PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
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[x] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S)240.14a-12
AMERICAN SKIING COMPANY
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -------------------------------------------------------------------------------
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[LETTERHEAD OF AMERICAN SKIING COMPANY]
November 8, 1998
Dear Shareholder:
You are cordially invited to attend the 1998 Annual Meeting of
Shareholders of American Skiing Company, which will be held at 9:00
a.m., Eastern Time, on Tuesday, December 8, 1998, at the Jordan Grand
Hotel, Newry, Maine 04261.
The enclosed Notice and Proxy Statement contain complete
information about matters to be considered at the Annual Meeting, at
which the business and operations of our Company will also be reviewed.
If you plan to attend, please check the box provided on the proxy card.
Only shareholders entitled to vote at the Annual Meeting and their
proxies will be permitted to attend the Annual Meeting.
Whether or not you plan to attend, we urge you to complete,
sign and return the enclosed proxy card, so that your shares will be
represented and voted at the Annual Meeting.
Sincerely yours,
/s/ Leslie B. Otten
Leslie B. Otten
Chairman and Chief Executive Officer
[LETTERHEAD OF AMERICAN SKIING COMPANY]
AMERICAN SKIING COMPANY
P.O. Box 450
Bethel, ME 04217
---------------------------------------
NOTICE OF THE 1998 ANNUAL MEETING OF SHAREHOLDERS
-------------------------------------
November 8, 1998
To our Shareholders:
The Annual Meeting of Shareholders of American Skiing Company, a Maine
corporation, will be held on Tuesday, December 8, 1998, at 9:00 a.m., Eastern
Standard Time, at the Jordan Grand Hotel, Newry, Maine 04261:
(1) To elect Directors;
(2) To ratify the appointment of PricewaterhouseCoopersL.L.P. as independent
public accountants;
(3) To transact such other business as may properly come before the meeting.
The record date for the determination of the shareholders entitled to
vote at the meeting or at any adjournment thereof is the close of business on
October 15, 1998. Only stockholders of record at the close of business on the
Record Date are entitled to notice of and to vote at the 1998 Annual Meeting.
All stockholders are cordially invited to attend the 1998 Annual Meeting.
A copy of the Company's Annual Report to shareholders for the fiscal
year ended July 26, 1998 is enclosed.
A list of shareholders entitled to vote at the Annual Meeting will be
open to the examination of any shareholder, for any purpose germane to the
meeting, at the offices of the Company's Transfer Agent and Registrar, Boston
Equiserve, 150 Royall Street, Canton, Massachusetts, 02021, during ordinary
business hours for ten days prior to the Annual Meeting, as well as at the
Company's executive offices at Sunday River Road, Bethel, ME 04217.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE, DATE,
SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED REPLY ENVELOPE. THIS WILL NOT
LIMIT YOUR RIGHT TO ATTEND OR VOTE AT THE MEETING.
By Order of the Board of Directors
/s/ Christopher E. Howard
Christopher E. Howard
Secretary
AMERICAN SKIING COMPANY
-----------------------
PROXY STATEMENT FOR THE 1998
ANNUAL MEETING OF SHAREHOLDERS
-----------------------
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy, being mailed to shareholders on or about
November 8, 1998, is solicited by the Board of Directors of American Skiing
Company (the "Company") for use at the Annual Meeting of Shareholders (the
"Meeting") to be held on Tuesday, December 8, 1998. In case the Meeting is
adjourned, the proxy will be used at any adjournments thereof. If a proxy is
received before the Meeting, the shares represented by it will be voted unless
the proxy is revoked by written notice to the Clerk of the Company prior to the
Meeting or by voting by ballot at the Meeting. If matters other than those
specifically set forth in the accompanying Notice of Annual Meeting are
presented at the Meeting for action, which is not currently anticipated, the
proxy holders will vote the proxies in accordance with their best judgment. The
mailing address of the Company is P.O. Box 450, Bethel, ME 04217.
Holders of Common Stock and Class A Common Stock of the Company as of
the close of business on October 15, 1998 will be entitled to vote at the
Meeting. On such date there were outstanding and entitled to vote 15,525,022
shares of Common Stock of the Company and 14,760,530 shares of Class A Common
Stock of the Company. Pursuant to the Company's Articles of Incorporation (the
"Charter"), four directors of the Company are elected by a majority vote of the
holders of Class A Common Stock and three directors are elected by a majority
vote of the holders of the Common Stock. Each share of Common Stock and Class A
Common Stock is entitled to one vote with respect to each other matter to be
voted on at the Meeting. The holders of a majority of outstanding shares of
Common Stock and the holders of a majority of outstanding shares of Class A
Common Stock entitled to vote shall constitute a quorum for the transaction of
business at the Meeting. Proxies marked as abstaining (including proxies
containing broker non-votes) on any matter to be acted upon by shareholders will
be treated as present at the meeting for purposes of determining a quorum but
will not be counted as votes cast on such matters.
The cost of soliciting proxies in the form enclosed will be borne by
the Company. In addition to the solicitation by mail, proxies may be solicited
personally, or by telephone, by employees of the Company. The Company may
reimburse brokers holding Common Stock or Class A Common Stock in their names or
in the names of their nominees for their expenses in sending proxy material to
the beneficial owners of such Common Stock.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
GENERAL INFORMATION - ELECTION OF DIRECTORS
The Charter and the bylaws of the Company provide that two-thirds of
the Board of Directors of the Company shall be comprised of directors elected by
the holders of the Class A Common Stock (the "Class A Directors") and one-third
shall be comprised of directors elected by the holders of the Common Stock (the
"Common Directors"). The directors are to serve staggered terms, with one-third
of the directors elected for a one year term, one-third of the directors elected
for a two year term, and one-third of the directors elected for a three year
term. Pursuant to the Company's Charter, four directors will be elected by the
affirmative vote of the holders of a majority of the shares of Class A Common
Stock cast at the Meeting and three directors will be elected by the affirmative
vote of the holders of a majority of the shares of Common Stock cast at the
Meeting. Currently, the Board of Directors is comprised of six members, four of
which are Class A Directors and two of which are Common Directors. At the
Meeting, four Class A Directors will be elected by the Class A Common Stock
holders and three Common Directors will be elected by the Common Stock holders.
At subsequent annual meetings of the Company, each director whose term is
expiring (or successor nominees) will be considered for election for three year
terms. Those nominees receiving the highest numbers of votes at the Meeting will
be elected for the respective directorships for which they have been nominated.
Leslie B. Otten owns all of the Class A Common Stock of the Company.
Consequently, Mr. Otten has the ability to elect all of the Class A Directors.
The persons named as proxies in the accompanying proxy, who have been
designated by the Board of Directors, intend to vote, unless otherwise
instructed in such proxy, FOR the election of Messrs. Nassetta, Alvord and
Hawkes as Common Directors and FOR the election of Messrs. Howard, Otten,
Gillies and Wilson as Class A Directors.
INFORMATION WITH RESPECT TO NOMINEES
The following sets forth the name and age of each nominee, all other
positions and offices, if any, now held by him or her with the Company, his or
her principal occupation during the last five years and any other directorships
of SEC reporting companies held by such nominee.
NOMINEES FOR COMMON DIRECTORS
Three Year Term
- ---------------
Joel B. Alvord, Director. 60. Mr. Alvord was appointed a director of
the Company on February 9, 1998. Mr. Alvord is currently President and Managing
Director of Shawmut Capital Partners, Inc. Prior to joining Shawmut in 1996, he
was Chairman of Fleet Financial Group for two years, after it was merged with
Shawmut National Corporation. Mr. Alvord began his banking career in 1963. He
became President of Hartford National Corporation in 1978 and served as Chief
Executive Officer of Shawmut National Corporation from 1987 to 1995. He is a
director of Hartford Steam Boiler Inspection & Insurance Company (HSB Group),
CUNO, Inc., and Fleet Financial Group. He has been a member of the Board of the
Federal Reserve Bank of Boston and Swiss Reinsurance Company of North America.
He is a trustee of the Wang Center for the Performing Arts, a trustee of The
A.R.T., and an overseer of the Boston Symphony Orchestra and the Museum of Fine
Arts.
Two Year Term
- -------------
Christopher J. Nassetta, Director. 36. Mr. Nassetta was appointed a
director of the Company on February 9, 1998. Mr. Nassetta is Executive Vice
President and Chief Operating Officer for Host Marriott Corporation. Before
joining Host Marriott in 1995, Mr. Nassetta co-founded Bailey Capital
Corporation in 1991, where he was responsible for the operations of the real
estate investment and advisory firm. Prior to founding Bailey Capital
Corporation, Mr. Nassetta spent seven years with The Oliver Carr Company,
serving as Chief Development Officer and as Development Director, as well as
Vice President and Regional Partner. Currently, Mr. Nassetta serves on the Board
of Trustees for Prime Group Realty Trust, and as a member of the McIntire School
of Commerce Advisory Board for the University of Virginia.
One Year Term
- -------------
David B. Hawkes. 54. David B. Hawkes is a nominee to join the Board of
Directors of the Company. He is currently a co-owner, consultant and business
advisor of Cloudhawk, Inc., a management consulting firm which has offices in
Maine and New Hampshire. He is also a part owner in New England Internet
Services, Inc. Before founding Cloudhawk in 1993, Mr. Hawkes served as partner
with KPMG Peat Marwick from 1970 to 1993, in charge of the firm's Portland,
Maine tax practice. Mr. Hawkes is a member of the Board of Directors of several
companies, including AAA of Northern New England, Bancroft & Martin, Inc., Mark
Stimson Associates, and Northland Health Group.
NOMINEES FOR CLASS A DIRECTORS
Three Year Term
- ---------------
Leslie B. Otten, Director, President and Chief Executive Officer. 49.
Mr. Otten has served in his present capacity since the inception of the Company
in July, 1997. In 1970, Mr. Otten joined Sherburne Corporation, then the parent
company of Sunday River, Killington and Mount Snow. Mr. Otten became Assistant
General Manager of Sunday River in 1972 and became General Manager of Sunday
River in 1974. He has been a director and the President and Chief Executive
Officer of the Company (or its predecessors) since 1980. Mr. Otten is currently
a director and was previously chairman of the Portland Museum of Art, and is
also a director of the Maine Chamber and Business Alliance, Maine Handicap
Skiing, Gould Academy (a private secondary school) and Project Opportunity (a
higher education scholarship program).
Two Year Term
- -------------
Christopher E. Howard, Director, Senior Vice President, Acting Chief
Financial Officer, General Counsel and Clerk. Chief Operating Officer and Senior
Vice President, American Skiing Company Resort Properties, Inc. 41. Mr. Howard
has been a director and officer of the Company since its inception in July,
1997. Mr. Howard joined the Company's subsidiary, ASC East, Inc., in 1996 after
serving as its outside counsel. From 1982 to October, 1996, Mr. Howard practiced
with Pierce Atwood, northern New England's largest law firm, where he was a
partner and senior member of the firm with a practice emphasizing on corporate
and real estate development. Mr. Howard organized and was the interim Chief
Executive Officer of Maine Employers' Mutual Insurance Company, Maine's second
largest insurance company. He serves on the Board of the Maine Governmental
Facilities Authority and is a former member of the Board of the Maine Chamber of
Commerce.
One Year Term
- -------------
Gordon M. Gillies, Director. 54. Mr. Gillies was appointed as a
director of the Company in February 9, 1998. Mr. Gillies retired as a Coast
Guard Officer in 1970, attended the University of New Mexico (M.A. 1972) and
Wake Forest University (J.D. 1976). Mr. Gillies practiced law in Maine from 1976
to 1991, when he retired from practice to join the faculty of Hebron Academy, a
private boarding-day secondary school in Maine.
Martel D. Wilson, Jr., Director. 61. Mr. Wilson was appointed as a
director of the Company in August, 1998. Mr. Wilson is the former Vice
President, Chief Financial Officer and Director of S-K-I Ltd., the owner and
operator of the Killington, Mount Snow and Sugarloaf ski resorts, in which
capacities he served from 1988 to 1996. He graduated from the University of
Colorado and received an M.B.A. from Cornell University. Mr. Wilson is a
Director and Chairman of the Board of Building Material Distributors, Inc. of
Stockton, California, a building material wholesaler in California and Nevada,
and a director of Chittenden Corp., a bank holding company with subsidiaries in
Massachusetts and Vermont. He is a past President and Director of the Rutland
Region Chamber of Commerce, a past Trustee of the College of St. Joseph the
Provider, a past President and Director of the Rutland Regional Medical Center,
and past Chairman of the Board of Trustees of Comprehensive Health Resources, a
health care holding company.
The Board of Directors recommends that holders of Common Stock vote FOR
each of the Common Directors nominated in Proposal 1 and that holders of Class A
Common Stock vote FOR each of the Class A Directors nominated in Proposal 1.
EXECUTIVE OFFICERS
The following table sets forth the executive officers of the Company
and its primary subsidiaries as of the date hereof:
Name/Age Position
-------- --------
Leslie B. Otten, 49 Director, President and Chief Executive Officer
Christopher E. Howard, 41 Director, Senior Vice President,
Acting Chief Financial Officer,
General Counsel and
Clerk of American Skiing Company;
Chief Operating Officer and
Senior Vice President of
American Skiing Company Resort Properties, Inc.
G. Christopher Brink, 45 Senior Vice President--Marketing
Warren C. Cook, 53 Chief Operating Officer,
Senior Vice President--Resort Operations
W. Scott Oldakowski, 35 Senior Vice President--Marketing and Sales of
American Skiing Company Resort Properties, Inc.
Michael Meyers, 44 Senior Vice President--Project Delivery of
American Skiing Company Resort Properties, Inc.
Gregory Spearn, 45 Senior Vice President--Planning and Development
of American Skiing Company Resort
Properties, Inc.
For biographical information about Messrs. Otten and Howard, see
"Information With Respect to Nominees."
G. Christopher Brink, Senior Vice President--Marketing. Mr. Brink has
been with the Company since 1993 and in his present capacity since July 1996.
Prior to joining the Company, Mr. Brink served from 1991-1993 as a director of
off-site sale centers for Marriott Vacation Ownership, Inc.
Warren C. Cook, Chief Operating Officer, Senior Vice President--Resort
Operations. Mr. Cook joined the Company in 1996 as Managing Director of
Sugarloaf Mountain Corporation, upon ASC East's acquisition of that Company. Mr.
Cook has served as Senior Vice President - Resort Operations of the Company
since January, 1997, and as the Company's Chief Operating Officer since July
1998. Prior to joining the Company, Mr. Cook was President and Chief Executive
Officer of Sugarloaf Mountain Corporation from 1986 to 1996.
W. Scott Oldakowski, Senior Vice President--Marketing and Sales,
American Skiing Company Resort Properties, Inc. Mr. Oldakowski joined the
Company in 1991 as an independent consultant on the Summit Hotel project before
being hired as Director of Real Estate in 1993. He became Vice President of Real
Estate Sales for the Company in 1995. From 1986 to 1991, he served as Director
of Sales and Marketing at multiple resorts for Dunes Marketing Group, a resort
development firm.
Michael Meyers, Senior Vice President--Project Delivery, American
Skiing Company Resort Properties, Inc. Mr. Meyers joined the Company in April
1995 and has led the development of five hotels for Grand Summit Resort
Properties, Inc., a subsidiary of the Company. From 1989 to 1993, Mr. Meyers was
Vice President at Stanmar Development, a real estate development firm.
Immediately prior to joining the Company, he was chief operating officer from
1993 to 1995 for Massachusetts Industrial Finance Agency.
Gregory Spearn, Senior Vice President--Planning and Development,
American Skiing Company Resort Properties, Inc. Mr. Spearn joined the Company in
the fall of 1997, specializing in master planning, entitlements and
on-time/on-budget project delivery. From 1995 to 1997, he held the position of
Senior Vice President of Intrawest Corporation. Prior to joining Intrawest he
served as Senior Vice President, Development for the Polygon Group of Companies,
a large private corporation engaged in the multi-family development and
construction business in the Pacific Northwest, beginning in 1993.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
Set forth in the following table is the beneficial ownership of the
Company's Common Stock and Class A Common Stock as of October 1, 1998, for all
directors, nominees and the executive officers listed on the Summary
Compensation Table and all directors, nominees and executive officers as a
group. No director, nominee or executive officer owns more than 1% of the
outstanding shares of Common Stock of the Company (including exercisable
options), with the exception of Mr. Otten, who owns approximately 15.6% of the
total outstanding shares of Common Stock of the Company (including exercisable
options) and all of the outstanding shares of Class A Common Stock of the
Company. All directors and executive officers as a group own approximately 17.6%
of the total outstanding shares of Common Stock of the Company (including
exercisable options). No director or executive officer of the Company, other
than Mr. Otten, owns any Class A Common Stock of the Company.
Common Stock Class A Common Percent Of Class A
Beneficially Owned Stock Beneficially Owned Common Stock And
------------------ ------------------------ Common Stock
Beneficially Owned
------------------
Percent of Percent of
Directors and Named Executive Officers Shares Class Shares Class
- -------------------------------------- ------ ---------- ------ ----------
Leslie B. Otten (1)(6) 2,716,530 15.6% 14,760,530 100% 54.4%
Christopher E. Howard (2) 150,450 1.0% --- --- *
Thomas M. Richardson (5) 101,600 * --- --- *
Burton R. Mills (2) 60,240 * --- --- *
G. Christopher Brink(2) 80,240 * --- --- *
Martel D. Wilson, Jr.(4) 10,500 * --- --- *
Gordon M. Gillies(2) 2,500 * --- --- *
Christopher J. Nassetta(2) 2,500 * --- --- *
Joel B. Alvord(2)(4) 6,500 * --- --- *
David B. Hawkes 500 * --- --- *
Directors and Executive Officers as a
Group (10 persons) (3) 3,131,560 17.6% 14,760,530 100% 55.0%
- -----------------------------------------
* Less than one percent
<FN>
(1) Includes 1,853,197 shares of Common Stock issuable under exercisable
options granted under the Company's Stock Option Plan. Also includes 30,000
shares owned by Albert Otten Trust f/b/o Mildred Otten, as to which Mr.
Otten is trustee and co-beneficiary. Does not include 20,060 shares of
Common Stock issuable under exercisable options granted under Stock Option
Plan to Mr. Otten's spouse, Christine Otten, as to which Mr.
Otten disclaims beneficial ownership.
(2) All shares of Common Stock beneficially owned by such person are issuable
under exercisable options granted under the Stock Option Plan.
(3) Includes 2,254,427 shares of Common Stock issuable under exercisable
options granted under the Stock Option Plan.
(4) Includes 2,500 shares of Common Stock issuable under exercisable options
granted under the Stock Option Plan.
(5) Includes 100,300 shares of Common Stock issuable under exercisable options
granted under the Stock Option Plan.
(6) As of October 15, 1998, all of Mr. Otten's Common Shares and 9,200,000 of
Mr. Otten's Class A shares were pledged to secure a margin loan from ING
(U.S.) Capital Corporation, the proceeds of which were used by Mr. Otten to
purchase approximately 833,333 shares of Common Stock of the Company in the
Company's initial public offering on November 6, 1998. A default under this
loan which is not cured within any applicable grace period would entitle
ING to realize on this pledge and could result in a change in control of
the Company.
</FN>
INFORMATION AS TO CERTAIN SHAREHOLDERS
Set forth below is certain information with respect to the only persons
known to the Company who owned beneficially more than five percent of any class
of the Company's voting securities as of October 1, 1998.
Common Stock Class A Common Percent Of Class A
Beneficially Owned Stock Beneficially Owned Common Stock And
------------------ ------------------------ Common Stock
Beneficially Owned
------------------
Percent of Percent of
Five Percent Shareholders Shares Class Shares Class
- ------------------------- ------ ---------- ------ ----------
Leslie B. Otten (1) 2,716,530 15.6% 14,760,530 100% 54.4%
American Skiing Company
P.O. Box 450
Bethel, ME 04217
Madeleine LLC (2) 3,701,546 20.7% --- --- 11.3%
c/o Cerberus
450 Park Avenue
New York, NY 10022
State of Wisconsin Investment Board 2,525,000 16.3% --- --- 8.3%
P.O. Box 7842
Madison, WI 53707
Fusion Capital Management Inc. 1,063,700 6.9% --- --- 3.5%
237 Park Avenue
Suite 801
New York, New York 10012
<FN>
(1) Includes 1,853,197 shares of Common Stock issuable under exercisable
options granted under the Stock Option Plan. Also includes 30,000 shares
owned by Albert Otten Trust f/b/o Mildred Otten, as to which Mr. Otten is
trustee and co-beneficiary. Does not include 20,060 shares of Common Stock
issuable under exercisable options granted under Stock Option Plan to Mr.
Otten's spouse, Christine Otten, as to which Mr. Otten disclaims beneficial
ownership.
(2) Includes 2,348,746 shares of Common Stock issuable upon the conversion of
such holder's shares of 10 1/2% Convertible Preferred Stock. Does not
include up to 1,530,767 additional shares of Common Stock issuable upon
conversion of the Company's 10 1/2% Convertible Preferred Stock as a result
of the accrual of cumulative dividends thereon to the scheduled mandatory
redemption of such preferred stock.
</FN>
BOARD OF DIRECTORS' MEETINGS, COMMITTEES AND FEES
The Board of Directors of the Company held a total of 9 meetings during
the fiscal year ended July 26, 1998 ("Fiscal 1998"), four of which were held
subsequent to the November, 1997 initial public offering of the Company's Common
Stock. The Board of Directors has an Audit Committee, a Nominating Committee and
a Compensation Committee.
The Audit Committee is primarily concerned with the effectiveness of
the Company's accounting policies and practices, financial reporting and
internal controls. The Audit Committee is authorized to (i) establish and review
the activities of the independent auditors and the internal auditors; (ii)
review and approve the format of the financial statements to be included in the
annual report to the shareholders; (iii) review recommendations of the
independent auditors and responses of management; (iv) review and discuss the
Company's financial reporting, loss exposures and asset control with the
auditors and management; (v) monitor the Company's program for compliance with
policies on business ethics; and (vi) direct and supervise any special
investigations the Committee deems necessary. The members of the Audit Committee
are Messrs. Nassetta and Gillies. Mr. Otten is an ex-officio member of the Audit
Committee. The Audit Committee held its initial meeting in August, 1998.
The Compensation Committee is authorized and directed to: (i) review
and report to the Board on the Company's programs for attracting, retaining and
promoting executives, and for developing future senior management; (ii) review
and make recommendations to the Board regarding compensation for the chief
executive officer and other inside directors; (iii) review and approve
performance targets, participation and level of awards for long-term incentive
award plans; (iv) review, approve and report to the Board concerning
administration of compensation programs; and (v) administer any stock option
plans which may be adopted and the granting of options under such plans. The
members of the Compensation Committee are Messrs. Alvord, Wilson and Otten
(ex-officio). The Compensation Committee held its initial meeting in August,
1998.
The Nominating Committee is authorized and directed to screen, on
behalf of the Board, candidates for election to the Board for regularly
scheduled elections or to fill vacancies on the Board. The Board is ultimately
responsible for nominating new members and filling vacancies. In addition, the
Nominating Committee annually reviews employment and other relationships of
directors, to assure there is no current relationship between any non-employee
director and the Company that would comprise the independence of any director.
The members of the Nominating Committee are Messrs. Alvord, Gillies, Nassetta,
and Otten (ex-officio). Shareholder nominees for Board positions are accepted by
the Nominating Committee. Nominees for the next annual meeting should be
addressed to the Nominating Committee c/o Christopher Howard, Secretary,
American Skiing Company and delivered to the Company's executive offices prior
to July 7, 1999. The Nominating Committee's first meeting was in August, 1998,
to consider potential nominees for vacant Board positions and to recommend to
the Board the appointment of Mr. Wilson as a Director.
During Fiscal 1998 all of the persons who were directors of the Company
at the times of such meetings attended 75% or more of the meetings of the Board
of Directors and of committees of the Board of Directors on which they served
either in person or telephonically.
The Company reimburses each member of the Board of Directors for
expenses incurred in connection with attending Board and committee meetings.
Directors receive $5,000 for attendance at each meeting of the Board, unless
attendance is via telephone. The Company grants options to purchase 2,500 shares
of Common Stock to non-employee directors upon their election and re-election to
the Board of Directors. The stock options are fully vested at the time of
granting and have a term of 10 years with an exercise price not less than fair
market value as of the date of the grant.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors and persons who own more than ten
percent of a registered class of the Company's equity securities to file initial
reports of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC") and the New York Stock Exchange. Such officers, directors and
shareholders are required by SEC regulations to furnish the Company with copies
of all Section 16(a) forms they file. Based solely on a review of the copies of
such forms furnished to the Company, all persons subject to the reporting
requirements of Section 16(a) filed the required reports on a timely basis for
Fiscal 1998, except that Messrs. Otten, Howard, Brink, Cook, Richardson and
Mills each filed one late report on Form 3, and Messrs. Alvord, Nassetta and
Gillies each failed to make one required filing on Form 3 and each filed one
late report on Form 4.
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS
In June 1996, Sunday River Skiway Corporation, a subsidiary of the
Company ("SRSC"), issued an unsecured demand note to Mr. Otten obligating SRSC
to pay to Mr. Otten a total of $5.2 million. Interest on the note is calculated
at 5.4% per annum. The note was issued to Mr. Otten for an amount equal to the
income taxes to be paid by him in 1996 and 1997 with respect to the income of
SRSC as an S corporation which was converted to a C corporation. The remaining
principal amount of such note, as of July 26, 1998, was approximately $1.8
million.
Christine Otten, Mr. Otten's spouse, is employed by the Company as its
director of retail buying and is principally involved in its retail sales
activities. During fiscal years 1996, 1997 and 1998, Ms. Otten received total
compensation of $54,577, $51,600 and $51,600, respectively. In the first quarter
of fiscal 1998, the Company granted Ms. Otten options to purchase up to 20,060
shares of Common Stock at a price of $2.00 per share. Ms. Otten is fully vested
with respect to these shares. The options granted to Ms. Otten include a cash
payment on the date of exercise to cover Federal and State income tax liability
generated by exercising the options.
Western Maine Leasing Co., a corporation wholly owned by Mr. Otten,
presently leases items of heavy equipment to SRSC under short-term leases on
terms believed by management to be comparable to those that could be obtained by
SRSC from unaffiliated lessors of such equipment. In fiscal 1996, 1997 and 1998,
payments under such leases totaled $37,000, $24,000 and $17,000, respectively.
SRSC provides lodging management services for Ski Dorm, Inc., a
corporation owned by Mr. Otten and his mother, which owns a ski dorm located
near the Sunday River resort, on terms believed by management to be comparable
to those that would be offered by SRSC to unaffiliated entities. In fiscal 1996,
1997 and 1998, payments by Ski Dorm, Inc., to SRSC totaled $90,000, $258,000 and
$2,000, respectively. In addition, Ski Dorm, Inc., issued to SRSC a promissory
note in 1995 in the principal amount of $265,000, of which $250,000 was
outstanding at October 1, 1998. Such note is secured by a mortgage on real
estate and related improvements owned by Ski Dorm, Inc. Interest on the note is
charged at the prime rate plus 1 1/2% and principal and any accrued interest are
due in December 1999.
Mr. Otten borrowed funds from ING (U.S.) Capital Corporation to
purchase Common Stock in the Company's IPO, and has pledged shares of Common
Stock and Class A Common Stock to secure the loan. In connection with the loan,
the Company entered into a registration rights agreement with the lender
containing customary provisions pursuant to which the lender will have the right
to require the Company to register with the Securities and Exchange Commission,
at the Company's expense, the shares pledged by Mr. Otten to secure the loan.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table provides information concerning compensation paid
by the Company to the Chief Executive Officer and the other four highest paid
executive officers of the Company whose compensation was at least $100,000 for
Fiscal 1998 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
Name and Principal Fiscal Annual Compensation Long-Term Compensation
Position Year ------------------- ----------------------
------------------ ------ Salary Bonus Other annual Restricted Securities All other
------ ----- compensation Stock Awards underlying Compensation
------------ ------------ Options/SARs ------------
------------
Leslie B. Otten 1998 $386,538.56 $--- $10,000.00(2) --- 1,853,197 ---
President and
Chief Executive Officer 1997 $350,000.00 $--- $--- --- --- ---
Thomas M. Richardson 1998 $218,846.22 $30,000.00 $10,000.00(2) --- 100,300 ---
Chief Financial Officer 1997 $170,000.00 $--- $--- --- --- ---
Christopher E. Howard, 1998 $223,076.83 $61,271.25 $10,000.00(2) --- 150,450 ---
Chief Administrative
Officer 1997 $150,000.00 $--- $--- --- --- ---
Burton R. Mills 1998 $191,923.11 $-- $227,955.52(1) --- 80,240 ---
Senior Vice President
- Mountain Operations 1997 $170,000.00 $--- $--- --- --- ---
G. Christopher Brink 1998 $191,923.11 $-- $-- --- 80,240 ---
Senior Vice President
- Marketing 1997 $170,000.00 $--- $--- --- --- ---
<FN>
(1) Represents compensation resulting from cash payment to cover individual
Federal and State income tax liability generated by exercising stock
options.
(2) Represents fees paid to such employee for attendance at meetings of the
Board of Directors of the Company.
</FN>
The following table sets forth information concerning individual grants
of stock options made under the 1997 Stock Option Plan during Fiscal 1998 for
services rendered during Fiscal 1998 by each of the Named Executive Officers.
OPTION GRANTS DURING FISCAL 1998
Individual Grants Potential realizable value at
assumed annual rates of stock price
appreciation for option term (1)
NAME NUMBER OF % OF TOTAL EXERCISE EXPIRATION 0% ($) 5% ($) 10% ($)
SECURITIES OPTIONS/ OR DATE
UNDERLYING SARS BASE PRICE
OPTIONS/ GRANTED TO ($/SH)
SARS GRANTED EMPLOYEES
(#) DURING
FISCAL 1998
Leslie B. Otten 1,853,197 71.7% $18.00 08/01/07 $--- $20,978,381.00 $53,163,337.00
Christopher E. Howard(2) 150,450 5.8% $2.00 08/01/07 $2,407,200.00 $4,110,310.00 $6,723,214.00
Thomas M. Richardson (2) 100,300 3.9% $2.00 08/01/07 $1,604,800.00 $2,740,206.00 $4,482,143.00
Burton R. Mills (2) 80,240 3.1% $2.00 08/01/07 $1,283,840.00 $2,192,165.00 $3,585,714.00
G. Christopher Brink (2) 80,240 3.1% $2.00 08/01/07 $1,283,840.00 $2,192,165.00 $3,585,714.00
<FN>
(1) The potential realizable value uses the hypothetical rates specified by
the Securities and Exchange Commission and is not intended to forecast
future appreciation, if any, of the Company's Common Stock price.
(2) The options granted to these Named Executive Officers include a cash
payment on the date that the options are exercised to cover individual
Federal and State income tax liability generated by exercising the
options.
</FN>
The following table sets forth information concerning each exercise of
stock options during Fiscal 1998 by each of the Named Executive Officers and the
value of unexercised options at July 26, 1998.
AGGREGATED OPTION/SAR EXERCISES DURING FISCAL YEAR ENDED
JULY 26, 1998, AND OPTION/SAR VALUES AS OF JULY 26, 1998
NAME SHARES ACQUIRED VALUE NUMBER OF VALUE OF
- ---- ON EXERCISE REALIZED SECURITIES UNEXERCISED
(#) ($) UNDERLYING IN-THE-MONEY
-------------- -------- UNEXERCISED OPTIONS/SARS (2)
OPTIONS/SARS (2) ---------------
---------------
Leslie B. Otten N/A --- 1,853,197/0 $---
Christopher E. Howard N/A --- 150,450/0 $1,589,128.13
Thomas M. Richardson N/A --- 100,300/0 $1,059,418.75
Burton R. Mills 20,000 $246,103.40 60,240/0 $636,285.00
G. Christopher Brink N/A --- 80,240/0 $847,535.00
<FN>
(1) The "Value of Unexercised In-the-Money Options/SARs at July 26, 1998" was
calculated by determining the difference between the closing price on the New
York Stock Exchange of the underlying Common Stock at July 24, 1998, of $12 9/16
and the exercise price of the option. An option is "In-the-Money" when the fair
market value of the underlying Common Stock exceeds the exercise price of the
option. (2) All of such Options/SARs are exerciseable.
</FN>
EMPLOYMENT AGREEMENTS
The Company does not currently have any employment agreements in place
with its executive officers. The Compensation Committee of the Board of
Directors is currently considering proposed employment agreements between the
Company and Messrs. Otten and Howard.
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee")
is comprised of Messrs. Alvord and Wilson, with Mr. Otten acting as an
ex-officio member. The Committee is responsible for establishing and
administering the Company's executive compensation programs and determining
awards under the Company's 1997 Stock Option Plan.
The report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this Proxy Statement into any filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such Acts.
COMPENSATION PHILOSOPHY
The Committee's compensation philosophy is designed to support the
Company's primary objective of creating long term value for shareholders. The
Committee follows a three-pronged compensation strategy applicable to the
Company's executive officers, including the Chief Executive Officer ("CEO"),
whereby each executive officer of the Company is compensated through three
separate but related compensation schemes:
First, each executive officer receives a base salary consistent with
his or her core responsibilities;
Second, a short term bonus, generally determined annually, is
established to provide reward and incentive for shorter term
productivity;
Third, stock options are awarded under the Company's 1997 Stock Option
Plan to provide a longer term incentive and reward longer term Company
loyalty and performance.
This strategy is intended to: (i) attract and retain talented
executives; (ii) emphasize pay for performance; and (iii) encourage management
stock ownership.
The Internal Revenue Code imposes a limitation on the deduction for
certain executive officers' compensation unless certain requirements are met.
The Committee has carefully considered the impact of these tax laws and has
taken certain actions intended to preserve the Company's tax deduction with
respect to any affected compensation. The Company's 1997 Stock Option Plan
qualifies for tax deductibility. The following are descriptions of the Company
compensation programs for executive officers, including the CEO.
BASE SALARY
The Company generally establishes base salary ranges by considering
compensation levels in similarly sized companies in the
resort/leisure/hospitality industry and the real estate development industry.
The base salary and performance of each executive officer is reviewed
periodically (at least annually) by his or her immediate supervisor (or the
Committee, in the case of the CEO) resulting in salary actions as appropriate.
An executive officer's level of responsibility is the primary factor used in
determining base salary. Individual performance and industry information are
also considered in determining any salary adjustment. The Committee reviews and
approves all executive officer salary adjustments as recommended by the CEO. The
Committee reviews the performance of the CEO and establishes his base salary.
BONUS PLAN
The Company has established an incentive compensation plan for
executive officers of the Company, which is designed to provide rewards for
shorter term productivity by key employees. The plan provides for payment of
cash bonuses to executive officers if certain performance objectives established
for each individual are met. Such objectives include maximization of the
Company's EBITDA, development and sale of real estate assets, and consummation
of strategic acquisitions which are accretive to earnings of the Company.
STOCK OPTION PLAN
The Company's 1997 Stock Option Plan is designed to align management
interests with those of shareholders. In furtherance of this objective, the
level of stock option grants for executive officers is determined by the
Committee each year, typically in consultation with the CEO except with respect
to the CEO himself. Awards for all employees (including all executive officers)
are determined by giving equal consideration to base salary, level of
responsibility and industry long-term compensation information.
Compensation Committee
Joel Alvord
Martel Wilson
PERFORMANCE GRAPH
The following graph compares the performance of the Company's Common
Stock to the Russell 2000 and the Company's Peer Group Index*.
GRAPHIC
SKI Russell 2000 Peer Group*
--- ------------ ----------
11/4/97 100 100 100
11/30/97 85 97 99
12/31/97 88 99 97
1/31/98 81 97 97
2/28/98 88 104 108
3/31/98 99 109 116
4/30/98 91 109 114
5/31/98 79 103 109
6/30/98 76 103 113
7/24/98 74 99 102
*The Company's Peer Group Index performance is weighted according to
market capitalization.
The total return graphic is presented for the approximate eight-month
period since the Company's initial public offering. The total stockholder return
assumes that $100 is invested at the beginning of the period in the Common Stock
of the Company, The Russell 2000, and the Company's Peer Group. The Company's
Peer Group, as selected by the Company, is comprised of Vail Resorts, Inc.,
Intrawest Corp., Fairfield Communities, Inc., Vistana Inc., Florida Panthers
Holdings, Premier Parks, Inc., and Cedar Fair, L.P. The Company has selected
this Peer Group because these companies operate in the
Resort/Leisure/Hospitality sector or the Resort Real Estate Development sector.
The Company included The Russell 2000 in the graph because the Company is
included in such index and because there is no industry index for the Company's
business. Total shareholder return is weighted according to market
capitalization so that companies with a larger market capitalization have a
greater impact on the Peer Group index results. Historical stock performance
during this period may not be indicative of future stock performance.
PROPOSAL NO. 2.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors, based on the recommendation of the Audit
Committee, has voted to retain PricewaterhouseCoopers, L.L.P. to serve as the
Company's independent public accountants for the fiscal year ending July 25,
1999. PricewaterhouseCoopers, L.L.P. expects to have a representative at the
Meeting who will have the opportunity to make a statement and who will be
available to answer appropriate questions.
It is understood that even if the appointment is ratified, the Board of
Directors, in its discretion, may direct the appointment of a new independent
accounting firm at any time during the year if the Board of Directors believes
that such a change would be in the best interests of the Company and its
shareholders.
The Board of Directors recommends that you vote FOR the ratification of
the appointment of PricewaterhouseCoopers, L.L.P. as the Company's independent
public accountants for the fiscal year ended July 25, 1999.
FUTURE SHAREHOLDER PROPOSALS
The Company anticipates that its proxy statement for the next annual
meeting will be released to shareholders no later than November 5, 1999 and,
accordingly, shareholder proposals for the next Annual Meeting must be received
by the Secretary of the Company no later than July 7, 1999.
OTHER MATTERS
At the date of this Proxy Statement, the Board of Directors has no
knowledge of any business other than that described herein which will be
presented for consideration at the meeting. In the event any other business is
presented at the meeting, the persons named in the enclosed proxy will vote such
proxy thereon in accordance with their judgment in the best interests of the
Company.
By Order of the Board of Directors
/s/ Christopher E. Howard
Christopher E. Howard
Senior Vice President, General Counsel
and Clerk
November 8, 1998
PROXY
AMERICAN SKIING COMPANY
Proxy Solicited on Behalf of the Board of Directors of the Company
for the Annual Meeting of Shareholders--December 8, 1998
The undersigned holder of COMMON STOCK hereby constitutes and appoints Leslie B.
Otten and Christopher E. Howard, and each of them, the undersigned's true and
lawful agents and proxies with full power of substitution in each, to represent
the undersigned at the Annual Meeting of Shareholders of American Skiing
Company, to be held at the Jordan Grand Hotel, Newry, Maine 04261, on Tuesday,
December 8, 1998 at 9:00 a.m. Eastern Time and at any adjournments thereof, on
all matters coming before said meeting.
You are encouraged to specify your choices by marking in the appropriate boxes,
but you need not mark any boxes if you wish to vote in accordance with the Board
of Directors' recommendations. Please complete, sign and return this proxy card
promptly.
SEE REVERSE SIDE SEE REVERSE SIDE
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[x] Please mark votes as in this example.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned shareholder(s); If no direction is made, this
proxy will be voted FOR Proposals 1 and 2.
1. Election of Common Directors
Nominees: Christopher Nassetta, Joel Alvord, David Hawkes
FOR ALL NOMINEES [ ] [ ] WITHHELD FROM ALL NOMINEES
[ ]
--------------------------------------
For all nominees except as noted above
2. Ratification of appointment of PricewaterhouseCoopersL.L.P. as independent
public accountants.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. In their discretion, upon other matters as they properly come before the
meeting.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
Please mark, sign and return promptly using the enclosed envelope. Executors,
administrators, trustees, etc., should give full title as such. If the signer is
a corporation, please sign full corporate name by duly authorized officer.
Signature: Date:
---------------------- ------------
Signature: Date:
-------------------- -----------