PROSPECTUS Filed Pursuant to Rule 424(b)(3)
- ---------- Registration No. 333-49099
663,444 Shares
VISTANA, INC.
Common Stock
This Prospectus relates to 663,444 shares (the "Shares") of Common Stock,
par value $.01 per share (the "Common Stock"), of Vistana, Inc. (the "Company").
The Shares will be offered for sale or otherwise transferred from time to time
by the shareholders named herein (the "Selling Shareholders") in transactions
(which may include block transactions) on the Nasdaq National Market or in the
over-the-counter market, in negotiated transactions or otherwise, at fixed
prices, which may be changed, at market prices prevailing at the time of sale,
at negotiated prices, or without consideration, or by any other legally
available means. The Selling Shareholders may offer the Shares to third parties
(including purchasers) directly or by or through brokers, dealers, agents or
underwriters who may receive compensation in the form of discounts, concessions
or commissions or otherwise. The Selling Shareholders and any brokers, dealers,
agents or underwriters that participate in the distribution of the Shares may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), in which event any discounts, concessions and
commissions received by any such brokers, dealers, agents or underwriters and
any profit on resale of the Shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. The aggregate
net proceeds to the Selling Shareholders from the sale of the Shares will be the
purchase price of such Shares less any commissions. The Company will not
receive any proceeds from the sale of Shares by the Selling Shareholders. The
Company will pay all expenses incurred in connection with this offering, other
than underwriting discounts and selling commissions. See "Plan of
Distribution."
A total of 638,444 of the Shares were issued by the Company to certain of
the Selling Shareholders in connection with the September 1997 acquisition by
the Company from such Selling Shareholders of certain entities. Delivery of a
total of 430,814 of such Shares is contingent upon the achievement by the
acquired entities of certain operating results on a quarterly basis during the
calendar years 1998 through 2000. A total of 25,000 of the Shares may be
acquired by one of the Selling Shareholders pursuant to the exercise of options
granted by certain of the Company's principal shareholders. All of the Shares
are "restricted securities" under the Securities Act of 1933, as amended (the
"Securities Act"), prior to their sale hereunder. This Prospectus has been
prepared for the purpose of registering the Shares under the Act to allow for
future sales by the Selling Shareholders to the public without restriction. See
"Selling Shareholders."
The Common Stock is quoted on the Nasdaq National Market under the symbol
"VSTN." The last reported sale price of the Common Stock on March 30, 1998 on
the Nasdaq was $26-1/8 per share.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is April 7, 1998.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the Public
Reference Room of the Commission, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549 and at the Commission's regional offices at Seven World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can be obtained from the Public Reference Room of the Commission, 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates.
Such materials also may be accessed electronically by means of the
Commission's home page on the Internet at http://www.sec.gov. The Company's
Common Stock is listed on the Nasdaq National Market and such reports, proxy
statements and other information also can be inspected at the offices of the
Nasdaq National Market, 1735 K Street, N.W., Washington, D.C. 20549.
The Company has filed with the Commission a Registration Statement on Form
S-3 (the "Registration Statement") under the Securities Act, with respect to
the shares of Common Stock offered hereby. This Prospectus, which constitutes
a part of the Registration Statement, does not contain all of the information
set forth in the Registration Statement, certain items of which are contained
in schedules and exhibits to the Registration Statement as permitted by the
rules and regulations of the Commission. Statements made in this Prospectus as
to the contents of any contract, agreement or other document referred to are
not necessarily complete. With respect to each such contract, agreement or
other document filed as an exhibit to the Registration Statement, reference is
made to the exhibit for a more complete description of the matter involved,
and each such statement shall be deemed qualified in its entirety by such
reference. Items and information omitted from this Prospectus but contained in
the Registration Statement may be inspected and copied at the Public Reference
Room of the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant to
the Exchange Act are incorporated in this Prospectus by reference and are made
a part hereof:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1997
(the "Company 10-K");
2. The portions of the Company's Proxy Statement for its 1998 Annual
Meeting of Shareholders that have been incorporated by reference into the
Company 10-K;
3. The portions of the Company's Annual Report to Shareholders for the
year ended December 31, 1997 that have been incorporated by reference into
the Company 10-K; and
4. The description of the Company's Common Stock which is contained in
the Registration Statement on Form 8-A filed by the Company with the
Commission on February 24, 1997, pursuant to Section 12 of the Exchange
Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act from the date of this Prospectus and prior to the
termination of the offering made by this Prospectus shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
filing of such documents. Any statement contained herein or in any document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for the purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed to constitute a part of this Prospectus, except as so modified
or superseded. The Company will provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is
delivered, upon written or oral request of such person, a copy of any or all
of the information that
2
has been incorporated by reference in this Prospectus (excluding exhibits to
such information which are not specifically incorporated by reference into
such information). Requests for such information should be directed to
Vistana, Inc., 8801 Vistana Centre Drive, Orlando, Florida 32821, Attention:
Director of Investor Relations, Telephone (407) 239-3568.
THE COMPANY
Founded in 1980, the Company is a leading developer and operator of high
quality timeshare resorts in the United States. The Company's principal
operations consist of (i) acquiring, developing and operating timeshare
resorts, also known as vacation ownership resorts; and (ii) marketing, selling
and financing vacation ownership interests in its resorts, which typically
entitle the buyer to ownership of a fully-furnished unit for a one-week period
on either an annual or an alternate-year basis ("Vacation Ownership
Interests").
The Company currently operates and sells Vacation Ownership Interests at six
vacation ownership resorts. Three of these resorts are in Florida (Vistana
Resort in Orlando, Hampton Vacation Resort--Oak Plantation in Kissimmee, and
Vistana's Beach Club on Hutchinson Island), two in Colorado (Eagle Point in
Vail and Falcon Point in Avon) and one in Arizona (Villas of Cave Creek
located north of Scottsdale). Available inventory at two of these resorts
(Vistana's Beach Club and Eagle Point) is limited to Vacation Ownership
Interests that the Company has reacquired in connection with defaults under
customer mortgages. The Company has four new resorts under development. These
resorts are Embassy Vacation Resort at Myrtle Beach in South Carolina, Vistana
Resort at World Golf Village near St. Augustine, Florida, PGA Vacation Resort
by Vistana in Port St. Lucie, Florida, and Embassy Vacation Resort in
Scottsdale, Arizona. In addition, the Company acts as exclusive sales and
marketing agent for The Christie Lodge, a large vacation ownership resort in
Avon, Colorado. The Company has also entered into an agreement with a
subsidiary of Sun International Hotels Limited ("Sun") to form a joint venture
to develop a proposed new vacation ownership resort to be known as the Villas
at Atlantis adjacent to the Atlantis Resort and Casino on Paradise Island in
The Bahamas.
During its 17-year history, the Company has sold in excess of $650 million
of Vacation Ownership Interests and has developed an ownership base of over
65,000 Vacation Ownership Interest owners residing in more than 100 countries.
The Company was the first to open a vacation ownership resort in the Orlando,
Florida market, which has become one of the largest vacation ownership resort
markets in the world in terms of Vacation Ownership Interests sold. Each of
the Company's existing Florida-based resorts is rated as a Gold Crown resort
by Resort Condominiums International ("RCI"), and the Villas of Cave Creek and
Falcon Point Resort are rated as Five Star Resorts by Interval International.
Two of the Company's resorts under development, Vistana Resort at World Golf
Village and the Embassy Vacation Resort at Myrtle Beach, have received the
Gold Crown designation from RCI prior to their official openings.
As part of its operating strategy, the Company seeks to develop strategic
relationships with selected parties in order to broaden and enhance its
marketing and sales efforts and to provide additional vacation ownership
resort development opportunities. In furtherance of this strategy, the Company
has entered into (i) an exclusive joint venture agreement with Promus Hotels,
Inc., a leading hotel company in the United States; (ii) a long-term
affiliation agreement with a subsidiary of The Professional Golfers'
Association of America; (iii) a limited partnership (in which the Company is
the general partner) which has the exclusive right to develop and market
Vacation Ownership Interests at World Golf Village; and (iv) an agreement to
form an exclusive joint venture agreement with a subsidiary of Sun to develop
a vacation ownership resort in The Bahamas.
The Company's principal executive offices are at 8801 Vistana Centre Drive,
Orlando, Florida 32821 and its telephone number at that address is (407) 239-
3000.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Shares by the
Selling Shareholders.
3
SELLING SHAREHOLDERS
The following table sets forth (i) the names of the Selling Shareholders,
(ii) the number of shares of Common Stock currently beneficially owned by the
Selling Shareholders and (iii) the number of such shares of Common Stock which
will be beneficially owned by the Selling Shareholders after the offering,
assuming the sale of all the Shares currently beneficially owned:
BENEFICIAL SHARES BENEFICIAL
OWNERSHIP TO BE OWNERSHIP
SELLING SHAREHOLDERS PRIOR TO OFFERING OFFERED (3) AFTER OFFERING (3)
-------------------- ----------------- ----------- ------------------
Larry D. Doll (1)........ 165,631 165,631 --
Donald J. Dubin (1)...... 208,803 208,803 --
Ronald R. Sharp (1)...... 104,400 104,400 --
David E. Bruce (1)....... 104,400 104,400 --
David H. Friedman (1).... 55,210 55,210 --
John M. Sabin (2)........ 25,000 25,000 --
- --------
(1) A total of 638,444 of the Shares were issued by the Company to Messrs.
Doll, Dubin, Sharp, Bruce and Friedman (or, in the case of Shares subject
to contingencies, to an escrow agent) in connection with the September
1997 acquisition by the Company (the "Acquisition") from such Selling
Shareholders of the entities comprising The Success Companies, Success
Developments, L.L.C. and Points of Colorado, Inc. Delivery of a total of
430,814 of such Shares is contingent upon the achievement by the acquired
entities of certain operating results on a quarterly basis during the
calendar years 1998 through 2000. These Shares have been registered for
resale under the 1933 Act in accordance with the provisions of the
agreements among the Company and such Selling Shareholders. The Company
has agreed with the Selling Shareholders to use its reasonable best
efforts to keep the Registration Statement of which this Prospectus forms
a part effective until the earlier of (i) the date the Shares held by
these Selling Shareholders are tradeable without restriction under the
Securities Act and (ii) the date on which all of such Shares have been
sold pursuant to such Registration Statement. Prior to the Acquisition,
Messrs. Doll, Dubin, Sharp, Bruce and Friedman were the only equity owners
of the acquired entities. In addition, for at least three years prior to
the Acquisition, Messrs. Doll, Dubin, Sharp, Bruce and Friedman were the
only executive officers of the acquired entities and have continued to
hold substantially the same positions since the Acquisition.
(2) A total of 25,000 of the Shares may be acquired by Mr. Sabin pursuant to
the exercise of options granted to him by certain of the Company's
principal shareholders. These Shares have been registered for resale under
the 1933 Act in accordance with the provisions of the agreements between
the Company and Mr. Sabin. The Company has agreed with this Selling
Shareholder to use its reasonable best efforts to keep the Registration
Statement of which this Prospectus forms a part effective until the
earlier of (i) one year and (ii) the first date on which all of the Shares
held by this Selling Shareholder have been sold pursuant to such
Registration Statement. Prior to December 1997, Mr. Sabin was employed as
the Company's Senior Vice President and Treasurer and held the position of
chief financial officer of the Company. From and after December 1, 1997,
Mr. Sabin continues to be employed by the Company, on an at-will basis, as
the Company's Senior Vice President and Treasurer but no longer holds the
position of chief financial officer of the Company.
(3) The exact number of Shares to be sold by a Selling Shareholder at any time
or from time to time cannot currently be determined.
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Shareholders that they may sell
or transfer all or a portion of the Shares offered hereby from time to time to
third parties (including purchasers) directly or by or through brokers,
dealers, agents or underwriters, who may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling
Shareholders and/or from purchasers of the Shares for whom they may act as
agent. Such sales and transfers of the Shares may be effected from time to
time in one or more transactions on the Nasdaq National Market, in the over-
the-counter market, in negotiated transactions or
4
otherwise, at a fixed price or prices, which may be changed, at market prices
prevailing at the time of sale, at negotiated prices, or without
consideration, or by any other legally available means. Any or all of the
Shares may be sold or transferred from time to time by means of (a) a block
trade in which the broker or dealer so engaged will attempt to sell the Shares
as agent but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal
and resale by such broker or dealer for its account pursuant to this
Prospectus; (c) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; (d) through the writing of options on the Shares;
(e) pledges as collateral to secure loans, credit or other financing
arrangements and subsequent foreclosure, if any, thereunder; (f) gifts,
donations and contributions; and (g) any other legally available means. To the
extent required, the number of Shares to be sold or transferred, the purchase
price, the name of any such agent, broker, dealer or underwriter and any
applicable discounts or commissions and any other required information with
respect to a particular offer will be set forth in an accompanying Prospectus
Supplement. The aggregate net proceeds to the Selling Shareholders from the
sale of the Shares will be the purchase price of such Shares less any
commissions. This Prospectus also may be used by affiliates of the Selling
Shareholders and, with the Company's prior written consent (which may not be
unreasonably withheld), by unaffiliated donees and pledgees of the Selling
Shareholders.
The Selling Shareholders and any brokers, dealers, agents or underwriters
that participate in the distribution of the Shares may be deemed to be
"underwriters" within the meaning of the Securities Act, in which event any
discounts, concessions and commissions received by such brokers, dealers,
agents or underwriters and any profit on the resale of the Shares purchased by
them may be deemed to be underwriting commissions or discounts under the
Securities Act.
No underwriter, broker, dealer or agent has been engaged by the Company in
connection with the distribution of the Shares.
Any Shares covered by this Prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under Rule 144 rather than
pursuant to this Prospectus. There is no assurance that the Selling
Shareholders will sell any or all of the Shares. The Selling Shareholders may
transfer, devise or gift Shares by other means not described herein.
The Company will pay all of the expenses incident to the registration of the
Shares, other than underwriting discounts and selling commissions, if any, and
fees and expenses of counsel for the Selling Shareholders.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale
in the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under the terms of certain registration rights agreements, (i) the Company
has agreed to indemnify each of the Selling Shareholders against certain
liabilities, including liabilities under the Securities Act; (ii) each of the
Selling Shareholders has also agreed, under certain circumstances, to
indemnify the Company, its directors, officers and certain affiliates of the
Company against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Neal, Gerber & Eisenberg.
EXPERTS
The consolidated financial statements of Vistana, Inc. and subsidiaries as
of December 31, 1997 and 1996 and for each of the years in the three-year
period ended December 31, 1997 have been incorporated by reference herein in
reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority
of such firm as experts in accounting and auditing.
5
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No dealer, salesperson or any other person has been authorized to give any
information to make any representations other than those contained or
incorporated by reference in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company, the Selling Shareholders or any broker, dealer or agent. This
Prospectus does not constitute an offer or solicitation by anyone in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to
anyone to whom it is unlawful to make such offer or solicitation. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under any
circumstances, create an implication that there has been no change in the
affairs of the Company since the date hereof.
-------------------
TABLE OF CONTENTS
Page
----
Available Information..................................................... 2
Incorporation of Certain Documents
by Reference............................................................ 2
The Company............................................................... 3
Use of Proceeds........................................................... 4
Selling Shareholders...................................................... 4
Plan of Distribution...................................................... 5
Legal Matters............................................................. 6
Experts................................................................... 6
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
663,444 Shares
VISTANA, INC.
Common Stock
----------
PROSPECTUS
----------
April 7, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------