacy of our internal
controls.
Our recent or future acquisitions might not be successful. In recent years, we
have acquired a major ski resort and several other destination resorts and hotel
properties, including Heavenly Ski Resort, RockResorts and its associated
management contracts, the Lodge at Rancho Mirage and the Vail Marriott Mountain
Resort & Spa, as well as developable land in proximity to such resorts. We
cannot assure you that we will be able to continue to successfully integrate and
manage these acquired properties profitably or increase our profits from these
operations. We continually evaluate potential acquisitions and intend to
actively pursue acquisition opportunities, some of which could be significant.
We would face various risks from additional acquisitions, including:
o inability to integrate acquired businesses into our operations;
o potential goodwill impairment;
o diversion of our management's attention;
o potential increased debt leverage; and
o unanticipated problems or liabilities.
Similar problems from future acquisitions could adversely affect our operations
and financial performance. In addition, we run the risk that our new
acquisitions may fail to perform in accordance with our expectations, and that
our estimates of the costs of improvements for such properties may prove
inaccurate. We cannot assure you that we will be able to mitigate exposure to
these markets in the future.
Our future development plans might not be successful. We have significant
development plans for our operations. We could experience significant
difficulties initiating or completing these projects, including:
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o delays in completion;
o market or economic downturns impacting our ability to achieve required
revenues from sales;
o inaccurate cost estimates;
o difficulty in finding partners to assist with financing;
o difficulty in receiving the necessary regulatory approvals; and
o difficulty in obtaining qualified subcontractors.
Additionally, we may not benefit from the projects as we expected. Further, we
may not be able to fund these projects with cash flow from operations and
borrowings under our credit facility or third-party non-recourse financing if we
face these difficulties.
In addition, we may decide to alter or abandon a development plan that is
currently underway or under consideration. Consequently, you should not place
undue reliance upon any particular development plan as such plan may not be
consummated, or may not be consummated in the manner described in this
prospectus.
Terrorist acts upon the United States and acts of war (actual or threatened)
could have a material adverse effect on us. The terrorist acts carried out
against the United States on September 11, 2001 have had an adverse effect on
the global travel and leisure industry. The war with Iraq and its aftermath also
had a materially adverse effect on us. We cannot guarantee if or when normal
travel and vacation patterns will resume. Additional terrorist acts against the
United States and the threat of or the actual act of war by or upon the United
States could result in further degradation of discretionary travel, upon which
our operations are highly dependent. Such degradation could have a material
adverse impact on our results of operations.
Unforeseen global events could adversely impact us. The SARS epidemic in the
spring of 2003 adversely impacted the international travel industry and,
consequently, adversely impacted our business. Other such events of a global
nature could also adversely impact discretionary travel, upon which our
operations are highly dependent, which could have a material adverse impact on
our results of operations.
We rely on government permits. Virtually all of our ski trails and related
activities at Vail, Breckenridge, Keystone and Heavenly and a substantial
portion on Beaver Creek are located on federal land. The United States Forest
Service (the "Forest Service") has granted us permits to use these lands, but
maintains the right to review and approve many operational matters, as well as
the location, design and construction of improvements in these areas. Currently,
our permits expire October 31, 2031 for Vail, December 31, 2029 for
Breckenridge, December 31, 2032 for Keystone, May 1, 2042 for Heavenly and
December 31, 2038 for Beaver Creek. The Forest Service can terminate most of
these permits if, in its opinion, such revocation is required in the public
interest. A termination of any of our permits would adversely affect our
business and operations.
We have applied for several new permits or other approvals for improvements and
new development. These efforts, if not successful, could impact our expansion
efforts as currently contemplated. Furthermore, Congress may increase the fees
we pay to the Forest Service for use of these federal lands.
GTLC operates three resort properties within Grand Teton National Park under a
concession contract with the National Park Service that expired on December 31,
2002. This contract was extended for two years through December 31, 2004, or
until such time a new contract is awarded, whichever occurs first. The new
contract for this concession is subject to a competitive bidding process under
the rules promulgated to implement the concession provisions of the National
Park Omnibus Management Act of 1998. The bidding and renewal process is expected
to occur in early to mid-2004. We cannot predict or guarantee the prospects for
success in being awarded a new contract, although we believe GTLC is
well-positioned to obtain a new concession contract on satisfactory terms. In
the event GTLC is not the successful bidder for the new concession contract,
under the existing contract, GTLC is required to
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sell to the new concessionaire its "possessory interest" in improvements and its
other property used in connection with the concession operations. GTLC would
then be entitled to be compensated by the successful bidder for the value of its
"possessory interest" in the assets, although the matter may be subject to
arbitration if the value is disputed. Under an amendment to the contract, in the
summer of 2003, GTLC and the National Park Service agreed upon the value to be
contained in the prospectus soliciting bids for the contract.
We are subject to litigation in the ordinary course of business. We are, from
time to time, subject to various legal proceedings and claims, either asserted
or unasserted. Any such claims, whether with or without merit, could be
time-consuming and expensive to defend and could divert management's attention
and resources. While management believes we have adequate insurance coverage and
accrued loss contingencies for all known matters, we cannot assure that the
outcome of all current or future litigation will not have a material adverse
effect on us.
We are subject to extensive environmental laws and regulations in the ordinary
course of business. Our operations are subject to a variety of federal, state
and local environmental laws and regulations including those relating to
emissions to the air, discharges to water, storage, treatment and disposal of
wastes, land use, remediation of contaminated sites and protection of natural
resources such as wetlands. For example, future expansions of certain of our ski
facilities must comply with applicable forest plans approved under the National
Forest Management Act or local zoning requirements. Our facilities are subject
to risks associated with mold and other indoor building contaminants. From time
to time, our operations are subject to inspections by environmental regulators
or other regulatory agencies. We are also subject to worker health and safety
requirements. We believe our operations are in substantial compliance with
applicable environmental, health and safety requirements. However, our efforts
to comply do not remove the risk that we may be held liable, incur fines or be
subject to claims for damages, and that the amount of any liability, fines,
damages or remediation costs may be material for, among other things, the
presence or release of regulated materials at, on or emanating from properties
we now or formerly owned or operated, newly discovered environmental impacts or
contamination at or from any of our properties, or changes in environmental laws
and regulations or their enforcement.
Implementation of existing and future legislation, rulings, standards and
interpretations from the FASB or other regulatory bodies could affect the
presentation of our financial statements and related disclosures. The FASB has
recently issued FIN No. 46, FIN No. 46R and SFAS No. 150, which we are currently
in the process of implementing. The implementation of these accounting
pronouncements could affect the way we account for our involvement with variable
interest entities and could also affect the presentation of liabilities and
equity on our balance sheet, including potentially recording certain off-balance
sheet liabilities on our balance sheet. These and other future regulatory
requirements could significantly change our current accounting practices and
disclosures. Such changes in the presentation of our financial statements and
related disclosures could change your interpretation or perception of our
financial position and results of operations. For a more detailed discussion on
the possible treatment of our variable interest entities see "Management's
Discussion and Analysis of Financial Condition and Results of Operations--Off
Balance Sheet Arrangements" and Notes 8 and 13 to "Consolidated Financial
Statements" included in our Annual Report on Form 10-K for the fiscal year ended
July 31, 2003 as well as "Off Balance Sheet Arrangements" and "New Accounting
Pronouncements" under "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Notes 8 and 11 to "Consolidated
Condensed Financial Statements" included in our Quarterly Report on Form 10-Q
for the fiscal quarter ended October 31, 2003.
We are subject to the risks of brand concentration. We are subject to the
potential risks associated with concentration of our hotels under the
RockResorts brand. A negative public image or other adverse event which becomes
associated with the RockResorts brand could adversely affect hotels operated
under that brand. Should the RockResorts brand suffer a significant decline in
popularity with the traveling public, it could adversely affect our revenues and
profitability.
Our future growth and real estate development requires additional capital whose
availability is not assured. We intend to make significant investments in our
resorts to maintain our competitive position. We spent approximately $106.3
million, $76.2 million and $57.8 million in the fiscal years ended July 31,
2003, 2002 and 2001, respectively, on capital expenditures and we have made
investments of approximately $22.6 million, $68.7 million and $39.2 million in
fiscal years 2003, 2002 and 2001, respectively, in our real estate developments,
and we expect
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to continue making substantial resort capital expenditures and investments in
real estate development. We could finance future expenditures from any of the
following sources:
o cash flow from operations;
o bank borrowings;
o public offerings of debt or equity;
o private placements of debt or equity;
o non-recourse, sale leaseback or other financing; or
o some combination of the above.
We might not be able to obtain financing for future expenditures on favorable
terms or at all.
Future changes in the real estate market could affect the value of our
investments. We have extensive real estate holdings near our mountain resorts
and in Wyoming. We plan to make significant additional investments in developing
property at all of our resorts. The value of our real property and the revenue
from related development activities may be adversely affected by a number of
factors, including:
o national and local economic climate;
o local real estate conditions (such as an oversupply of space or a
reduction in demand for real estate in an area);
o attractiveness of the properties to prospective purchasers and
tenants;
o competition from other available property or space;
o our ability to obtain adequate insurance;
o unexpected construction costs or delays;
o government regulations and changes in real estate, zoning or tax laws;
o interest rate levels and the availability of financing; and
o potential liabilities under environmental and other laws.
If we do not retain our key personnel, our business may suffer. The success of
our business is heavily dependent on the leadership of our key management
personnel. If any of these persons were to leave our company, it would be
difficult to replace them, and our business could be harmed. We do not have
"key-man" life insurance.
Apollo Ski Partners has influence over us. Apollo Ski Partners owns
approximately 99.9% of our outstanding shares of Class A Common Stock, giving
them approximately 21.1% of the combined voting power with respect to all
matters submitted for a vote of all stockholders. Pursuant to our bylaws, the
holders of Class A Common Stock have the right to elect a class of directors
that constitutes up to two-thirds of our board of directors. Accordingly, Apollo
Ski Partners and, indirectly, Apollo Advisors, L.P. (which indirectly controls
Apollo Ski Partners) have the ability to elect two-thirds of our board of
directors and control the approval of matters requiring approval by the board of
directors, including mergers, liquidations and asset acquisitions and
dispositions. However, in order to assist us in complying with new NYSE rules
which require listed companies to have a board of directors composed of a
majority of "independent" directors, Apollo Ski Partners has agreed that the
directors that they are entitled to
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elect may include as many independent directors as necessary so that we can
comply with this new rule. However, notwithstanding the above, Apollo Ski
Partners will still have several designees on the board of directors and will be
able to influence the board of directors. In addition, Apollo Ski Partners and
Apollo Advisors, L.P. may be able to significantly influence decisions on
matters submitted for stockholder consideration. The Lead Director on our board
of directors is associated with Apollo Ski Partners.
Risks Relating to This Offering and Our Capital Structure
Future sales of shares of our common stock and Class A common stock could
depress the price of the common stock. Future sales of common stock by us or our
existing shareholders could adversely affect the prevailing market price of the
common stock. As of February 2, 2004, we had 27,859,651 shares of common stock
outstanding and 7,439,834 shares of class A common stock outstanding.
Substantially all of the 7,439,834 shares of class A common stock outstanding
and at least 9,471,417 shares of common stock outstanding are beneficially owned
by people who may be deemed "affiliates," as defined by Rule 405 of the Act, and
are "restricted securities" which can be resold in the public market only if
registered with the Securities and Exchange Commission or pursuant to an
exemption from registration.
In general, under Rule 144 as currently in effect, an "affiliate" is entitled to
sell within any three-month period a number of shares that does not exceed the
greater of one percent of the then outstanding shares of common stock or the
average weekly reported trading volume of the common stock during the four
calendar weeks preceding the date on which notice of such sale is given,
provided certain manner of sale and notice requirements as to the availability
of current public information are satisfied (which requirements as to the
availability of current public information is currently satisfied). Under Rule
144(k), a person who is not deemed an "affiliate" at any time during the three
months preceding a sale by such person would be entitled to sell such shares
without regard to volume limitations, manner of sale provisions, notification
requirements or the availability of current public information concerning the
company, provided that a period of at least two years has elapsed since the
later of the date the common stock was acquired from the company or from an
affiliate of the company.
In addition to the above shares, there are a number of shares of our common
stock which may be sold pursuant to the exercise of outstanding stock options.
We cannot predict what effect, if any, that future sales of such restricted
shares and the shares issuable upon exchange of stock options, or the
availability of shares for future sale, will have on the market price of the
common stock from time to time. Sales of substantial amounts of common stock in
the public market, or the perception that such sales could occur, could
adversely affect prevailing market prices for the common stock and could impair
our ability to raise additional capital through an offering of our equity
securities.
Our stock price is highly volatile. The market price of our stock is highly
volatile and subject to wide fluctuations in response to factors such as the
following, some of which are beyond our control:
o quarterly variations in our operating results;
o operating results that vary from the expectations of securities
analysts and investors;
o changes in expectations as to our future financial performance,
including financial estimates by securities analysts and investors or
such guidance provided by us;
o announcements of new services by us or our competitors;
o announcements by us or our competitors of significant contracts,
acquisitions, dispositions, strategic partnerships, joint ventures or
capital commitments;
o additions or departures of key personnel;
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o future sales of our securities;
o trading and volume fluctuations; and
o other unforeseen events.
Stock markets in the United States often experience extreme price and volume
fluctuations. Market fluctuations, as well as general political and economic
conditions such as a recession or interest rate or currency rate fluctuations,
could adversely affect the market price of our stock.
We do not intend to pay dividends in the foreseeable future. We have never
declared or paid any cash dividends on our common stock. For the foreseeable
future, we intend to retain any earnings to finance the development and
expansion of our business, and we do not anticipate paying any cash dividends on
our common stock. Payment of any future dividends on our common stock will
depend upon our earnings and capital requirements, the terms of our debt
instruments and preferred stock and other factors our board of directors
considers appropriate.
Anti-takeover provisions affecting us could prevent or delay a change of control
that is beneficial to you. Provisions of our certificate of incorporation and
bylaws, provisions of our debt instruments and other agreements and provisions
of applicable Delaware law and applicable federal and state regulations may
discourage, delay or prevent a merger or other change of control that holders of
our securities may consider favorable. These provisions could:
o delay, defer or prevent a change in control of our company;
o discourage bids for our securities at a premium over the market price;
o adversely affect the market price of, and the voting and other rights
of the holders of, our securities; or
o impede the ability of the holders of our securities to change our
management.
Our substantial indebtedness could adversely affect our financial health and
prevent us from fulfilling our obligations. We have a significant amount of
indebtedness. On October 31, 2003, after giving pro forma effect to our recent
offering of our 6.75% senior subordinated notes and the purchase of all of our
8.75% senior subordinated notes tendered in the tender offer and the discharge
of all of our 8.75% senior subordinated notes not tendered in the tender offer,
we would have had total indebtedness of $617.4 million (of which $390 million
would have consisted of the notes and the balance would have consisted of senior
debt).
Our substantial indebtedness could have important consequences to you. For
example, it could:
o make it more difficult for us to satisfy our obligations;
o increase our vulnerability to general adverse economic and industry
conditions;
o require us to dedicate a substantial portion of our cash flow from
operations to payments on our indebtedness, thereby reducing the
availability of our cash flow to fund working capital, capital
expenditures, research and development efforts and other general
corporate purposes;
o limit our flexibility in planning for, or reacting to, changes in our
business and the industry in which we operate;
o place us at a competitive disadvantage compared to our competitors
that have less debt; and
o limit our ability to borrow additional funds.
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In addition, the indenture governing the 6.75% senior subordinated notes and our
credit facility contain financial and other restrictive covenants that limit our
ability to engage in activities that may be in our long-term best interests. Our
failure to comply with those covenants could result in an event of default
which, if not cured or waived, could result in the acceleration of all of our
debts. Despite current indebtedness levels, we and our subsidiaries may still be
able to incur substantially more debt. This could further exacerbate the risks
associated with our substantial leverage.
We and our subsidiaries may be able to incur substantial additional indebtedness
in the future. The terms of the indenture do not fully prohibit us or our
subsidiaries from doing so. Our credit facility permits additional borrowings of
up to $72.3 million (as of October 31, 2003). If new debt is added to our and
our subsidiaries' current debt levels, the related risks that we and they now
face could intensify.
There are restrictions imposed by the terms of our indebtedness. The operating
and financial restrictions and covenants in our credit facility and the
indenture governing the 6.75% senior subordinated notes may adversely affect our
ability to finance future operations or capital needs or to engage in other
business activities. In addition, there can be no assurance that we will meet
the financial covenants contained in our credit facility. If we breach any of
these restrictions or covenants, or suffer a material adverse change which
restricts our borrowing ability under our credit facility, we would be unable to
borrow funds thereunder without a waiver, which inability could have an adverse
effect on our business, financial condition and results of operations. A breach
could cause a default under the notes and our other debt. Our indebtedness may
then become immediately due and payable. We may not have or be able to obtain
sufficient funds to make these accelerated payments, including payments on the
notes.
In addition, the indenture governing the 6.75% senior subordinated notes
restricts, among other things, our ability to:
o borrow money or sell preferred stock;
o create liens;
o pay dividends on or redeem or repurchase stock;
o make certain types of investments;
o sell stock in our restricted subsidiaries;
o restrict dividends or other payments from subsidiaries;
o enter into transactions with affiliates;
o issue guarantees of debt; and
o sell assets or merge with other companies.
If we fail to comply with these covenants, we would be in default under the
indenture governing the notes, and the principal and accrued interest on the
notes would become due and payable.
To service our indebtedness, we will require a significant amount of cash,
generation of which depends on many factors beyond our control. Our ability to
make payments on and to refinance our indebtedness, including our 6.75% senior
subordinated notes, and to fund planned capital expenditures and development
efforts will depend on our ability to generate cash in the future. This, to a
certain extent, is subject to general economic, financial, competitive,
legislative, regulatory and other factors that are beyond our control.
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Based on our current level of operations, we believe our cash flow from
operations, available cash and available borrowings under our credit facility
will be adequate to meet our future liquidity needs for at least the next twelve
months.
We cannot assure you, however, that our business will generate sufficient cash
flow from operations, that currently anticipated cost savings and operating
improvements will be realized on schedule or that future borrowings will be
available to us under our credit facility in an amount sufficient to enable us
to pay our indebtedness, including the notes, or to fund our other liquidity
needs. We may need to refinance all or a portion of our indebtedness, including
the notes, on or before maturity. We cannot assure you that we will be able to
refinance any of our indebtedness, including our credit facility and the notes,
on commercially reasonable terms or at all.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth Vail Resorts' consolidated ratio of earnings to
fixed charges for each of the periods indicated.
For purposes of calculating the ratio of earnings to fixed charges, earnings
consist of pretax income from continuing operations before adjustment for (a)
minority interest in consolidated subsidiaries and equity method earnings or
losses, (b) fixed charges, (c) amortization of interest capitalized and (d)
distributed income from equity method investees. From the total of these items
interest capitalized is deducted. Fixed charges include: (i) interest expense;
(ii) interest capitalized; (iii) amortization of debt issuance cost and (iv) an
estimate of the interest component of rent expense. As of the date of this
prospectus, we have no preferred stock outstanding. The ratio of earnings to
fixed charges and preferred stock dividends is the same as the ratio of earnings
to fixed charges in all periods as we have not had any preferred stock
outstanding (all amounts in thousands of dollars, except ratios).
Year Ended July 31, Three Months Ended
October 31,
1999 2000 2001 2002 2003 2002 2003
Ratio of Earnings to Fixed Charges 1.29 1.46 1.64 1.33 -- -- --
Deficiency of Earnings to Fixed Charges -- -- -- -- $9,735 $48,228 $42,716
USE OF PROCEEDS
Except as we may specifically state in any prospectus supplement, we intend to
use the net proceeds from the sale of the securities under this prospectus for
general corporate purposes, which may include repayment of indebtedness.
PLAN OF DISTRIBUTION
We may sell the securities offered by this prospectus to or through underwriters
or dealers, directly to other purchasers, through agents or through a
combination of any such methods of sale. The prospectus supplement will set
forth the terms of the offering of such securities, including
o the name or names of any underwriters, dealers or agents and the
amounts of securities underwritten or purchased by each of them,
o the initial public offering price of the securities and the proceeds
to us and any discounts, commissions or concessions allowed or
reallowed or paid to dealers, and
o any securities exchanges on which the securities may be listed.
Any public offering price and any discounts or concessions allowed or reallowed
or paid to dealers may be changed from time to time.
The securities may be distributed from time to time in one or more transactions
at:
o a fixed price or prices, which may be changed;
o market prices prevailing at the time of sale;
o prices related to the prevailing market prices; or
o negotiated prices.
If underwriters are used in the sale of any securities, the securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions. The securities may be either offered to the
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public through underwriting syndicates represented by managing underwriters, or
directly by underwriters. Generally, the underwriters' obligations to purchase
the securities will be subject to certain conditions precedent. The underwriters
will be obliged to purchase all of the securities if they purchase any of the
securities. In connection with the sale of securities, underwriters may receive
compensation from us or from purchasers of securities for whom they may act as
agents. This compensation may be in the form of discounts, concessions or
commissions.
Underwriters may sell securities to or through dealers, and these dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as
agents. Underwriters, dealers and agents that participate in the distribution of
securities could be considered underwriters, and any discounts or commissions
received by them from us and any profit on the resale of securities by them
could be considered underwriting discounts and commissions, under the Securities
Act.
Under agreements entered into by us for the purchase or sale of securities,
these underwriters and agents may be entitled to indemnification by us against
certain liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which the agents or underwriters may be
required to make in respect thereof. Agents and underwriters may be customers
of, engage in transactions with, or perform services for us in the ordinary
course of business.
If so indicated in the prospectus supplement, we will authorize underwriters or
other persons acting as our agents to solicit offers by institutional investors
to purchase securities from us under contracts requiring payment and delivery on
a future date. Institutions with which these contracts may be made include,
among others:
o commercial and savings banks;
o insurance companies;
o pension funds;
o investment companies; and
o educational and charitable institutions.
In all cases we must approve these institutions. The obligations of any
purchaser under these contracts will be subject to the condition that the
purchase of the offered securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which that purchaser is
subject. The underwriters and other agents will not have any responsibility in
respect of the validity or performance of these contracts.
One or more firms, referred to as "remarketing firms," may also offer or sell
the securities, if the prospectus supplement so indicates, in connection with a
remarketing arrangement upon their purchase. Remarketing firms will act as
principals for their own accounts or as agents for us. These remarketing firms
will offer or sell the securities in accordance with a redemption or repayment
pursuant to the terms of the securities. The prospectus supplement will identify
any remarketing firm and the terms of its agreement, if any, with us and will
describe the remarketing firm's compensation. Remarketing firms may be deemed to
be underwriters in connection with the securities they remarket. Remarketing
firms may be entitled under agreements that may be entered into with us to
indemnification by us against certain civil liabilities, including liabilities
under the Securities Act and may be customers of, engage in transactions with or
perform services for us in the ordinary course of business.
DESCRIPTION OF DEBT SECURITIES WE MAY OFFER
This section outlines some of the provisions of the indentures and the debt
securities. This information may not be complete in all respects and is
qualified entirely by reference to the indentures under which the debt
securities are issued. These indentures are incorporated by reference as
exhibits to the registration statement of which this prospectus is a part. This
information relates to terms and conditions that generally apply to the debt
securities. The specific terms of any series of debt securities will be
described in the prospectus supplement. If so described in a prospectus
supplement, the terms of that series may differ from the general description of
the terms presented below.
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Debt Securities May Be Senior or Subordinated
We may issue senior or subordinated debt securities. The senior debt securities
and the subordinated debt securities may or may not be secured by any of our
property or assets.
The senior debt securities will constitute part of our senior indebtedness, will
be issued under our senior debt indenture described below and will rank equally
with all of our other unsecured and unsubordinated debt.
The subordinated debt securities will constitute part of our subordinated debt,
will be issued under our subordinated debt indenture described below and will be
subordinated in right of payment to all of our "senior indebtedness," as defined
in the subordinated debt indenture. The prospectus supplement for any series of
subordinated debt securities will indicate the approximate amount of senior
indebtedness outstanding as of the end of our most recent fiscal quarter.
Neither indenture limits our ability to incur additional senior indebtedness.
When we refer to "debt securities" in this prospectus, we mean both the senior
debt securities and the subordinated debt securities.
The Senior Debt Indenture and the Subordinated Debt Indenture
The senior debt securities and the subordinated debt securities are each
governed by a document called an indenture--the senior debt indenture, in the
case of the senior debt securities, and the subordinated debt indenture, in the
case of the subordinated debt securities. Each indenture is a contract between
us and a trustee that will be named therein. The indentures are substantially
identical, except for the provisions relating to subordination, which are
included only in the subordinated indenture.
The trustee under each indenture has two main roles:
o First, the trustee can enforce your rights against us if we default.
There are some limitations on the extent to which the trustee acts on
your behalf, which we describe later under "--Events of Default"; and
o Second, the trustee performs administrative duties for us, such as
sending you interest payments and notices.
When we refer to the indenture or the trustee with respect to any debt
securities, we mean the indenture under which those debt securities are issued
and the trustee under that indenture.
The indentures permit us to issue different series of securities from time to
time. We may issue securities in such amounts, at such times and on such terms
as we wish. The debt securities may differ from one another in their terms.
Neither indenture limits the aggregate amounts of debt securities that we may
issue or the aggregate amount of any particular series.
The indentures and the debt securities are governed by New York law.
This Section Is Only a Summary
Because this section is a summary, it does not describe every aspect of the debt
securities. The indentures, any supplemental indentures and the debt securities
contain the full legal text of the matters described in this section. This
summary is subject to and qualified in its entirety by reference to all the
provisions of the indentures, including definitions of some of the terms used in
the indentures. We also include references in parentheses to some sections and
articles of the indentures. Whenever we refer to particular sections, articles
or defined terms of the indentures in this prospectus or in the prospectus
supplement, those sections, articles or defined terms are incorporated by
reference here or in the prospectus supplement. The indentures are exhibits to
our registration statement. See "Where You Can Find More Information" for
information on how to obtain a copy. This summary is also subject to and
qualified by reference to the description of the particular terms of your series
of debt securities described in any prospectus supplement.
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Specific Terms of a Series of Debt Securities
In this section we summarize only the more important terms of the indentures
that will apply generally to the debt securities. Each particular debt security
will have financial, legal and other terms specific to it, and the specific
terms of each debt security will be described in the applicable prospectus
supplement. Those terms may vary from the terms described here. As you read this
section, therefore, please remember that the specific terms of your debt
security as described in your prospectus supplement will supplement and, if
applicable, may modify or replace the general terms described in this section.
The statements we make in this section may not apply to your debt security.
We may issue the debt securities as original issue discount securities, which
are debt securities that are offered and sold at a substantial discount to their
stated principal amount. The debt securities may also be issued as indexed
securities or securities denominated in foreign currencies or currency units, as
well as composite currencies or composite currency units, as described in more
detail in the prospectus supplement relating to any of these types of debt
securities.
The prospectus supplement relating to a series of debt securities will specify
whether the securities are senior or subordinated debt securities and will
describe the following terms of the series:
o the title of the series;
o the aggregate principal amount (or any limit on the aggregate
principal amount) of the series and, if any debt securities of a
series are to be issued at a discount from their face amount, the
method of computing the accretion of such discount;
o the interest rate or rates, if any, or method of calculating the
interest rate;
o the date or dates from which interest will accrue;
o the record dates for interest payable on registered debt securities;
o the dates when principal and interest are payable;
o the manner of paying principal and interest;
o the places where principal and interest are payable;
o the registrar, transfer agent and paying agent;
o in the case of subordinated debt securities, any subordination
provisions in addition to or in lieu of those set forth in the
indenture;
o the terms of any mandatory (including any sinking fund requirements)
or optional redemption by us;
o the terms of any repayment at the option of holders;
o the denominations in which debt securities are issuable;
o whether debt securities will be issuable as registered securities or
bearer securities;
o whether and upon what terms registered securities and bearer
securities may be exchanged;
o whether any debt securities will be represented by a debt security in
global form;
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o the terms of any global debt security;
o the terms of any tax indemnity;
o the currencies (including any composite currency) in which principal
or interest may be paid;
o if payments of principal or interest may be made in a currency other
than that in which debt securities are denominated, the manner for
determining such payments;
o if amounts of principal or interest may be determined by reference to
an index, formula or other method, the manner for determining such
amounts;
o provisions for electronic issuance of debt securities or for debt
securities in uncertificated form;
o the portion of principal payable upon acceleration of a discounted
debt security;
o any events of default or covenants in addition to or in lieu of those
set forth in the applicable indenture;
o whether and upon what terms debt securities may be defeased, if
different from the provisions set forth in the base indenture;
o the forms of the debt securities;
o any terms that may be required by or advisable under U.S. or other
applicable laws;
o the percentage of the principal amount of the debt securities which is
payable if the maturity of the debt securities is accelerated in the
case of debt securities issued at a discount from their face amount;
o whether and upon what terms the debt securities will be convertible
into or exchangeable for our common stock; and
o any other terms not inconsistent with the indenture.
Special U.S. Federal income tax considerations may apply to a series of debt
securities issued as original issue discount securities. These tax
considerations will be discussed in the related prospectus supplement. In
addition, if any special U.S. Federal income tax considerations apply to a
series of debt securities denominated in a currency or currency unit other than
U.S. dollars, the related prospectus supplement will describe those
considerations.
Conversion Rights
If debt securities of any series are convertible into our common stock, the
related prospectus supplement will discuss the conversion terms. Those terms
will include provisions as to whether the conversion is mandatory or at the
option of the holder and may also include provisions for calculating the number
of shares of common stock to be delivered upon conversion.
Subordination of Subordinated Debt Securities
Holders of subordinated debt securities should recognize that contractual
provisions in the subordinated debt indenture may prohibit us from making
payments on those securities. Subordinated debt securities are subordinate in
right of payment, to the extent and in the manner stated in the subordinated
debt indenture, to all our senior debt, including all debt securities we have
issued that constitute senior debt and all debt securities we will issue under
the senior debt indenture.
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The subordinated debt indenture defines "senior indebtedness" as all our
indebtedness and other payment obligations relating to our debt, as defined
below, including:
o all obligations under credit facilities (whether for principal,
interest, fees, expenses or indemnities);
o all indebtedness for borrowed money or under any reimbursement
obligation relating to a letter of credit or other similar instruments
or evidenced by a bond, note, debenture or similar instrument, or such
indebtedness of others which we guarantee (to the extent of the
guarantee) and capitalized lease obligations, including principal,
premium, if any, and interest on such indebtedness, unless the
instrument under which such indebtedness is incurred expressly
provides that such indebtedness is not senior or superior in right of
payment to the subordinated debt securities;
o all obligations under interest protection agreements; and
o all obligations under currency agreements.
All amendments, renewals, extensions, modifications and refundings of these
obligations will also be included in senior indebtedness. Senior indebtedness
excludes the subordinated debt securities and any other indebtedness or
obligations specifically designated as being subordinate, or not superior, in
right of payment to the subordinated debt securities.
The subordinated debt indenture provides that, unless all principal of and any
premium or interest on the senior debt has been paid in full, no payment or
other distribution may be made in respect of any subordinated debt securities in
the following circumstances:
o if there exists a default in the payment of all or any portion of the
obligations on any senior indebtedness, whether at maturity, on
account of mandatory redemption or prepayment or purchase,
acceleration or otherwise, that continues beyond any applicable period
of grace, and such default shall not have been cured or waived or the
benefits of the subordination provisions in the subordinated debt
indenture is waived by or on behalf of the holders of such senior
indebtedness; or
o after receipt by the trustee of written notice from the holder or
holders of certain designated senior indebtedness or the trustee or
agent acting on behalf of such designated senior indebtedness and for
179 days thereafter, during the continuance of any non-payment event
of default with respect to any designated senior indebtedness pursuant
to which the maturity thereof may be immediately accelerated, and,
then, unless and until such event of default has been cured or waived
or has ceased to exist or such designated senior indebtedness has been
discharged or repaid in full in cash or the benefits of the
subordination provisions in the subordinated debt indenture have been
waived by the holders of such designated senior indebtedness.
As defined in the subordinated debt indenture, "designated senior indebtedness"
means any senior indebtedness (a) under a credit facility or (b) which, at the
time of determination, has an aggregate commitment or principal amount
outstanding of at least $25.0 million if the instrument governing such senior
indebtedness expressly states that such indebtedness is "designated senior
indebtedness" for purposes of the subordinated debt indenture and a resolution
of our board of directors setting forth such designation by us has been filed
with the trustee.
For the purposes of the subordination provisions, the payment of cash or
delivery of property or securities upon conversion of a subordinated debt
security, excluding delivery of our common stock and certain of our subordinated
securities, will be deemed a payment of the principal of that subordinated debt
security.
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Legal Ownership
Street Name and Other Indirect Holders
Investors who hold debt securities in accounts at banks or brokers will
generally not be recognized by us as legal holders of debt securities. This is
called holding in street name. Instead, we would recognize only the bank or
broker, or the financial institution the bank or broker uses to hold its debt
securities. These intermediary banks, brokers and other financial institutions
pass along principal, interest and other payments on the debt securities, either
because they agree to do so in their customer agreements or because they are
legally required to do so. If you hold debt securities in street name, you
should check with your own institution to find out:
o how it handles debt securities payments and notices;
o whether it imposes fees or charges;
o how it would handle voting, if it were ever required;
o whether and how you can instruct it to send you debt securities
registered in your own name so you can be a direct holder as described
below; and
o how it would pursue rights under the debt securities if there were a
default or other event triggering the need for holders to act to
protect their interests.
Direct Holders
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by us or the trustee, under the debt securities run only
to persons who are registered as holders of debt securities. As noted above, we
do not have obligations to you if you hold in street name or other indirect
means, either because you choose to hold debt securities in that manner or
because the debt securities are issued in the form of global securities as
described below. For example, once we make payment to the registered holder we
have no further responsibility for the payment even if that holder is legally
required to pass the payment along to you as a street name customer but does not
do so.
Global Securities
What is a Global Security? A global security is a special type of indirectly
held security, as described above under "--Street Name and Other Indirect
Holders." If we choose to issue debt securities in the form of global
securities, the ultimate beneficial owners of global securities can only be
indirect holders. We require that the global security be registered in the name
of a financial institution we select.
We also require that the debt securities included in the global security not be
transferred to the name of any other direct holder unless the special
circumstances described in the section "Legal Ownership and Book-Entry Issuance"
below occur. The financial institution that acts as the sole direct holder of
the global security is called the depositary. Any person wishing to own a
security must do so indirectly by virtue of an account with a broker, bank or
other financial institution that in turn has an account with the depositary. The
prospectus supplement indicates whether your series of debt securities will be
issued only in the form of global securities.
Further details of legal ownership are discussed in the section "Legal Ownership
and Book-Entry Issuance."
In the remainder of this description "you" means direct holders and not street
name or other indirect holders of debt securities. Indirect holders should read
the previous subsection entitled "Street Name and Other Indirect Holders."
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Overview of Remainder of This Description
The remainder of this description summarizes:
o Additional mechanics relevant to the debt securities under normal
circumstances, such as how you transfer ownership and where we make
payments.
o Your rights under several special situations, such as if we merge with
another company or if we want to change a term of the debt securities.
o Covenants contained in the indentures that require us, or limit our
ability to perform various acts. A particular series of debt
securities may have additional covenants.
o Your rights if we default or experience other financial difficulties.
o Our relationship with the trustee.
Additional Mechanics
Exchange and Transfer
Unless otherwise provided in the prospectus supplement, debt securities will
have a minimum denomination of $1,000. You may have your debt securities divided
into more debt securities of smaller denominations, but not below the minimum
denomination, or combined into fewer debt securities of larger denominations, as
long as the total principal amount is not changed. This is called an exchange.
You may exchange or transfer your debt securities at the office of the trustee.
The trustee acts as our agent for registering debt securities in the names of
holders and transferring debt securities. We may change this appointment to
another entity or perform the service ourselves. The entity performing the role
of maintaining the list of registered holders is called the security registrar.
It will also register transfers of the debt securities.
You will not be required to pay a service charge to transfer or exchange debt
securities, but you may be required to pay for any tax or other governmental
charge associated with the exchange or transfer. The transfer or exchange of a
debt security will only be made if the security registrar is satisfied with your
proof of ownership.
If we designate additional transfer agents, they will be named in the prospectus
supplement. We may cancel the designation of any particular transfer agent. We
may also approve a change in the office through which any transfer agent acts.
If the debt securities are redeemable and we redeem less than all of the debt
securities of a particular series, we may block the transfer or exchange of debt
securities during a specified period of time in order to freeze the list of
holders to prepare the mailing. The period begins 15 days before the day we mail
the notice of redemption and ends on the day of that mailing. We may also refuse
to register transfers or exchanges of debt securities selected for redemption.
However, we will continue to permit transfers and exchanges of the unredeemed
portion of any security being partially redeemed.
Payment and Paying Agents
We will pay interest to you if you are a direct holder listed in the trustee's
records at the close of business on a particular day in advance of each due date
for interest, even if you no longer own the security on the interest due date.
That particular day, usually about two weeks in advance of the interest due
date, is called the regular record date and is stated in the prospectus
supplement.
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We will pay interest, principal and any other money due on the debt securities
at the corporate trust office of the trustee in New York City. You must make
arrangements to have your payments picked up at or wired from that office. We
may also choose to pay interest by mailing checks.
Interest on global securities will be paid to the holder of the securities by
wire transfer of same-day funds.
Holders buying and selling debt securities must work out between them how to
compensate for the fact that we will pay all the interest for an interest period
to the one who is the registered holder on the regular record date. The most
common manner is to adjust the sales price of the debt securities to pro rate
interest fairly between buyer and seller. This pro rated interest amount is
called accrued interest.
Street name and other indirect holders should consult their banks or brokers for
information on how they will receive payments.
We may also arrange for additional payment offices, and may cancel or change
these offices, including our use of the trustee's corporate trust office. These
offices are called paying agents. We may also choose to act as our own paying
agent. We must notify the trustee of changes in the paying agents for any
particular series of debt securities.
Notices
We and the trustee will send notices only to direct holders, using their
addresses as listed in the trustee's records.
Regardless of who acts as paying agent, all money that we pay to a paying agent
that remains unclaimed at the end of two years after the amount is due to direct
holders will be repaid to us. After that two-year period, you may look only to
us for payment and not to the trustee, any other paying agent or anyone else.
Special Situations
Mergers and Similar Events
We will generally not be permitted to consolidate with or merge into, or
transfer all or substantially all of our assets to, any person unless:
o either (a) we survive the transaction or (b) the person that survived
the transaction (if other than us) is organized under the laws of the
United States of America or a State thereof or the District of
Columbia;
o the person that survives the transaction (if other than us) assumes by
supplemental indenture all our obligations under and the performance
and observance of every covenant of the indenture, the debt securities
and any other agreements entered into in connection therewith; and
o immediately after giving effect to the transaction, no default or
event of default under the indenture exists.
We will also be required to deliver to the trustee prior to the consummation of
the proposed transaction an officers' certificate to the foregoing effect and an
opinion of counsel stating that the proposed transaction and such supplemental
indenture comply with the indenture.
The successor shall be substituted for us, and thereafter all our obligations
under the indenture and the debt securities shall terminate.
Modification and Waiver
There are three types of changes we can make to the indentures and the debt
securities.
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Changes Requiring Your Approval. First, there are changes that cannot be made to
your debt securities without your specific approval. Following is a list of
those types of changes that require the approval of each holder of debt
securities:
o reduce the amount of debt securities whose holders must consent to an
amendment;
o reduce the interest on or change the time for payment of interest on
any debt security;
o change the fixed maturity of any debt security;
o reduce the principal of any non-discounted debt security or reduce the
amount of principal of any discounted debt security that would be due
upon an acceleration thereof;
o change the currency in which principal or interest on a debt security
is payable;
o make any change in provisions relating to waivers of defaults and
amendments, except to increase the amount of debt securities whose
holders must consent to an amendment or waiver or to provide that
other provisions of the indenture cannot be amended or waived without
the consent of each holder of debt securities affected thereby;
o impair your right to sue for payment; or
o in the case of subordinated debt securities, modify the subordination
provisions in a manner adverse to the holders.
Changes Requiring a Majority Approval. The second type of change to the
indentures and the debt securities is the kind that requires an approval by
holders of debt securities owning a majority of the principal amount of the
particular series affected. Most changes fall into this category. Majority
approval would be required for us to obtain a waiver of all or part of certain
covenants or a waiver of a past default. However, we cannot obtain a waiver of a
payment default or any other aspect of the indentures or the debt securities
listed in the first category described above under "--Changes Requiring Your
Approval" unless we obtain your individual consent to the waiver.
Changes Not Requiring Approval. The third type of change does not require any
approval by holders of debt securities. This type is limited to clarifications
and other changes that would not adversely affect holders of the debt securities
in any material respect.
Further Details Concerning Votes and Consents
When seeking approval, we will use the following rules to determine whether the
holders of the requisite principal amount of the outstanding securities have
given, made or taken any action under the indenture as of any date:
o For original issue discount securities, we will use the amount of
principal that would be due as of the date of such determination if
payment of the debt security were accelerated on that date.
o For debt securities whose principal amount is not known (for example,
because it is based on an index), we will use a special rule for that
security described in the prospectus supplement.
o For debt securities denominated in one or more foreign currencies or
currency units, we will use the U.S. dollar equivalent determined as
described in the prospectus supplement.
o Debt securities will not be considered outstanding, and therefore not
eligible to vote, if we have deposited or set aside in trust for you
money for their payment or redemption, if they have been fully
defeased as described later under "--Defeasance and Discharge" or if
they are owned by us or any of our affiliates.
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o We will generally be entitled to set any day as a record date to
determine the holders of outstanding debt securities that are entitled
to vote or take other action under the indentures. In limited
circumstances, the trustee will be entitled to set a record date for
action by holders. If we or the trustee set a record date for a vote
or other action to be taken by holders of a particular series, that
vote or action may be taken only by persons who are holders of
outstanding debt securities of that series on the record date and must
be taken within 180 days following the record date or another period
that we may specify, or as the trustee may specify if it sets the
record date. We may shorten or lengthen, but not beyond 180 days, this
period from time to time.
Street name and other indirect holders should consult their banks or brokers for
information on how approval may be granted or denied if we seek to change the
indentures or the debt securities or request a waiver.
Defeasance and Discharge
The following discussion of full defeasance and discharge will apply to your
series of debt securities only if we choose to have them apply to that series.
If we do so choose, we will say so in the prospectus supplement.
The indentures provide that if we choose to have the defeasance and discharge
provision applied to the debt securities, we can legally release ourselves from
any payment or other obligations on the debt securities, except for the
ministerial obligations described below, if we put in place the following
arrangements for you to be repaid and comply with other requirements set forth
in the indentures:
o we irrevocably deposit in trust with the trustee or another trustee
money or U.S. government obligations;
o we deliver to the trustee a certificate from a nationally recognized
firm of independent accountants expressing their opinion that the
payments of principal and interest when due on the deposited U.S.
government obligations without reinvestment plus any deposited money
without investment will provide cash at such times and in such amounts
as will be sufficient to pay principal and interest when due on all
the debt securities of the series to maturity or redemption, as the
case may be;
o immediately after the deposit no default exists under the indenture;
o the deposit does not constitute a default under any other agreement
binding on us; and
o we deliver to the trustee an opinion of counsel to the effect that
holders of the debt securities will not recognize income, gain or loss
for Federal income tax purposes as a result of the defeasance and, in
the case of legal defeasance, such opinion must be based on a U.S.
Internal Revenue Service ruling or a change in U.S. Federal income tax
law.
In addition, the subordinated debt indenture provides that if we choose to have
the defeasance and discharge provision applied to the subordinated debt
securities, the subordination provisions of the subordinated debt indenture will
become ineffective.
However, even if we make the deposit in trust and opinion delivery arrangements
discussed above, a number of our obligations relating to the debt securities
will remain. These include our obligations:
o to register the transfer and exchange of debt securities;
o to replace mutilated, destroyed, lost or stolen debt securities;
o to maintain paying agencies; and
o to hold money for payment in trust.
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Events of Default
You will have special rights if an event of default occurs and is not cured, as
described later in this subsection.
What Is an Event of Default?
The term "event of default" means any of the following:
o we default in the payment of interest on the debt security when the
same becomes due and payable and the default continues for a period of
30 days;
o default in the payment of the principal of the debt security when the
same becomes due and payable at maturity, upon redemption or
otherwise, or in the making of any sinking fund payment, if any,
required by the terms of such series;
o we fail to comply with any of our other covenants, conditions or
agreements in the debt securities or the indenture and the default
continues for the period and after the notice specified below;
o we, pursuant to or within the meaning of any bankruptcy law:
(a) commence a voluntary case,
(b) consent to the entry of an order for relief against us in an
involuntary case,
(c) consent to the appointment of a custodian of our or for all or
substantially all of our property, or
(d) make a general assignment for the benefit of our creditors;
o a court of competent jurisdiction enters an order or decree under any
bankruptcy law that:
(a) is for the relief against us in an involuntary case,
(b) appoints a custodian for us or all or substantially all of our
property, or
(c) orders our liquidation, and the order or decree remains unstayed
and in effect for 90 days.
o If we default under any indebtedness for money borrowed if:
(a) that default either (1) results from the failure to pay the
principal of that indebtedness at its stated maturity or (2)
relates to an obligation other than the obligation to pay the
principal of that indebtedness at its stated maturity and results
in that indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and
payable,
(b) the principal amount of that indebtedness, together with the
principal amount of any other indebtedness in default for failure
to pay principal at stated maturity or the maturity of which has
been so accelerated, aggregates $10,000,000 or more at any one
time outstanding.
o We are subject to a final judgment or judgments in an amount of
$10,000,000 or more, individually or in the aggregate, for the payment
of money having been entered by a court or courts of competent
jurisdiction and such judgment or judgments is not satisfied, stayed,
annulled or rescinded within 60 days of being entered; or
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o any other event of default described in the prospectus supplement
occurs.
Remedies if an Event of Default Occurs. If an event of default other than those
described in the fourth or fifth bullet point above has occurred and has not
been cured, the trustee or the holders of at least 25% in principal amount of
the debt securities of the affected series may declare the entire principal
amount of all the debt securities of that series to be due and immediately
payable. This is called a declaration of acceleration of maturity. A declaration
of acceleration of maturity may be canceled by the holders of at least a
majority in principal amount of the debt securities of the affected series. If
any event of default described in the fourth or fifth bullet point above occurs,
the entire principal amount of all the debt securities of that series shall
automatically, and without any declaration or other action on the part of the
trustee or any holder, become immediately due and payable.
Except in cases of default, where the trustee has some special duties, the
trustee is not required to take any action under the indentures at the request
of any holders unless the holders offer the trustee reasonable protection from
expenses and liability. This protection is called an indemnity. If reasonable
indemnity is provided, the holders of a majority in principal amount of the
outstanding debt securities of the relevant series may direct the time, method
and place of conducting any lawsuit or other formal legal action seeking any
remedy available to the trustee. These majority holders may also direct the
trustee in performing other actions under the indentures.
Before you bypass the trustee and bring your own lawsuit or other formal legal
action or take other steps to enforce your rights or protect your interests
relating to the debt securities, the following must occur:
o You must give to the trustee written notice of a continuing event of
default with respect to such series;
o The holders of at least 25% in principal amount of the outstanding
debt securities of the relevant series must make a written request to
the trustee to pursue the remedy with respect to such series;
o You must offer to the trustee indemnity satisfactory to the trustee
against any loss, liability or expense;
o The trustee must not have complied with the request within 60 days
after receipt of the request and the offer of indemnity; and
o No inconsistent direction must have been given to the trustee during
the 60 day period from the holders of a majority in principal amount
of the outstanding debt securities of the relevant series.
Street name and other indirect holders should consult their banks or brokers for
information on how to give notice or direction to or make a request of the
Trustee and to make or cancel a declaration of acceleration.
We will furnish to the trustee every year a written statement from some of our
designated officers certifying that, to their knowledge, we are in compliance
with the indentures and the debt securities, or else specifying any default.
DESCRIPTION OF PREFERRED STOCK WE MAY OFFER
This section describes the general terms and provisions of the preferred stock
we may offer. This information may not be complete in all respects and is
qualified entirely by reference to our amended and restated certificate of
incorporation. The specific terms of any series will be described in a
prospectus supplement. Those terms may differ form the terms discussed below.
Any series of preferred stock we issue will be governed by our amended and
restated certificate of incorporation, and by the certificate of designations
relating to that series. We will file the certificate of designations with the
SEC and incorporate it by reference as an exhibit to our registration statement
at or before the time we issue any preferred stock of that series. For
information on how to obtain copies of our amended and restated certificate of
incorporation and amended and restated by-laws, see "Where You Can Obtain More
Information."
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Authorized Preferred Stock
Our amended and restated certificate of incorporation authorizes our board of
directors, without any vote or action by the holders of common stock, to issue
up to 25,000,000 shares of preferred stock from time to time in one or more
series. Our board of directors is authorized to determine the number of shares
and designation of any additional series of preferred stock and the dividend
rights, dividend rate, conversion rights and terms, voting rights, redemption
rights and terms, liquidation preferences, sinking fund terms and other rights,
preferences, privileges and restrictions of any series of preferred stock.
Issuances of preferred stock would be subject to the applicable rules of the
NYSE or other organizations whose systems the stock may then be quoted or listed
on. Depending upon the terms of preferred stock established by our board of
directors, any or all series of preferred stock could have preferences over the
common stock with respect to dividends and other distributions and upon
liquidation. Issuance of any such shares with voting powers, or issuance of
additional shares of common stock, would dilute the voting power of the
outstanding common stock. There are currently no shares of preferred stock
outstanding.
Specific Terms of a Series of Preferred Stock
The preferred stock we may offer will be issued in one or more series. Shares of
preferred stock, when issued against full payment of its purchase price, will be
fully paid and nonassessable. Their par value or liquidation preference,
however, will not be indicative of the price at which they will actually trade
after their issue. If necessary, the prospectus supplement will provide a
description of U.S. Federal income tax consequences relating to the purchase and
ownership of the series of preferred stock offered by that prospectus
supplement.
The preferred stock will have the dividend, liquidation, redemption and voting
rights discussed below, unless otherwise described in a prospectus supplement
relating to a particular series. A prospectus supplement will discuss the
following features of the series of preferred stock to which it relates:
o the designations and stated value per share;
o the number of shares offered;
o the amount of liquidation preference per share;
o the initial public offering price at which the preferred stock will be
issued;
o the dividend rate, the method of its calculation, the form of payment
of dividends, the dates on which dividends would be paid and the
dates, if any, from which dividends would cumulate;
o any redemption or sinking fund provisions;
o any conversion or exchange rights; and
o any additional voting, dividend, liquidation, redemption, sinking fund
and other rights, preferences, privileges, limitations and
restrictions.
Rank
Unless otherwise stated in the prospectus supplement, the preferred stock will
have priority over our common stock with respect to dividends and distribution
of assets, but will rank junior to all our outstanding indebtedness for borrowed
money. Any series of preferred stock could rank senior, equal or junior to our
other capital stock, as may be specified in a prospectus supplement, as long as
our amended and restated certificate of incorporation so permits.
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Dividends
Holders of each series of preferred stock shall be entitled to receive dividends
to the extent and in the form specified in the prospectus supplement, when, as
and if declared by our board of directors, from funds legally available for the
payment of dividends. The rates, form and dates of payment of dividends of each
series of preferred stock will be stated in the prospectus supplement. Dividends
will be payable to the holders of record of preferred stock as they appear on
our books on the record dates fixed by our board of directors. Dividends on any
series of preferred stock may be cumulative or non-cumulative, as discussed in
the prospectus supplement.
Convertibility
Shares of a series of preferred stock may be exchangeable or convertible into
shares of our common stock, another series of preferred stock or other
securities or property. The conversion or exchange may be mandatory or optional.
The prospectus supplement will specify whether the preferred stock being offered
has any conversion or exchange features, and will describe all the related terms
and conditions.
Redemption
The terms, if any, on which shares of preferred stock of a series may be
redeemed will be discussed in the prospectus supplement.
Liquidation
Upon any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of Vail Resorts, holders of each series of preferred stock will be
entitled to receive distributions upon liquidation in the amount described in
the related prospectus supplement plus an amount equal to any accrued and unpaid
dividends for the then-current dividend period (including any accumulation in
respect of unpaid dividends for prior dividend periods, if dividends on that
series of preferred stock are cumulative). These distributions will be made
before any distribution is made on any securities ranking junior to the
preferred stock with respect to liquidation, including our common stock. If the
liquidation amounts payable relating to the preferred stock of any series and
any other securities ranking on a parity regarding liquidation rights are not
paid in full, the holders of the preferred stock of that series will share
ratably in proportion to the full liquidation preferences of each security.
Holders of our preferred stock will not be entitled to any other amounts from us
after they have received their full liquidation preference.
Voting Rights
The holders of shares of preferred stock will have no voting rights, except:
o as otherwise stated in the applicable prospectus supplement;
o as otherwise stated in the certificate of designations establishing
the series; or
o as required by applicable law.
No Other Rights
The shares of a series of preferred stock will not have any preferences, voting
powers or relative, participating, optional or other special rights except:
o as discussed above or in the prospectus supplement;
o as provided in our amended and restated certificate of incorporation
and in the certificate of designations; and
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o as otherwise required by law.
Transfer Agent
The transfer agent for each series of preferred stock will be named and
described in the prospectus supplement for that series.
DESCRIPTION OF COMMON STOCK WE MAY OFFER
The following summary description of our common stock is based on the provisions
of our amended and restated certificate of incorporation and amended and
restated by-laws and the applicable provisions of the Delaware General
Corporation Law. This information may not be complete in all respects and is
qualified entirely by reference to the provisions of our amended and restated
certificate of incorporation, amended and restated by-laws and the Delaware
General Corporation Law. For information on how to obtain copies of our amended
and restated certificate of incorporation and amended and restated by-laws, see
"Where You Can Find More Information."
We may offer common stock, including common stock issuable upon the conversion
of debt securities or preferred stock or as payment of dividends on, or
redemption or repurchase of, preferred stock.
Common Stock
Our authorized capital stock consists of 20,000,000 shares of Class A common
stock, par value $0.01 per share and 80,000,000 shares of common stock, par
value $0.01 per share. As of February 2, 2004, there were approximately
7,439,834 shares of Class A common stock and 27,859,651 shares of common stock
issued and outstanding held by approximately three stockholders and 5,200
stockholders respectively. The following description of our capital stock and
provisions of our amended and restated certificate of incorporation and amended
and restated by-laws are only summaries, and we encourage you to review complete
copies of our amended and restated certificate of incorporation and amended and
restated by-laws, which we have filed previously with the SEC.
All outstanding shares of common stock and Class A common stock are validly
issued, fully paid and non-assessable. The rights of holders of Class A common
stock and common stock are substantially identical, except that, while any Class
A common stock is outstanding, holders of Class A common stock elect a class of
directors that constitutes two-thirds of our board and holders of common stock
elect another class of directors constituting one-third of our board. The Class
A common stock is convertible into common stock (i) at the option of the holder,
(ii) automatically, upon transfer to a non-affiliate and (iii) immediately upon
the occurrence of an event which results in the number of shares of Class A
common stock outstanding falling below 5,000,000 (as such number shall be
adjusted by reason of any stock split, reclassification or other similar
transaction). The common stock is not convertible. Subject to the prior rights
of the holders of any preferred stock, the holders of outstanding shares of
common stock and Class A common stock are entitled to receive dividends out of
assets legally available therefor at such times and in such amounts as our board
of directors may from time to time determine. The holders of shares of common
stock and Class A common stock will have no preemptive or subscription rights to
purchase any of our securities. In the event of our liquidation, dissolution,
winding up or distribution of our assets, the holders of common stock and Class
A common stock are entitled to receive pro rata the assets which are legally
available for distribution, after payment of all debts and other liabilities and
subject to the prior rights of any holders of preferred stock, if any, then
outstanding. Each outstanding share of common stock and Class A common stock is
entitled to vote on all matters submitted to a vote of stockholders.
Delaware Law and Certain Provisions of our Certificate of Incorporation and
By-Laws
Statutory Provisions. We are a Delaware corporation and are subject to Section
203 of the Delaware General Corporation Law ("Delaware Law"). In general,
Section 203 prevents an "interested stockholder" (defined generally as a person
owning 15% or more of a corporation's outstanding voting stock) from engaging in
a "business combination" (as defined) with a Delaware corporation for three
years following the time such person became an interested stockholder unless (i)
prior to the time such person became an interested stockholder, the board of
directors of the corporation approved the transaction in which the interested
stockholder became an interested stockholder or ap-
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proved the business combination, (ii) upon consummation of the transaction that
resulted in the interested stockholder becoming an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding (1) shares owned by
persons who are both officers and directors of the corporation and (2) held by
certain employee stock ownership plans) or (iii) at or subsequent to the time
the business combination is approved by the board of directors of the
corporation and authorized at a meeting of stockholders, and not by written
consent, by the affirmative vote of at least two-thirds of the outstanding
voting stock of the corporation not owned by the interested stockholder.
Directors Liability and Indemnification. Our Amended and Restated Certificate of
Incorporation (the "Certificate") provides that to the fullest extent permitted
by the Delaware General Corporation Law or other applicable law, directors shall
not be liable to us or our stockholders for monetary damages for breach of
fiduciary duty as a director. Under current Delaware Law, liability of a
director may not be limited (i) for any breach of the director's duty of loyalty
to us or our stockholders, (ii) for acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii) in respect
of certain unlawful dividend payments or stock redemptions or repurchases and
(iv) for any transaction from which the director derives an improper personal
benefit. The effect of the provision of the Certificate is to eliminate our
rights and our stockholders rights (through stockholders' derivative suits on
our behalf) to recover monetary damages against a director for breach of the
fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) through (iv) above. This provision does not limit or eliminate our
rights or any right of our stockholders to seek non-monetary relief such as an
injunction or rescission in the event of a breach of a director's duty of care.
In addition, our bylaws provide that we shall indemnify our directors, officers
and employees to the fullest extent permitted by applicable law.
Advance Notice Provisions for Stockholder Nominations and Stockholder Proposals.
Our by-laws establish an advance notice procedure for stockholders to make
nominations of candidates for election as director, or to bring other business
before an annual meeting of our stockholders (the "Stockholder Notice
Procedure").
The Stockholder Notice Procedure provides that only persons who are nominated
by, or at the direction of, our board, or by a stockholder who has given timely
written notice to our principal executive offices prior to the meeting at which
directors are to be elected, will be eligible for election as directors. The
Stockholder Notice Procedure provides that at an annual meeting only such
business may be conducted as has been properly brought before the meeting by, or
at the direction of, our board or by a stockholder who has given timely written
notice to our principal executive offices of such stockholder's intention to
bring such business before such meeting. Under the Stockholder Notice Procedure,
to be timely, notice of stockholder nominations or proposals to be made at an
annual or special meeting must be received by us not less than 30 days prior to
the scheduled date of the meeting (or, if less than 60 days' notice of the date
of the meeting is given, the 9th day following the day such notice was made).
Under the Stockholder Notice Procedure, a stockholder's notice to us proposing
to nominate a person for election as a director must contain certain information
about the nominating stockholder and the proposed nominee. Under the Stockholder
Notice Procedure, a stockholder's notice relating to the conduct of business
other than the nomination of directors must contain certain information about
such business and about the proposing stockholder. If the officer presiding at a
meeting determines that a person was not nominated, or other business was not
properly brought before the meeting, in accordance with the Stockholder Notice
Procedure, such person will not be eligible for election as a director, or such
business will not be transacted at such meeting, as the case may be.
By requiring advance notice of nominations by stockholders, the Stockholder
Notice Procedure affords our board an opportunity to consider the qualifications
of the proposed nominees and, to the extent deemed necessary or desirable by our
board, to inform stockholders about such qualifications. By requiring advance
notice of other proposed business, the Stockholder Notice Procedure also
provides a more orderly procedure for conducting annual meetings of stockholders
and, to the extent deemed necessary or desirable by our board, provides our
board with an opportunity to inform stockholders, prior to such meetings, of any
business proposed to be conducted at such meetings, together with any
recommendations as to our board's position regarding action to be taken with
respect to such business, so that stockholders can better decide whether to
attend such a meeting or to grant a proxy regarding the disposition of any such
business.
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Although our by-laws do not give our board any power to approve or disapprove
stockholder nominations for the election of directors or proposals for action,
the foregoing provisions may have the effect of precluding a contest for the
election of directors or the consideration of stockholder proposals if the
proper procedures are not followed, and of discouraging or deferring a third
party from conducting a solicitation of proxies to elect its own slate of
directors or to approve its own proposal, without regard to whether
consideration of such nominees or proposals might be harmful or beneficial to us
and our stockholders.
Written Consent of Stockholders. Our by-laws provide that stockholders may
consent to corporate action by written consent without a meeting. Any
stockholder of record seeking to have the stockholders authorize or take
corporate action by written consent shall, by written notice to our secretary,
request that our board of directors fix a record date. Written consents shall be
delivered to us by delivery to our registered office in Delaware, our principal
place of business, or to any of our officers or agents having custody of the
book in which proceedings of meetings of stockholders are recorded, by hand or
by certified or registered mail, return receipt requested (the "Delivery
Requirements"). We will engage independent inspectors of elections for the
purpose of performing promptly a ministerial review of the validity of the
consents and revocations. For the purpose of permitting the inspectors to
perform such review, no action by written consent without a meeting shall be
effective until such date as the independent inspectors certify to us that the
consents delivered to us in accordance with the Delivery Requirements represent
at least the minimum number of votes that would be necessary to take the
corporate action. Our board of directors or any stockholder shall not be
entitled to contest the validity of any consent or revocation thereof, whether
before or after such certification by the independent inspectors, or to take any
other action (including, without limitation, the commencement, prosecution or
defense of any litigation with respect thereto, and the seeking of injunctive
relief in such litigation). The written consents shall be effective to take the
corporate action referred to therein only if, within sixty (60) days of the
earliest dated written consent received in accordance with the Delivery
Requirements, a written consent or consents signed by a sufficient number of
holders to take action are delivered to us pursuant to the Delivery
Requirements.
Certain Effects of Authorized but Unissued Stock. There are 12,560,166 shares of
Class A common stock authorized but unissued, 52,164,958 shares of common stock
authorized but unissued (and not reserved for issuance upon conversion of the
Class A common stock or exercise of options), and 25,000,000 shares of preferred
stock authorized but unissued, for future issuance without additional
stockholder approval. These additional shares may be utilized for a variety of
corporate purposes, including future offerings to raise additional capital or to
facilitate corporate acquisitions.
The issuance of preferred stock could have the effect of delaying or preventing
a change in our control. The issuance of preferred stock could decrease the
amount of earnings and assets available for distribution to the holders of
common stock or could adversely affect the rights and powers, including voting
rights, of the holders of the common stock. In certain circumstances, such
issuance could have the effect of decreasing the market price of the common
stock.
One of the effects of the existence of unissued and unreserved common stock or
preferred stock may be to enable our board to issue shares to persons friendly
to current management, which could render more difficult or discourage an
attempt to obtain control of us by means of a merger, tender offer, proxy
contest or otherwise, and thereby protect the continuity of management. Such
additional shares also could be used to dilute the stock ownership of persons
seeking to obtain control of us.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the common stock is Wells Fargo Bank
Minnesota, N.A.
In the event of our liquidation, dissolution or winding up, holders of common
stock are entitled to share ratably in the assets available for distribution,
subject to any prior rights of any holders of preferred stock, if any, then
outstanding.
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LEGAL OWNERSHIP AND BOOK-ENTRY ISSUANCE
Unless otherwise mentioned in the prospectus supplement, securities will be
issued in the form of one or more global certificates, or global securities,
registered in the name of a depositary or its nominee. Unless otherwise
mentioned in the prospectus supplement, the depositary will be The Depository
Trust Company, commonly referred to as DTC. DTC has informed us that its nominee
will be Cede & Co. Accordingly, we expect Cede & Co. to be the initial
registered holder of all securities that are issued in global form. No person
that acquires a beneficial interest in those securities will be entitled to
receive a certificate representing that person's interest in the securities
except as mentioned below or in the prospectus supplement. Unless definitive
securities are issued under the limited circumstances described below,
o all references in this prospectus to actions by holders of securities
issued in global form refer to actions taken by DTC upon instructions
from its participants; and
o all references to payments and notices to holders refer to payments
and notices to DTC or Cede & Co., as the registered holder of these
securities.
DTC has informed us that it is a limited purpose trust company organized under
the New York Banking Law, a banking organization within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a clearing corporation
within the meaning of the New York Uniform Commercial Code, and a clearing
agency registered under Section 17A of the Securities Exchange Act of 1934, as
amended, and that it was created to hold securities for its participating
organizations and to facilitate clearance and settlement of securities
transactions among its participants through electronic book-entry. This
eliminates the need for physical movement of certificates. DTC's participants
include securities brokers and dealers, banks, trust companies and clearing
corporations. Indirect access to the DTC system also is available to others,
such as banks, brokers, dealers and trust companies, that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly.
Persons that are not participants or indirect participants but desire to
purchase, sell or otherwise transfer ownership of, or other interests in,
securities may do so only through participants and indirect participants. Under
a book-entry format, holders may experience some delay in their receipt of
payments, as these payments will be forwarded by our designated agent to Cede &
Co., as nominee for DTC. DTC will forward these payments to its participants,
who will then forward them to indirect participants or holders. Holders will not
be recognized by the relevant registrar, transfer agent, warrant agent or unit
agent as registered holders of the securities entitled to the benefits of our
amended and restated certificate of incorporation and/or the applicable
indenture, deposit agreement, warrant agreement, purchase contract agreement or
unit agreement. Beneficial owners that are not participants will be permitted to
exercise their rights only indirectly through and according to the procedures of
participants and, if applicable, indirect participants.
Under the rules, regulations and procedures governing DTC and its operations as
currently in effect, DTC will be required to make book-entry transfers of
securities among participants and to receive and transmit payments to
participants. DTC rules require participants and indirect participants with
which beneficial securities owners have accounts to make book-entry transfers
and receive and transmit payments on behalf of their respective account holders.
Because DTC can act only on behalf of participants, the ability of a beneficial
owner of securities issued in global form to pledge those securities to
non-participants may be limited due to the unavailability of physical
certificates for these securities. Beneficial owners may also be unable to sell
interests in their securities to some insurance companies and other institutions
that are required by law to own their securities in the form of physical
certificates.
DTC has advised us that it will take any action permitted to be taken by a
registered holder of any securities under its certificate of incorporation or
the relevant indenture, deposit agreement, warrant agreement, purchase contract
agreement or unit agreement only at the direction of one or more participants to
whose accounts with DTC those securities are credited.
Unless otherwise mentioned in the prospectus supplement, a global security will
be exchangeable for definitive securities registered in the names of persons
other than DTC or its nominee only if:
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o DTC notifies us that it is unwilling or unable to continue as
depositary for that global security or if DTC ceases to be a clearing
agency registered under the Exchange Act when it is required to be so
registered;
o we execute and deliver to the relevant registrar, transfer agent,
trustee, depositary, warrant agent and/or unit agent an order
complying with the requirements of our amended and restated
certificate of incorporation and amended and restated by-laws or the
relevant indenture, deposit agreement, warrant agreement, purchase
contract agreement and/or unit agreement that this global security
shall be so exchangeable; or
o there has occurred and is continuing a default in the payment of any
amount due in respect of the securities or, in the case of debt
securities, an event of default or an event that, with the giving of
notice or lapse of time, or both, would constitute an event of default
with respect to those debt securities.
In these circumstances, the global security will be exchangeable for securities
registered in the names that DTC directs.
DTC will generally not be required to notify its participants of the
availability of definitive securities. When DTC surrenders the global security
and delivers instructions for reregistration, the registrar, transfer agent,
trustee, depositary, warrant agent or unit agent, as the case may be, will
reissue the securities as definitive securities.
Except as described above, a global security may not be transferred except as a
whole to DTC or another nominee of DTC, or to a successor depositary we appoint.
Except as described above, DTC may not sell, assign, transfer or otherwise
convey any beneficial interest in a global security unless the beneficial
interest is in an amount equal to an authorized denomination for those
securities.
None of Vail Resorts, the trustees, any registrar and transfer agent, any
depositary, any warrant agent, any purchase contract agent or any unit agent, or
any of their agents, will have any responsibility for any aspect of DTC's or any
participant's records relating to, or for payments made on account of,
beneficial interests in a global security, or for maintaining, supervising or
reviewing any records relating to those beneficial interests.
VALIDITY OF SECURITIES
The validity of any securities will be passed upon for us by Cahill Gordon &
Reindel LLP.
EXPERTS
The consolidated financial statements and the related financial statement
schedule incorporated in this prospectus by reference to the Annual Report on
Form 10-K for the year ended July 31, 2003 have been so incorporated in reliance
on the report (which contains an explanatory paragraph for the restatement of
the financial statements for the years ended July 31, 2002 and 2001 as described
in Note 2 to the financial statements) of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are required to file annual, quarterly and special reports, proxy statements,
any amendments to those reports and other information with the SEC. You may read
and copy any documents filed by us with the SEC at the SEC's public reference
room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the public reference room. Reports,
proxy statements and information statements, any amendments to those reports and
other information filed electronically by us with the SEC are available to the
public at the SEC's website at http://www.sec.gov.
We have filed a registration statement on Form S-3 with the SEC relating to the
securities covered by this prospectus. This prospectus is a part of the
registration statement and does not contain all of the information in the
registration statement. Whenever a reference is made in this prospectus to a
contract or other document of Vail Resorts,
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please be aware that the reference is only a summary and that you should refer
to the exhibits that are a part of the registration statement for a copy of the
contract or other document. You may review a copy of the registration statement
at the SEC's public reference room in Washington, D.C., as well as through the
SEC's website.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC's rules allow us to "incorporate by reference" information into this
prospectus. This means that we can disclose important information to you by
referring you to another document. Any information referred to in this way is
considered part of this prospectus from the date we file that document. Any
reports filed by us with the SEC under Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of the initial filing of the registration statement
of which this prospectus forms a part and prior to the effectiveness of such
registration statement, as well as any such reports filed by us with the SEC
after the date of this prospectus and before the date that the offering of the
securities is terminated will automatically update and, where applicable,
supersede any information contained in this prospectus or incorporated by
reference in this prospectus.
We incorporate by reference into this prospectus the following documents filed
with the SEC:
o Our Annual Report on Form 10-K for the year ended July 31, 2003.
o Our Quarterly Report on Form 10-Q for the quarter ended October 31,
2003.
o Our Current Report on Form 8-K filed February 2, 2004.
o Proxy Statement for our 2003 Annual Meeting of Shareholders.
We will provide a copy of the documents we incorporate by reference, at no cost,
to any person who receives this prospectus, including any beneficial owner of
our common stock. To request a copy of any or all of these documents, you should
write or telephone us at the following address and telephone number:
Vail Resorts, Inc.
Post Office Box 7
Vail, Colorado 81658
Telephone: (970) 845-2500
Attention: Investor Relations
http://www.vailresorts.com
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a statement of estimated expenses, other than underwriting
discounts and commissions (all of which are estimated other than the SEC
registration fee), to be incurred by the Registrant in connection with the
distribution of the securities registered under this registration statement.
Estimated Amounts
SEC Securities Act registration fee $12,670
Trustee's fees and expenses $25,000
Legal fees $100,000
Accountant's fees $10,000
Printing expenses $50,000
Miscellaneous $10,000
Total $207,670
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the "DGCL") makes provision
for the indemnification of officers and directors of corporations in terms
sufficiently broad to indemnify the officers and directors of the registrant
under certain circumstances for liabilities (including reimbursement of expenses
incurred) arising under the Securities Act.
The Company's Amended and Restated Certificate of Incorporation (the
"Certificate") provides that to the fullest extent permitted by Delaware Law or
another applicable law, a director of the Company shall not be liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty as
a director. Under current Delaware Law, liability of a director may not be
limited (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or purchases and (iv)
for any transaction from which the director derives an improper personal
benefit. The effect of the provision of the Certificate is to eliminate the
rights of the Company and its stockholders (through stockholders' derivative
suits on behalf of the Company) to recover monetary damages against a director
for breach of the fiduciary duty of care as a director (including breaches
resulting from negligent or grossly negligent behavior) except in the situations
described in clauses (i) through (iv) above. This provision does not limit or
eliminate the rights of the Company or any stockholder to seek non-monetary
relief such as an injunction or rescission in the event of a breach of a
director's duty of care. In addition, the Company's Restated Bylaws (the
"Bylaws") provide that the Company shall indemnify its directors, officers and
employees to the fullest extent permitted by applicable law.
The Bylaws provide that the Company may indemnify any person who is or was
involved in any manner or is threatened to be made so involved in any
threatened, pending or completed investigation, claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative (including
any action, suit or proceeding by or in the right of the registrant to procure a
judgment in its favor), by reason of the fact that he is or was or had agreed to
become a director, officer or employee of the registrant or is or was or had
agreed to become at the request of the board or an officer of the registrant a
director, officer or employee of another corporation, partnership, joint
venture, trust or other entity against all expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such proceeding.
II-1
Item 16. Exhibits.
1.1* Form of Underwriting Agreement.
4.1 Shareholder Agreement among Vail Resorts, Inc., Ralston Foods, Inc., and
Apollo Ski Partners, L.P. dated January 3, 1997. (Incorporated by reference
to Exhibit 2.4 of the report on Form 8-K of Vail Resorts, Inc. dated
January 8, 1997.)
4.2 First Amendment to the Shareholder Agreement dated as of November 1, 1999,
among Vail Resorts, Inc., Ralcorp Holdings, Inc. (f/k/a Ralston Foods,
Inc.) and Apollo Ski Partners, L.P. (Incorporated by reference to Exhibit
10.17(b) of the report on Form 10-Q of Vail Resorts, Inc. for the quarter
ended January 31, 2000.)
4.3* Form of Senior Indenture.
4.4* Form of Subordinated Indenture.
4.5* Form of Senior Debt Security.
4.6* Form of Subordinated Debt Security.
5.1 Opinion of Cahill Gordon & Reindel LLP.
12.1 Statement of Computation of Ratio of Earnings to Fixed Charges.
23.1 Consent of Independent Accountants.
23.2 Consent of Cahill Gordon & Reindel LLP (contained in Exhibit 5.1).
24.1 Powers of Attorney.
25.1* Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
the Trustee under the Senior Indenture.
25.2* Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
the Trustee under the Subordinated Indenture.
- -----------------
*To be filed by amendment
Item 17. Undertakings.
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 (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in the volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
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% 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 the registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (1)(i) and (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 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.
II-2
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(4) 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.
(5) Insofar as indemnification for liabilities under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
In the event that a claim of 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 a 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 of whether such indemnification by it
is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
(6) The undersigned registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee
to act under subsection (a) of section 310 of the Trust Indenture Act
("Act") in accordance with the rules and regulations prescribed by the
Commission under section 305(b)(2) of the Act.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of New York, State of New
York, on the 6th day of February, 2004.
VAIL RESORTS, INC.
By: /s/ JEFFREY W. JONES
---------------------------------------------
Name: Jeffrey W. Jones
Title: Chief Financial Officer and
Senior Vice President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
------------------------------ ----------------------------------------------- -------------------
/S/ADAM M. ARON Chairman of the Board, Chief Executive Officer February 6, 2004
------------------------------ and Director (Principal Executive Officer)
Adam M. Aron
/S/JEFFREY W. JONES Senior Vice President and Chief Financial February 6, 2004
------------------------------ Officer (Principal Financial Officer)
Jeffrey W. Jones
/S/FRANK BIONDI* Director February 6, 2004
------------------------------
Frank Biondi
/S/JOHN J. HANNAN* Director February 6, 2004
------------------------------
John J. Hannan
/S/JOHN R. HAUGE* Director February 6, 2004
------------------------------
John R. Hauge
/S/ROLAND A. HERNANDEZ* Director February 6, 2004
------------------------------
Roland A. Hernandez
/S/ROBERT A. KATZ* Director February 6, 2004
------------------------------
Robert A. Katz
/S/THOMAS H. LEE* Director February 6, 2004
------------------------------
Thomas H. Lee
/S/WILLIAM L. MACK* Director February 6, 2004
------------------------------
William L. Mack
/S/JOE R. MICHELETTO* Director February 6, 2004
------------------------------
Joe R. Micheletto
/S/JOHN F. SORTE* Director February 6, 2004
------------------------------
John F. Sorte
II-4
/S/WILLIAM P. STIRITZ* Director February 6, 2004
------------------------------
William P. Stiritz
/S/JAMES S. TISCH* Director February 6, 2004
------------------------------
James S. Tisch
/S/JEFFREY W. JONES Attorney-in-Fact February 6, 2004
------------------------------
Jeffrey W. Jones
* By Attorney-in-Fact
II-5
Exhibit 5.1
[LETTERHEAD OF CAHILL GORDON & REINDEL LLP]
/
February 6, 2004
Vail Resorts, Inc.
Post Office Box 7
Vail, Colorado 81658
Re: Registration Statement on Form S-3
Ladies and Gentleman:
We have acted as counsel to Vail Resorts, Inc., a Delaware corporation (the
"Company") in connection with the Registration Statement on Form S-3 (the
"Registration Statement"), filed by the Company with the Securities and Exchange
Commission. The Registration Statement relates to the issuance and sale from
time to time, pursuant to Rule 415 of the rules and regulations promulgated
under the Securities Act of 1933, as amended (the "Act"), of the following
securities with an aggregate initial offering price of up to $100,000,000 as
shall be designated by the Company: (i) senior debt securities of the Company,
in one or more series (the "Senior Debt Securities"), which are to be issued
under a senior indenture proposed to be executed between the Company and a
trustee (the "Senior Indenture"), (ii) subordinated debt securities of the
Company, in one or more series (the "Subordinated Debt Securities"), which are
to be issued under a subordinated indenture proposed to be executed between the
Company and a trustee (the "Subordinated Indenture"), (iii) shares of common
stock of the Company, par value $0.01 per share (the "Common Stock"), and (iv)
shares of preferred stock of the Company (the "Preferred Stock"). The Senior
Debt Securities, the Subordinated Debt Securities, the Common Stock and the
Preferred Stock are referred to collectively as the "Securities" and
individually as a "Security."
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such corporate
records, documents, certificates and instruments as we deemed necessary and
appropriate to enable us to render the opinion expressed below.
In our examination, we have assumed (a) the authenticity of original
documents and the genuineness of all signatures, (b) the conformity to the
originals of all documents submitted to us as copies, (c) the truth, accuracy
and completeness of the information, representations and warranties contained in
the records, documents, instruments and certificates we have reviewed and (d)
the due authorization, execution and delivery of each document named below by
each party other than the Company.
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We advise you that, in our opinion:
(a) With respect to the shares of Common Stock, when (i) the
Registration Statement, as finally amended (including all necessary
post-effective amendments), has become effective under the Act; (ii) an
appropriate prospectus supplement or term sheet with respect to the Common
Stock has been prepared, delivered and filed in compliance with the Act and
the applicable rules and regulations promulgated thereunder; (iii) if the
Common Stock is to be sold pursuant to a firm commitment underwritten
offering, an underwriting agreement with respect to the Common Stock has
been duly authorized, executed and delivered by the Company and the other
parties thereto; (iv) the Board of Directors, including any appropriate
committee appointed thereby, and appropriate officers of the Company have
taken all necessary corporate action to approve the issuance of the Common
Stock and related matters; (v) the terms of the issuance and sale of the
Common Stock have been duly established in conformity with the Amended and
Restated Certificate of Incorporation and the Amended and Restated By-laws
of the Company so as not to violate any applicable law, the Amended and
Restated Certificate of Incorporation or the Amended and Restated By-laws
of the Company or result in default under or breach of any agreement or
instrument binding upon the Company and so as to comply with any
requirement or restriction imposed by any court or governmental body having
jurisdiction over the Company; and (vi) certificates representing the
shares of Common Stock have been duly executed, countersigned, registered
and delivered upon payment of the agreed-upon consideration therefor
(provided that such consideration is not less than the par value thereof),
the shares of Common Stock (including any Common Stock duly issued upon
conversion of any other Security), when issued and sold in accordance with
the applicable underwriting agreement or any other duly authorized,
executed and delivered valid and binding purchase or agency agreement, will
be duly authorized, validly issued, fully paid and nonassessable.
(b) With respect to the shares of Preferred Stock, when (i) the
Registration Statement, as finally amended (including all necessary
post-effective amendments), has become effective under the Act; (ii) an
appropriate prospectus supplement or term sheet with respect to the
Preferred Stock has been prepared, delivered and filed in compliance with
the Act and the applicable rules and regulations promulgated thereunder;
(iii) if the Preferred Stock is to be sold pursuant to a firm commitment
underwritten offering, an underwriting agreement with respect to the
Preferred Stock has been duly authorized, executed and delivered by the
Company and the other parties thereto; (iv) the Board of Directors,
including any appropriate committee appointed thereby, and appropriate
officers of the Company have taken all necessary corporate action to
approve the issuance and terms of the Preferred Stock and related matters,
including the adoption of a Certificate of Designation for the Preferred
Stock in accordance with the applicable provisions of Delaware law (the
"Certificate of Designation"); (v) the filing of the Certificate of
Designation with the Secretary of State of the State of Delaware has duly
occurred; (vi) the terms of the Preferred Stock and of their issuance and
sale have been duly established in conformity with the Company's Amended
and Restated Certificate of Incorporation, including the Certificate of
Designation related to the Preferred Stock, and the Amended and Restated
By-laws of the Company so as not to violate any applicable law, the Amended
and Restated Certificate of Incorporation or the Amended and Restated
By-laws of the Company or result in default under or breach of any
agreement or instrument binding upon the Company and so as to comply with
any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Company; and (vii) certificates representing
the shares of Preferred Stock have been duly executed, countersigned,
registered and delivered upon payment of the agreed-upon consideration
therefor (provided that such consideration is not less then the par value
thereof), the shares of Preferred Stock (including any Preferred Stock duly
issued upon conversion of any other Security), when issued and sold in
accordance with the applicable underwriting agreement or any other duly
authorized, executed and delivered valid and binding purchase or agency
agreement, will be duly authorized, validly issued, fully paid and
nonassessable.
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(c) With respect to the Senior Debt Securities, when (i) the
Registration Statement, as finally amended (including all necessary
post-effective amendments), has become effective under the Act; (ii) the
Senior Indenture has been duly authorized, executed and delivered by the
Company and the other parties thereto and duly qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"); (iii) an appropriate
prospectus supplement or term sheet with respect to the Senior Debt
Securities has been prepared, delivered and filed in compliance with the
Act and the applicable rules and regulations promulgated thereunder; (iv)
if the Senior Debt Securities are to be sold pursuant to a firm commitment
underwritten offering, an underwriting agreement with respect to the Senior
Debt Securities has been duly authorized, executed and delivered by the
Company and the other parties thereto; (v) the Board of Directors,
including any appropriate committee appointed thereby, and appropriate
officers of the Company have taken all necessary corporate action to
approve the issuance and terms of the Senior Debt Securities and related
matters; (vi) the terms of the Senior Debt Securities and their issuance
and sale have been duly established in conformity with the Senior Indenture
so as not to violate any applicable law, the Amended and Restated
Certificate of Incorporation or the Amended and Restated By-laws of the
Company or result in default under or breach of any agreement or instrument
binding upon the Company and so as to comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction
over the Company; and (vii) the Senior Debt Securities have been duly
executed and authenticated in accordance with the provisions of the Senior
Indenture and duly delivered to the purchasers thereof upon payment of the
agreed-upon consideration therefor, the Senior Debt Securities, when issued
and sold in accordance with the provisions of the Senior Indenture and in
accordance with the applicable underwriting agreement, if any, or any other
duly authorized, executed and delivered valid and binding purchase or
agency agreement, will constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms,
except as enforcement thereof may be limited by (a) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or other laws
now or hereafter in effect related to or affecting creditors' rights
generally and (b) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
(d) With respect to the Subordinated Debt Securities, when (i) the
Registration Statement, as finally amended (including all necessary
post-effective amendments), has become effective under the Act; (ii) the
Subordinated Indenture has been duly authorized, executed and delivered by
the Company and the other parties thereto and duly qualified under the TIA;
(iii) an appropriate prospectus supplement or term sheet with respect to
the Subordinated Debt Securities has been prepared, delivered and filed in
compliance with the Act and the applicable rules and regulations
promulgated thereunder; (iv) if the Subordinated Debt Securities are to be
sold pursuant to a firm commitment underwritten offering, an underwriting
agreement with respect to the Subordinated Debt Securities has been duly
authorized, executed and delivered by the Company and the other parties
thereto; (v) the Board of Directors, including any appropriate committee
appointed thereby, and appropriate officers of the Company have taken all
necessary corporate action to approve the issuance and terms of the
Subordinated Debt Securities and related matters; (vi) the terms of the
Subordinated Debt Securities and their issuance and sale have been duly
established in conformity with the Subordinated Indenture so as not to
violate any applicable law, the Amended and Restated Certificate of
Incorporation or the Amended and Restated By-laws of the Company or result
in default under or breach of any agreement or instrument binding upon the
Company and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over the Company; and
(vii) the Subordinated Debt Securities have been duly executed and
authenticated in accordance with the provisions of the Subordinated
Indenture and duly delivered to the purchasers thereof upon payment of the
agreed-upon consideration therefor, the Subordinated Debt Securities, when
issued and sold in accordance with the provisions of the Subordinated
Indenture and in accordance with the applicable underwriting agreement, if
any, or any other duly authorized, executed and delivered valid and binding
purchase or agency agreement, will constitute valid and binding obligations
of the Company enforceable against the Company in accordance with their
terms, except as enforcement thereof may be limited by (a) bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium
or other laws now or hereafter in effect related
-4-
to or affecting creditors' rights generally and (b) general principles of
equity (regardless of whether enforceability is considered in a proceeding
at law or in equity).
In rendering the opinion set forth above, we express no opinion as to the
laws of any jurisdiction other than the laws of the State of New York, the
General Corporation law of the State of Delaware, including the applicable
provisions of the Delaware Constitution and the reported judicial decisions
interpreting such laws, and the federal laws of the United States of America.
The Securities may be issued from time to time on a delayed or continuous basis,
and our opinion is limited to the laws as in effect on the date hereof.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference of our firm under the caption
"Validity of Securities" in the Registration Statement and the prospectus
forming a part thereof. Our consent to such reference does not constitute a
consent under Section 7 of the Act, as in consenting to such reference we have
not certified any part of the Registration Statement and do not otherwise come
within the categories of persons whose consent is required under Section 7 of
the Act or under the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
/s/ Cahill Gordon & Reindel LLP
Exhibit 12.1
Vail Resorts, Inc.
Computation of Ratio of Earnings to Fixed Charges
(in thousands of dollars, except ratio amounts)
Three Months Ended
Year Ended July 31, October 31,
1999 2000 2001 2002 2003 2002 2003
Fixed Charges:
Interest Expensed(1).............. 25,149 35,047 31,735 38,788 50,001 11,778 13,408
Interest Capitalized ............. 200 200 1,318 1,846 1,205 459 --
Estimated Interest Component of
Rent Expense................... 3,795 6,633 7,557 5,082 7,425 1,320 1,485
Total Fixed Charges.................... 29,144 41,880 40,610 45,716 58,631 13,557 14,893
Income/(Loss) from Operations Before
Income Taxes:....................... 14,240 18,581 22,360 15,601 (14,005) (43,218) (43,313)
Add:
Minority Interest in
Consolidated Subsidiaries..... 1,448 713 785 569 1,064 (2,024) (2,091)
Fixed Charges.................... 29,144 41,880 40,610 45,716 58,631 13,557 14,893
Distributed Income from Equity
Method Investees.............. 2,176 5,156 10,793 4,997 3,120 268 1,066
Amortization of Interest
Capitalized.................... 84 118 162 216 267 58 67
Subtract:
Equity Income/(Losses)........... 9,233 5,034 6,775 4,435 (1,024) 2,853 (1,555)
Interest Capitalized ............ 200 200 1,318 1,846 1,205 459 --
Adjusted Earnings...................... 37,659 61,214 66,617 60,818 48,896 (34,671) (27,823)
Ratio of Earnings to Fixed Charges..... 1.29 1.46 1.64 1.33 -- -- --
Deficiency of Earnings to Fixed
Charges............................. -- -- -- -- 9,735 48,228 42,716
- -------------------------------------
1 Interest Expensed includes Amortization of Deferred Financing Costs and
Amortization of Discount on Debt Issuance
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated November 11, 2003 relating to the
financial statements and financial statement schedule, which appears in Vail
Resorts, Inc.'s Annual Report on Form 10-K for the year ended July 31, 2003. We
also consent to the references to us under the heading "Experts" in such
Registration Statement.
/s/ PricewaterhouseCoopers LLP
Denver, Colorado
February 4, 2004
Exhibit 24.1
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Jeffrey W. Jones and Martha D. Rehm and each acting alone, 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 the Universal Shelf Registration Statement on Form S-3 of
Vail Resorts, Inc. registering debt securities, preferred stock and common stock
and to sign any or all amendments (including post-effective amendments) or
supplements thereto 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 full power and authority to do
and perform each and every act and thing necessary or appropriate to be done
with the Universal Shelf Registration Statement and any amendments (including
post-effective amendments) or supplements thereto, 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 their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Signature Title Date
- --------------------------- ----------------- ------------------------
/s/ Frank Biondi Director February 4, 2004
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Frank Biondi
/s/ John J. Hannan Director February 4, 2004
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John J. Hannan
/s/ John R. Hauge Director February 4, 2004
- ---------------------------
John R. Hauge
/s/ Roland A. Hernandez Director February 5, 2004
- ---------------------------
Roland A. Hernandez
/s/ Robert A. Katz Director February 4, 2004
- ---------------------------
Robert A. Katz
/s/ Thomas H. Lee Director February 2, 2004
- ---------------------------
Thomas H. Lee
/s/ William L. Mack Director February 4, 2004
- ---------------------------
William L. Mack
/s/ Joe R. Micheletto Director February 4, 2004
- ---------------------------
Joe R. Micheletto
/s/ John F. Sorte Director February 4, 2004
- ---------------------------
John F. Sorte
/s/ William P. Stiritz Director February 3, 2004
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William P. Stiritz
/s/ James S. Tisch Director February 3, 2004
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James S. Tisch