As filed with the Securities and Exchange Commission on July 9, 2003

Registration No. 333-105499

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

American Seafoods Corporation

(Exact name of registrant as specified in its charter)

Delaware

6719

01-0781250

(State or other jurisdiction of incorporation or organization)

(Primary Standard Industrial Classification Code Number)

(I.R.S. Employer

Identification Number)

Market Place Tower

2025 First Avenue

Suite 1200

Seattle, Washington 98121

(206) 374-1515

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

Co-Registrants

See Next Page

Brad Bodenman

Chief Financial Officer

American Seafoods Group LLC

Market Place Tower

2025 First Avenue

Suite 900

Seattle, Washington 98121

(206) 374-1515

(Name, address, including zip code, and telephone

number, including area code, of agent for service)

Copies to:

Jeffrey J. Rosen, Esq.

Debevoise & Plimpton

919 Third Avenue

New York, New York 10022

(212) 909-6000

David J. Goldschmidt, Esq.

Skadden, Arps, Slate,

Meagher & Flom LLP

Four Times Square

New York, New York 10036

(212) 735-3000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

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, check the following box. ¨

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 this Form is a post-effective amendment filed pursuant to Rule 462(d) 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 under the Securities Act, check the following box. ¨

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price(1)		Amount of Registration Fee

Income Deposit Securities (IDSs)(2)	$	635,176,425	$	15,124

Shares of Common Stock, par value 0.01 per share(4)		36,609,592

% Notes(5)	$	287,385,299

Guarantees		*		None(6)

(1)	Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)

The IDS units represent 36,609,592 shares of the common stock and $287.4 million aggregate principal amount of % notes of American Seafoods Corporation, including 3,170,029 IDSs subject to the underwriters’ over-allotment option. 34,870,317 IDSs will be sold to the public in connection with this initial public offering and 1,739,275 IDSs will be issued to certain affiliates and members of management in connection with the transactions described in this registration statement under “Detailed Transaction Steps.”

(3)	$36,405 were previously paid in connection with the initial filing of this Registration Statement on May 22, 2003.

(4)

Includes 3,170,029 common shares subject to the underwriters’ over-allotment option. 34,870,317 common shares will be sold to the public in connection with this initial public offering and 1,739,275 common shares will be issued to certain affiliates and members of management in connection with the transactions.

(5)

Includes $24.9 million principal amount subject to the underwriters’ over-allotment option. $273.7 million % notes will be sold to the public in connection with this initial public offering and $13.7 million % notes will be issued to certain affiliates and members of management in connection with the transactions.

(6)	Pursuant to Rule 457(n), no separate filing fee is required for the guarantees.

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 this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Exact Name of Co-Registrant as Specified in its Charter	State or Other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification No.	Code, and Telephone Number, Including Area Code, of Principal Executive Office
American Seafoods Holdings LLC	Delaware	6719	13-4097209	Market Place Tower 2025 First Avenue, Suite 1200 Seattle, WA 98121 Phone: (206) 374-1515

American Seafoods Group LLC	Delaware	6719	22-3702647	Market Place Tower 2025 First Avenue, Suite 1200 Seattle, WA 98121 Phone: (206) 374-1515

American Seafoods International LLC	Delaware	2092	22-3702872	40 Herman Melville Blvd. P.O. Box 2087 New Bedford, MA 02741 Phone: (508) 997-0031

New Bedford Seafoods LLC	Delaware	2092	22-3702925	40 Herman Melville Blvd. P.O. Box 2087 New Bedford, MA 02741 Phone: (508) 997-0031

The Hadley Group LLC	Delaware	2092	04-2918779	40 Herman Melville Blvd. P.O. Box 2087 New Bedford, MA 02741 Phone: (508) 997-0031

American Seafoods Processing LLC	Delaware	2092	04-3540757	40 Herman Melville Blvd. P.O. Box 2087 New Bedford, MA 02741 Phone: (508) 997-0031

American Seafoods Company LLC	Delaware	2092	22-3702875	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

American Challenger LLC	Delaware	0912	22-3702876	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

American Dynasty LLC	Delaware	0912	22-3702909	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

American Triumph LLC	Delaware	0912	22-3702882	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Exact Name of Co-Registrant as Specified in its Charter	State or Other Jurisdiction of Incorporation or Organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification No.	Code, and Telephone Number, Including Area Code, of Principal Executive Office

Ocean Rover LLC	Delaware	0912	22-3702880	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515
Northern Eagle LLC	Delaware	0912	22-3702900	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Northern Hawk LLC	Delaware	0912	22-3702905	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Northern Jaeger LLC	Delaware	0912	22-3702901	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Katie Ann LLC	Delaware	0912	22-3702906	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Southern Pride Catfish LLC	Delaware	0912	42-1563059	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Southern Pride Catfish Trucking, Inc.	Delaware	0912	42-1563057	Market Place Tower 2025 First Avenue, Suite 900 Seattle, WA 98121 Phone: (206) 374-1515

Subject to Completion, Dated July 8, 2003

The information in this 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 declared effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PROSPECTUS

31,700,288

Income Deposit Securities (IDSs)

American Seafoods Corporation

We are selling 31,700,288 IDSs in respect of 31,700,288 shares of our common stock and $248.8 million aggregate principal amount of our % notes. Each IDS represents:

one share of our common stock; and

$7.85 aggregate principal amount of our % notes.

Assuming we make our scheduled interest payments and pay dividends in the amount contemplated by our current dividend policy, you will receive in the aggregate approximately $1.80 per year in dividends and interest on the common stock and notes represented by each IDS.

This is the initial public offering of our common stock and notes. We anticipate that the public offering price will be between $16.70 and $18.00 per IDS. We will apply to list our IDSs on the American Stock Exchange under the trading symbol “ ” and on the Toronto Stock Exchange under the trading symbol “ .” We have applied to list our shares of common stock on the Toronto Stock Exchange under the symbol “ .” We do not anticipate that the notes will be separately listed on any exchange.

Holders of IDSs will have the right to separate IDSs into the shares of common stock and notes represented thereby at any time after the earlier of 180 days from the date of original issuance or the occurrence of a change of control. Separation of IDSs will occur automatically upon a repurchase, redemption or maturity of the notes. Similarly, holders of our common stock and notes may, at any time, unless the IDSs have automatically separated, combine the applicable number of shares of common stock and principal amount of notes to form IDSs.

Under specified circumstances, we will be required to defer interest payments on our notes initially represented by the IDSs. Interest payments will not be required to be deferred for more than 24 months in the aggregate or at any time after , 2008. We will also have the ability to defer interest payments on our notes on one occasion for not more than 10 months between , 2008 and , 2013. Deferred interest on our notes will bear interest at an annual rate of %. Our notes mature on , 2013, subject to our right to extend their maturity for two additional successive five-year terms under specified circumstances.

We are subject to foreign ownership provisions of federal law as a result of which all 5% owners of our capital stock will be required to be U.S. citizens, and either 98% of our beneficial owners (other than the limited number holding through The Canadian Depository for Securities Limited system) or % of all of our beneficial owners will be required to have U.S. addresses. The right to vote will be limited to holders that certify that they are U.S. citizens. These requirements, and the remedies we may need to invoke to satisfy them, may have an adverse effect on the market for and trading price of IDSs or shares of our common stock.

Investing in the shares of our common stock and our notes represented by IDSs involves risks. See “Risk Factors” beginning on page 20.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per IDS	Total
Public offering price	$	$
Underwriting discount	$	$
Proceeds to American Seafoods Corporation (before expenses)(1)	$	$

(1)	Approximately $162.9 million of those proceeds will be paid to the current owners of our business before this offering and approximately $33.7 million will be paid to a related party to repay indebtedness and redeem preferred stock.

We have granted the underwriters an option to purchase up to 3,170,029 additional IDSs at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus to cover over-allotments. We will use all of the proceeds from the sale of any additional IDSs under the underwriters’ over-allotment option to redeem additional equity from the persons who owned our affiliate, American Seafoods, L.P., before this offering, which will increase our percentage ownership in Holdings. This prospectus also relates to 1,739,275 IDSs being issued concurrently with this offering to certain indirect holders of equity interests in Holdings in exchange for a portion of those interests.

The underwriters expect to deliver the IDSs to purchasers on or about , 2003.

CIBC World Markets

Credit Suisse First Boston

UBS Investment Bank

RBC Capital Markets

Legg Mason Wood Walker

Incorporated

McDonald Investments Inc.

U.S. Bancorp Piper Jaffray

Wells Fargo Securities, LLC

Scotia Capital

, 2003

Table Of Contents

		Page
Summary		1
Risk Factors		20
Cautionary Statement Regarding Forward-Looking Statements		34
Use of Proceeds		35
Dividend Policy and Restrictions		36
Capitalization		37
Pro Forma Dilution		38
Selected Historical and Pro Forma Financial Information for Holdings		39
Selected Pro Forma Financial Information for the Issuer		42
Management’s Discussion and Analysis of Financial Condition and Results of Operations		43
Industry and Regulatory Overview		62
Business		69
Management		87
Security Ownership of Certain Beneficial Owners and Management		94
Related Party Transactions		97
Detailed Transaction Steps		101
Description of Certain Indebtedness		105
Description of IDSs		107
Description of Notes		111
Description of Capital Stock		154
IDSs Eligible for Future Sale		159
Material U.S. Federal Income Tax Considerations		160
Certain ERISA Considerations		169
Underwriting		171
Legal Matters		174
Change in Accountants		174
Experts		174
Where You Can Find More Information		174
Index to Financial Statements		F-1
Glossary		G-1

Summary

The following is a summary of the principal features of this offering of IDSs and should be read together with the more detailed information and financial data and statements contained elsewhere in this prospectus.

Throughout this prospectus, we refer to American Seafoods Corporation, a Delaware corporation, as the “Issuer.” The Issuer will be the sole general partner of American Seafoods Holdings, L.P., a Delaware limited partnership (together with its predecessor, American Seafoods Holdings LLC, “Holdings”), which owns the operating entities described below, including American Seafoods Group LLC, a Delaware limited liability company (“ASG”). References in this prospectus to “we,” “our” and “us” refer to the Issuer, Holdings and its direct and indirect subsidiaries and their predecessors, unless the context otherwise requires. The current owner of our business is American Seafoods, L.P., a Delaware limited partnership (“ASLP”), which is controlled by its general partner, ASC Management, Inc.

Our Company

We are one of the largest integrated seafood companies in the U.S. in terms of revenues. We harvest and process a variety of fish, either on board our sophisticated catcher-processor vessels or at our land-based processing facilities, and market our products to a diverse group of customers in North America, Asia and Europe. We are the largest harvester and at-sea processor of pollock and the largest processor of catfish in the U.S. Pollock is the world’s highest-volume whitefish harvested for human consumption and accounts for a majority of our revenues. According to the Food and Agriculture Organization of the United Nations, catfish accounted for approximately 50% of the value of all aquaculture in the U.S. in 2001. In addition, we harvest and/or process other seafood, including scallops, hake and cod. We maintain an international marketing network through our U.S., Japanese and European offices and have developed long-term relationships with a U.S. and international customer base.

We own and operate a premier modern fleet of seven catcher-processor vessels, which average over 300 feet in length and carry crews of 90 to 125 persons. We produce a variety of products at sea, such as pollock roe (fish eggs), surimi (a fish protein paste used in products such as imitation lobster and crabmeat), fillet blocks, headed and gutted fish and fishmeal. We harvest pollock primarily in the U.S. Bering Sea pollock fishery. According to the Marine Conservation Alliance, this fishery is among the largest and most conservatively managed in the world.

We own and operate two catfish processing facilities in Alabama. We have strong relationships with catfish farmers and we distribute fresh and frozen catfish products to both retailers and foodservice customers throughout several regions in the U.S. In addition, we conduct other seafood processing operations at our facility in Massachusetts, where we manufacture products such as breaded seafood portions, fillets and scallops.

We operate in two principal business segments, ocean harvested whitefish and other seafood products. The ocean harvested whitefish segment includes the harvesting and processing of pollock, cod and hake. Processing of ocean harvested whitefish occurs on our vessels while at sea and at our facilities in Massachusetts. The other seafood products segment includes the processing of catfish and scallops at our facilities in Alabama and Massachusetts.

Industry Overview

Our pollock harvesting and at-sea processing operations benefit from a favorable statutory and regulatory environment. The American Fisheries Act specifically identifies the catcher-processor vessels that are eligible to participate in the U.S. Bering Sea pollock fishery, prohibits the entry of additional vessels and prohibits any single entity from harvesting more than 17.5% of the annual directed pollock catch. We own and operate seven of the 19 catcher-processor vessels permitted to participate in the catcher-processor sector of the U.S. Bering Sea pollock fishery. Under the American Fisheries Act, this sector is allocated 40% of the annual directed pollock catch. Within the catcher-processor sector, our allocation for pollock under the Pollock Conservation Cooperative agreement, a contractual arrangement among the seven companies that own the catcher-processors named in the statute, is nearly 2.5 times larger than that of the second largest Cooperative member. In addition to harvesting and processing pollock, we also participate in the catcher-processor sector of U.S. fisheries for hake and cod.

Catcher-processors, such as the vessels we own, harvest and process fish into frozen products, such as roe, fillets and surimi, within hours of catching them.

As part of our other seafood products processing operations, we process approximately 100 million pounds of catfish per year, making us the largest catfish processor by volume in the U.S. We do not own any of the farms from which we source catfish, reducing our exposure to catfish price volatility. In the U.S., the catfish market has evolved over the last decade from being a regional commodity, locally produced and consumed predominantly in the southern U.S., to a large, commercial aquaculture industry serving major U.S. markets.

Competitive Strengths

Attractive Regulatory Environment; Barriers to Entry. The American Fisheries Act provides us with key competitive benefits, among other things limiting participation in the catcher-processor sector of the U.S. Bering Sea pollock fishery to 19 specifically named catcher-processor vessels, of which we own seven.

Efficient Large-Scale Operator. We own and operate the largest fleet of catcher-processors in the U.S. Bering Sea pollock fishery. In 2002, our fleet included the industry’s top five catcher-processors in terms of metric tons harvested. Each of our catcher-processors is a floating factory equipped with flexible manufacturing platforms and an integrated computer system, enabling constant communication among vessels, the corporate office and our sales representatives, and the ability to shift production based on current market demand.

Catfish Processor Leader. We are the largest catfish processor in the U.S., processing approximately 100 million pounds of catfish per year in our two Alabama facilities, which represents a leading market share in the catfish processing sector of over 15%.

Strong Customer Relationships and Distribution Network. We have established long-standing relationships with a diverse base of customers worldwide, including industrial importers, foodservice distributors, food retailers, restaurant chains and reprocessing companies.

Experienced Management Team. Our senior management team members average more than 20 years of industry experience.

Business Strategy

Over the past decade, we have become one of the largest integrated seafood companies in the U.S. Today we are committed to building on our existing harvesting, processing and marketing platforms.

The primary components of our business strategy include the following:

Maximize Pollock Revenues. Our pollock harvesting and at-sea processing operations provide a majority of our revenues. Our strategy to maximize pollock revenues includes continuing to increase our share of the total allowable catch in the U.S. Bering Sea pollock fishery by purchasing community development quota from Alaska Community Development Groups and optimizing our product mix based on global demand and pricing.

Continue to Diversify Sources of Revenues. We participate in a number of other fisheries besides pollock, such as those for hake and cod. With the recent acquisition of Southern Pride, we became the largest catfish processor in the U.S. and therefore have significant market positions in pollock, catfish and cod, the top three whitefish species in terms of U.S. human consumption.

Pursue Strategic Acquisitions. We intend to evaluate and selectively pursue accretive opportunities that we believe are strategically important based on their potential to diversify our product and customer base, broaden our distribution network and increase cash flow.

New Credit Facility

Upon completion of this offering, our subsidiary ASG will enter into $300.0 million of senior secured debt facilities with a syndicate of financial institutions, which we refer to as the “new credit facility.” We expect that the new credit facility will include an $80.0 million senior secured revolving credit facility, which we refer to as the “new revolver,” a term loan in a total principal amount of $80.0 million, which we refer to as the “new term loan,” and $140.0 million of senior secured notes, which we refer to as the “new senior notes.” The Issuer will not be a party to the new credit facility. The new credit facility will contain restrictions on ASG’s ability to make distributions to Holdings and the Issuer. Such distributions are the projected sources of cash to allow the Issuer to make interest and dividend payments to IDS holders. We expect that the new credit facility will have a 5-year maturity. CIBC World Markets Corp., the lead underwriter of this offering, is also the sole placement agent, lead arranger and bookrunner of the new credit facility. See “Use of Proceeds” and “Description of Certain Indebtedness—New Credit Facility.”

Existing Senior Subordinated Notes

In conjunction with this offering, ASG commenced a consent solicitation with respect to its outstanding 10.125% senior subordinated notes due 2010, which we refer to as our “existing senior subordinated notes” and a tender offer for such notes. ASG intends to use a portion of the net proceeds from this offering and borrowings under the new credit facility (1) to acquire our existing senior subordinated notes in the tender offer and (2) to pay fees, expenses and premiums associated with the consent solicitation and tender offer. The closing of the consent solicitation and tender offer is conditioned on the consummation of this offering. Credit Suisse First Boston is the dealer manager of the tender offer and the solicitation agent in the consent solicitation.

The Transactions and Use of Proceeds

Prior to and in connection with this offering, we will consummate various internal restructuring and realignment transactions, the principal effects of which will be to rationalize the existing structure and recapitalize ASLP’s equity interest in Holdings into an interest consisting of part equity and part notes issued by Holdings. In this offering, we expect that the Issuer will sell 31,700,288 IDSs and receive approximately $522.5 million in net proceeds, assuming an initial public offering price of $17.35 per IDS, which represents the mid-point of the range set forth on the cover page of this prospectus. In addition, the Issuer will issue 1,739,275 IDSs, and pay approximately $15.7 million of the net proceeds it receives from the offering, to certain indirect holders of equity interests in Holdings in exchange for those interests.

The remaining net proceeds will be invested, directly or indirectly, in equity interests in Holdings and in the notes to be issued by Holdings. The Issuer will become the managing general partner of Holdings (which will convert to a limited partnership).

Holdings will use the proceeds it receives from the Issuer, as well as proceeds from the repayment of a management loan: to repay related party indebtedness and to redeem preferred equity interests (a total of approximately $33.7 million); to make a distribution to ASLP in redemption of Holdings equity held by ASLP (approximately $153.4 million); and to make an investment of approximately $325.9 million in equity of ASG.

ASLP will use the funds it receives from Holdings to make a distribution to the existing owners of our business. ASG will use the funds it receives from Holdings, as well as the proceeds from the new credit facility, to repay its outstanding indebtedness as well as expenses associated with such repayment and these transactions.

Holdings will guarantee on a subordinated basis the Issuer’s notes represented by the IDSs. ASG and its principal operating subsidiaries will also guarantee, on a subordinated basis, the Issuer’s notes included in the IDSs, as well as the notes issued by Holdings and held by the Issuer and ASLP. For a more detailed outline of these steps and transactions, see “Detailed Transaction Steps.”

After giving effect to these transactions, the Issuer will own directly or indirectly approximately 66.5% of the economic interests in Holdings and, indirectly, in ASG, and ASLP will own the remaining 33.5%. In addition, members of management will have unvested options to acquire equity interests in ASLP, a portion of which will vest based either on the option holders’ continued employment or on a combination of such continued employment and the achievement by Holdings of performance targets. The options that vest in this compensatory manner will be structured so that the resulting dilution is shared ratably by the Issuer and ASLP. Other management options to acquire equity interests in ASLP will dilute only the owners of ASLP.

In connection with the offering, the Issuer will issue to all ASLP partners and option holders exchange warrants permitting such holders to exchange their ASLP limited partnership units for the Issuer’s common stock and notes, which may be combined to form IDSs. Upon any such exchange, the Issuer would then have the right to exchange the ASLP units received by it for equity interests in Holdings and Holdings notes. If all such exchange warrants, other than those associated with compensatory options, were exercised in full, the ASLP partners and option holders would receive an aggregate of 16,858,853 IDSs (or 33.5% of the total IDSs that would be outstanding following such exercise) and the Issuer would own 100% of the economic interests in Holdings.

The Issuer will also issue preferred stock to three partners of ASLP—Centre Partners, Bernt O. Bodal, our chairman and chief executive officer, and Coastal Villages Pollock LLC. The preferred stock will entitle each such holder to elect one member of the Issuer’s board of directors for so long as such holder meets minimum indirect ownership levels in Holdings. Following this offering, we expect our board to have seven members.

The following chart reflects our capital structure immediately following this offering:

LOGO

The Issuer was formed under Delaware law in May 2003 for the purpose of making this offering of IDSs and engaging in the transactions described in this prospectus. Following this offering, Holdings will own 100% of the economic interests in ASG. The Issuer will not have direct operations but, as the sole general partner of Holdings, it will have management responsibility for Holdings and its subsidiaries, including ASG.

Our principal executive office is located at Market Place Tower, 2025 First Avenue, Suite 1200, Seattle, Washington 98121, and our telephone number is (206) 374-1515. Our internet address is www.americanseafoods.com. www.americanseafoods.com is a textual reference only, meaning that the information contained on the website is not part of this prospectus and is not incorporated in this prospectus by reference.

The Offering

Summary of the IDSs

What are IDSs?

We are offering 31,700,288 IDSs at an initial public offering price of $17.35 per IDS, which represents the mid-point of the range set forth on the cover page of this prospectus. As described below, assuming we make our scheduled interest payments and pay dividends in the amount contemplated by our current dividend policy, you will receive in the aggregate approximately $1.80 per year in dividends and interest on the common stock and notes represented by each IDS.

Each IDS represents:

one share of our common stock; and

$7.85 aggregate principal amount of our % notes.

The ratio of common stock to principal amount of notes represented by an IDS is subject to change in the event of a stock split, recombination or reclassification of our common stock. For example, if we elect to effect a two-for-one stock split, from and after the effective date of the stock split, each IDS will represent two shares of common stock and the same principal amount of notes as it previously represented. Likewise, if we effect a recombination or reclassification of our common stock, each IDS will thereafter represent the appropriate number of shares of common stock on a recombined or reclassified basis, as applicable, and the same principal amount of notes as it previously represented.

What payments can I expect to receive as a holder of IDSs?

You will be entitled to receive monthly interest payments at an annual rate of % of the aggregate principal amount of notes represented by your IDSs or approximately $1.02 per IDS per year, subject to our obligation, under specified circumstances, to defer interest payments on the Issuer’s notes for no more than 24 months in the aggregate and no later than , 2008; and subject further to our right, on one occasion for not more than 10 months between , 2008 and , 2013, to defer interest payments on the Issuer’s notes; in each case, so long as the Issuer is not in default under such notes and (if the default is not a payment default) the notes have not been accelerated as a result of such default at the time or during the pendency of such deferral.

You will also receive monthly dividends on the shares of our common stock represented by your IDSs, if and to the extent dividends are declared by our board of directors and permitted by applicable law and the terms of our then existing indebtedness. The notes indenture contains restrictions on our ability to declare and pay dividends on our common stock. We have adopted a dividend policy which contemplates that initial annual dividends will be approximately $0.78 per share of our common stock. However, our board of directors may, in its discretion, modify or repeal our dividend policy. We cannot assure you that we will pay dividends at this level in the future or at all.

We expect to make interest and dividend payments on or about the 20th day of each month to holders of record on the 1st day of the month. The cash used to make such interest and dividend payments is expected to come from interest payments and distributions by Holdings, and those are expected to be funded out of distributions made to Holdings by ASG. The new credit facility will contain provisions limiting ASG’s ability to make distributions to Holdings in the event various financial tests are not met. See “Description of Certain Indebtedness—New Credit Facility—Limitations on Distributions to Holdings and the Issuer.”

Will my rights as a holder of IDSs be any different than the rights of a direct holder of the common stock and notes?

No. As a holder of IDSs you are the beneficial owner of the common stock and notes represented by your IDSs. As such, you will have exactly the same rights, privileges and preferences, including voting rights, rights to receive distributions, rights and preferences in the event of a default under the notes indenture, ranking upon bankruptcy and rights to receive communications and notices as a direct holder of the common stock and notes, as applicable.

Will the IDSs be listed on an exchange?

We will apply to list the IDSs on the American Stock Exchange under the trading symbol “ ” and on the Toronto Stock Exchange under the trading symbol “ .” The Issuer’s charter will contain provisions limiting to 9% the portion of the Issuer’s capital stock that can be held through The Canadian Depository for Securities Limited system.

Will the notes and shares of our common stock represented by the IDSs be listed on an exchange?

The notes represented by the IDSs will not be listed on any exchange. We will apply to list the shares of our common stock represented by the IDSs on the Toronto Stock Exchange under the trading symbol “ .” In addition, if more than 33% of our outstanding shares of common stock are no longer held in the form of IDSs for a period of 30 consecutive trading days, we will apply to list the shares of our common stock on the American Stock Exchange. The notes and shares of our common stock represented by the IDSs will be freely tradable without restriction or further registration under the Securities Act, unless they are purchased by “affiliates” as that term is defined in Rule 144 under the Securities Act of 1933.

In what form will IDSs and the securities represented by the IDSs be issued?

The IDSs and the securities represented by the IDSs will be issued in book-entry form only. This means that you will not be a registered holder of IDSs or the securities represented by the IDSs, and you will not be entitled to receive a certificate for your IDSs or the securities represented by your IDSs. You must rely on your broker or other financial institution that will maintain your book-entry position to receive the benefits and exercise the rights of a holder of IDSs.

How can I separate my IDSs into shares of common stock and notes or combine shares of common stock and notes to form IDSs?

Holders of IDSs may, at any time after the earlier of 180 days from the date of original issuance or the occurrence of a change of control, through a broker or other financial institution, separate each of their IDSs into the shares of common stock and notes represented thereby. Similarly, any holder of shares of our common stock and notes may, at any time, through a broker or other financial institution, combine the applicable number of shares of common stock and principal amount of notes to form IDSs.

What will be the U.S. federal income tax considerations in connection with an investment in the IDSs?

Certain aspects of the U.S. federal income tax consequences of the purchase, ownership and disposition of IDSs in this offering are not entirely clear. We intend to treat the purchase of IDSs in this offering as the purchase of shares of our common stock and notes and, by purchasing IDSs, you will agree to such treatment. You must allocate the purchase price of the IDSs between those shares of common stock and notes in proportion to their respective initial fair market values, which will establish your initial tax basis. We expect to report the initial fair market value of each share of common stock as $9.50 and the initial fair market value of each $7.85 aggregate

principal amount of our notes as $7.85 and, by purchasing IDSs, you will agree to and be bound by such allocation, assuming an initial public offering price of $17.35 per IDS, which represents the mid-point of the range set forth on the cover page of this prospectus.

We believe that the notes should be treated as debt for U.S. federal income tax purposes. However, this conclusion is not free from doubt. If the notes were treated as equity rather than debt for U.S. federal income tax purposes, then the stated interest on the notes would generally be treated as a dividend, and interest on the notes would not be deductible by us for U.S. federal income tax purposes, which could materially increase our taxable income and significantly reduce our future cash flow. In addition, payments on the notes to foreign holders would be subject to U.S. federal withholding taxes at rates of up to 30%. Payments to foreign holders would not be grossed-up on account of any such taxes.

Dividends paid by us, to the extent paid out of our tax “earnings and profits,” will generally be taxable to you at long-term capital gains rates under recently-enacted legislation, which is scheduled to sunset in 2008. Interest income on the notes will generally be taxable to you at ordinary income rates. See “Material U.S. Federal Income Tax Considerations.”

What will be the U.S. federal income tax considerations in connection with a subsequent issuance of notes?

The U.S. federal income tax consequences to you of the subsequent issuance of notes with original issue discount (referred to as OID) upon a subsequent sale of IDSs pursuant to an offering by us or upon an exercise of exchange rights by partners of ASLP are not entirely clear. The indenture governing the notes and the agreements with the Depository Trust Company, or DTC, will provide that, in the event there is a subsequent issuance of notes by the Issuer having substantially identical terms as the notes, each holder of notes or IDSs (as the case may be) agrees that a portion of such holder’s notes will be exchanged for a portion of the notes acquired by the holders of such subsequently issued notes, and the records of any record holders of notes will be revised to reflect such exchanges. Consequently, following each such subsequent issuance and exchange, without any further action by such holder, each holder of notes or IDSs (as the case may be) will own an indivisible unit composed of notes of each separate issuance in the same proportion as each other holder (and, for any such holder of IDSs, such indivisible unit composed of notes will be included in such holder’s IDSs). However, the aggregate principal amount of notes owned by each holder will not change as a result of such subsequent issuance and exchange. We believe that this exchange should not result in a taxable event requiring a holder to recognize gain for U.S. federal income tax purposes. However, the Internal Revenue Service, or the IRS, may assert a contrary view. Even if the exchange is not treated as a taxable event, such exchange may result in holders having to include OID in taxable income prior to the receipt of cash and other potentially adverse U.S. federal income tax consequences to holders. Because a subsequent issuance will affect the notes in the same manner regardless of whether the notes are held as part of IDSs or directly, the recombination of notes and shares of common stock to form IDSs or the separation of IDSs should not affect your tax treatment. See “Material U.S. Federal Income Tax Considerations.”

Following the subsequent issuance and exchange, we (and our agents) will report any OID on the subsequently issued notes ratably among all holders of notes and IDSs, and each holder of notes and IDSs will, by purchasing IDSs, agree to report OID in a manner consistent with this approach. However, the IRS may assert that any OID should be reported only to the persons that initially acquired such subsequently issued notes (and their transferees) and thus may challenge the holders’ reporting of OID on their tax returns. Such a challenge could create significant uncertainties in the pricing of IDSs and notes and could adversely affect the market for IDSs and notes.

Because there is no statutory, judicial or administrative authority directly addressing the tax treatment of the IDSs or instruments similar to the IDSs, we urge you to consult your own tax advisor concerning the tax consequences of an investment in the IDSs. For additional information, see “Material U.S. Federal Income Tax Considerations.”

Summary of the Notes

Issuer

American Seafoods Corporation.

Notes to be outstanding following the offering

$262.5 million aggregate principal amount of % notes (or $287.4 million aggregate principal amount assuming the underwriters’ over-allotment option is exercised in full), which includes $13.7 million aggregate principal amount of notes issued to certain of our existing direct and indirect equity investors upon consummation of this offering in connection with our internal restructuring and realignment transactions.

Interest rate

% per year.

Interest payment dates

Interest will be paid monthly in arrears on the 20th day of each month, commencing 2003 to holders of record on the 1st business day of the month of such interest payment date.

Interest deferral

We will be required to defer interest payments on the notes if and for so long as the most recently calculated (i) fixed charge coverage ratio of Holdings for any twelve-month period ended on December 31, June 30 or September 30 is less than or (ii) adjusted fixed charge coverage ratio of Holdings for any period ended on March 31 is less than , unless, in each case, a default in payment of interest, principal or premium, if any, on the notes has occurred and is continuing, or any other event of default with respect to the notes has occurred and is continuing and the notes have been accelerated as a result of the occurrence of such event of default. Interest payments will not be required to be deferred for more than 24 months in the aggregate or at any time after , 2008. In addition, on one occasion for not more than 10 months between , 2008 and , 2013, interest payments may again be deferred, at our option, on the notes, unless a default in payment of interest, principal or premium, if any, has occurred and is continuing, or any other event of default with respect to the notes has occurred and is continuing and the notes have been accelerated as a result of the occurrence of such event of default. Deferred interest on the notes will bear interest at an annual rate of %. After the end of any deferral period occurring before , 2008, we will repay deferred interest (together with accrued interest thereon) in one or more equal quarterly installments payable through , 2008. We may prepay deferred interest at any time, except when an interest deferral period is in effect. At the end of the interest deferral period occurring between 2008 and 2013, we must pay all deferred interest and accrued interest on deferred interest in full.

In the event that interest payments on the notes are deferred, you would be required to include interest in your income for U.S. federal income tax purposes on an economic accrual basis even if you do not receive any cash interest payments.

Maturity date

The notes will mature on , 2013. We may extend the maturity of the notes for two additional successive five-year terms if the fixed charge coverage ratio of Holdings for the most recent twelve month period ended on the last day of the fiscal quarter ended at least 45 days before the end of the then current term is equal to or greater than and so long as we are not in default under our notes or any of our other outstanding indebtedness and there are no overdue payments of interest on our notes or any of our other outstanding indebtedness for borrowed money in excess of $ .

Ranking

The notes will be senior secured indebtedness of the Issuer and will rank pari passu in right of payment with all existing and future unsubordinated obligations of the Issuer. As of , 2003, after giving pro forma effect to the IDSs offering and the use of proceeds as contemplated in this prospectus, the Issuer had no indebtedness other than the notes.

As a holding company, we will rely entirely on dividends, distributions and other payments from our subsidiaries to make payments on the notes. The new credit facility contains limitations on the ability of our subsidiaries to make distributions to us. See “Description of Certain Indebtedness.”

Note guarantees

The notes will be guaranteed by Holdings, ASG and its subsidiaries on an unsecured subordinated basis on the terms set forth in the indenture, including a standstill period of not more than 90 days prior to the enforcement of the guarantees. The note guarantees will be subordinated in right of payment to all existing and future senior indebtedness of the guarantors, including indebtedness and guarantees of ASG and its subsidiaries under our new credit facility and will rank pari passu with all existing and future unsecured subordinated debt of the guarantors that does not expressly provide that it is subordinated to the guarantees. See “Description of Notes—Guarantees and Pledge.”

As of March 31, 2003, after giving pro forma effect to the IDSs offering and the use of proceeds as contemplated in this prospectus, the guarantors had approximately $ million of indebtedness, excluding trade payables, of which $220.0 million is indebtedness under our new credit facility and other senior indebtedness of the guarantors.

Collateral

The Issuer will pledge all of its interest in the Holdings notes and all of its partnership interests in Holdings as security for the notes. In addition, ASC, Inc. and the Corporate Partners will pledge their respective interests in Holdings as security for the notes. We will be required to provide additional collateral in the form of additional Holdings notes if we issue additional notes in the future.

Optional redemption

On and after , 2008, we may redeem for cash all or part of the notes upon not less than 30 or more than 60 days’ notice by mail to the owners of notes, at redemption prices described under “Description of Notes—Optional Redemption.” If the notes are redeemed in part on a pro rata basis, the notes and stock represented by each IDS will be automatically separated.

In addition, at any time before , 2008, we may redeem all or part of the notes at a redemption price equal to the sum of the present values of the redemption price of the notes at the first optional redemption date pursuant to the preceding paragraph and all required interest payments on the notes through the first optional redemption date, discounted at the treasury rate plus basis points, plus accrued and unpaid interest. See “Description of Notes—Optional Redemption.”

Change of control

Upon the occurrence of a change of control, as defined under “Description of Notes—Change of Control,” unless we have exercised our right to redeem all notes as described above, each holder of the notes will have the right to require us to repurchase that holder’s notes at a price equal to 101% of the principal amount of the notes being repurchased, plus any accrued but unpaid interest to the date of repurchase. In order to exercise this right, a holder must separate the notes and common stock represented by such holder’s IDSs.

Procedures relating to subsequent Issuances

The indenture governing the notes will provide that, in the event there is a subsequent issuance of notes by the Issuer having substantially identical terms as the notes, each holder of notes or IDSs (as the case may be) agrees that a portion of such holder’s notes (whether held directly in book-entry form or held as part of IDSs) will be exchanged for a portion of the notes purchased by the holders of such subsequently issued notes, and the records of any record holders of notes will be revised to reflect such exchanges. Consequently, following each such subsequent issuance and exchange, without any further action by such holder, each holder of notes or IDSs (as the case may be) will own an indivisible unit composed of notes of each separate issuance in the same proportion as each other holder. However, the aggregate principal amount of notes owned by each holder will not change as a result of such subsequent issuance and exchange. The indenture governing the notes will permit issuances of additional notes upon exercise of exchange warrants by holders of ASLP units for notes and common stock and for other permitted purposes, subject to compliance with restrictive covenants contained in the indenture. Any subsequent issuance of notes by the Issuer may affect the tax treatment of the holders of notes and IDSs. See “Material U.S. Federal Income Tax Considerations—Exchange Rights and Additional Issuances.”

Restrictive covenants

The indenture governing the notes will contain covenants with respect to us and our restricted subsidiaries that will restrict:

the incurrence of additional indebtedness and the issuance of preferred stock and certain redeemable capital stock;

dividends or distributions on or redemptions of capital stock;

a number of other restricted payments, including investments;

specified sales of assets;

specified transactions with affiliates;

the creation of a number of liens; and

consolidations, mergers and transfers of all or substantially all of our assets.

The indenture will also prohibit certain restrictions on distributions from our restricted subsidiaries. However, there will be no restriction in the indenture on the Issuer incurring indebtedness in connection with the issuance of shares of the Issuer’s common stock so long as the ratio of the aggregate principal amount of the additional debt securities over the number of the additional shares of the Issuer’s common stock will not exceed the equivalent ratio represented by the then existing IDSs. In addition, all the limitations and prohibitions described above are subject to a number of other important qualifications and exceptions described under “Description of Notes —Certain Covenants.”

Use of Proceeds; Intercompany Notes

The aggregate gross cash proceeds from the issuance of the notes will be approximately $248.8 million (or $273.7 million if the underwriters’ overallotment option is exercised in full). The Issuer will lend these proceeds and a portion of the proceeds from the issuance of the common stock to Holdings pursuant to intercompany notes, such that the aggregate principal amount of Holdings notes issued to the Issuer will be the same as the principal amount of the notes. Holdings will also issue identical notes to ASLP in redemption of a portion of the Holdings’ equity interests held by ASLP. If the Issuer issues additional notes in the future under the indenture governing the notes, the Issuer must use the proceeds to acquire a corresponding principal amount of Holdings notes. The Holdings notes will have the same payment and interest terms and substantially similar other provisions as the notes and will contain cross-default provisions such that an event of default under the notes will trigger an event of default under the Holdings notes. The Holdings notes will be guaranteed by ASG and its subsidiaries on the same basis as the notes. The Issuer will pledge all of its interest in the Holdings notes to secure the notes as described above. The Issuer will covenant not to enforce the guarantees of the Holdings notes or the Holdings notes issued to it unless instructed to do so by the Trustee, and the amounts collected from any guarantor under its note guarantee and under its guarantee of the Holdings notes (or under the Holdings notes) will be credited against each other.

Summary of the Capital Stock

Issuer

American Seafoods Corporation.

Shares of common stock to be outstanding following the offering

33,439,563 shares (or 36,609,592 shares assuming the underwriters’ over-allotment option is exercised in full), which include 1,739,275 shares to be issued to certain of our existing direct or indirect equity investors upon consummation of this offering in connection with our internal restructuring and realignment transactions.

Voting rights

Each outstanding share of our common stock will carry one vote per share and, subject to the provisions in this paragraph and to applicable law, the common stock will vote as a class on all matters presented to the shareholders for a vote.

Listing

The shares of our common stock will be freely tradable without restriction or further registration under the Securities Act, unless they are purchased by “affiliates” as that term is defined in Rule 144 under the Securities Act of 1933. We will apply to list our shares of common stock on the Toronto Stock Exchange under the trading symbol “ ”. In addition, if more than 33% of our outstanding shares of common stock are no longer held in the form of IDSs for a period of 30 consecutive trading days, we will apply to list the shares of our common stock on the American Stock Exchange.

Foreign ownership provisions

We are subject to complex foreign ownership limitations applicable to companies that participate in U.S. fisheries. The Issuer’s charter will contain provisions (i) limiting to 20% the aggregate percentage ownership of the Issuer’s capital stock by non-U.S. citizens, (ii) limiting to 9% the portion of the Issuer’s capital stock that can be held through The Canadian Depository for Securities Limited system and prohibiting transfers that increase the portion of the Issuer’s capital stock that is held through that system at any time, (iii) requiring each 5% owner of the Issuer’s capital stock to provide an affidavit of U.S. citizenship, (iv) requiring that either at least 98% of the Issuer’s capital stock (exclusive of the portion held through The Canadian Depository for Securities Limited system) or % of all of the Issuer’s capital stock be held by beneficial owners with U.S. addresses, (v) limiting the right to vote to holders that certify that they are U.S. citizens, and (vi) declaring any holding in violation of the foregoing null and void, or voidable, and providing the Issuer with various remedies including mandatory redemptions and sales. See “Business—Government Regulation.”

Equity interest in Holdings

The Issuer will be the sole general partner of Holdings and, through Holdings, will have management control of all of its subsidiaries. Three wholly-owned subsidiaries of the Issuer will hold limited partnership interests in Holdings. The Issuer’s direct and indirect interests in Holdings at the closing will constitute 66.5% of the equity of Holdings. The balance of the equity of Holdings will be held by ASLP.

Preferred Stock

The Issuer will have outstanding 100 shares of each of its Class A, Class B and Class C preferred stock, which will be owned, directly or indirectly by Centre Partners Management LLC, Coastal Villages Pollock LLC and Bernt O. Bodal, respectively. Each class of preferred shares will entitle the holder thereof to elect one member of our board of directors, which will have a total of at least seven members and not more than 13 members. The shares of preferred stock will not entitle the holders thereof to any voting rights other than the right to block any increase in the size of the board to more than 13 members and as required by applicable law. The shares of preferred stock will not be transferable except to a limited class of affiliates of the original owners. The preferred shares of each class will be redeemable by us for nominal consideration (i) if the holders thereof sell shares of our common stock or equity in ASLP such that their indirect equity interest in Holdings is reduced below 5% (or at anytime after their indirect equity interest in Holdings has otherwise been reduced below 5%) or (ii) at such time as, for any reason, the indirect equity interest in Holdings of the holders of such class falls below 2%. The preferred shares will not entitle the holders thereof to receive dividends or distributions of any kind, other than nominal redemption consideration.

Risk Factors

You should carefully consider the information under the heading “Risk Factors” and all other information in this prospectus before investing in the shares of our common stock and notes represented by IDSs.

General Information About This Prospectus

Unless we specifically state otherwise, the information in this prospectus does not take into account the exercise by the underwriters of their over-allotment option with respect to IDSs.

Throughout this prospectus, we have assumed (i) the purchase of all of the existing senior subordinated notes pursuant to the consent solicitation and tender offer for aggregate consideration of $209.6 million, (ii) a 13% interest rate on the notes, which is subject to change depending on market conditions and (iii) an initial public offering price of $17.35 per IDS (comprised of $7.85 allocated to each note and $9.50 allocated to each share of common stock).

Unless we specifically state otherwise, the information and computations in this prospectus do not take into account the exercise by members of our management of compensatory options to acquire interests in ASLP that, if exercised, would cause ASLP to exercise parallel or mirror options, resulting in dilution for all holders of IDSs and ASLP units. If all of such options and mirror options were exercised immediately following the offering, the Issuer’s percentage ownership in Holdings would decline from 66.5% to 65.4%.

Summary Consolidated Financial Information for Holdings

The following summary historical consolidated financial information for Holdings for the years ended December 31, 2001 and 2002 has been derived from our audited consolidated financial statements included elsewhere in this prospectus and the summary historical consolidated financial information for Holdings as of March 31, 2003 and for the three month periods ended March 31, 2002 and 2003 has been derived from our unaudited consolidated financial statements included elsewhere in this prospectus.

The following summary unaudited pro forma financial information for Holdings has been derived by the application of pro forma adjustments to Holdings’ historical financial statements included elsewhere in this prospectus. The summary pro forma financial information for Holdings gives pro forma effect to (i) the distribution by Holdings to ASLP of Holdings’ 80% interest in PLC and (ii) the acquisition of Southern Pride as if such transactions occurred on January 1, 2002 and, in the case of balance sheet data, as of March 31, 2003. The pro forma financial information for Holdings does not reflect any adjustments that give effect to this offering or any of the other transactions contemplated hereby, which adjustments are reflected in the pro forma financial information for the Issuer appearing elsewhere in this prospectus.

													Pro forma
	Year ended December 31,						Three Months ended March 31,						Year ended December 31,			Three Months ended March 31,			Three Months ended March 31,
	2001			2002			2002			2003			2002			2002			2003
	(dollars in thousands)
Statement of Operations Data:
Total revenue	$	336,839		$	332,872			83,858			111,099		$	419,293		$	109,269		$	109,650
Gross profit		127,239			126,481			41,343			47,564			146,628			47,027			47,328
Gross margin		37.8	%		38.0	%		49.3	%		42.8	%		35.0	%		43.0	%		43.2	%
Operating profit		35,436			58,975			27,194			30,977			63,629			28,876			30,981
Income before income taxes and minority interest		18,180			23,012			21,049			22,455			24,858			21,819			22,539
Net income		20,078			22,253			19,737			21,395			24,099			20,507			21,479
Statement of Cash Flows Data:
Cash flows from operating activities		84,588			96,678			17,980			2,834
Cash flows from investing activities		(13,648	)		(58,634	)		(1,566	)		(3,330	)
Purchases of property, vessels and equipment		(9,171	)		(9,431	)		(1,697	)		(3,269	)
Cash flows from financing activities		(73,014	)		(34,736	)		(11,975	)		1,376
Other Financial Data:
EBITDA(1)	$	121,385		$	103,150		$	34,733		$	40,162		$	110,767		$	37,155		$	40,013
Unrealized foreign exchange gains, net(1)		(12,976	)		(10,763	)		(757	)		(2,304	)		(10,763	)		(757	)		(2,304	)
Equity-based compensation(1)		527			5,600			102			138			5,600			102			138
Loss from debt repayment and related write-offs(1)		—			15,711			—			—			15,711			—			—
Ratio of earnings to fixed charges(2)		1.53			1.59			3.73			3.10			1.59			3.74			3.13

	March 31, 2003			Pro forma March 31, 2003
	(dollars in thousands)
Balance Sheet Data:
Current assets	$	145,184		$	140,542
Current liabilities		74,433			72,615
Property, vessels and equipment, net		246,578			236,392
Cooperative rights, net		84,798			84,798
Total assets		588,071			571,922
Total interest bearing obligations		574,653			567,416
Members interest (deficit)		(103,651	)		(106,761	)

(1)

EBITDA represents net income from continuing operations before interest expense, income tax provision (benefit) and depreciation and amortization. EBITDA is not a measure of operating income, operating performance or liquidity under GAAP. We include EBITDA because we understand it is used by some investors to determine a company’s historical ability to service indebtedness and fund ongoing capital expenditures, and because certain covenants in our borrowing agreements are tied to similar measures. Nevertheless, this measure should not be considered in isolation or as a substitute for operating income (as determined in accordance with GAAP) as an indicator of our operating performance, or of cash flows from operating activities (as determined in accordance with GAAP), or as a measure of liquidity. The consummation of the transactions contemplated by this offering will not have an impact on EBITDA before minority interest. EBITDA as calculated here differs from Adjusted EBITDA as defined in our note indenture and credit agreements. Adjusted EBITDA as defined in our note indenture and credit agreements means net income from continuing operations before interest expense, income tax provision or benefit, depreciation, amortization, net unrealized foreign exchange gains or losses, minority interest in income or loss of consolidated entities, equity-based compensation, and any loss from debt repayments and related write-offs. If our Adjusted EBITDA were to decline below certain levels, covenants in our indebtedness that are based on Adjusted EBITDA, including our interest coverage ratio and fixed charge coverage ratio covenants could result in, among other things, a default or mandatory prepayment under our senior credit facility, our inability to pay dividends or a requirement that we defer interest payments on the notes. These covenants are summarized under “Description of Certain Indebtedness” and “Description of Notes.” A reconciliation of EBITDA to Adjusted EBITDA is as follows:

													Pro Forma
	Year ended December 31,						Three Months ended March 31,						Year ended December 31, 2002			Three Months ended March 31, 2002			Three Months ended March 31, 2003
	2001			2002			2002			2003			Year ended December 31, 2002			Three Months ended March 31, 2002			Three Months ended March 31, 2003
	(dollars in thousands)

EBITDA	$	121,385		$	103,150		$	34,733		$	40,162		$	110,767		$	37,155		$	40,013
Unrealized foreign exchange gains, net		(12,976	)		(10,763	)		(757	)		(2,304	)		(10,763	)		(757	)		(2,304	)
Equity-based compensation		527			5,600			102			138			5,600			102			138
Loss from debt repayment and related write-offs		—			15,711			—			—			15,711			—			—
Minority interest in income (loss) of subsidiary		171			401			(297	)		51			—			—			—

Adjusted EBITDA	$	109,107		$	114,099		$	33,781		$	38,047		$	121,315		$	36,500		$	37,847

We consider EBITDA to be a measure of liquidity. Accordingly, EBITDA is reconciled to operating cash flows as follows:

	Year ended December 31,						Three Months ended March 31,
	2001			2002			2002			2003
	(dollars in thousands)

Cash flows from operating activities	$	84,588		$	96,678		$	17,980		$	2,834
Interest expense, net of non-cash interest		18,715			35,051			5,203			9,301
Net change in operating assets and liabilities		899			(15,495	)		9,286			23,859
Income tax provision (benefit)		(1,898	)		759			1,312			1,060
Deferred income tax provision (benefit)		6,607			(3,696	)		—			—
Other		25			401			297			(51	)
Unrealized foreign exchange gains/losses, net		12,976			10,763			757			3,297
Equity-based compensation		(527	)		(5,600	)		(102	)		(138	)
Loss from debt repayment and related write-offs		—			(15,711	)		—			—

EBITDA	$	121,385		$	103,150		$	34,733		$	40,162

(2)

Ratio of earnings to fixed charges is calculated as the total of income before income taxes, minority interest, fixed charges, amortization of capitalized interest, less interest capitalized, divided by the total of interest capitalized and interest expense, including amortization of deferred financing fees and discounts on debt securities.

Summary Pro Forma Financial Information for the Issuer

The following summary pro forma financial information has been derived by the application of pro forma adjustments to the Issuer’s historical consolidated financial statements included elsewhere in this prospectus. The summary pro forma consolidated balance sheet and statement of operations data gives effect to (1) the distribution by Holdings of its interest in PLC to ASLP, (2) the acquisition of Southern Pride and (3) the financing transactions described under “Capitalization” and the application of the proceeds therefrom as if the Issuer was formed and all these transactions had been consummated on March 31, 2003 for the consolidated balance sheet data and January 1, 2002 for the consolidated statement of operations data.

Assumptions underlying the pro forma adjustments are described in the notes to the unaudited pro forma condensed consolidated financial statements, which should be read in conjunction with this summary pro forma financial information. We believe that the assumptions used provide a reasonable basis for presenting the significant effects directly attributable to these transactions; however, this summary pro forma financial information should not be considered indicative of actual results that would have been achieved had the PLC distribution, the acquisition of Southern Pride and the financing transactions been consummated on the date or for the periods indicated and do not purport to indicate consolidated balance sheet data or results of operations as of any future date or for any future period.

This summary pro forma financial information should be read in conjunction with the information contained in “Selected Historical and Pro Forma Financial Information for Holdings,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Holdings’ consolidated financial statements and related notes included elsewhere in this prospectus.

	Pro Forma Issuer for the
	Year ended December 31, 2002			Three Months ended March 31, 2002			Three Months ended March 31, 2003
	(in thousands)

Statement Of Operations Data
Total revenue	$	419,293		$	109,269		$	109,650
Gross profit		146,628			47,027			47,328
Gross margin		35.0	%		43.0	%		43.2	%
Operating profit		63,629			28,876			30,981
Other income (expense), net		(68,214	)		(16,944	)		(14,961	)
Net income (loss)	$	(4,585	)	$	11,932		$	16,020
Other Financial Data:
EBITDA	$	110,767		$	37,155		$	40,013
Unrealized foreign exchange gains/losses, net		(10,763	)		(757	)		(2,304	)
Equity-based compensation		5,600			102			138
Loss from debt repayment and related write-offs		15,711			—			—
Ratio of earnings to fixed charges		0.96			1.67			1.94

							Pro forma Issuer as of March 31, 2003
							(in thousands)

Balance Sheet Data:
Current assets							$	140,543
Current liabilities								58,382
Property, vessels and equipment, net								236,392
Cooperative rights, net								84,798
Total assets								553,653
Total interest bearing obligations								614,843
Shareholders’ deficit							$	(132,694	)

Interest and Dividend Payments to IDS Holders

The table below shows certain information relating to our available cash in 2002 and for the twelve month period ended March 31, 2003 on a pro forma basis for the Issuer to give effect to this offering, including the use of proceeds from this offering, our recapitalization and the consent solicitation and tender offer, and to give effect to ASG’s new credit facility. For purposes of this presentation, we have assumed that all of the existing senior subordinated notes are purchased pursuant to the consent solicitation and tender offer for an aggregate consideration of $209.6 million and that all ASLP units are exchanged for IDSs.

The information in the table below assumes that these transactions occurred on January 1, 2002.

	Pro Forma Issuer
	Year ended December 31, 2002			LTM ended March 31, 2003
	(in thousands)

Net loss	$	(4,585	)	$	(497	)
Additions:
Interest expense		71,354			70,617
Tax expense		—			—
Depreciation and amortization		43,998			43,505

EBITDA	$	110,767		$	113,625
Additions:
Unrealized foreign exchange gains/losses, net	$	(10,763	)	$	(12,310	)
Equity-based compensation		5,600			5,636
Loss from debt repayment and related write-offs		15,711			15,711
Deductions:
Interest expense(1)		(65,852	)		(65,852	)

Available cash before additional public company administrative expenses, capital expenditures and dividend payments	$	55,463		$	56,810

(1)	Assumes interest at current rates, estimated as 6.09% average interest on $220.0 million outstanding borrowings under the new term loan and the new senior notes, 4.12% interest on an overall balance of $20.0 million under the new revolver and 13% interest on $394.8 million represented by the IDSs.

Under the dividend policy we expect to have in place upon consummation of this offering, we would have used the available cash before additional public company administrative expenses, capital expenditures and dividend payments shown in the above table as follows:

	Pro Forma Issuer
	Year ended December 31, 2002			LTM ended March 31, 2003
	(In thousands)
Available cash before additional public company administrative expenses, capital expenditures and dividend payments	$	55,463		$	56,810
Annual maintenance capital expenditures(1)		(9,500	)		(9,500	)
Estimated additional public company administrative expenses(2)		(760	)		(760	)
Dividends on shares of common stock		(39,208	)		(39,208	)

Remaining cash	$	5,995		$	7,342

(1)

We use the term “maintenance capital expenditures” to refer to costs we incur that meet capitalization requirements under accounting principles generally accepted in the United States of America that we consider recurring in nature. The majority of our maintenance capital expenditures relate to our catcher-processor fleet and include items such as fishing gear, improvements to vessel factory processing equipment and major scheduled vessel maintenance. Major scheduled vessel maintenance costs relate principally to our periodic overhauls and replacements performed generally on a three- to five-year cycle.

(2)

Consist of $50,000 of certain administrative fees being reimbursed to ASLP, estimated audit fees, tax audit fees, director and officer liability insurance, expenses relating to the annual stockholders’ meeting, printing expenses, investor relations expenses, additional filing fees, additional trustee fees, registrar and transfer agent fees, directors’ fees, additional legal fees, listing fees and miscellaneous fees.

Dividend payments are discretionary. See “Dividend Policy and Restrictions.”

With the recent acquisition of Southern Pride, we estimate that we will have capital expenditure requirements of approximately $10.0 million in each of 2003 and 2004. Interest payments on the notes may be required to be deferred for up to 24 months in the aggregate prior to , 2008 and may be deferred at our option on one occasion for not more than 10 months between , 2008 and , 2013.

Based on the foregoing, aggregate payments to IDS holders for the twelve months ended March 31, 2003 would have been as follows:

	Aggregate		Per IDS
	(In millions)
Interest on notes represented by IDSs	$	51.3	$	1.02
Dividends on shares of common stock represented by IDSs		39.2		0.78

Total	$	90.5	$	1.80

Risk Factors

An investment in the shares of our common stock and our notes represented by the IDSs involves a number of risks. In addition to the other information contained in this prospectus, prospective investors should give careful consideration to the following factors.

Risks Relating to Our Industry and Its Regulation

The repeal of or adverse amendments to the American Fisheries Act and other industry regulations would likely impair our profitability.

The American Fisheries Act restricts the number of vessels operating in the catcher-processor sector of the U.S. Bering Sea pollock fishery to 19 named catcher-processor vessels, of which we own seven, and by allocating 40% of the directed pollock catch to this sector (with 36.6% being allocated to these 19 catcher-processor vessels and 3.4% being allocated to catcher-vessels). In the event that the American Fisheries Act and other related industry regulations were repealed or modified to permit additional large vessels to operate in the catcher-processor sector of the U.S. Bering Sea pollock fishery, we could be subject to new competition that could adversely affect our profitability. In addition, our harvesting rights and profitability would be adversely affected if the American Fisheries Act and other industry regulations were repealed or modified in a manner that decreases the percentage of the total pollock harvest allocated to the 19 catcher-processor vessels named in the Act. A repeal or modification of the American Fisheries Act or other industry regulations could result from changes in the political environment, a significant increase or decrease in the pollock biomass or other factors, all of which are difficult to predict and are beyond our control.

The relatively stable and predictable nature of our harvesting operations and our efficiencies would deteriorate if the Pollock Conservation Cooperative agreement were terminated or adversely changed.

The members of the Pollock Conservation Cooperative, which is comprised of all participants in the catcher-processor sector of the U.S. Bering Sea pollock fishery, have agreed that each member will catch only an agreed-upon share of the total allowable catch allocated to the catcher-processor sector in that fishery. By establishing allocations among all catcher-processors, the Pollock Conservation Cooperative, which we refer to as the Cooperative, ensures that members will have the opportunity to harvest a fixed percentage of the total pollock harvest and removes the incentives to harvest and process pollock as fast as possible, thereby giving each member a greater opportunity to optimize operational efficiencies. The Cooperative could be terminated as a result of an adverse change in the American Fisheries Act allocations, the bankruptcy of a Cooperative member or the decision of two or more Cooperative members. The termination of the Cooperative or any adverse change to the allocation system currently in place under the agreement could increase the volatility of our operations, cause us to lose operational efficiencies and have an adverse effect on our existing harvesting rights.

Growth in our core pollock harvesting operations is limited by the American Fisheries Act and long-term contracts.

The American Fisheries Act imposes a statutory limit on the maximum amount of pollock that we may independently harvest equal to 17.5% of the directed pollock catch (or approximately 15.1% of the total allowable catch). However, we may supplement our harvest above this limitation through the purchase of community development quota, which represents up to an additional 10.0% of the total allowable catch. In 2001 and 2002, we harvested an aggregate of 17.9% of the total allowable catch. We are allocated 16.8% of the directed pollock catch under our Cooperative agreements, and we lease the right to harvest another 0.7% of the directed pollock catch from other vessels in our fishery, bringing us to the 17.5% limit. We supplemented our share of the directed pollock catch in 2001 and 2002 by purchasing 28.0% of the community development quota (or 2.8% of the total allowable catch) from two Alaska Community Development Groups, both of which are

equity investors in our company. Because most of the remaining community development quota is subject to long-term contracts, relationships and partnerships, it is unlikely that we will be able to substantially increase our purchases of total allowable catch from these groups in the future.

Our business could be materially affected if we were not able to continue to purchase community development quota.

Our access to community development quota plays an important part in our strategy of maximizing access to pollock. The primary agreements governing our current arrangements for purchasing community development quota expire at the end of 2005. The Alaska Community Development Groups from which we purchase community development quota could discontinue to sell their quota to us or could offer their quota at prices we consider unreasonable.

In addition, every three years the state of Alaska may re-allocate the community development quota allocation among the six Alaska Community Development Groups. The next reallocation is for the period beginning 2006. The Alaska Community Development Groups from which we purchase community development quota could have their quota allocation reduced below current levels. If any significant reduction were to occur, we could experience a significant decline in our revenues, earnings and profitability.

Our ocean harvested whitefish operations are subject to regulatory control and political pressure from interest groups may seek to materially limit our ability to harvest fish.

Under the American Fisheries Act, the Magnuson-Stevens Fishery Conservation and Management Act and other relevant statutes and regulations, various regulatory agencies, including the National Marine Fisheries Service and the North Pacific Fishery Management Council, are endowed with the power to control our harvest of pollock and other groundfish in the fisheries of the North Pacific. These regulatory agencies have the authority to materially reduce the Alaska pollock total allowable catch allocated to the catcher-processor sector as well as our allocation of pollock and other groundfish without any compensation to us.

These regulators may be subject to political pressure to decrease or eliminate our allocation of the fish supply from a broad spectrum of lobbying interests including:

native Alaskan groups seeking a greater allocation of the pollock harvest to be devoted to community development quotas;

other sectors of the pollock fishery, such as inshore processors who periodically seek an increased allocation of the pollock harvest devoted to the on-shore sector; and

environmental groups.

As a result of these varying political pressures, the laws and rules that govern the highly-regulated fishing industry could change in a manner that would have a negative impact on our operations. In addition, protests and other similar acts of politically motivated third party groups could cause substantial disruptions to the ability of our vessels to engage in harvesting activities. These factors may affect a substantial portion of our harvesting and processing operations in any year, which could have a material adverse effect on our business, results of operations or financial condition.

Regulations related to our by-catch could impose substantial costs on our operations and reduce our operational flexibility.

The National Marine Fisheries Service imposes various operational requirements aimed at limiting our ability to discard unwanted species, or by-catch, for regulatory or economic reasons in the North Pacific. By-catch is from time to time debated in various forums, including the United Nations, and is the subject of public campaigns by environmental groups. Any significant change in the by-catch rules resulting from these debates or campaigns could materially increase the costs or decrease the flexibility of our fishing operations.

Governmental efforts to protect endangered species, such as Steller sea lions, may significantly restrict our ability to access our primary fisheries and revenues.

There is a risk that access to certain areas of the primary fisheries in which we operate could be restricted due to constraints imposed by governmental authorities in response to the listing of endangered species, such as Steller sea lions, for purposes of the Endangered Species Act. Since 1990, the National Marine Fisheries Service has issued various biological opinions as to the impact on Steller sea lions of the pollock and other groundfish fisheries of the U.S. Bering Sea. These opinions have analyzed the effects of the various groundfish fisheries in the waters off Alaska and have recommended actions to avoid jeopardy for the western population of Steller sea lions and the adverse modification of its habitat. Based upon these opinions, the National Marine Fisheries Service has adopted several regulations relating to the protection of Steller sea lions which have caused us to harvest our allocation of pollock and other groundfish from less than the full territory of the fisheries in which we have historically operated.

The regulations to protect endangered species, such as Steller sea lions, may significantly restrict our fishing operations and revenues. Further, whatever measures that are adopted may be found to be inadequate or not in compliance with the Endangered Species Act. Therefore, as has occurred in the past, a court may in the future force us to modify our fishing operations by restricting our access to certain areas of the primary fisheries in which we operate in order to ensure the protection of the Steller sea lions in compliance with the Endangered Species Act. These restrictions could have an impact on our fishing operations, profitability and revenues which may be material to our business.

In addition, the U.S. Fish and Wildlife Service is currently preparing a biological opinion on the effects of the Bering Sea/Aleutian Islands/Gulf of Alaska groundfish fisheries on bird species listed under the Endangered Species Act, in particular the short-tailed albatross. The National Marine Fisheries Service is also conducting an assessment of the potential interactions between short-tailed albatross and equipment used by trawl vessels in these fisheries. The measures that could be imposed as a result of these investigations could have an impact on our fishing operations, profitability and revenues which may be material to our business.

If we and members of our crew fail to comply with applicable regulations, our vessels may become subject to liens, foreclosure risks and various penalties and our fishing rights could be revoked.

Our industry is subject to highly complex statutes, rules and regulations. For example, we are subject to statutory and contractual limitations on the type and amount of fish we may harvest, as well as restrictions as to where we may fish within our fisheries. If we or members of our crew violate maritime law or otherwise become subject to civil and criminal fines, penalties and sanctions, our vessels could be subject to forfeiture and our fishing rights could be revoked. The violations that could give rise to these consequences include operating a vessel with expired or invalid vessel documentation or in violation of trading restrictions, violating international fishing treaties or fisheries laws or regulations, submitting false reports to a governmental agency, interfering with a fisheries observer or improperly handling or discarding pollock roe. Because our vessels’ harvesting and processing activities take place at sea, outside the day-to-day supervision of senior management, members of the crews of our vessels may have been guilty of infractions or violations that could subject them or us to significant penalties, which could have a material and adverse effect on our results of operations and financial condition.

In 2001, we became aware of allegations that certain crew members may have tampered or attempted to tamper with measurement equipment on board one or more of our vessels, principally related to the 2001 fishing season. In 2002, we received additional tampering allegations relating to one of our vessels. The National Marine Fisheries Service conducted an investigation regarding these allegations, which did not uncover any evidence that any tampering or other wrongdoing occurred. In consultation with the National Marine Fisheries Service, we conducted an internal investigation regarding these allegations, which also did not uncover any evidence that any tampering or other wrongdoing occurred. However, violations may have occurred or may occur in the future.

In addition, our vessels may become subject to liens imposed by operation of maritime law in the ordinary course of business. These include liens for unpaid crew wages, liens for damages arising from maritime torts, liens for various services provided to the vessel and liens arising out of the operation, maintenance and repair of the vessel. The holders of these liens may have the right to foreclose on the vessel if the circumstances giving rise to the liens are not adequately addressed.

If we do not comply with rules regulating non-U.S. citizen ownership and control of fishing vessels, we could lose our eligibility to participate in U.S. fisheries.

In order to maintain our eligibility to participate in U.S. fisheries, our existing governance documents contain restrictions on transfers of interests in ASLP or Holdings to non-U.S. citizens, as well as provisions allowing us to require evidence of U.S. citizenship from our equity owners and providing for the automatic redemption of interests held by non-U.S. citizens to the extent necessary to keep the percentage held by non-U.S. citizens below specified limits. To maintain our eligibility following the consummation of this offering, we will put in place charter provisions (i) limiting to 20% the aggregate percentage ownership of the Issuer’s capital stock by non-U.S. citizens, (ii) limiting to 9% the portion of the Issuer’s capital stock that can be held through The Canadian Depository for Securities Limited system and prohibiting transfers that increase the portion of the Issuer’s capital stock that is held through that system at any time, (iii) requiring each 5% owner of the Issuer’s capital stock to provide an affidavit of U.S. citizenship, (iv) requiring that either at least 98% of the Issuer’s capital stock (exclusive of the portion held through The Canadian Depository for Securities Limited system) or % of all of the Issuer’s capital stock be held by beneficial owners with U.S. addresses, (v) limiting the right to vote to holders that certify that they are U.S. citizens, and (vi) declaring any holding in violation of the foregoing null and void, or voidable, and providing the Issuer with various remedies including mandatory redemptions and sales. Related provisions will permit us at any time to require record and beneficial owners of our common stock or IDSs to provide information and affidavits concerning citizenship status.

In addition, ASLP will adopt provisions and procedures to ensure that non-U.S. citizen ownership of ASLP does not exceed a percentage that, assuming 20% non-U.S. citizen ownership of the Issuer, would cause aggregate non-U.S. citizen ownership of Holdings to exceed 22%. If the provisions and procedures described above prove to be inadequate, we could lose our eligibility to harvest pollock, which would have a material adverse effect on our business, financial condition or results of operations.

The determinations we have received from the Maritime Administration with respect to our equity ownership, and the confirmation we expect to receive in connection with this offering and the adoption of the provisions and procedures described above, do not extend to the citizenship status of lenders or the terms of any loan covenants and financing arrangements. Moreover, such determinations contain language in which the Maritime Administration expressly reserves the right to review these terms to determine if they constitute an impermissible shifting of control to a non-U.S. citizen lender. Based on discussions with counsel and with pertinent government officials, we believe the intention of the Maritime Administration is to prevent provisions couched as loan covenants from serving as a device to shift control to non-U.S. citizens, and not to impede conventional market based loans and credit facilities.

On February 4, 2003, the Maritime Administration published final regulations implementing certain statutory requirements under the American Fisheries Act for lenders holding preferred mortgages on large U.S. flag fishing industry vessels directly or through qualified mortgage trustees. We expect that our secured lending arrangements will comply with these requirements.

The American Fisheries Act is relatively new legislation. As a result, no reported judicial cases clearly interpret its meaning. For this reason, the full future impact of the American Fisheries Act on our ownership and debt capital structure remains uncertain.

Risks Relating to Our Business

A significant decline in the market price of our products would significantly reduce our profitability.

The sale of pollock roe is our highest margin business. Pollock roe prices have experienced significant volatility in recent years and may continue to do so in the future. The price of pollock roe is heavily influenced by the size and condition of roe skeins, color and freshness and the maturity of the fish caught. In addition, pollock roe prices are influenced by anticipated Russian and U.S. production and Japanese inventory carryover, as pollock roe is consumed almost exclusively in Japan. A decline in the quality of the pollock roe that we harvest or fluctuations in supply could cause a significant decline in the market price of pollock roe, which would reduce our margins and revenues. Other products we sell are also subject to price variations.

A material decline in the population and biomass of pollock stocks in the fisheries in which we operate would materially and adversely affect our business.

The population and biomass of pollock stocks are subject to natural fluctuations which are beyond our control and which may be exacerbated by disease, reproductive problems or other biological issues. Pollock stocks are also largely dependent on proper resource management and enforcement. The overall health of a fish stock is difficult to measure and fisheries management is still a relatively inexact science. Since we are unable to predict the timing and extent of fluctuations in the population and biomass of the pollock stocks, we are unable to engage in any measures that might alleviate the adverse effects of these fluctuations. Any such fluctuation which results in a material decline in the population and biomass of the pollock stocks in the fisheries in which we operate would materially and adversely affect our business. Conversely, a significant increase in Russian pollock stocks could dramatically reduce the market price of our products.

Our catfish operations are similarly subject to the risk of variations in supply. For example, disease in catfish ponds could reduce catfish stocks and adversely affect our business.

Our business is subject to Japanese currency fluctuations which could materially adversely affect our financial condition.

Our profitability depends in part on revenues received in Japanese yen as a result of sales in Japan. During 2002, our Japanese sales represented 41.4% of our total revenues. A decline in the value of the yen against the U.S. dollar would adversely affect our earnings from sales in Japan. Fluctuations in currency are beyond our control and are unpredictable. From January 1 through December 31, 2002, the value of the dollar declined by 9.6% against the yen, from ¥131.26 per $1.00 to ¥118.64 per $1.00.

The hedging activities we conduct may not be sufficient to provide complete protection against loss, and accordingly any such fluctuations could adversely affect our revenues.

The segments of the fish industry in which we operate are competitive, and our inability to compete successfully could adversely affect our business, results of operations and financial condition.

We compete with major integrated seafood companies such as Trident Seafoods, Nippon Suisan and Maruha, as well as with inshore processors that operate inshore on fixed location processing facilities, relying on catcher-vessels to harvest and deliver fish for processing. We also compete with motherships that are solely at-sea processors, relying on catcher-vessels to harvest and deliver fish for processing. We also compete with other pollock fisheries, particularly the Russian pollock fishery in the Sea of Okhotsk. Some of our competitors have the benefit of marketing their products under brand names that have better market recognition than ours, or have stronger marketing and distribution channels than we do. In addition, other competitors may produce better

quality products or have more advantageous pricing margins than we do. We may not be able to compete successfully with any of these companies. In addition, production and distribution of substitute products for pollock could have a significant adverse impact on our profitability. Increased competition as to any of our products could result in price reduction, reduced margins and loss of market share, which could negatively affect our profitability. An increase in imported products in the U.S. at low prices could also negatively affect our profitability.

Our industry and the sales of our products are subject to seasonal variations and, as a result, our quarterly operating results fluctuate widely.

Our quarterly operating results are affected by the seasonal fluctuations of our sales and operating profits. The prices that we generally receive for our fish products fluctuate in response to seasonal factors and the typical increase in fish production value, or revenue per pound of fish harvested, during the January-to-April pollock season. Production value tends to be higher in the January-to-April season due to the harvesting of roe. As a result of these seasonal and quarterly fluctuations, we believe that comparisons of our sales and operating results between different quarters within a single fiscal year are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of our future performance.

In addition, our fishing seasons, including the important January-to-April season, straddle more than one quarter. As a result, the timing of the recognition of sometimes significant amounts of revenue from one quarter to another can be a function of unpredictable factors, such as the timing of roe auctions, weather, the timing of invoicing of pollock roe customers, fishing pace and product delivery schedules, all of which are likely to vary from year to year. Accordingly, comparisons of our sales and operating results between similar quarters within different fiscal years are not necessarily meaningful.

All of our business activities are subject to a variety of environmental and natural risks, which could have a material adverse effect on our business, financial condition or results of operations.

The U.S. Bering Sea pollock fishery, which is the primary fishery in which we operate, is characterized by extreme sea conditions. Unusual weather conditions could materially and adversely affect the quality and quantity of the fish products we produce and distribute.

Our vessels are expensive assets that are subject to substantial risks of serious damage or destruction. The sinking or destruction of, or substantial damage to, any of our vessels would entail significant costs to us, including the loss of production while the vessel was being replaced or repaired. We carry customary insurance coverage, including policies on each of our vessels which provide for the payment of an assessed amount corresponding to “fair market value” (generally approximately one-half of current replacement cost) in the event of a loss of a vessel. Additionally, all of our catcher-processor vessels have a further layer of umbrella insurance which provides coverage for 80% of the difference between that fair market value and the total replacement cost for one vessel during each one-year policy term. However, our insurance coverage may prove to be inadequate or may not continue to be available to us. In the event that such coverage proves to be inadequate, the sinking or destruction of, or substantial damage to, any of our vessels could have a material adverse effect on our business, financial condition or results of operations.

Should any of our vessels be destroyed or otherwise become inoperable, the American Fisheries Act would limit our ability to replace that vessel. The statute permits the replacement of lost vessels only if the loss is due to an Act of God, an act of war, the result of a collision, or otherwise not an intentional act of the vessel’s owner. These rules would restrict our ability to replace our vessels on account of obsolescence and, accordingly, could cause us to incur increased costs of maintaining our vessels, including the substantial loss of capacity during times of such maintenance and rebuilding.

We may be required to pay significant damages in connection with litigation that is pending against us.

Some of the lawsuits against us could require us to pay significant damages which could have a material adverse effect on our business, results of operations or financial condition. See “Business—Litigation.”

We may be adversely affected by a pending IRS audit.

Currently, the IRS is conducting an audit of two of our subsidiaries, ASG and ASC, Inc., with respect to tax years 2000 for ASG and 1999 and 2000 for ASC, Inc. We do not know what issues will be raised in the course of this audit and such audit could result in adjustments that could have a material adverse effect on our financial condition.

We may incur unexpected costs associated with compliance with environmental regulations.

We are subject to foreign, federal, state, and local environmental requirements, including those governing discharges to water, the management of hazardous substances, and the remediation of contamination. If we do not fully comply with environmental regulations, or if a release of hazardous substances occurs at or from one of our facilities or vessels, we may be subject to penalties and/or held liable for the cost of remediation. For example, an accident involving one of our vessels could result in significant environmental liability. If we are subject to these penalties or costs, we may not be covered by insurance, or any insurance coverage that we do have may not cover the entire cost. The operational and financial effects associated with compliance with the variety of environmental regulations to which we are subject could require us to make material expenditures or otherwise materially adversely affect the way we operate our business, as well as have a material adverse effect on our results of operations and financial condition.

We produce and distribute food products that are susceptible to contamination and, as a result, we face the risk of exposure to product liability claims and damage to our reputation.

As part of the fish processing and in spite of our quality control procedures, small pieces of metal or other similar foreign objects may enter into some of our products. Additionally, our fish products are vulnerable to contamination by disease-producing organisms or pathogens. Shipments of products that contained foreign objects or were so contaminated could lead to an increased risk of exposure to product liability claims, product recalls, adverse public relations and increased scrutiny by federal and state regulatory agencies. If a product liability claim were successful, our insurance might not be adequate to cover all the liabilities we would incur, and we might not be able to continue to maintain such insurance, or obtain comparable insurance at a reasonable cost, if at all. If we did not have adequate insurance or contractual indemnification available, product liability claims relating to defective products could significantly increase our operating costs. In addition, even if a product liability claim was not successful or was not fully pursued, the negative publicity surrounding any such assertion could harm our reputation with our customers.

Our operations are labor intensive, and our failure to attract and retain qualified employees may adversely affect us.

The segments of the harvesting and processing industry in which we compete are labor intensive and require an adequate supply of qualified production workers willing to work in rough weather and potentially dangerous operating conditions at sea. Some of our operations have from time to time experienced a high rate of employee turnover and could continue to experience high turnover in the future. Labor shortages, the inability to hire or retain qualified employees or increased labor costs could have a material adverse effect on our ability to control expenses and efficiently conduct our operations. We may not be able to continue to hire and retain the sufficiently skilled labor force necessary to operate efficiently and to support our operating strategies, or we may not continue to experience favorable labor relations. In addition, our labor expenses could increase as a result of a continuing shortage in the supply of personnel. Changes in applicable state and federal laws and regulations could increase labor costs, which could have a material adverse effect on our business, results of operations and financial condition.

Risks Relating to the IDSs, our Notes, the New Credit Facility and the Shares of our Common Stock

We have substantial indebtedness, which could restrict our ability to pay interest and principal on the notes and to pay dividends with respect to shares of our common stock represented by the IDSs.

Our ability to make distributions, pay dividends or make other payments will be subject to applicable law and contractual restrictions contained in the instruments governing any indebtedness of ours and our subsidiaries, including the new credit facility. The degree to which we are leveraged on a consolidated basis could have important consequences to the holders of the IDSs, including:

our ability in the future to obtain additional financing for working capital, capital expenditures or acquisitions may be limited;

we may not be able to refinance our indebtedness on terms acceptable to us or at all;

a significant portion of our cash flow from operations is likely to be dedicated to the payment of the principal of and interest on our indebtedness, thereby reducing funds available for future operations, capital expenditures and/or dividends on our common stock; and

we may be more vulnerable to economic downturns and be limited in our ability to withstand competitive pressures.

The indenture governing the notes represented by the IDSs will not limit our ability to issue additional notes to be represented by additional IDSs that we may issue or additional indebtedness evidenced by a different series of notes, provided such different series is issued in connection with the issuance of the same number of shares of our common stock as would be issued in an offering of IDSs.

We are subject to restrictive debt covenants that limit our business flexibility by imposing operating and financial restrictions on our operations.

The agreements governing our indebtedness impose significant operating and financial restrictions on us. These restrictions prohibit or limit, among other things:

the incurrence of additional indebtedness and the issuance of preferred stock and certain redeemable capital stock;

the payment of dividends on, and purchase or redemption of, capital stock;

a number of other restricted payments, including investments;

specified sales of assets;

specified transactions with affiliates;

the creation of a number of liens; and

consolidations, mergers and transfers of all or substantially all of our assets.

The terms of the new credit facility will include other and more restrictive covenants and prohibit us from prepaying our other indebtedness, including the notes, while indebtedness under the new credit facility is outstanding. The new credit facility will also require us to maintain specified financial ratios and satisfy financial condition tests, including a minimum interest coverage ratio. Our ability to comply with the ratios or tests may be affected by events beyond our control, including prevailing economic, financial and industry conditions.

A breach of any of these covenants, ratios or tests could result in a default under the new credit facility and/or the indenture. Certain events of default under the new credit facility would prohibit ASG from making distributions that would permit us to make payments on the notes, including payments of interest, when due. In addition, upon the occurrence of an event of default under the new credit facility, the lenders could elect to declare all amounts outstanding under the new credit facility, together with accrued interest, to be immediately due and payable. If we were unable to repay those amounts, the lenders could proceed against the security granted to them to secure that indebtedness. If the lenders accelerate the payment of the indebtedness, our assets may not be sufficient to repay in full this indebtedness and our other indebtedness, including the notes.

Compliance with rules regulating non-U.S. citizen ownership and control of fishing vessels may adversely affect the marketability or the price of our IDSs or shares of our common stock.

The charter provisions we will adopt and the related steps we will take in order to comply with the foreign ownership restrictions imposed by federal law on companies that participate in U.S. fisheries are complex and burdensome. They may require beneficial owners of our common stock to execute complex affidavits and provide detailed ownership information and they could require trades of IDSs or shares of our common stock to be reversed or persons who hold IDSs or shares to dispose of them on unfavorable terms. These administrative burdens and requirements and the potential that trades could be unwound or sales required could have an adverse effect on the market for and trading price of IDSs or shares of our common stock. See “Business—Government Regulation.”

We are a holding company and rely on dividends, interest and other payments, advances and transfers of funds from our subsidiaries to meet our debt service and other obligations.

We are a holding company and conduct all of our operations through our subsidiaries and currently have no significant assets other than our equity interest in Holdings and our interest in the notes issued by Holdings. As a result, we will rely on interest, dividends and other payments or distributions from our subsidiaries to meet our debt service obligations and enable us to pay interest and dividends. The ability of our subsidiaries to pay interest and dividends or make other payments or distributions to us will depend on their respective operating results and will be subject to restrictions under, among other things, the laws of their jurisdiction of organization (which may limit the amount of funds available for the payment of dividends), agreements of those subsidiaries, the terms of the new credit facility and the notes and the covenants of any future outstanding indebtedness we or our subsidiaries incur.

You may not receive the level of dividends provided for in our existing dividend policy or any dividends at all.

Our board of directors may, in its discretion, amend or repeal our existing dividend policy. Future dividends with respect to shares of our capital stock, if any, will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions, business opportunities, provisions of applicable law and other factors that our board of directors may deem relevant. Our board of directors may decrease the level of dividends provided for in our existing dividend policy or entirely discontinue the payment of dividends. The new credit facility contains restrictions on our ability to make dividend payments.

Interest on the notes may not be deductible by us for U.S. federal income tax purposes, which could significantly reduce our future cash flow and impact our ability to make interest and dividend payments.

While we believe that the notes should be treated as debt for U.S. federal income tax purposes, this conclusion is not free from doubt. If the notes were treated as equity rather than debt for U.S. federal income tax purposes, then the stated interest on the notes would generally be treated as a dividend, and interest on the notes would not be deductible by us for U.S. federal income tax purposes. Our inability to deduct interest on the notes could materially increase our taxable income and, thus, our U.S. federal and applicable state income tax liability. This would reduce our after-tax cash flow and materially and adversely impact our ability to make interest and

dividend payments. In the case of foreign holders, treatment of the notes as equity for U.S. federal income tax purposes would subject payments to such holders in respect of the notes to withholding or estate taxes in the same manner as payments made with regard to common stock and could subject us to liability for withholding taxes that were not collected on payments of interest. Payments to foreign holders would not be grossed-up for any such taxes.

You will be immediately diluted by $17.44 per share of common stock if you purchase IDSs in this offering.

If you purchase IDSs in this offering, you will experience an immediate dilution of $17.44 per share of common stock represented by the IDSs which exceeds the entire price allocated to each share of common stock represented by the IDSs in this offering because there will be a net tangible book deficit for each share of common stock outstanding immediately after this offering. Our net tangible book deficit as of March 31, 2003, after giving effect to this offering, was approximately $265.6 million, or 7.94 per share of common stock. As a result of this deficit, the face amount of notes will exceed the net book value of available assets by $336 per $1,000 face amount of notes.

Our interest expense may increase significantly and could cause our net income and distributable cash to decline significantly.

The new credit facility will be subject to periodic renewal or must otherwise be refinanced. We may not be able to renew or refinance the new credit facility, or if renewed or refinanced, the renewal or refinancing may occur on less favorable terms. The new credit facility’s revolving facility and term facility will be made available at a floating and fixed rate of interest, respectively. In the event of an increase in the base reference interest rates, our interest expense will increase and could have a material adverse effect on our ability to make interest payments on the notes or to make cash dividend payments to our stockholders. Our ability to continue to expand our business will, to a large extent, be dependent upon our ability to borrow funds under our new credit facility and to obtain other third-party financing, including through the sale of IDSs or other securities. Such financing may not be available to us on favorable terms or at all.

Deferral of interest payments would have adverse tax consequences for you and may adversely affect the trading price of the IDSs.

If interest payments on the notes are deferred, you will be required to recognize interest income for U.S. federal income tax purposes in respect of interest payments on the notes held by you before you receive any cash payment of this interest. See “Material U.S. Federal Income Tax Considerations—Deferral of Interest.” In addition, you will not receive this cash payment if you sell the IDSs or the notes before the end of any deferral period or before the record date relating to interest payments that are to be paid.

If interest is deferred, the IDSs may trade at a price that does not fully reflect the value of accrued but unpaid interest on the notes. In addition, the existence of the right and obligation that we defer payments of interest on the notes under certain circumstances may mean that the market price for the IDSs may be more volatile than other securities that do not have these restrictions.

We may not have sufficient funds to pay interest on the notes if our performance is below a specified threshold.

As a holding company, we will rely on dividends, distributions, interest payments and other payments from our subsidiaries to pay interest on the notes. Our new credit facility will provide that, if the interest coverage ratio of Holdings is less than , ASG and its subsidiaries will be prohibited from indirectly making distributions to the Issuer to enable us to pay interest on the notes. In this event, the Issuer will also be required to defer interest on the notes pursuant to the indenture governing the notes. See “Description of Notes—Interest Deferral.” However, the indenture provides that interest on the notes may not be deferred for more than 24 months in the aggregate prior to 2008. The prohibition on distributions by ASG and its subsidiaries contained in our new credit

facility will not be subject to the 24-month limitation that is contained in the indenture relating to deferral of interest on the notes. Accordingly, if the Issuer may no longer defer interest on the notes but the interest coverage ratio of Holdings remains below the specified threshold and the new credit facility prohibits ASG and its subsidiaries from making distributions to the Issuer, we may not have sufficient funds to pay interest on the notes.

In a bankruptcy, liquidation or reorganization or similar proceeding, the Issuer and the guarantors may not be able to make all principal payments on the notes represented by the IDSs.

As a result of the subordinated nature of the guarantees of the notes and the notes issued by Holdings, upon any distribution to creditors of ASG or the subsidiary guarantors in bankruptcy, liquidation or reorganization or similar proceedings relating to ASG or the subsidiary guarantors or their property or assets, the holders of such entities’ senior indebtedness will be entitled to be paid in full in cash before any payment may be made with respect to the notes or the Holdings notes under the subordinated guarantees (and before any distribution may be made by ASG to Holdings). In the event of a bankruptcy, liquidation or reorganization or similar proceeding relating to ASG or the subsidiary guarantors, the Issuer, ASLP and the noteholders would participate under the subordinated guarantees with other holders of unsecured indebtedness after the payment in full of the senior indebtedness. In any of these cases, there may not be sufficient funds to pay all of our creditors and the holders of the notes or the Holdings notes may receive less, ratably than the holders of senior indebtedness. In such event the Issuer and the guarantors may not be able to make all principal payments on the notes represented by IDSs.

On a pro forma basis as of December 31, 2002, the subordinated guarantees would have ranked junior to $220.0 million of outstanding senior indebtedness on a consolidated basis, all of which would have been secured. In addition, as of December 31, 2002, on a pro forma basis, ASG would have had the ability to borrow up to an additional amount of $80.0 million under the new credit facility, which would have been senior in right of payment to the subordinated guarantees of the Holdings notes.

The guarantees of the notes and the Holdings notes by our subsidiaries may not be enforceable because of fraudulent conveyance laws.

Under federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee could be voided, or claims in respect of a guarantee could be subordinated to all other debt of the guarantor, if, among other things, the guarantor, at the time that it assumed the guarantee:

issued the guarantee to delay, hinder or defraud present or future creditors; or

received less than reasonably equivalent value or fair consideration for issuing the guarantee and, at the time it issued the guarantee:

was insolvent or rendered insolvent by reason of issuing the guarantee and the application of the proceeds of the guarantee;

was engaged or about to engage in a business or a transaction for which the guarantor’s remaining unencumbered assets constituted unreasonably small capital to carry on its business;

intended to incur, or believed that it would incur, debts beyond its ability to pay the debts as they mature; or

was a defendant in an action for money damages, or had a judgment for money damages docketed against it if, in either case, after final judgment, the judgment is unsatisfied.

In addition, any payment by the guarantor under its guarantee could be voided and required to be returned to the guarantor or to a fund for the benefit of the creditors of the guarantor or the guarantee could be subordinated to other debt of the guarantor.

The measures of insolvency for the purposes of fraudulent transfer laws vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a person would be considered insolvent if, at the time it incurred the debt:

the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or

it could not pay its debts as they become due.

Whatever standard that a court uses to determine whether or not the subsidiary guarantors were solvent at the relevant time, the court could rule that such guarantors were not solvent.

If this were to occur, the guarantee of the notes and the Holdings notes by ASG or any subsidiary guarantor would be subject to the claim that, since the guarantee was incurred for the benefit of the noteholders, Holdings and ASLP, and only indirectly for the benefit of the guarantor or creditors of the guarantor, the guarantees were incurred for less than fair consideration. A court could therefore void the obligations of ASG or the subsidiary guarantor under the guarantees or subordinate these obligations to ASG or the subsidiary guarantor’s other debt or take action detrimental to holders of the notes. If the guarantee of ASG or any subsidiary guarantor were voided, the notes and the notes issued by Holdings would not have a debt claim against ASG or that subsidiary guarantor.

Seasonality and variability of our businesses may cause volatility in the market value of your investment and may hinder our ability to make timely distributions on the IDSs.

Our business is seasonal in nature, and our net sales and operating results vary significantly from quarter to quarter. Consequently, results of operations for any particular quarter may not be indicative of results of operations for future periods, which makes it difficult to forecast our results for an entire year. This variability may cause volatility in the market price of the IDSs.

In addition, the seasonality and variability of our business means that at certain times of the year our cash receipts are significantly higher than at other times. Given that we are required to make equal monthly interest payments and expect to pay equal monthly dividends to IDS holders throughout the year, there is a risk that we will experience cash shortages, which could hinder our ability to make timely distributions to IDS holders.

Subsequent issuances of notes pursuant to an offering by us or following an exercise of exchange rights by partners of ASLP may adversely affect your tax treatment.

The indenture governing the notes and the agreements with DTC will provide that, in the event there is a subsequent issuance of notes by the Issuer having substantially identical terms as the notes, each holder of notes or IDSs (as the case may be) agrees that a portion of such holder’s notes will be exchanged for a portion of the notes acquired by the holders of such subsequently issued notes, and the records of any record holders of notes will be revised to reflect such exchanges. Consequently, following each such subsequent issuance and exchange, without any further action by such holder, each holder of notes or IDSs (as the case may be) will own an indivisible unit composed of notes of each separate issuance in the same proportion as each other holder. However, the aggregate principal amount of notes owned by each holder will not change as a result of such subsequent issuance and exchange. Although we believe that this exchange should not result in a taxable event requiring a holder to recognize gain for U.S. federal income tax purposes, the IRS may assert a contrary view. Even if the exchange is not treated as a taxable event, such exchange may result in holders having to include OID in taxable income prior to the receipt of cash and other potentially adverse tax consequences to holders. See “Material U.S. Federal Income Tax Considerations.”

IDSs, agree to report OID in a manner consistent with this approach. However, the IRS may assert that any OID should be reported only to the persons that initially acquired such subsequently issued notes (and their transferees) and thus may challenge the holders’ reporting of OID on their tax returns. Such a challenge could create significant uncertainties in the pricing of IDSs and notes and could adversely affect the market for IDSs and notes. For these and additional tax-related risks, see “Material U.S. Federal Income Tax Considerations.”

Before this offering, there has not been a public market for our IDSs or shares of our common stock. The price of the IDSs may fluctuate substantially, which could negatively affect IDS holders.

Neither the IDSs nor the shares of our common stock has a public market history. In addition, there has not been an active market in the United States or in Canada for securities similar to the IDSs. An active trading market for the IDSs might not develop in the future, and we currently do not expect that an active trading market for the shares of our common stock will develop until the notes mature. If the notes represented by your IDSs mature or are redeemed or repurchased, the IDSs will be automatically separated and you will then hold the shares of our common stock. We do not intend to list our notes on any securities exchange.

The initial public offering price of the IDSs will be determined by negotiations between us and the representatives of the underwriters and may not be indicative of the market price of the IDSs after the offering. Factors such as quarterly variations in our financial results, announcements by us or others, developments affecting us and our customers, general interest rate levels, the market price of our shares of common stock and general market volatility could cause the market price of the IDSs to fluctuate significantly.

Future sales or the possibility of future sales of a substantial amount of IDSs, shares of our common stock or our notes may depress the price of the IDSs, the shares of our common stock and our notes.

Future sales or the availability for sale of substantial amounts of IDSs or shares of our common stock or a significant principal amount of our notes in the public market could adversely affect the prevailing market price of the IDSs, the shares of our common stock and our notes and could impair our ability to raise capital through future sales of our securities.

We may issue shares of our common stock and notes, which may be in the form of IDSs, or other securities from time to time as consideration for future acquisitions and investments. In the event any such acquisition or investment is significant, the number of shares of our common stock and the aggregate principal amount of notes, which may be in the form of IDSs, or the number or aggregate principal amount, as the case may be, of other securities that we may issue may in turn be significant. In addition, we may also grant registration rights covering those IDSs, shares of our common stock, notes or other securities in connection with any such acquisitions and investments.

Retained ownership by our existing owners may prevent you from receiving a premium in the event of a change of control and may create conflicts of interest.

Upon the completion of the transactions contemplated by this offering, the existing owners, through their ownership of ASLP, will own approximately 33.5% of the economic interests in the business described in this prospectus, or approximately 27.2% if the over-allotment option is exercised in full. If such existing owners, or their permitted transferees, exercise their rights to exchange all of their ownership in ASLP for our IDSs, they will own approximately 37.0% of the voting power of our company. This concentration of ownership could have the effect of delaying, deferring or preventing a change in control, merger or tender offer, which would deprive you of an opportunity to receive a premium for your IDSs and may negatively affect the market price of the IDSs. Moreover, our existing owners could effectively receive a premium for transferring ownership to third parties that would not inure to your benefit.

In addition, in connection with this offering, Centre Partners Management LLC, Coastal Villages Pollock LLC, and Bernt O. Bodal, will acquire shares of our Class A, B and C preferred stock, respectively. Each class of preferred shares will entitle the holder thereof to elect one member of our board of directors, which will have a total of at least seven members and not more than 13 members. As a result, the existing owners of our business will continue to have the ability to significantly influence numerous matters. Because of their significant ownership position, coupled with the fact that their ownership stake is held through securities with somewhat different terms and characteristics than the IDSs or our common stock, the interests of these parties may conflict with the interests of holders of IDSs or our common stock.

Our certificate of incorporation and by-laws and several other factors could limit another party’s ability to acquire us and deprive our investors of the opportunity to obtain a takeover premium for their securities.

A number of provisions in our certificate of incorporation and by-laws will make it difficult for another company to acquire us and for you to receive any related takeover premium for your securities. For example, our certificate of incorporation will provide that stockholders generally may not act by written consent and only stockholders representing at least 50% in voting power may request that our board of directors call a special meeting. Our certificate of incorporation will provide for a classified board of directors and authorize the issuance of preferred stock without stockholder approval and upon such terms as the board of directors may determine. The rights of the holders of shares of our common stock will be subject to, and may be adversely affected by, the rights of holders of preferred stock and any other class or series of preferred stock that may be issued in the future.

Cautionary Statement Regarding Forward-Looking Statements

All statements other than statements of historical fact are “forward-looking statements.” Some of the statements under “Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and elsewhere in this prospectus may include forward-looking statements which reflect our current views with respect to future events and financial performance. Statements which include the words “may,” “estimate,” “continue,” “expect,” “intend,” “plan,” “believe,” “project,” “anticipate” and similar statements of forward-looking nature identify forward-looking statements.

Although we believe that the expectations reflected in our forward-looking statements are reasonable, all forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in these statements. We believe that these factors include the following:

future results of operations;

future capital expenditures;

environmental conditions and regulations;

plans or intentions relating to acquisitions;

our competitive strengths and weaknesses;

future financing needs;

our business strategy;

general economic conditions;

trends in the industries and economies in which we operate;

proposed new products, services or developments; and

any assumptions underlying the foregoing.

We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

Use of Proceeds

The table below sets forth our estimate of the sources and uses of funds required to effect the transactions contemplated hereby. See “Detailed Transaction Steps.” The estimated sources and uses are based on an assumed initial public offering price of $17.35 and do not take into account the exercise by the underwriters of their over-allotment option. Actual amounts will vary from the amounts shown below.

Sources and Uses

(In millions)

Sources

New credit facility	$	220.0
Repayment of management loan		6.2
IDSs sold hereby		550.0

Total sources of funds	$	776.2

Uses
Repayment of existing credit facility	$	324.4
Purchase of existing senior subordinated notes		175.0
Tender premium for existing senior subordinated notes		34.6
Redemption of preferred equity units and subordinated Holdings notes		33.7
Fees and expenses		39.4
Direct and indirect proceeds to ASLP and Holdings owners		169.1

Total uses of funds	$	776.2

Dividend Policy and Restrictions

Upon completion of this offering, our board of directors will adopt a dividend policy pursuant to which, in the event and to the extent we have any available cash for distribution to the holders of shares of our common stock as of the end of any calendar month, and subject to applicable law, our board of directors will declare cash dividends per share on our common stock equal to $0.78 per share. We will pay those dividends on or about the 20th day of the subsequent month. In addition, to the extent of their available cash for distribution, we will also cause our subsidiaries to distribute funds to us in respect of their respective equity interests, in each case subject to applicable law and the terms of their indebtedness sufficient to permit us to make the distribution described in the preceding sentence.

If we have any remaining cash after the payment of dividends as contemplated above, our board of directors will, in its sole discretion, decide to use that cash to fund capital expenditures or acquisitions, repay indebtedness, pay additional dividends or for general corporate purposes.

The indenture governing our notes restricts our ability to declare and pay dividends on our common stock as follows:

the aggregate amount of dividends per share paid in any fiscal quarter may not exceed ¹/4 of the sum of (i) $ , and (ii) 90% of the Issuer’s adjusted EBITDA per share over $ for the twelve-month period ended on the last day of the most recent fiscal quarter for which financial statements are available;

the Issuer may not pay any dividends on its capital stock if and for so long as the fixed charge coverage ratio of Holdings (with respect to any twelve-month period ended on December 31, June 30 or September 30) or the adjusted fixed charge coverage ratio of Holdings (with respect to any 15-month period ended on March 31), in each case, for the period ended on the last day of the most recent fiscal quarter for which the financial statements are available, is less than ; and

the Issuer may not pay any dividends while interest on the notes is being deferred or, after the end of any deferred period, so long as any deferred interest has not been paid in full.

In addition, our new credit facility will provide that if the interest coverage ratio of Holdings is less than , ASG and its subsidiaries may not make any distributions to us, other than certain permitted distributions, including distributions to pay interest on the notes and to pay taxes.

Our board of directors may, in its discretion, amend or repeal our dividend policy. Future dividends with respect to shares of our capital stock, if any, will depend on, among other things, our results of operations, cash requirements, financial condition, contractual restrictions, provisions of applicable law and other factors that our board of directors may deem relevant. Under Delaware law, our board of directors may declare dividends only to the extent of our “surplus” (which is defined as total assets at fair market value minus total liabilities, minus statutory capital), or if there is no surplus, out of our net profits, if any, for the then current and/or immediately preceding fiscal years. Our board of directors may decrease the level of dividends provided for in our existing dividend policy or discontinue entirely the payment of dividends.

During 2001 and 2002, ASLP distributed to its partners approximately $11.2 million and $207.8 million, respectively. The latter amount was distributed in connection with the April 2002 recapitalization of Holdings and its affiliates.

Capitalization

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2003:

on a pro forma basis for Holdings to give effect to the PLC distribution; and

on a pro forma basis for the Issuer to give effect to this offering, including the use of proceeds from this offering, our recapitalization and the consent solicitation and tender offer and to give effect to ASG’s new credit facility. For purposes of this presentation, we have assumed that all of the existing senior subordinated notes are purchased pursuant to the consent solicitation and tender offer for an aggregate consideration of $209.6 million, including $34.6 million of tender costs.

	As of March 31, 2003
	Pro Forma Holdings			Adjustments			Pro Forma Issuer
	(In thousands)
Cash	$	6,057		$	1		$	6,058

Long-term debt, including current portion
Current maturities of long-term debt	$	14,233			(14,233	)	$	—
Existing debt		355,016			(355,016	)		—
New credit facility		—			220,000			220,000
Existing senior subordinated notes		175,000			(175,000	)		—
% notes		—			394,843			394,843

Total long-term debt		544,249			70,594			614,843

Minority Interest
Stockholders’/members’ deficit
Common stock, $0.01 par value per share—authorized: shares; issued and outstanding: 33,439,563 shares		—			334			334
Additional paid in capital		—			300,819			300,819
Preferred stock, $0.01 par value per share—authorized: shares; issued: 300 shares; outstanding: 300 shares		—			—			—
Accumulated deficit(1)		(100,551	)		(327,086	)		(427,637	)
Accumulated other comprehensive income (loss)		(6,210	)		—			(6,210	)

Total stockholders’/members’ deficit		(106,761	)		(25,933	)		(132,694	)

Total capitalization	$	443,545		$	44,662		$	488,207

(1)

The accumulated deficit includes the deficit balance attributable to the minority interest holders.

Pro Forma Dilution

Dilution is the amount by which the portion of the price paid by purchasers of IDSs in the offering that is allocated to our shares of common stock exceeds the net tangible book value or deficiency per share of our common stock after the offering. Net tangible book value or deficiency per share of our common stock is determined at any date by subtracting our total liabilities from the total book value of our tangible assets and dividing the difference by the number of shares of common stock deemed to be outstanding at that date.

For purposes of calculating dilution below, we have assumed that as of March 31, 2003 all ASLP units had been exchanged for IDSs simultaneously with the closing of this offering and 50,298,417 shares of our common stock are outstanding.

The pro forma net tangible book deficiency of Holdings as of March 31, 2003 was approximately $240.0 million, or $4.76 per unit (which is equivalent to $4.76 per share of the Issuer’s common stock). After giving effect to our receipt and intended use of approximately $516.5 million of estimated net proceeds (after deducting estimated underwriting discounts and commissions and offering expenses) from our sale of IDSs in this offering, the increase in our aggregate consolidated indebtedness, and the issuance and redemption of Holdings units included in the transactions to be consummated in connection with this offering, our pro forma as adjusted net tangible book deficiency as of March 31, 2003 would have been approximately $265.6 million, or $5.28 per unit. This represents an immediate decrease in net tangible book value of $0.52 per Holdings unit (which is equivalent to $0.52 per share of the Issuer’s common stock) to existing owners and an immediate dilution of $14.78 per share of the Issuer’s common stock to new investors purchasing IDSs in this offering. As a result of this deficiency, the face amount of notes will exceed the net book value of available assets by $336 per $1,000 face amount of notes.

The following table illustrates this substantial and immediate dilution to new investors:

	Per Share of Common Stock
Assumed initial public offering price of common stock represented by IDSs	$	9.50
Pro forma net tangible book deficiency of Holdings as of March 31, 2003		(4.76	)
Decrease per share attributable to assumed exchange of ASLP units for IDSs		(3.51	)
Decrease per share attributable to cash distribution made to existing owners		(2.48	)
Decrease per share attributable to loss on debt repayment and equity offering costs, net of reduction of deferred tax liabilities		(1.13	)
Decrease per share attributable to notes issued to minority interest holders		(2.90	)

Pro forma as adjusted net tangible book value after this offering	$	(5.28	)

Dilution in net tangible book value per share to new investors	$	14.78

The following table summarizes on a pro forma basis as of March 31, 2003:

the total number of shares of our common stock represented by IDSs (assuming all ASLP units had been exchanged for IDSs);

the total consideration paid to us by our existing owners and new investors, before deducting the estimated underwriting discounts and commissions and offering expenses payable by us in connection with the offering; and

the average price per share of common stock paid by new investors and our existing owners:

	Shares of Common Stock Purchased		Total Consideration	Average Price Per Share of Common Stock
	Number	Percent	Total Consideration	Average Price Per Share of Common Stock
			(in thousands)
New investors
Existing owners

Total		%	$	$

Selected Historical and Pro Forma Financial Information for Holdings

The following selected historical consolidated financial information for Holdings as of December 31, 2001 and 2002 and for the period January 28 through December 31, 2000 and the years ended December 31, 2001 and 2002 has been derived from our audited consolidated financial statements included elsewhere in this prospectus. See Note 1 to Holdings’ audited consolidated financial statements. The following selected historical consolidated financial data for Holdings as of December 31, 2000 and for the predecessor business, as of and for the year ended December 31, 1998 and 1999 and the period January 1 through January 27, 2000, has been derived from our consolidated financial statements which are not included in this prospectus.

The following selected historical consolidated financial information for Holdings as of March 31, 2003 and for the three month periods ended March 31, 2002 and 2003 has been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. Such unaudited consolidated financial statements, in the opinion of our management, include all adjustments necessary for the fair presentation of our financial condition and results of operations for such periods and as of such dates.

The audited consolidated financial statements and the unaudited consolidated financial statements do not purport to project our results of operations or financial position for any future period or date.

The following selected unaudited pro forma financial information for Holdings has been derived by the application of pro forma adjustments to Holdings’ historical financial statements included elsewhere in this prospectus. The selected pro forma balance sheet information for Holdings was prepared as if the distribution by Holdings to ASLP of Holdings’ 80% interest in PLC had occurred on March 31, 2003. The pro forma statement of operations data for Holdings for the year ended December 31, 2002 and for the three month periods ended March 31, 2002 and 2003 gives effect to the acquisition of Southern Pride and the PLC distribution as if they had occurred as of January 1, 2002. The pro forma financial information for Holdings does not reflect any adjustments that give effect to this offering or any of the other transactions contemplated hereby, which adjustments are reflected in the pro forma financial information for the Issuer appearing elsewhere in this prospectus. The selected pro forma information should not be considered indicative of actual balance sheet data or results that would have been achieved had the transactions been consummated on the dates indicated and do not purport to indicate balance sheet data or results of operations as of any future date or for any future period.

The following selected historical and unaudited pro forma financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” Holdings’ consolidated financial statements and related notes and the unaudited condensed consolidated pro forma financial statements and related notes included elsewhere in this prospectus.

Selected Historical and Pro Forma Financial Information for Holdings

	Predecessor Business(1)									American Seafoods Holdings LLC
																									Pro Forma
	Year Ended December 31,						January 1 through January 27,			January 28 through December 31,			Year Ended December 31,						Three Months ended March 31,						Year ended December 31,			Three Months ended March 31,			Three Months ended March 31,
	1998			1999			2000			2000			2001			2002			2002			2003			2002			2002			2003
	(dollars in thousands)									(dollars in thousands)
Statement of Operations Data:
Total revenue	$	278,306		$	240,715		$	9,719		$	252,346		$	336,839		$	332,872		$	83,858		$	111,099		$	419,293		$	109,269		$	109,650
Gross profit		62,288			89,346			(1,953	)		100,370			127,239			127,789			41,343			47,564			146,628			47,027			47,328
Gross margin		22.4	%		37.1	%		(20.1	)%		39.8	%		37.8	%		38.4	%		49.3	%		42.8	%		35.0	%		43.0	%		43.2	%
Operating profit		3,849			49,179			(4,334	)		29,596			35,436			58,975			27,194			30,977			63,629			28,876			30,981
Income (loss) before income taxes and minority interest		(33,769	)		9,923			1,828			10,448			18,180			23,012			21,049			22,455			24,858			21,819			22,539
Net income		(21,389	)		6,262			1,190			7,220			20,078			22,253			19,737			21,395			24,099			20,507			21,479
Statement of Cash Flows Data:
Cash flows from operating activities		17,476			18,510			20,685			44,174			84,588			96,678			17,980			2,834
Cash flows from investing activities		49,965			255			(626	)		(369,847	)		(13,648	)		(58,634	)		(1,566	)		(3,330	)
Purchases of property, vessels and equipment		(10,147	)		(6,506	)		(626	)		(7,363	)		(9,171	)		(9,431	)		(1,697	)		(3,269	)
Cash flows from financing activities		(70,012	)		(18,752	)		(4,973	)		330,042			(73,014	)		(34,736	)		(11,975	)		1,376
Other Financial Data:
EBITDA(2)		12,869			47,122			7,809			106,209			121,385			103,150			34,733			40,162			110,767			37,155			40,013
Unrealized foreign exchange (gains) losses, net(2)		14,868			13,112			(10,381	)		(20,185	)		(12,976	)		(10,763	)		(757	)		(2,304	)		(10,763	)		(757	)		(2,304	)
Equity-based compensation(2)		—			—			—			197			527			5,600			102			138			5,600			102			138
Loss from debt repayment and related write-offs(2)		1,001			—			—			—			—			15,711			—			—			15,711			—			—
Minority interest in loss (income) of subsidiary		—			—			—			—			171			401			297			(51	)		—			—			—

	Predecessor Business(1)									American Seafoods Holdings LLC
	December 31,									December 31,						March 31,						Pro forma March 31,
	1998			1999						2000			2001			2002			2003			2003
	(dollars in thousands)									(dollars in thousands)
Balance Sheet Data:
Property, vessels, and equipment, net	$	307,173		$	239,333					$	267,868		$	254,341		$	253,090		$	246,578		$	236,392
Total assets		407,281			342,516						527,179			522,846			529,550			588,071			571,922
Total interest bearing obligations		311,436			248,092						369,072			326,499			573,141			574,653			567,416
Equity (deficit)		13,023			(8,334	)					92,959			119,235			(125,201	)		(103,651	)		(106,761	)

(1)

Our business was acquired by Centre Partners and others through ASLP in a transaction accounted for as a purchase on January 28, 2000. The purchase accounting resulted in all assets and liabilities being recorded at their estimated fair values. Also, the method of accounting for major scheduled vessel maintenance and derivative instruments was changed effective with the purchase. Accordingly, the predecessor business amounts are not comparable to Holdings amounts.

(2)

EBITDA represents net income from continuing operations before interest expense, income tax provision (benefit) and depreciation and amortization. EBITDA is not a measure of operating income, operating performance or liquidity under GAAP. We include EBITDA because we understand it is used by some investors to determine a company’s historical ability to service indebtedness and fund ongoing capital expenditures, and because certain covenants in our borrowing agreements are tied to similar measures. Nevertheless, this measure should not be considered in isolation or as a substitute for operating income (as determined in accordance with GAAP) as an indicator of our operating performance, or of cash flows from operating activities (as determined in accordance with GAAP), or as a measure of liquidity. The consummation of the transactions contemplated by this offering will not have an impact on EBITDA before minority interest. EBITDA as calculated here differs from Adjusted EBITDA as defined in our note indenture and credit agreements. Adjusted EBITDA as defined in our note indenture and credit agreements means net income from continuing operations before interest expense, income tax provision or benefit, depreciation, amortization, net unrealized foreign exchange gains or losses, minority interest in income or loss of consolidated entities, equity-based compensation, and any loss from debt repayments and related write-offs. If our Adjusted EBITDA were to decline below certain levels, covenants in our indebtedness that are based on Adjusted EBITDA, including our interest coverage ratio and fixed charge coverage ratio covenants, could result in, among other things, a default or mandatory prepayment under our senior credit facility, our inability to pay dividends or a requirement that we defer interest payments on the notes. These covenants are summarized under “Description of Certain Indebtedness” and “Description of Notes.” A reconciliation of EBITDA to Adjusted EBITDA is as follows:

													Pro Forma
	Year ended December 31,						Three Months ended March 31,						Year ended December 31,			Three Months ended March 31,			Three Months ended March 31,
	2001			2002			2002			2003			2002			2002			2003
	(dollars in thousands)
EBITDA	$	121,385		$	103,150		$	34,733		$	40,162		$	110,767		$	37,155		$	40,013
Unrealized foreign exchange gains, net		(12,976	)		(10,763	)		(757	)		(2,304	)		(10,763	)		(757	)		(2,304	)
Equity-based compensation		527			5,600			102			138			5,600			102			138
Loss from debt repayment and related write-offs		—			15,711			—			—			15,711			—			—
Minority interest in income (loss) of subsidiary		171			401			(297	)		51			—			—			—

Adjusted EBITDA	$	109,107		$	114,099		$	33,781		$	38,047		$	121,315		$	36,500		$	37,847

We consider EBITDA to be a measure of liquidity. Accordingly, EBITDA is reconciled to operating cash flows as follows:

	Year ended December 31,						Three Months ended March 31,
	2001			2002			2002			2003
	(dollars in thousands)
Cash flows from operating activities	$	84,588		$	96,678		$	17,980		$	2,834
Interest expense, net of non-cash interest		18,715			35,051			5,203			9,301
Net change in operating assets and liabilities		899			(15,495	)		9,286			23,859
Income tax provision (benefit)		(1,898	)		759			1,312			1,060
Deferred income tax benefit (provision)		6,607			(3,696	)		—			—
Other		25			401			297			(51	)
Unrealized foreign exchange gains, net		12,976			10,763			757			3,297
Equity-based compensation		(527	)		(5,600	)		(102	)		(138	)
Loss from debt repayment and related write-offs		—			(15,711	)		—			—

EBITDA	$	121,385		$	103,150		$	34,733		$	40,162

Selected Pro Forma Financial Information for the Issuer

The following pro forma financial information has been derived by the application of pro forma adjustments to our historical consolidated financial statements included elsewhere in this prospectus. The pro forma consolidated balance sheet and statement of operations data assumes the Issuer was formed on January 1, 2002 and gives effect to (1) the distribution by Holdings of its interest in PLC to ASLP, (2) the acquisition of Southern Pride and (3) the financing transactions described under “Capitalization” and the application of the proceeds therefrom as if all these transactions had been consummated on December 31, 2002 for the consolidated balance sheet data and January 1, 2002 for the consolidated statement of operations data.

Assumptions underlying the pro forma adjustments are described in the notes to the unaudited pro forma condensed consolidated financial statements, which should be read in conjunction with this pro forma financial information. We believe that the assumptions used provide a reasonable basis for presenting the significant effects directly attributable to these transactions; however, this pro forma financial information should not be considered indicative of actual results that would have been achieved had the PLC distribution and the financing transactions been consummated on the date or for the periods indicated and do not purport to indicate consolidated balance sheet data or results of operations as of any future date or for any future period.

The pro forma financial information should be read in conjunction with the information contained in “Selected Historical and Pro Forma Financial Information for Holdings,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Holdings’ consolidated financial statements and related notes included elsewhere in this prospectus.

	Pro Forma Issuer for the
	Year ended December 31, 2002			Three Months ended March 31, 2002			Three Months ended March 31, 2003
	(dollars in thousands)

Statement Of Operations Data
Total revenue	$	419,293		$	109,269		$	109,650
Gross profit		146,628			47,027			47,328
Gross margin		35.0	%		43.0	%		43.2	%
Operating profit		63,629			28,876			30,981
Other income (expense), net		(68,214	)		(16,944	)		(14,961	)
Net income	$	(4,585	)	$	11,932		$	16,020
Other Financial Data:
EBITDA	$	110,767		$	37,155		$	40,013
Unrealized foreign exchange gains/losses, net		(10,763	)		(757	)		(2,304	)
Equity-based compensation		5,600			102			138
Loss from debt repayment and related write-offs		15,711			—			—
Ratio of earnings to fixed charges		0.96			1,67			1.94
Balance Sheet Data
Property, vessels, and equipment, net							$	236,392
Total assets								553,653
Total interest bearing obligations								614,843
Shareholders’ deficit							$	(132,694	)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with Holdings’ consolidated financial statements and the notes to those statements and other financial information appearing elsewhere in this prospectus. This prospectus contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those indicated in forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements.”

Overview

Corporate Structure

The Issuer was formed under Delaware law in May 2003.

Upon the completion of the transactions contemplated by this offering, the Issuer will be the sole general partner of Holdings. The Issuer will own 66.5% of the equity of Holdings and 66.5% of the Holdings notes, and ASLP will own the remainder of the equity and the notes. Holdings will own 100% of the economic interests of ASG; American Seafoods Company LLC, through which we conduct our at-sea pollock harvesting and processing operations; Southern Pride, through which we harvest and process catfish; and American Seafoods International LLC, through which we conduct our secondary processing activities. The Hadley Group LLC, or Hadley Group, a wholly-owned subsidiary of American Seafoods International LLC, purchases frozen fish products and re-sells them into the U.S., Canadian and European markets.

Corporate History

In January 2000, ASLP purchased from Norway Seafoods all of the outstanding stock of American Seafoods Company. The acquisition also involved the purchase of six additional catcher-processors, one catcher-vessel and certain assets of Frionor USA (now called American Seafoods International LLC). ASG was formed in connection with the acquisition. The acquisition was accounted for as a purchase, and all of the debt, assets and goodwill relating to the acquisition have been “pushed down” to ASG’s and Holdings’ balance sheets. The purchase accounting resulted in all assets and liabilities being recorded at their estimated fair values on that date. The aggregate purchase price for the acquisition was $477.9 million, including acquisition costs. The acquisition was financed through short-term seller financing ($21.9 million), long-term debt ($280.0 million) and seller long-term subordinated promissory notes ($95.0 million). In addition, ASLP issued a warrant ($3.5 million) for the purchase, at a future date, of additional partnership interests in ASLP to an affiliate of Norway Seafoods. The warrant entitled the holder to purchase ASLP partnership units at a price per unit equal to the amount per unit contributed at that time by the ASLP partners. The warrant was redeemed on October 4, 2002.

In August 2001, we, along with two other partners, formed PLC in order to acquire three longline vessels. Our initial ownership through this transaction was 60% of PLC. We subsequently increased our ownership to 80%. PLC harvests and processes ocean harvested whitefish, primarily comprised of cod, in the U.S. Bering Sea. Because it is in an early stage investment, Holdings will distribute the interest in PLC to ASLP prior to the completion of the transactions contemplated by this offering.

Effective as of December 16, 2002, we purchased substantially all of the assets of Southern Pride Catfish LLC and Southern Pride Catfish Trucking, Inc., or collectively Southern Pride, an Alabama corporation engaged in the business of catfish harvesting, processing and distribution. The acquired assets included, among other things, certain real property, fixtures, equipment, accounts receivable, intellectual property, customer and other contracts, and cash on hand. The purchase price was approximately $41.8 million in cash. In addition, we assumed substantially all of the liabilities of Southern Pride, other than certain specifically excluded liabilities, and paid bank debt of Southern Pride in the amount of approximately $2.4 million. The acquisition was financed with additional indebtedness under our existing credit facility.

Revenues and Expenses

Ocean Harvested Whitefish Revenues. Revenues in our ocean harvested whitefish segment are primarily driven by the following factors:

the volume of pollock harvested annually by our catcher-processors;

the quantity of finished product we are able to produce (determined by the flesh and roe recovery rates);

the prevailing market prices for the pollock products we sell, such as roe, surimi (a fish protein paste used in products such as imitation lobster and crabmeat) and fillet block;

the yen-dollar exchange rate; and

volume throughput for our secondary processing of ocean harvested whitefish.

Harvest volumes. In addition to the portion of the directed pollock catch allocated to us under the Pollock Conservation Cooperative agreement, we historically have purchased additional pollock quota from other industry participants up to the 17.5% limit of the directed pollock catch. In addition, we supplemented our harvest in 2001 and 2002 by purchasing 28.0% of the community development quota from Alaska Community Development Groups, which does not count against the 17.5% limitation. See “Industry and Regulatory Overview—Groundfish—Pollock Allocation.”

Recovery rates. Increases in flesh and roe recovery rates, which represent the percentage of finished product produced from a whole fish, result in higher finished product volumes. Flesh recovery rate means the weight of at-sea processed products, other than fishmeal and roe, relative to the weight of fish harvested, expressed as a percentage. Roe recovery rate means the weight of at-sea processed roe, relative to the weight of fish harvested, expressed as a percentage.

Market prices. Market prices are mainly a function of the aggregate supply of pollock products produced in any given year, the anticipated inventory carry over for that year and changes in demand. The supply is determined primarily by the U.S. and Russian pollock harvest levels.

Prices for surimi and roe products generally fluctuate year to year and do not necessarily follow a typical price cycle trend. For example, the 29.7% increase in our surimi prices, denominated in Japanese yen, from year 2001 to 2002 was primarily due to market conditions, but also due to producing a slightly higher grade mix of surimi in year 2002. The 2002 “A” season roe price of ¥1,906 per kilogram, which we consider to be a normalized roe price level, declined from the 2001 “A” season roe price of ¥2,247 per kilogram due primarily to an

exceptionally high grade mix produced in 2001. On a grade by grade basis, roe prices have remained relatively stable to strengthening for the past several years with the exception of year 2000, which was an unusual year due largely to market misperceptions of supply. With the introduction of long-term supply contracts for deepskin product in early 2000, the price for deepskin dropped from an annual average price of $1.59 per pound for 1999, to $1.32 per pound for 2000, and has leveled out at about $1.25 per pound for 2001 and 2002.

Below is a chart illustrating our average prices achieved for the years 1999, 2000, 2001 and 2002 for pollock surimi, pollock roe, deepskin and pollock block pin bone out products. The surimi and roe prices are noted in yen per kilogram, which is the price unit we receive from our Japanese customers.

	Average annual price
	1999		2000		2001		2002
Pollock surimi ¥/kg	¥	285	¥	218	¥	212	¥	275
Pollock roe ¥/kg	¥	1,865	¥	2,856	¥	2,247	¥	1,906
Deepskin $/lb	$	1.59	$	1.32	$	1.25	$	1.24
Pollock block pin bone out $/lb	$	1.33	$	0.80	$	0.88	$	1.04

Exchange rate effects. Because we sell large quantities of roe to Japanese customers, a significant portion of our revenue is denominated in Japanese yen. This means that we could be at risk that any increase or decrease in the value of the yen relative to the dollar would increase or reduce, respectively, the amount of dollar revenues we record on the sales of our products in Japan. In order to mitigate the potentially adverse effect of fluctuations in the yen to U.S. dollar spot exchange rate, we enter into forward currency contracts. It is our risk management policy to hedge approximately 80% of our forecasted yen sales over the next 12 months, 65% over months 13 to 24, 50% over months 25 to 36, and 35% over months 37 to 48.

Other Seafood Products Revenues. Revenues from our other seafood products segment are primarily a function of the volume of catfish and scallops that we process. The key performance driver for our other seafood products operations are the purchase price of raw materials and the volume of production.

Ocean Harvested Whitefish Expenses. The operating cost structure of the ocean harvested whitefish operations include four main cost categories:

variable costs driven by revenue or product volume, such as crew compensation, quota purchases, product freight and storage, marketing commissions and packaging and additives;

vessel-related depreciation;

fixed costs that are assumed to be incurred whether or not the vessel is deployed, such as insurance, repair and maintenance, nets and gear supplies, moorage, equipment rental, crew travel and general supplies; and

daily operating costs driven by vessel operating days, such as fuel, galley supplies, observers and technicians.

Costs of sales includes operating costs such as crew and factory personnel compensation, fish purchases, vessel fuel, raw material purchases, packaging, insurance and other operating related expenses and depreciation applicable to property, vessels and equipment used in production. Selling costs include product freight, storage, and marketing costs. General and administrative expenses include employee compensation and benefits, rent expense, professional fees, association dues and other expenses, such as business development, office equipment and supplies.

Excluding depreciation expense, crew compensation represents the largest operating cost for the vessel operations and is a variable cost, structured to reward each crew based upon a pre-season estimated value per product applied to actual production and actual roe value achieved by their vessel. Quota purchase costs, the

second largest operating cost excluding depreciation expense, are calculated as an amount per ton harvested and are incurred when we purchase quota amounts from our Alaska Community Development Group partners, catcher vessel owners and other third party fishery participants. Product freight is incurred when we transport the product to either our customer or a cold storage facility. Storage costs are incurred for product entering a cold storage facility.

Excluding production-related depreciation of $32.5 million in 2002, approximately 12.7% of our total harvesting operating costs are fixed in that we assume that we would incur them even if a vessel were inactive for the season. As a result of our relatively low fixed harvesting cost base, we have the ability to manage our cost structure by matching vessel harvesting capacity with the available harvest amount for any given season.

Other Seafood Products Expenses. Operating costs related to our other seafood products operations are principally comprised of the cost of raw material purchases and labor. In addition, these costs include depreciation expense related to equipment and facilities used for processing and transportation.

Our other main expenses include general and administrative expenses, amortization of cooperative rights and other intangible assets, interest expense and losses, if any, on foreign currency contracts.

We recognize revenues and record accounts receivable balances when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed or determinable and collectibility is reasonably assured. The allowance for doubtful accounts reflects management’s estimate of potential losses inherent in the accounts receivable balance. Management determines the allowance based on known troubled accounts, historical experience, and other currently available evidence. It is our policy to write off accounts as collectibility becomes remote. We have two valuation accounts recorded on our balance sheet. The allowance for doubtful accounts balance was approximately $0.5 million at December 31, 2002, December 31, 2001 and December 31, 2000. Total bad debt write-offs for the year ended December 31, 2002 and the year ended December 31, 2001 were less than $0.1 million. Bad debts write-offs for the year ended December 31, 2000 were $2.2 million. We also had an allowance of $1.8 and $0.9 million recorded at December 31, 2002 and December 31, 2001, respectively, for a receivable due from one of our insurance providers, which filed for bankruptcy in March 2001. $0.9 million of this allowance was recorded in each of the years ended December 31, 2002 and December 31, 2001.

Results of Operations

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002.

Revenues. Revenues for the three months ended March 31, 2003 increased $27.2 million, or 32.4%, to $111.1 million from $83.9 million for the three months ended March 31, 2002. Other seafood product revenues for the three months ended March 31, 2003 increased $33.2 million to $34.8 million from $1.7 million for the three months ended March 31, 2002, primarily due to the inclusion of catfish sales in our revenues for the current year as a result of the December 2002 acquisition of Southern Pride. Ocean harvested whitefish product revenues for the three months ended March 31, 2003 decreased $5.9 million to $76.3 million from $82.2 million for the three months ended March 31, 2002, primarily due to lower sales of hake block. Pricing achieved for our ocean harvested white fish product through March 31, 2003, for our A-season pollock roe, surimi and fillet block products were, on a grade mix-adjusted basis, in line with those prices achieved during the A-season of 2002.

Cost of Sales. Cost of sales for the three months ended March 31, 2003 increased $21.0 million, or 49.4%, to $63.5 million from $42.5 million for the three months ended March 31, 2002. Other seafood product cost of sales for the three months ended March 31, 2003 increased $26.1 million to $27.8 million from $1.7 million for the three months ended March 31, 2002, primarily due to the inclusion of cost of sales for the catfish operations in the current year. Ocean harvested whitefish product cost of sales for the three months ended March 31, 2003 decreased $5.1 million to $35.7 million from $40.8 million for the three months ended March 31, 2002, primarily due to the lower sales of these products in the current quarter and a larger proportion of these sales being

attributable to sales of higher margin roe products when compared to the same period in the prior year. Gross profit for the three months ended March 31, 2003 increased $6.3 million, or 15.3%, to $47.6 million from $41.3 million for the three months ended March 31, 2002. Gross margins as a percent of sales for the three months ended March 31, 2003 decreased to 42.8% from 49.3% for the three months ended March 31, 2002, primarily due to a higher proportion of lower margin other seafood product sales for the current period as compared to the same period in the prior year. Other seafood product gross margins for the three months ended March 31, 2003 increased to 20.1% from (5.8%) for the three months ended March 31, 2002, primarily due to the inclusion of catfish sales in our product mix. Ocean harvested whitefish gross margins increased to 53.0% from 50.4% primarily due to a higher proportion of higher margin roe sales to total sales as compared to the same period in the prior year.

Selling, General and Administrative Expenses. For the three months ended March 31, 2003, selling, general and administrative expenses, including equity based compensation, increased $2.3 million, or 18.4%, to $14.7 million from $12.4 million for the three months ended March 31, 2002. This increase was primarily due to an increase in selling, general and administrative costs of $2.7 million for other seafood products to $2.9 million from $0.2 million as a result of the inclusion of catfish sales to our results of operations in the current year. This increase was partially offset by a decrease in ocean harvested whitefish selling, general and administrative expenses for the three months ended March 31, 2003 of $1.0 million to $11.8 million from $12.2 million for the three months ended March 31, 2002. This decrease was principally due to a decline in variable selling cost components, primarily logistical costs for our ocean harvested white fish, of approximately 17%, as measured per ton. This cost reduction per ton is due primarily to more cost effective logistical planning and execution. Selling, general and administrative costs, excluding equity-based compensation, as a percent of sales for the three months ended March 31, 2003 decreased to 13.1% from 14.7% for the three months ended March 31, 2002.

Amortization of Cooperative Rights, Intangibles and Goodwill and Depreciation of Other Assets. Amortization includes the amortization related to the cooperative rights and other intangibles. For the three months ended March 31, 2003, amortization and depreciation of other assets increased $0.2 million, or 8.8%, to $1.9 million from $1.7 million for the three months ended March 31, 2002 as a result of amortization expense on the intangible assets acquired during the acquisition of Southern Pride in December 2002.

Interest Expense, Net (Including Related Party Interest). Net interest expense for the three months ended March 31, 2003 increased $3.2 million, or 44.3%, to $10.6 million from $7.4 million for the three months ended March 31, 2002. The increase in net interest expense was mainly attributable to higher debt levels incurred in connection with the April 2002 recapitalization, the Southern Pride acquisition and the issuance of notes and redeemable equity securities.

Foreign Exchange (Losses) Gains, Net. Net foreign exchange gain is attributable to the ineffective, or time value portion of financial derivatives designated as hedges, and to financial derivatives not designated as hedges. For the three-months ended March 31, 2003, the net foreign exchange gain increased $1.2 million, or 133.3%, to $2.1 million from $0.9 million for the comparable period in 2002. This increase was primarily attributable to a higher average notional amount of foreign exchange contracts outstanding for the three months ended March 31, 2003, as compared to the prior year period in 2002.

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001.

Revenue. Revenue for the year ended December 31, 2002 decreased $3.9 million, or 1.2%, to $332.9 million from $336.8 million for the year ended December 31, 2001. The revenue decrease in 2002 was primarily due to lower roe pricing and lower Hadley Group related trade sales, partially offset by higher pricing of our block and surimi products. The price of roe achieved during our 2002 “A”-season was ¥1,906 as compared to ¥2,247 in 2001, or a decrease of approximately 15.2%. Hadley Group trade sales decreased by $13.8 million or approximately 49.5% due to global product supply constraints. We believe these same constraints that influenced the Hadley Group’s inability to obtain product for resale also contributed to our increased pricing for our pin

bone out block products. Production of finished goods in metric tons decreased in 2002 compared to 2001 primarily as a result of lower hake production in 2002 due to a reduction in the hake production. Pollock production in 2002 decreased by less than 1% as compared to the 2001 pollock production.

Cost of Sales. Cost of sales for the year ended December 31, 2002 decreased $3.2 million, or 1.5%, to $206.4 million from $209.6 million for the year ended December 31, 2001. This decrease was primarily attributable to lower variable product costs such as packaging and additives resulting from selling approximately 9,300 fewer metric tons of at-sea processed finished product in 2002, as compared to a total of 100,200 metric tons in 2001, lower fuel costs due to a decrease in fuel prices, and lower fish cost for the Hadley Group due to a decline in fish purchases, partially offset by an increase in crew compensation due to the higher value per metric ton produced as a result of the higher surimi and block prices. The gross profit for the year ended December 31, 2002 decreased $0.7 million to $126.5 million from $127.2 million for the year ended December 31, 2001. Gross margin for the year ended December 31, 2002 increased to 38.0% from 37.8% for the year ended December 31, 2001 due principally to the decrease in Hadley Group trade sales which generate lower gross margins.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended December 31, 2002, including equity based compensation, increased $2.8 million, or 4.8%, to $60.7 million from $57.9 million for the year ended December 31, 2001. These expenses increased primarily due to an increase in non-cash equity-based compensation expenses from $0.5 million for the year ended December 31, 2001 to $5.6 million for the year ended December 31, 2002, partially offset by lower freight related costs resulting from selling approximately 9,300 less metric tons of at-sea processed finished product in 2002 combined with lower logistical costs per unit achieved in 2002.

Amortization of Cooperative Rights, Intangibles and Goodwill and Depreciation of Other Assets. Amortization includes the amortization related to the cooperative rights, depreciation of office related assets and, through December 2001, goodwill recorded in connection with the January 2000 acquisition and depreciation of office related assets. Amortization expense for the year ended December 31, 2002 decreased $27.1 million, or 80.0%, to $6.8 million from $33.9 million for year ended December 31, 2001. This decrease was primarily attributable to an extension of the amortization schedule for cooperative rights, an intangible asset representing our allocation rights as a member of the Pollock Conservation Cooperative. From January 28, 2000 to October 31, 2001, the cooperative rights were amortized on a straight-line basis over 59 months, which was the remaining life of the Pollock Conservation Cooperative agreement. Beginning in November 2001, as a result of changes to the American Fisheries Act, we changed the amortizable life of the cooperative rights to 23.2 years, which matches the average remaining depreciable lives of our vessels. As of January 1, 2002, we adopted “Statement of Financial Accounting Standards (SFAS) No. 142, Goodwill and Other Intangible Assets,” and ceased amortization of goodwill.

Interest Expense, Net (including related party interest). Interest expense is net of interest income of $0.2

million and $0.4 million in 2001 and 2002, respectively. Net interest expense for the year ended December 31, 2002 increased $4.6 million, or 13.2%, to $39.5 million from $34.9 million for the year ended December 31, 2001. The increase in net interest expense was mainly attributable to the increase in the principal balance on the senior bank debt resulting from the April 2002 recapitalization, the addition of $175.0 million principal amount related to the private offering of the existing senior subordinated notes, partially offset by declining variable interest rates applied to the senior bank debt. Interest expense for our revolving credit facility for the years ended December 31, 2002 and December 31, 2001 was $0.9 million and $1.6 million, respectively, including commitment fees. Interest expense for our two term loans was $14.1 million for the year ended December 31, 2002 and $15.1 million for the year ended December 31, 2001. In connection with the April 2002 recapitalization, we repaid all amounts outstanding under the bank credit facility that was in place at the time of the recapitalization, and entered into our existing credit facility. See “—Liquidity and Capital Resources—Our Indebtedness.”

Foreign Exchange (Losses) Gains, Net. Net foreign currency exchange gain attributable to financial derivatives for the year ended December 31, 2002 increased $1.3 million to $19.0 million from $17.7 million for the year ended December 31, 2001. Beginning January 28, 2000, in compliance with our adoption of SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities,” the existing forward contracts were designated as hedges and the change in value related to the fluctuation in the value of the Japanese yen was not reflected in earnings. The net unrealized gains related to the ineffective portion (the time value) of the derivatives recognized in earnings for the years ended December 31, 2002 and December 31, 2001 were $18.3 million and $16.2 million, respectively. We recorded realized gains of $0.2 million and $3.0 million related to the change in the ineffective portion of the derivatives which settled during the years ended December 31, 2002 and December 31, 2001, respectively.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000.

The following discussion and analysis includes the results for the period January 1, 2000 to January 27, 2000 and the results for the period January 28, 2000 to December 31, 2000 where indicated. Management believes this presentation provides useful information; however, there are differences in the accounting for certain items between the periods January 1, 2000 to January 27, 2000, and January 28, 2000 to December 31, 2000. The accounting differences related to derivatives, major scheduled vessel maintenance, and basis changes resulting from the January 28, 2000 acquisition.

Revenue. Revenue for the year ended December 31, 2001 increased $74.8 million, or 28.5%, to $336.8 million from $9.7 million for the period from January 1, 2000 to January 27, 2000 and $252.3 million for the period from January 28, 2000 to December 31, 2000. The revenue increase in 2001 was primarily attributable to harvesting over 60,000 metric tons more pollock in 2001 compared to the 2000 pollock harvest, an increase of 32.9%. This additional harvest led to higher sales volumes resulting in approximately 33,800 more metric tons of at-sea processed frozen pollock product sold in 2001 as compared to 2000. The increase was also driven by an improvement in recovery rates from an average pollock flesh recovery rate of 22.0% in 2000 to 24.5% in 2001, and an increase in the roe recovery rate from 3.9% in 2000 to 4.8% in 2001. These positive factors were partially offset by a less favorable yen exchange rate in 2001 and declines in roe and surimi yen prices by approximately 27.5% and 2.8%, respectively, from 2000 to 2001. The 2001 increase in pollock harvest was the result of a 22.9% increase in the total allowable catch and an increase in community development quota that we acquired from our Alaska Community Development Group partners from 15.3% of the community development pollock quota allocation in 2000 to 28.0% in 2001.

Cost of Sales. Cost of sales for the year ended December 31, 2001 increased $45.9 million, or 28.0%, to $209.6 million from $11.7 million for the period from January 1, 2000 to January 27, 2000 and $152.0 million for the period from January 28, 2000 to December 31, 2000. This increase was primarily attributable to additional variable product costs such as crew compensation and packaging resulting from selling approximately 37,000 more metric tons of at-sea processed finished product in 2001, higher quota purchase cost due to the increase in the volume of quota purchased and higher fuel costs due to an increase in fishing days. The gross profit for the year ended December 31, 2001 increased $28.8 million, or 29.3%, to $127.2 million, from ($2.0) million for the period from January 1, 2000 to January 27, 2000 and $100.4 million for the period from January 28, 2000 to December 31, 2000. Gross margin for the year ended December 31, 2001 increased to 37.8% from 37.5% for the year ended December 31, 2000.

Selling, General and Administrative Expenses. Selling, general and administrative expenses for the year ended December 31, 2001 increased $20.3 million, or 54.0%, to $57.9 million from $2.0 million for the period from January 1, 2000 to January 27, 2000 and $35.6 million for the period from January 28, 2000 to December 31, 2000. These expenses increased primarily due to our selling approximately 37,000 more metric tons of at-sea processed finished product in 2001, which resulted in $10.9 million of higher freight costs; higher general and administrative costs related to increases in salary and bonus expense; non-cash option compensation expense; association dues, which are assessed on the volume of pollock quota allocation; legal fees and professional services.

Amortization of Cooperative Rights, Intangibles and Goodwill and Depreciation of Other Assets. Amortization includes the amortization related to the cooperative rights and goodwill recorded in connection with the January 2000 acquisition and depreciation of office related assets. Amortization expense for the year ended December 31, 2001 decreased $1.7 million, or 4.8%, to $33.9 million from $0.4 million for the period from January 1, 2000 to January 27, 2000 and $35.2 million for the period from January 28, 2000 to December 31, 2000. This decrease was primarily attributable to an extension of the amortization schedule for cooperative rights, an intangible asset representing our allocation rights as a member of the Pollock Conservation Cooperative. From January 28, 2000 to October 31, 2001, the cooperative rights were amortized on a straight-line basis over 59 months, which was the remaining life of the Pollock Conservation Cooperative agreement. Beginning in November 2001, as a result of changes to the American Fisheries Act, we changed the amortizable life of the cooperative rights to 23.2 years, which matches the average remaining depreciable lives of our vessels. Amortization of cooperative rights was $24.1 million for the period ended December 31, 2001 and $25.9 million for the period from January 28, 2000 to December 31, 2000.

Interest Expense, Net (including related party interest). Interest expense is net of interest income of $0.2 million in 2001. Net interest expense for the year ended December 31, 2001 decreased $7.7 million, or 18.1%, to $34.9 million from $4.3 million for the period from January 1, 2000 to January 27, 2000 and $38.3 million for the period from January 28, 2000 to December 31, 2000. Interest expense for the period from January 1, 2000 to January 27, 2000 included $3.1 million of related party debt guarantee and refinance fees that were recorded as an expense of the Predecessor Business. The decrease in net interest expense was mainly attributable to the absence of related party debt guarantee and refinance fees in 2001 and to lower variable interest rates applied to a declining principal balance on the senior bank debt we incurred in connection with the January 2000 acquisition. Interest expense for our revolving credit facility for the period from January 28, 2000 to December 31, 2000 and the year ended December 31, 2001 was $2.1 million and $1.6 million, respectively, including commitment fees. Interest expense for our two term loans was $21.7 million for the period from January 28, 2000 to December 31, 2000 and $15.1 million in 2001. We repaid all amounts outstanding under this bank credit facility in connection with the recapitalization in April 2002, and entered into our existing credit facility. See “—Liquidity and Capital Resources—Our Indebtedness.”

In connection with the January 2000 acquisition, ASC, Inc. and Holdings each issued a long-term subordinated note payable to the seller, Norway Seafoods. The principal amounts of these seller notes totaled $95.0 million at issuance and bore interest at the rate of 10% per annum increasing to 12% to the extent interest was not paid in cash, but rather added to the principal amounts of the notes. No cash interest was paid on these notes in 2000 or 2001. Related party interest expense attributable to these seller notes was $9.2 million in 2000 and $12.6 million in 2001. We repaid these notes in connection with the recapitalization in April 2002. See “—Liquidity and Capital Resources—Our Indebtedness.”

Foreign Exchange (Losses) Gains, Net. Net foreign currency exchange gain attributable to financial derivatives for the year ended December 31, 2001 decreased $11.8 million to $17.7 million from $10.4 million for the period from January 1, 2000 to January 27, 2000 and $19.1 million for the period from January 28, 2000 to December 31, 2000. Of the $11.8 million, $10.4 million was unrealized gain related to the entire change in fair value of derivatives due to a significant decrease in the value of the Japanese yen during the first twenty-seven days of January 2000 prior to our adoption of SFAS No. 133 “Accounting for Derivative Instruments and Hedging Activities.” Beginning January 28, 2000, the existing forward contracts were designated as hedges and the change in value related to the fluctuation in the value of the Japanese yen was not reflected in earnings. The net unrealized gains related to the ineffective portion (the time value) of the derivatives recognized in earnings during the period from January 28, 2000 to December 31, 2000 and the twelve months ended December 31, 2001 were $16.4 million and $16.2 million, respectively. We recorded realized gains of $2.6 million and $1.7 million related to the change in the ineffective portion of the derivatives which settled during the period from January 28, 2000 to December 31, 2000 and the twelve months ended December 31, 2001. Due to the accounting effects resulting from our adoption of SFAS No. 133, the foreign currency gains (losses) recorded in periods related to the Predecessor Business are not comparable to the foreign currency gains (losses) recorded in periods related to ASG.

Seasonality

The U.S. Bering Sea pollock fishery is split into two distinct seasons, known as the “A” and “B” seasons. The “A” season opens in January and typically ends in April. During the “A” season, pollock carry their maximum quantities of high-value roe, making this season the more profitable one. During the “A” season we also produce other primary products, such as surimi and fillet blocks, although yields on these products are slightly lower in “A” season compared to “B” season due to the high roe content of pollock harvested in the “A” season. Although the “A” season typically accounts for approximately 40% of our year’s total pollock harvest measured by weight, it represents a majority of our revenues generated in the same period due to the higher value of roe that is recovered during the “A” season.

The “B” season occurs in the latter half of the year, typically beginning in July and extending through the end of October. The primary products produced in the “B” season are surimi and fillet blocks. The “B” season typically accounts for approximately 60% of our year’s total pollock harvest.

The table below shows our quarterly dispersion, in terms of percentage, for revenues and gross profit for the years ended December 31, 2000, 2001 and 2002:

	“A” Season				“B” Season
	Q-1		Q-2		Q-3		Q-4
Revenues:
2000	29	%	31	%	17	%	23	%
2001	33		26		16		25
2002	25		30		22		23
Gross profit:
2000	41	%	34	%	10	%	15	%
2001	42		23		12		23
2002	36		26		24		14

Our fishing seasons, including the important January-to-April season, straddle more than one quarter. As a result, the timing of the recognition of significant amounts of revenue can vary from one quarter to another.

Financing Activities

On April 18, 2002, ASG issued and sold $175.0 million principal amount of 10.125% senior subordinated notes due 2010 (the existing senior subordinated notes) pursuant to Rule 144A and Regulation S of the Securities Act of 1933. The offering of these notes was part of a recapitalization involving Holdings and its affiliates. On November 20, 2002, ASG exchanged these notes through an exchange offer for notes registered with the SEC. Concurrently with the offering of these notes, ASG entered into its existing credit facility. Following the completion of the transactions contemplated by this offering, ASG will use the proceeds it receives from Holdings, together with borrowings under the new credit facility, to repay all outstanding borrowings under the existing credit facility and to repurchase all of the existing senior subordinated notes that are validly tendered and not withdrawn pursuant to the consent solicitation and tender offer. As part of the April 2002 recapitalization, we used the proceeds of the notes offering, together with borrowings of $325.9 million under the existing credit facility, to:

Repay all outstanding debt under our old credit facilities.

Repay all amounts outstanding (including accrued interest), under two senior subordinated promissory notes issued by our affiliates, ASC, Inc. and Holdings, to Norway Seafoods, the former owner of our business.

Pay related fees and expenses.

Distribute the remainder of the borrowed amounts to our equityholders.

In addition, we distributed to our equityholders any cash on hand on April 4, 2002 plus cash generated from our operations from April 4, 2002 to April 18, 2002. As a result, the aggregate amount of cash distributed to American Seafoods Consolidated LLC, for distribution to the equity holders of its parent, was approximately $203.8 million, including $5.7 million of fees paid out of the distribution.

On July 2, 2002, ASG loaned $6.0 million to Bernt O. Bodal to finance his purchase of equity interests in ASLP. The interest rate on this loan resets each January 1, April 1, July 1 and October 1 to the prime rate plus ¹/2 percent. The current rate is 5.25% per annum. This loan will mature in 2012. Mr. Bodal is obligated to apply the amount of any distributions he receives on his ASLP units, after payment of applicable income taxes, to repay this loan. In connection with the transactions contemplated by this offering, (i) all of ASG’s rights with respect to this loan will be distributed to Holdings and (ii) Mr. Bodal will repay this loan in full.

On October 4, 2002, three investment funds managed by Wasserstein & Co., which we refer to as the U.S. Equity Partners Funds purchased from Holdings a combination of preferred equity securities and notes, and purchased from ASLP warrants to purchase ASLP units, for a total purchase price of $27.3 million. Proceeds from the sale were used by ASLP to redeem 44,828 ASLP units and a warrant to purchase 106,875 ASLP units, which were held by affiliates of Norway Seafoods. In the transactions contemplated by this offering, Holdings will use $33.7 million of the proceeds received to redeem the preferred equity interests and notes held by the U.S. Equity Partners Funds. A portion of the U.S. Equity Partners Funds warrants will be exercised in connection with the offering and a portion will be amended to become exercisable for Holdings equity and then transferred to the Issuer in exchange for IDSs and cash. An aggregate of $6.1 million will be paid to the U.S. Equity Partners Funds in connection with the transfer or exercise of such warrants.

On October 28, 2002, Holdings loaned approximately $0.7 million to certain members of management of ASG to purchase ownership interests in ASLP from a selling partner. The loans bear an initial interest rate of 5.25% with a requirement to reset the rate to the prime rate plus one-half percent per annum on January 1, April 1, July 1 and October 1 of each year that the loans are outstanding. Payments on the loans are required to be made from the net proceeds of any and all dividends and distributions with respect to the purchasers’ interests in ASLP and with 25% to 33% of the gross amount of any annual bonus paid or payable to such purchasers, and any outstanding balance is due in 2012. The underlying loans are full recourse to the assets of the purchasers, except that the recourse to assets other than ownership interests is eliminated if the value of the underlying security in ASLP becomes greater than four times the loan balance. All of the purchasers’ ownership interest in ASLP is pledged as collateral for the loans. In connection with the transactions contemplated by this offering, (i) immediately prior to the consummation of this offering, Holdings’ rights with respect to these loans will be distributed to ASLP and (ii) such members of management shall apply any distributions received by them on their ASLP units as a result of the transactions consummated in connection with this offering, after payment of applicable income taxes, to repay such loans. We expect these loans to be repaid in full as a result of the transactions consummated in connection with this offering.

On November 18, 2002, we forgave the exercise price on certain Series C options that had been repriced to $0.01 in connection with the recapitalization of Holdings and its affiliates in April 2002 and forced the conversion of these options into ASLP ownership units.

On December 16, 2002, ASG entered into the Second Amended and Restated Credit Agreement with Bank of America, N.A., as Administrative Agent, and various other lenders, which amended the existing credit facility, dated as of April 18, 2002. The amendment provided, among other things, for an increase in the principal amount of term B loans by $50 million, and consents to our acquisition of Southern Pride as other than a permitted acquisition. We used the borrowing of $50 million in additional term B loans to pay the purchase price for the acquisition, make certain payments related to the acquisition, pay related fees and expenses and fund our general corporate purposes. The assets we acquired from Southern Pride secure ASG’s indebtedness under the existing credit facility. As of December 31, 2002, after giving effect to the amendment, there was $360.5 million of outstanding indebtedness under the existing credit facility and approximately $73.0 million of unused borrowing capacity under the revolving credit facility.

Following the completion of the transactions contemplated by this offering, ASG will use the proceeds it receives from Holdings, together with borrowings under the new credit facility, to repay all outstanding borrowings under the existing credit facility and to repurchase all of the existing senior subordinated notes that are validly tendered and not withdrawn pursuant to the consent solicitation and tender offer.

Liquidity and Capital Resources

Our principal liquidity requirements are for working capital, consisting primarily of receivables, inventories, pre-paid expenses, payables and accrued expenses; capital expenditures; and debt service. We will fund our liquidity needs primarily with cash generated from operations and, to the extent necessary, through borrowings under the new revolver that we will enter into as part of this offering. As of March 31, 2003, the balance under our revolving credit facility was $46.0 million.

Cash flows from operating activities was $18.0 million and $2.8 million as of March 31, 2002 and 2003, a decrease of $15.1 million. This decrease was primarily due to a net increase in working capital related to an increase in production, which led to additional inventory on hand and receivables due from sales. This amount was partially offset by an increase in accounts payable and accrued liabilities.

Cash used in investing activities was $1.6 million and $3.3 million for the three months ended March 31, 2002 and 2003, respectively, an increase of $1.7 million. The increase was primarily due to a $1.6 million increase in purchases of equipment due mostly to the Southern Pride acquisition.

Cash used in financing activities for the three months ended March 31, 2002 was $12.0 million, while cash provided by financing activities was $1.4 million for the three months ended March 31, 2003. The 2002 period reflects repayments of debt with cash provided by operations whereas the 2003 period reflects net borrowings to fund working capital increases.

Cash flow from operating activities was $44.2 million, $84.6 million and $96.7 million for the period from January 28, 2000 to December 31, 2000 and the years ended December 31, 2001 and 2002, respectively. The increase in cash flow provided by operating activities from 2001 to 2002 was due principally to an increase in operating income, and a net decrease in working capital excluding the current portion of long-term debt. The increase in cash flow provided by operating activities from 2000 to 2001 was due principally to an increase in operating income, and a more favorable Japanese yen exchange rate, partially offset by a net increase in working capital.

Cash flow used by investing activities was $369.8 million, $13.7 million, and $58.6 million for the period from January 28, 2000 to December 31, 2000 and the years ended December 31, 2001 and 2002, respectively. The increase in cash used by investing activities from 2001 to 2002 related principally to the acquisition of Southern Pride. The cash used by investing activities in 2000 was due principally to the January 2000 purchase of predecessor assets and vessels plus $24.1 million in a deferred purchase payment to the seller.

Cash flows from financing activities were net cash inflows of $330.0 million in the period from January 28, 2000 to December 31, 2000, net cash outflows of $73.0 million in 2001 and net cash outflows of $35.0 million for 2002.

During the period from January 1, 2000 to January 27, 2000, our cash flows from financing activities were comprised of net repayments of revolving debt of $5.0 million.

During the period from January 28, 2000 to December 31, 2000, our cash flows from financing activities included borrowings of $250.0 million of long-term debt, net revolving debt borrowings of $28.0 million and capital contributions of $72.1 million. These amounts represent cash flows relating primarily to funding the acquisition. The acquisition, which had a total purchase price of $477.9 million, involved the issuance of seller notes, bank

borrowings and the issuance of equity instruments. All debt obligations that we have assumed, that we repaid with proceeds from the offering of the notes, or that we have guaranteed or for which our assets are pledged as collateral, have been pushed down to ASG’s and Holdings’ financial statements. In addition to our acquisition funding, our cash flows from financing activities during the period January 28, 2000 to December 31, 2000 included $9.3 million of financing fees and costs, and principal payments on our long-term debt of $9.4 million.

During 2001, our cash flows from financing activities were primarily comprised of borrowings of long-term debt of $3.5 million, principal payments of long-term debt of $47.8 million, net repayments on our revolving debt of $16.0 million and distributions to a member of $11.2 million. We repaid our debt as required by our loan agreements and we paid down our revolving debt to reduce our interest cost and improve our leverage ratio as cash was available from our operating activities. The distributions to members were made based on estimated tax allocations.

During 2002, our cash flows from financing activities were primarily comprised of net borrowings and net payments of long-term and revolving debt. On April 18, 2002, we repaid all of our existing senior debt and seller notes in the amount of $305.6 million in connection with the April 2002 recapitalization. ASG entered into the existing credit facility in the amount of $445.0 million, which includes two term loans for $370.0 million and a revolving credit line of $75.0 million, and subordinated notes of $175.0 million. The total amount borrowed on the term loans and subordinated notes was $545.0 million, of which $9.5 million had been paid down at December 31, 2002. There was a $2.0 million outstanding balance on the revolver at December 31, 2002. Following the completion of the transactions contemplated by this offering, we will repay all outstanding borrowings under the existing credit facility.

We had $5.6 million of cash and cash equivalents at December 31, 2002 compared to $2.3 million at December 31, 2001 and $4.4 million at December 31, 2000. After giving effect to this offering, we believe that this cash, the cash flows we expect to generate from operations, and borrowing capabilities under our new credit facility, will be sufficient to meet our liquidity requirements in the foreseeable future, including our payment obligations under the notes and our anticipated dividend payments on our common stock.

Covenant Restrictions. The new credit facility will impose restrictions on our ability to make capital expenditures. Additionally, the new credit facility and the indenture governing the notes will limit our ability to incur additional indebtedness. Such restrictions could limit our ability to respond to certain market conditions, meet our capital spending program, provide for unanticipated capital investments or take advantage of business opportunities. The covenants in the new credit facility also, among other things, will restrict our ability and the ability of our subsidiaries to dispose of assets, incur indebtedness, incur guarantee obligations, prepay other indebtedness or amend other debt instruments, make restricted payments, create liens, make investments, make acquisitions, change the nature of our business, engage in mergers and consolidations, enter into sale and leaseback transactions, make capital expenditures or engage in certain transactions with affiliates. The indenture governing the notes also will impose similar restrictions on the operation of our business.

Capital Expenditures. We use the term “maintenance capital expenditures” to refer to costs we incur that meet capitalization requirements under accounting principles generally accepted in the United States of America that we consider recurring in nature. The majority of our maintenance capital expenditures relate to our catcher-processor fleet and include items such as fishing gear, improvements to vessel factory processing equipment and major scheduled vessel maintenance. Major scheduled vessel maintenance costs relate principally to our periodic overhauls and replacements performed generally on a three- to five-year cycle. Capital expenditures reflected below were funded from cash flows from operations and borrowings under our existing credit facility.

	January 28 through December 31, 2000		2001		2002
	(dollars in millions)
Fishing gear	$	1.0	$	2.3	$	0.8
Machinery and equipment		1.5		4.1		5.2
Major scheduled vessel maintenance		2.1		0.9		2.7
Other		2.8		1.9		0.7

Total capital expenditures	$	7.4	$	9.2	$	9.4

We estimate that we will have capital expenditure requirements in the range of approximately $9.0 million to $12.0 million per year for the next five years (of which in each year approximately $9.5 million is anticipated to represent maintenance capital expenditures and the remainder for expansion of facilities and production). This moderate level of anticipated capital expenditures is primarily due to the fact that we made significant investments on our vessels immediately following their acquisition. In addition to our capital expenditures, we spend approximately $7.0 million per year on routine vessel maintenance, which is expensed in the year it is incurred. We also anticipate maintenance capital expenditures for our facilities in Alabama and Massachusetts to maintain these facilities at their current conditions.

Our Indebtedness

Old Credit Facility. In connection with our acquisition by Centre Partners and others through ASLP on January 28, 2000, we entered into a revolving credit and term loan agreement with a syndicate of lenders, the administrative agent of which was Bank of America, N.A. This agreement provided for $250.0 million in term loans ($175.0 million Term A and $75.0 million Term B) and $60.0 million in revolving credit. In connection with the recapitalization of Holdings and its affiliates in April 2002, we repaid all indebtedness under our old senior credit facility.

Existing Credit Facility. In connection with the April 2002 recapitalization, ASG entered into a senior credit agreement with a syndicate of banks, the administrative agent of which is Bank of America, N.A. ASG’s credit agreement consists of a $75.0 million revolving credit facility with an initial $5.9 million drawn at closing, and $370.0 million in term loans ($90.0 million Term A and $280.0 million Term B). ASG’s obligations under the credit facility are secured by substantially all its assets. The agreement subjects ASG to various restrictive covenants, including limitations on its ability to prepay indebtedness (including its subordinated notes), incur additional indebtedness, and requirements that it maintains specified financial ratios, such as maximum total leverage, minimum interest coverage and minimum fixed charge coverage. Following the completion of the transactions contemplated by this offering, ASG will use net proceeds received from this offering, together with $220.0 million of borrowings under the new credit facility, to repay all outstanding borrowings under the existing credit facility.

U.S. Equity Partners Funds Equity Interests and Notes. On October 4, 2002, the U.S. Equity Partners Funds purchased from Holdings a combination of preferred equity securities and notes, and purchased from ASLP warrants to purchase ASLP units, for a total purchase price of $27.3 million. Proceeds from the sale were used by

ASLP to redeem 44,828 ASLP units and a warrant to purchase 106,875 ASLP units, which were held by affiliates of Norway Seafoods. In the transactions contemplated by this offering, Holdings will use $33.7 million of the proceeds received to redeem the preferred equity interests and notes held by the U.S. Equity Partners Funds. A portion of the U.S. Equity Partners Funds warrants will be exercised in connection with the offering and a portion will be amended to become exercisable for Holdings equity and then transferred to the Issuer in exchange for IDSs and cash. An aggregate of $6.1 million will be paid to the U.S. Equity Partners Funds in connection with the transfer or exercise of such warrants.

PLC Credit Facility. In December 2001, PLC entered into an $8.0 million revolving term note agreement with a bank. PLC obligations under this credit facility are secured by substantially all of PLC’s assets. The agreement subjects PLC to various restrictive covenants, including limitations on PLC’s ability to prepay indebtedness, incur additional indebtedness and requires that PLC maintains specified financial ratios. PLC will be distributed by Holdings to ASLP prior to the completion of this offering.

New Credit Facility. Upon completion of this offering, our subsidiary ASG will enter into $300.0 million of senior secured debt facilities with a syndicate of financial institutions, which we refer to as the “new credit facility.” We expect that the new credit facility will include an $80.0 million senior secured revolving credit facility, which we refer to as the “new revolver,” a term loan in a total principal amount of $80.0 million, which we refer to as the “new term loan,” and $140.0 million of senior secured notes, which we refer to as the “new senior notes.” The Issuer will not be a party to the new credit facility. The new credit facility will contain restrictions on ASG’s ability to make distributions to Holdings. Such distributions are the projected sources of cash to allow the Issuer to make interest and dividend payments to IDS holders. We expect that the new credit facility will have a 5-year maturity. See “Use of Proceeds” and “Description of Certain Indebtedness—New Credit Facility.”

Our ability to comply in future periods with the financial covenants in the new credit facility will depend on our ongoing financial and operating performance, which in turn will be subject to economic conditions and to financial, business and other factors, many of which are beyond our control, and will be substantially dependent on the selling prices for our products and our ability to successfully implement our overall business strategies.

Subordinated Seller Notes. In connection with the acquisition of our business by Centre Partners and others through ASLP on January 28, 2000, ASC, Inc. and Holdings each issued a note to the seller, Norway Seafoods. These notes were in the principal amounts of $50.0 million and $45.0 million, respectively, and bore interest at the rate of 10% per annum, increasing to 12% to the extent interest was not paid in cash. Any interest not paid in cash was added to the principal amounts of the notes. No cash interest was paid on these notes in 2000 or 2001. The notes were scheduled to mature on January 28, 2010. In connection with the recapitalization of Holdings and its affiliates in April 2002, we repaid these notes plus related accrued interest.

Existing Senior Subordinated Notes. On April 18, 2002, ASG completed a private offering of $175.0 million principal amount of 10.125% senior subordinated notes due 2010 (the existing senior subordinated notes). A registration statement under the Securities Act registering these notes became effective on October 15, 2002. On November 20, 2002, ASG completed its exchange offer of the privately-placed notes for SEC registered notes. All of the privately-placed notes were exchanged for registered notes. Following the completion of the transactions contemplated by this offering, we will repurchase all of the existing senior subordinated notes that are validly tendered and not withdrawn pursuant to the consent solicitation and tender offer.

Contractual Obligations and Commercial Commitments

The following table provides aggregated information about our contractual obligations as of December 31, 2002.

	Payments Due by Period (in thousands)
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Long-Term Debt	$	544,751	$	16,023	$	39,726	$	51,977	$	437,025
Operating Leases		3,147		831		1,256		1,060		—
Unconditional Purchase Obligations(1)		31,220		17,160		14,060		—		—
Other Long-Term Obligations		17,646		552		13,116		1,961		2,017

Total Contractual Cash Obligations		596,764		34,566		68,158		54,998		439,042

(1)	Unconditional purchase obligations assume total allowable catch and allocated quotas at 2003 levels.

In addition to the above, we are obligated to purchase up to 5 million pounds of catfish per year (which is less than 5% of the total amount of catfish purchased by Southern Pride in 2002) from Southern Pride’s previous owner at a price that is based on a market index. The term of this obligation is ten years. We had no significant commercial commitments as of December 31, 2002.

After the completion of the transactions contemplated by this offering, we expect total long-term debt to be approximately $614.8 million, $220.0 million of which will mature after 5 years and $394.8 million of which will mature after 10 years.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of our financial condition and results of operations is based on Holdings’ consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our critical accounting policies and estimates and base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies affect the most significant judgments and estimates used in the preparation of our consolidated financial statements:

Foreign exchange contracts. We record gains and losses on foreign currency transactions in other income and expense following Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities.” Foreign exchange contracts are used to hedge the variability of future cash flows associated with Japanese yen denominated sales due to changes in foreign currency exchange rates. The effectiveness of the hedged transactions is measured by changes in spot rates and the gain or loss resulting from the change in time value is recognized currently in earnings. The unrealized gains and losses resulting from the change in spot rates, or the effective portion, are recorded in other comprehensive income. These gains and losses are recognized in revenues when the forecasted sales have occurred. Gains and losses resulting from the ineffective portion of the hedge, which generally relate to the time value component of the contract, are recognized currently in earnings. See “Risk Factors—Our business is subject to Japanese currency fluctuations which could materially adversely affect our financial condition.”

Our profitability depends in part on revenues received in Japanese yen as a result of sales in Japan. During 2002, our Japanese sales represented 39.5% of our total revenues. A decline in the value of the yen against the U.S.

dollar would adversely affect our earnings from sales in Japan. Fluctuations in currency are beyond our control and are unpredictable. From January 1 through December 31, 2002, the value of the dollar decreased by 9.6% against the JPY, from 131.26 JPY per USD to 118.64 JPY per USD. While we conduct hedging activities to mitigate the risk of currency fluctuations, these hedging activities may not be sufficient to provide complete protection against loss, and accordingly any such fluctuations could adversely affect our revenues.

Acquisition and pushdown accounting. On January 28, 2000, Centre Partners and others through ASLP acquired our business in a transaction accounted for as a purchase. Accordingly, all of our assets and liabilities were recorded at their estimated fair market values as of the date of the acquisition.

The goodwill resulting from the purchase has also been recorded in our financial statements. In addition, expenses incurred by our parent have been recorded in our financial statements to the extent that such expenses related to or benefited our operations.

In December 2002, we acquired Southern Pride. A portion of the net book value of our property and equipment represents amounts allocated to those assets as part of the allocation of the purchase price in the acquisition. The allocation of the purchase price in a business combination under the purchase method of accounting is subjective. Management is required to estimate the fair values of assets and liabilities as of the acquisition date. For property and equipment, an estimate of fair market value was determined based on replacement cost and age of the assets. Inventories were valued at fair value less costs to sell and a normal profit margin. Intangible assets acquired, including the trade name and customer relationships, were valued by discounting estimated future cash flows. Other assets and liabilities were allocated purchase price based on the carrying value as management determined that carrying value approximated fair value. The excess purchase price over the fair value of the net assets acquired was recorded as goodwill. We review the carrying value of goodwill annually and when events and changes in circumstances indicate that the carrying value of the asset may not be recoverable through future operations.

Cooperative rights. An identifiable intangible asset, cooperative rights, was recorded at its estimated fair value of $138.2 million in connection with the acquisition on January 28, 2000. This estimated fair value was determined using a discounted cash flow analysis by comparing the expected discounted cash flows under the cooperative system to the cash flows under the former Olympic style system, which means that any vessel licensed to operate in the fishery may harvest as much fish as possible until the fishery’s aggregate seasonal quota allocation has been reached.

From January 2000 to October 2001, the cooperative rights intangible asset was amortized on a straight-line basis over 59 months, which was the remaining life of the sunset provision in the American Fisheries Act. Beginning in November 2001, as a result of changes to the American Fisheries Act, we changed the life of our cooperative rights to 23.2 years, which matched the average remaining lives of the vessels, as the American Fisheries Act specifies vessels to which the cooperative rights apply.

Vessel maintenance. A significant portion of our operations is related to our vessels. On January 28, 2000, the purchase of our vessels was part of the total acquisition. Our vessels were recorded at their estimated fair market values, with approximately 60% categorized as vessel equipment and machinery with an estimated useful life of seven years and approximately 40% as vessel hull with an estimated useful life of twenty-five years. We depreciate these assets on a straight-line basis over their estimated useful lives.

We incur expenses to repair and maintain our vessels. Repairs and ordinary maintenance are expensed as incurred. Significant additions and improvements are capitalized. As a condition to maintaining our Det Norske Veritas class certification, the highest vessel certification in the industry, the vessels must undergo scheduled major shipyard maintenance at intervals of three to five years. As a part of this scheduled maintenance, we may also have major vessel components overhauled. The costs for this major shipyard maintenance are capitalized and charged to operations on a pro-rata basis during the period through the next scheduled major shipyard maintenance.

Equity-Based Compensation. Certain employees of Holdings have equity-based compensation arrangements under which they received options to acquire units of ASLP. We follow the fair value recognition provisions of FASB Statement No. 123, Accounting for Stock-Based Compensation, for equity-based employee compensation. The related compensation cost has been pushed down to Holdings’ financial statements, and the deferred compensation has been recorded as a related party payable.

Segment information. We operate in two principal business segments, ocean harvested whitefish and other seafood products. The ocean harvested whitefish segment includes the harvesting and processing of pollock, cod and hake. Processing of ocean harvested whitefish occurs on our vessels while at sea and at our facilities in Massachusetts. The other seafood products segment includes the processing of catfish and scallops at our facilities in Alabama and Massachusetts. Other seafood products sales were not significant prior to our acquisition of Southern Pride.

New Accounting Pronouncements

In June 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” Statement 143 requires companies to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. SFAS No. 143 became effective for us on January 1, 2003. The provisions of this statement are not expected to have a material impact on our financial position or results of operations.

In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” Statement 146 requires companies to recognize costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Statement 146 will supersede accounting guidance previously provided by EITF Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” SFAS No. 146 will be applied prospectively to exit or disposal activities initiated after December 31, 2002. The provisions of this statement are not expected to have a material impact on our financial position or results of operations.

In November 2002, the FASB issued interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” Interpretation 45 elaborates on the existing disclosure requirements for most guarantees, including loan guarantees such as standby letters of credit. It also clarifies that at the time a company issues a guarantee, the company must recognize and record an initial liability for the fair value of the obligations it assumes under that guarantee and must disclose that information in its interim and annual financial statements. The initial recognition and initial measurement provisions apply on a prospective basis to guarantees issued or modified after December 31, 2002. Implementation of this interpretation is not expected to have a material effect on our financial position or results of operations.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure—an amendment of FASB Statement No. 123.” SFAS No. 148 requires companies who are utilizing the intrinsic value method to account for stock issued to employees as identified by APB 25, “Accounting for Stock Issued to Employees,” to expand disclosures about the fair value method as identified by SFAS No. 123, “Accounting for Stock-Based Compensation” and provides alternative methods to transition to the fair value method. Statement 148 will become effective for us for fiscal years ending after December 15, 2002. Management is evaluating whether to transition to the fair value method, and has included the disclosures required by SFAS No. 148.

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities.” The interpretation addresses consolidation of certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The consolidation provision of the

interpretation applies immediately to variable interest entities created, and to variable interest entities in which we obtain an interest, after January 31, 2003. We will also be required to apply the consolidation provisions of the interpretation as of the beginning of the third quarter of 2003 to variable interest entities in which our interest was acquired prior to February 1, 2003. Implementation of Interpretation No. 46 is not expected to have a material effect on our financial position or results of operations.

Inflation

We do not expect inflation to have a significant impact on our business, financial condition or results of operations. Historically, we generally have been able to offset the impact of inflation through a combination of productivity improvements and price increases.

Quantitative and Qualitative Disclosures About Market Risk

Market Pricing. The sale of pollock roe is our highest margin business. The price of pollock roe is heavily influenced by the size and condition of roe skeins, color and freshness and the maturity of the fish caught. In addition, pollock roe prices are influenced by anticipated Russian and U.S. production and Japanese inventory carryover, as pollock roe is consumed almost exclusively in Japan. A decline in the quality of the pollock roe that we harvest or fluctuations in supply could cause a decline in the market price of pollock roe, which may reduce our margins and revenues. Average roe prices per kilogram were ¥2,856, ¥2,247 and ¥1,906 per kilogram for the years ended December 31, 2000, 2001 and 2002, respectively.

Foreign Currency, Interest Rate and Commodity Hedging. We are exposed to cash flow and earnings market risk from certain changes in the yen foreign currency exchange rate, interest rates and diesel fuel prices. To mitigate the risk related to these factors, we utilize forward currency contracts and other derivative commodity instruments, principally futures contracts. As of December 31, 2002, we had open foreign exchange contracts maturing through December 29, 2006 with total notional amounts of $778.0 million, including $309.0 million subject to extension agreements.

Prior to the acquisition of our business by Centre Partners and others through ASLP on January 28, 2000, Aker RGI ASA, or Aker, the parent of Norway Seafoods, had entered into a currency forward transaction with Sparebanken NOR and a forward transaction with Den norske Bank ASA. On January 28, 2000, in connection with the acquisition of our business, Aker entered into an agreement with us whereby Aker is obligated to pay us all amounts less a nominal fee that Aker receives from Sparebanken NOR or Den norske Bank ASA, and we are obligated to pay Aker all amounts that Aker must pay to Sparebanken NOR or Den norske Bank ASA. Aker also had, as of December 31, 2002, exercisable foreign currency options with Sparebanken NOR with total notional amounts of $55.0 million relating to the period October 31, 2003 through July 29, 2005. Pursuant to the January 28, 2000 agreement, Aker is obligated to pay us all amounts less a nominal fee that Aker receives from Sparebanken NOR and we are obligated to pay Aker all amounts that Aker must pay to Sparebanken NOR. These options will become forward foreign currency exchange contracts at our election or in the event that the dollar-yen spot exchange rate is at or below 94.0 JPY per one U.S. dollar at any time before July 29, 2003.

In connection with our foreign exchange contracts, we also have extension agreements to enter into foreign exchange agreements. Two of the extension agreements expire between March 2004 and December 2005, and March 2006 and December 2007. These extension agreements would become binding and effective only if the spot rate falls to a rate below a pre-specified level (the trigger) on or before December 2003 or December 2005, respectively. If the spot rate does not reach the trigger on or before December 2003 or December 2005, neither we nor the counterparty shall have any right or obligation with respect to any of these extension agreements. The trigger for each of these two extension agreements is 99.0 JPY per USD and the notional amounts of these extension agreements are $100.0 million. We also have another extension agreement that has similar terms to the ones described above and expires between October 2003 and August 2005. The trigger is 94.0 JPY per USD and notional amounts are $70.0 million with a trigger date of July 28, 2003. During the first quarter of 2003, we

entered into two additional extension agreements that have similar terms to the ones described above. These extension agreements expire between September 2006 and March 2008, and February 2007 and March 2007, respectively. The trigger is 99.0 JPY per USD and 110.0 JPY per USD, respectively, and the notional amounts are $100.0 million and $39.0 million, respectively. The trigger dates are March 30, 2006 and March 29, 2004, respectively.

At December 31, 2002, we prepared an analysis to determine the sensitivity of our forward foreign exchange contracts, which were staggered over a rolling 36-month timeframe, to changes in exchange rates. A hypothetical adverse yen exchange rate movement of 1% against our forward foreign exchange contracts would have resulted in a potential loss in fair value of these contracts of approximately $2.7 million. All such losses on these forward foreign exchange contracts would have been substantially offset by gains on the related underlying Japanese yen sales transactions that we have hedged. Since December 31, 2002, we have entered into foreign exchange contracts which have increased the notional amounts of these contracts from $435.0 million at December 31, 2002 to $778.0 million at March 31, 2003, and the potential loss in fair value of these contracts increased to approximately $5.0 million, corresponding to the 1% hypothetical change. All such losses on these foreign exchange contracts would have been substantially offset by gains on the related underlying Japanese yen sales transactions that we have hedged.

Fuel hedges are entered into whereby we pay a fixed price per gallon and receive a floating price per gallon with the payments being calculated on a notional gallon amount of approximately 75% of our next 12 month estimated fuel usage and approximately 55% of months 13 through 24 estimated fuel usage over the term of the contracts through November 30, 2004. The objective of the swap agreements is to hedge the variability of future fuel prices. These instruments are considered to be substantially fully effective and, therefore, substantially all unrealized gains and losses at year-end are recognized as a component of other comprehensive income. An adverse change in fuel prices, such as what has occurred in recent months, will not have a material impact on the average fuel price paid by us during the term of the open fuel hedge contracts. The average hedged prices per gallon related to contracts maturing from January 2003 through November 2004 are lower than the 2002 average fuel price per gallon.

Interest Rates. The existing credit facility requires us to hedge the variable interest rate on a portion of the outstanding senior debt to convert such debt to fixed-rate debt. We are required to enter into hedging transactions such that no less than 50% of the aggregate principal amount of the term loans and the existing senior subordinated notes is effectively fixed rate debt until April 18, 2005.

We use various derivative financial instruments to manage our exposure to fluctuations in interest rates, including interest rate swaps. We had variable-to-fixed interest rate swap agreements whereby we paid a fixed rate and receive a floating rate with the interest payments being calculated on a notional amount of $36.0 million through March 15, 2003. In addition to interest rate swaps, we have interest rate caps with notional amounts of $93.5 million at March 31, 2003. The cap rate is 5.0% and the variable rate is the U.S. dollar three month LIBOR. The fair value of these instruments was, in the aggregate, $0.1 million at March 31, 2003. The objective of the agreements is to hedge the variability of future cash flows associated with changes in variable interest rates. Gains and losses are recognized in earnings at the interest payment dates throughout the year.

In addition to the interest hedges applicable to our senior debt, interest on the existing senior subordinated notes has a fixed rate. Approximately 54% of our total debt effectively has a fixed rate or is hedged by interest rate caps as of March 31, 2003. Interest rate changes generally do not affect the market value of floating rate debt but do impact the amount of our interest payments and, therefore, our future earnings and cash flows, assuming other factors are held constant.

Industry and Regulatory Overview

Overview

According to the Food and Agriculture Organization of the United Nations, or FAO, the worldwide production of seafood has increased steadily at a compounded annual growth rate of approximately 4% from approximately 19 million metric tons in 1950 to approximately 129 million metric tons in 2001 and is projected to increase slightly from 2003 to 2010, resulting in large part from increasing world population and continued economic growth in developing countries. In 2001, the supply provided by marine and inland fisheries, or capture fisheries, accounted for approximately 92.4 million metric tons, or approximately 72% of that amount. Worldwide seafood production of capture fish has remained stable in recent years. The growth in worldwide seafood production is primarily related to increased fish farming, or aquaculture. From 1990 to 2001, the amount of seafood produced in aquaculture worldwide grew at a compounded annual growth rate of approximately 10% from approximately 13.1 million metric tons to approximately 37.9 million metric tons.

Due to its higher cost per ton of fish produced, aquaculture is used primarily to produce higher value fish species such as catfish and salmon. Aquaculture is not a cost effective alternative for lower value fish species such as pollock or hake.

Capture Fisheries

The following chart provides a brief overview of the different types of fish categories caught in the wild for human consumption and use in 2001, including the different species of groundfish which we harvest. The table indicates the percentage each species represents of the volume of each category harvested from capture fisheries.

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¹	Represents species each accounting for less than 5% of the volume of finished products produced from capture fisheries.

Source: FAO Fishstat Plus Database, 2003.

In 2001, approximately 16.9 million metric tons of whitefish was produced worldwide. The whitefish category includes groundfish (such as pollock, hake and cod), flatfish (such as sole), and the redfish, bass and conger species groups. From 1990 to 2001, the worldwide production of groundfish has fluctuated between 8.6 million

and 11.6 million metric tons. We are the largest harvester and at-sea processor of groundfish in the U.S. Pollock, the species representing a substantial majority of our harvest, is the most abundant whitefish and groundfish species in the world.

Aquaculture

The following chart provides a brief overview of the different types of fish categories produced by aquaculture in the U.S. in 2001. In 2001, approximately 28% of the seafood produced worldwide was produced in aquaculture. In 2001, according to the FAO, catfish accounted for approximately 50% of the value of all aquaculture in the U.S., the primary market in which we sell catfish. We are the largest catfish processor in the U.S.

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Groundfish

Pollock Fisheries

Pollock accounted for 34% of groundfish produced worldwide in 2001, representing 3.1 million metric tons, which is more than any other groundfish species. The two primary global pollock sources are the U.S. Bering Sea pollock fishery, the primary fishery in which we operate, and the Russian fishery in the Sea of Okhotsk. The pollock biomasses in these U.S. and Russian pollock fisheries are independent of one another, with virtually no co-mingling between these stocks. Pollock stocks in the U.S. Bering Sea pollock fishery have increased steadily since 1999, while pollock stocks in Russia have experienced a steep decline in recent years. According to TINRO, Wespestad & Ianelli, the Russian fisheries are expected to continue their decline over the next several years, which we believe is attributable to overfishing. As a result, approximately 44% of the pollock produced worldwide in 2001 came from the U.S. Bering Sea pollock fishery, up from 30% in 1999.

The map below represents the U.S. Bering Sea pollock fishery and the Russian pollock fishery in the Sea of Okhotsk, our primary competing fishery.

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U.S. Pollock Fishery. According to the Marine Conservation Alliance, the U.S. Bering Sea pollock fishery is one of the healthiest and most responsibly managed fisheries in the world. In contrast to the general world trend of declining groundfish stocks, the U.S. Bering Sea pollock fishery is generally characterized by abundant fish stocks and conservative management. This fishery is highly regulated and only 19 specifically identified catcher-processor vessels, of which we own seven, can participate in the catcher-processor sector of the fishery. Pollock matures relatively quickly, with fish aged three to seven years contributing most significantly to the commercial fisheries. Rapid growth allows a relatively high portion of the pollock biomass to be harvested each year without impacting overall population. According to the National Marine Fisheries Service, the body that conducts pollock stock assessments and recommends sustainable harvest limits in this fishery, approximately 36% of this fishery’s 2002 pollock biomass could be harvested without causing overfishing to occur. The federal government typically sets harvest limits in the 10% to 20% range, substantially below the levels the National Marine Fisheries Service views as sustainable.

The National Marine Fisheries Service considers the current U.S. Bering Sea pollock population healthy and stable. The National Marine Fisheries Service’s population models for pollock in the U.S. Bering Sea pollock fishery show that between 1993 and 2002, the biomass has averaged 10.7 million metric tons. The following graphic indicates the historical pollock total allowable catch and biomass in the U.S. Bering Sea pollock fishery:

U.S. Bering Sea Pollock Fishery Total Allowable Catch/Biomass

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¹	Source for 1993 to 1998: National Marine Fisheries Service; source for 1999 to 2001: North Pacific Fishery Management Council; source for 2002: National Marine Fisheries Service. Amounts for 1999 and thereafter refer to the total allowable catch for the Eastern Bering Sea only.

²	Source for 1993 to 2001: Eastern Bering Sea Walleye Pollock Stock Assessment from Alaska Fisheries Science Center and National Marine Fisheries Service, November 20, 2001; source for 2002: National Marine Fisheries Service.

The pollock fishery in the U.S. Bering Sea is seasonal. The winter or “A” season takes place from January to April and the summer/fall or “B” season runs from July through October. Since 1998, the year the American Fisheries Act was passed, the National Marine Fisheries Services has permitted participants in the U.S. Bering Sea pollock fishery to harvest 40% of the annual quota during the “A” season and the remaining 60% during the “B” season. During the “A” season, spawning pollock produce large quantities of high-value roe, making this season the more profitable one.

Other Groundfish Fisheries

In addition to harvesting and processing pollock, we participate in the catcher-processor sector of U.S. fisheries for hake and cod. In 2001, the U.S. hake and cod fisheries represented 14% and 16% of the worldwide production of hake and cod, respectively. According to the FAO, from 1990 to 2001, the worldwide production of hake has varied from a low of approximately 1.1 million metric tons in 1992 to a high of approximately 1.7 million metric tons in 1996. Worldwide production of cod has dropped considerably over the last two decades (particularly the Atlantic cod) from approximately 2.6 million metric tons in 1981 to approximately 1.4 million metric tons in 2001. We believe this decrease in cod led to the spike in cod pricing in the early 1990s and the conversion of most fillet customers to lower-priced, relatively more abundant pollock as a primary source of groundfish.

Participants in these fisheries require a federal government permit. Harvesting by catcher-processors in U.S. hake fisheries is conducted on a cooperative basis similar to the system in place for pollock fishing; the mothership sector for hake is conducted on an “Olympic-style” or “open access” basis, meaning that any vessel licensed to operate in the fishery may harvest as much fish as possible until the fishery’s aggregate seasonal quota allocation has been reached. Harvesting in U.S. cod fisheries is Olympic-style.

Groundfish Consumption

Pollock and cod are the first and third, respectively, largest whitefish species in terms of human consumption. There are three primary markets for groundfish products produced for human consumption: Asia, Europe and

North America, representing 30%, 39% and 17%, respectively, of the market in 2001. The Japanese use groundfish primarily to produce surimi (a fish protein paste used in products such as imitation lobster and crabmeat), roe and a variety of fresh-fish products. Consumers in Western Europe and the United States generally purchase groundfish in the form of fresh and frozen fillets, products produced from blocks of fillets (steaks and fish sticks) and headed and gutted fish.

According to the National Fisheries Institute, consumption of pollock has experienced stable growth since 1987 at a compounded annual growth rate of approximately 2.3% per annum.

Groundfish Pricing

Each of the products produced from pollock has different pricing characteristics. The price of pollock roe is heavily influenced by the size and condition of roe skeins, color and freshness of the roe and the maturity of the fish caught. Catcher-processors are more likely to produce higher quality roe because they process the fish within hours of being caught, rather than several days later as is the case with inshore processors. In addition, roe prices are influenced by anticipated Russian and U.S. production and Japanese inventory carryover, because roe is consumed almost exclusively in Japan. The U.S. Bering Sea pollock fishery commonly produces the highest quality roe.

The prices of surimi and fillets are influenced primarily by expected production in the U.S. and Russian pollock fisheries, and other factors such as carryover inventories and changes in demand. Because surimi and fillet blocks often are composed of the same raw material, the demand for one product can influence the price of the other. Surimi and fillet blocks are also produced utilizing species of fish other than pollock, such as hake or itoyori species. However, due to differences in flesh attributes between pollock and other species, the surimi and block produced from other species are generally not used as substitutes for pollock products and thus have minimal influence on pollock pricing. Surimi and fillet blocks are often supplied by both the U.S. Bering Sea pollock fishery and the Russian fisheries.

Pollock Allocation

We operate within a favorable statutory and regulatory environment. The stable nature of the U.S. Bering Sea pollock fishery is partly a function of the regulatory and cooperative structure that governs its activities. The American Fisheries Act specifically identifies the catcher-processor vessels that are eligible to participate in the fishery, prohibits the entry of additional vessels and prohibits any single entity from harvesting more than 17.5% of the annual directed pollock catch.

The Act allocates the total allowable catch of pollock in the U.S. Bering Sea pollock fishery among the following sectors:

10% of the total allowable catch is allocated to six Alaska Community Development Groups (mostly native Alaskan villages and their residents) that sell or lease their community development quota to other participants, including us;

approximately 3.5% of the total allowable catch is set aside for pollock by-catch in other fisheries;

the remaining 86.5% of the total allowable catch (the “directed pollock catch”) is allocated as follows:

50% of the directed pollock catch is allocated to catcher-vessels delivering to inshore factories;

40% of the directed pollock catch is allocated to catcher-processors, and catcher-vessels that deliver to catcher-processors; and

10% of the directed pollock catch is allocated to the catcher-vessels that deliver to at-sea processor vessels called motherships, which do not harvest.

Catcher-processors, such as the vessels we own, harvest and process fish into products, such as roe, fillets and surimi, within hours of catching them, and operate offshore. Catcher-vessels harvest and deliver fish to catcher-processors, motherships and inshore processors for processing. Motherships are at-sea processors which rely on catcher-vessels to harvest and deliver fish to them. Inshore processors operate onshore at fixed-location processing facilities, relying on catcher-vessels to harvest and deliver fish to them.

We own and operate seven of the 19 catcher-processor vessels permitted to participate in the catcher-processor sector of the U.S. Bering Sea pollock fishery. Under the American Fisheries Act, this sector is allocated 40% of the annual directed pollock catch and, by the terms of the Pollock Conservation Cooperative agreement, a contractual arrangement among the seven companies that own the catcher-processors named in the statute, this percentage is further divided and allocated among the Cooperative members (with 3.4% being allocated to catcher-vessels). Within the catcher-processor sector, our allocation for pollock under the Cooperative agreement is nearly 2.5 times larger than that of the second largest Cooperative member.

In 2001 and 2002, we harvested an aggregate of 17.9% of the total allowable catch in the U.S. Bering Sea pollock fishery. We are allocated 16.8% of the directed pollock catch under our Cooperative agreements, and we lease the right to harvest another 0.7% of the directed pollock catch from other vessels in our fishery, bringing us to 17.5% of the directed pollock catch (which is the maximum permitted harvesting allocation of the directed pollock catch by any single entity). Our share of the directed pollock catch represented 15.1% of the total allowable catch. We supplemented our share of the directed pollock catch in 2001 and 2002 by purchasing 28.0% of the community development quota (or 2.8% of the total allowable catch) from two Alaska Community Development Groups, both of which are equity investors in our company.

Catfish

Catfish production has grown steadily since the earliest commercial production began. According to the FAO, worldwide production of catfish was approximately 800,000 tons in 2001, up from 472,000 tons in 1990, representing an increase of more than 70% over the last 11 years. Of this amount, approximately 55% came from aquaculture and approximately 45% came from capture fisheries.

A large amount of catfish produced in the U.S. comes from independently owned and operated local family farms. The catfish raised in these farms are typically sold to processors, such as ourselves. We do not own any of the farms from which we source catfish and we are not controlled by or affiliated with catfish farmers or their co-operatives, reducing our exposure to catfish price volatility. The catfish is processed into various ready to consume products such as fillets, nuggets and marinated and breaded products.

Prior to 1999, the total amount of catfish imports in the U.S. was insignificant, representing less than 5% of the volume of catfish sold. Beginning in 1999, there was an increase in catfish-like imports from Vietnam. In November 2002, the Department of Commerce, or DOC, made a preliminary ruling that the Vietnamese were selling catfish-like products into the U.S. at unfairly low market prices. The DOC is expected to issue its final ruling on the case in the summer of 2003. Vietnam could be subjected to import tariffs if the DOC determines that it is dumping its product into the U.S.

Worldwide catfish consumption is concentrated in the U.S., Asia, and Africa, and to a lesser degree in Central Europe. There is very little catfish consumption in Western Europe or Japan. According to the National Fisheries Institute, in the U.S., catfish consumption has surpassed cod and now is the second largest selling whitefish, behind pollock. According to the National Fisheries Institute, U.S. catfish consumption, like pollock consumption, has experienced stable growth since 1990 at a compounded annual growth rate of approximately 5% per annum since 1990. The majority of this growth has occurred in aquaculture, the sector in which we operate.

In the U.S., the catfish market has evolved over the last decade from being a regional commodity, locally produced and consumed predominantly in the southern U.S., to a large, commercial aquaculture industry serving

major U.S. markets. According to the FAO, catfish accounted for approximately 50% of the value of all aquaculture in the U.S. in 2001. The U.S. catfish industry is concentrated in Alabama, the region in which we operate, as well as Mississippi, Arkansas and Louisiana. We are the largest catfish processor in the U.S., processing approximately 100 million pounds of catfish per year.

Catfish harvests are seasonal, following the warm weather-growing cycle of the fish. Farmers prefer to harvest their ponds at the end of the summer, after the period in which the fish experience their maximum weight gain and before the fish enter a period of slower growth during the winter. The harvest slows modestly during November and December due to reduced demand during the holiday season and picks up again in the beginning of the year. This leads to a seasonal abundance of fish between late summer and early winter, the time of year when catfish prices are usually at their lowest.

Business

We are one of the largest integrated seafood companies in the U.S. in terms of revenues. We harvest and process a variety of fish, either on board our sophisticated catcher-processor vessels or at our land-based processing facilities, and market our products to a diverse group of customers in North America, Asia and Europe. We are the largest harvester and at-sea processor of pollock and the largest processor of catfish in the U.S. Pollock is the world’s highest-volume whitefish harvested for human consumption and accounts for a majority of our revenues. In the U.S., catfish is the basis for a large, commercial aquaculture industry serving major U.S. markets, and according to the FAO, catfish accounted for approximately 50% of the value of all aquaculture in the U.S. in 2001. In addition, we harvest and/or process other seafood, including scallops, hake and cod. We maintain an international marketing network through our U.S., Japanese and European offices and have developed long-term relationships with a U.S. and international customer base.

We own and operate a premier modern fleet of seven catcher-processor vessels, which average over 300 feet in length and carry crews of 90 to 125 persons. Our catcher-processors are capable of producing between 110 and 150 metric tons of frozen finished product daily. We produce a variety of products at sea, such as pollock roe (fish eggs), surimi (a fish protein paste used in products such as imitation lobster and crabmeat), fillet blocks, headed and gutted fish and fishmeal.

We harvest pollock primarily in the U.S. Bering Sea pollock fishery. According to the Marine Conservation Alliance, this fishery is among the largest and most conservatively managed in the world. We benefit from the favorable regulatory system that governs pollock fishing in these waters. Under U.S. federal law, the fishery is subject to total allowable catch limitations, quota allocations among the different sectors of participants in the fishery, and rules that give exclusive harvesting rights to specifically identified vessels, with the result that any potential new competitors face significant barriers to entry. We own and operate seven of the 19 catcher-processor vessels permitted to participate in the catcher-processor sector of the fishery. Under the American Fisheries Act, this sector is allocated 40% of the annual directed pollock catch and, by the terms of the Pollock Conservation Cooperative agreement, a contractual arrangement among the seven companies that own the catcher-processors named in the statute, this percentage is further divided and allocated among the Cooperative members (with 3.4% being allocated to catcher-vessels). Within the catcher-processor sector, our allocation for pollock under the Cooperative agreement is nearly 2.5 times larger than that of the second largest Cooperative member.

We own and operate two catfish processing facilities in Alabama. We do not own any of the farms from which we source catfish, reducing our exposure to catfish price volatility. We have strong relationships with catfish farmers and we distribute fresh and frozen catfish products to both retailers and foodservice customers throughout several regions in the U.S. In addition, we conduct other seafood processing operations at our facility in Massachusetts, where we manufacture products such as breaded seafood portions, fillets and scallops.

Competitive Strengths

Abundant, Stable Pollock Fishery. Our pollock harvesting operations target the U.S. Bering Sea pollock fishery, which, according to the Marine Conservation Alliance, is one of the healthiest and most responsibly managed fisheries in the world. Under federal law, the National Marine Fisheries Service is directed to set the total allowable catch at a level which ensures a healthy, abundant resource. The total allowable catch for pollock in the U.S. Bering Sea pollock fishery has grown from 992,000 metric tons in 1999 to 1,491,760 metric tons in 2003.

According to the North Pacific Fishery Management Council, the biomass for pollock stocks in the U.S. Bering Sea pollock fishery has remained relatively stable and averaged 10.7 million metric tons between 1993 and 2002. According to recent data obtained from the National Marine Fisheries Service, we expect this biomass to remain stable, and we believe that the total allowable catch in this fishery will not fluctuate significantly for the next several years. In contrast, the Russian pollock fishery, our primary competing fishery, has recently experienced significant declines in its biomass and total catch. We believe that the stability of our fishery will afford us an advantage over our competitors who harvest pollock in the declining fisheries.

Attractive Regulatory Environment; Barriers to Entry. We operate within a favorable statutory and regulatory environment primarily designed to ensure the long-term stability of the pollock biomass. The U.S. Congress in October 1998 enacted the American Fisheries Act, which provides us with the following key competitive benefits:

It ensures the catcher-processor sector in which we operate 40% of the annual directed pollock catch in the U.S. Bering Sea pollock fishery (with 36.6% being allocated to 19 catcher-processor vessels and 3.4% being allocated to catcher-vessels).

It creates a significant barrier to entry because participation in the catcher-processor sector of our fishery is limited to 19 specifically named catcher-processor vessels, of which we own seven.

It has facilitated the formation of the Pollock Conservation Cooperative, which allocates a fixed portion of the annual directed pollock catch to us, enabling us to increase the predictability and efficiency of our operations.

Efficient Large-Scale Operator. As one of the largest integrated seafood companies in the U.S., we believe that the scale and efficiency of our harvesting and processing operations, combined with the breadth of our marketing activities, give us substantial competitive advantages. We own and operate seven catcher-processors, the largest fleet of catcher-processors in the U.S. Bering Sea pollock fishery. In 2002, our fleet included the industry’s top five catcher-processors in terms of metric tons harvested. Each of our catcher-processors is a floating factory, averaging in excess of 300 feet in length and carrying a 90 to 125 person crew.

Our catcher-processors are capable of producing between 110 and 150 metric tons of frozen finished product daily and have flexible manufacturing platforms that enable them to operate both fillet and surimi production lines, giving us the ability to readily shift production based on current market demand and to mitigate pricing volatility. Each vessel is also equipped with an integrated computer system enabling constant communication among vessels, the corporate office and our sales representatives, and real-time response to shifts in market demand. We have been able to improve our average pollock flesh recovery rate from approximately 17% in 1997 to approximately 23.5% in 2002, which we believe is better than our competitors. In addition, we believe that our size enables us to negotiate more favorable transportation rates and fuel contracts.

Catfish Processor Leader. We are the largest catfish processor in the U.S., processing approximately 100 million pounds of catfish per year in our two Alabama facilities, which represents a leading market share in the catfish processing sector of over 15%. Our catfish sales and marketing operations include a network of 37 brokers capable of delivering fresh and frozen catfish products to both foodservice and retail customers throughout several regions in the U.S. We have strong relationships with approximately two hundred catfish farmers, most of whom run small farms in Alabama located close to our processing facilities. We operate our own harvest and live-haul departments, the largest in the nation.

Strong Customer Relationships and Distribution Network. We have established long-standing relationships with many customers worldwide. In 2002, our largest customer accounted for less than 8% of our total revenues. Our customer base includes industrial importers, foodservice distributors, food retailers, restaurant chains and reprocessing companies. We have established close relationships with major Japanese end-users. In the U.S., we

have established long-term customer relationships, including multi-year or multi-season supply contracts with some of the largest U.S. pollock deepskin/block customers. As a result of our worldwide operating scale, we believe we have formed good relationships with major international transporters and distributors. Our logistics team continually evaluates shipping and storage alternatives in an effort to maintain the most cost-efficient and reliable logistical system available.

Experienced Management Team. Our senior management team has extensive experience in fishing and related industries. Our Chairman and CEO has worked in the fishing industry for over 25 years and our senior management team members average more than 20 years of industry experience. In addition, we have an experienced group of operational managers and vessel managers throughout our organization.

Business Strategy

Over the past decade, we have become one of the largest integrated seafood companies in the U.S. Today we are committed to building on our existing harvesting, processing and marketing platforms.

The primary components of our business strategy include the following:

Maximize Pollock Revenues. Our pollock harvesting and at-sea processing operations provide a majority of our revenues. Our strategy to maximize pollock revenues includes:

Maximize access to pollock resources. Over the last two years, we have increased our share of the total allowable catch in the U.S. Bering Sea pollock fishery by approximately 15%, largely through increasing our purchases of community development quota from Alaska Community Development Groups from 5.0% of the total community development quota in 1999, to 28.0% in 2002. We will continue working to maximize our share of the total allowable catch within the applicable regulatory framework.

Optimize product mix to maximize profitability. We will continue our efforts to maximize revenues by optimizing product mix based on global demand and pricing. Each of our vessels is staffed with production managers who coordinate continuously with our marketing department to schedule production between blocks and surimi to optimize product mix and maximize our profitability.

Continue to Diversify Sources of Revenues. We generate most of our revenues from ocean harvested whitefish, primarily comprised of pollock-based products. In addition, we participate in a number of other fisheries, such as those for hake, cod and yellowfin sole. We plan to continue expanding our operations in these and other fisheries. With the recent acquisition of Southern Pride, we became the largest catfish processor in the U.S. and therefore have significant market positions in pollock, catfish and cod, the top three whitefish species in terms of U.S. human consumption. In addition, we have state of the art processing facilities to produce scallops, a market we entered in 2001. We also recently reconfigured one of our catcher-processors to more aggressively target yellowfin sole.

Leverage International Marketing Network. We are currently expanding our presence in worldwide seafood markets, with a particular focus on the Asian and European markets, to increase and diversify our customer base and global seafood market share. We have expanded our Japanese office in an effort to increase direct distribution to end-users and to gain an entryway into growing markets such as South Korea and China. We expect that over time, increasing local market presence in Asia will help maintain price stability through long-term contracts, improve production planning, strengthen customer relationships and provide us with marketing and sales advantages. Additionally, we believe that a strong local market presence will provide us with an opportunity to introduce new species and product forms into the Asian market and enhance relationships with distributors in Japan. In 2001, we established a sales office in Denmark to serve the growing European market for pollock block, which in the past has been supplied primarily with Russian pollock. As Russian pollock stocks and harvests decrease, we believe that our access to pollock resources in the U.S. Bering Sea pollock fishery will provide us

with a competitive advantage in implementing our strategy to increase our presence in Europe. Seafood sales to customers in Europe increased from 2.1% of total revenues in 1999 to 13.0% of total revenues in 2002.

Continually Improve Operating Efficiencies. We believe that there may be significant synergies created by integrating Southern Pride, our recently acquired Alabama catfish processing operations, with our secondary processing operations in Massachusetts, leading to improved profitability for both businesses. Synergies could be achieved by utilizing Southern Pride’s extensive distribution network to penetrate additional markets and increase sales of our secondary processed products to Southern Pride’s customer base. Southern Pride’s distribution network provides us with greater access to the retail, distributor and fresh seafood channels for all of our products.

Products

There are three steps in preparing pollock for retail sale: harvesting, primary processing and secondary processing. At sea catcher-processor vessels harvest fish and conduct primary processing to produce products such as fillets, surimi and roe. These products are further refined and packaged for retail sale by secondary processing companies in the United States, Asia (mainly Japan) and Europe, which produce products such as breaded seafood portions, imitation crabmeat and fish sticks.

The sale of pollock roe is our highest margin business. The fish we catch at-sea (after extraction of roe, if applicable) is either processed into surimi or fillet blocks. Each fish is first filleted and incremental flesh is removed from the carcass and sent to the surimi line. The fillets are then either inspected and frozen in block form, or minced and used to produce surimi. The manufacturing processes for surimi and fillet blocks generate different quantities of salable product from each fish.

We process fish into the following products:

Ocean harvested whitefish segment:

Roe. Roe is extracted from spawning fish, which are harvested primarily during the winter and spring. Egg sacs are sorted by size and quality and frozen on the vessels. The egg sacs are then salted and dyed by processors in Asia for sale to consumers. We produce roe primarily from pollock and to a lesser extent from cod. We sell roe primarily to large Japanese importers.

Block. We produce different types of block products such as skinless, boneless, pin bone out, pin bone in, deepskin and minced blocks. The frozen blocks are cut into different sizes, shapes and weights by our secondary processing operations for conversion into products such as breaded and battered fish sticks and fillets. We sell block produced from pollock, hake, cod and yellowfin sole. We sell most of our block products to foodservice customers, restaurant chains, retailers or large scale secondary processors in Asia, Europe and North America.

Surimi. Surimi is a tasteless fish paste used as the primary protein in numerous Asian dishes and, to a lesser extent in Europe and the U.S. We produce surimi from pollock and hake. We sell surimi as a commodity to importers and large-scale distributors, who then sell it to processors as a raw ingredient. Outside of Japan, the most recognized surimi products are imitation crab, shrimp, scallops and other similar products. Over 1,000 different products are made from surimi.

Fishmeal. Fishmeal is produced from fish by-products, primarily frames, guts and heads of pollock, hake and yellowfin sole. We sell fishmeal primarily in China, Taiwan and Japan, where it is used as the main ingredient in aquaculture feeds.

Other. We produce headed and gutted fish from cod and yellowfin sole and sell those products primarily to secondary processors in China for conversion into individual skinless, boneless fillets.

Other seafood products segment:

Fresh. We sell fresh catfish and scallops. Catfish is sold to foodservice customers and retailers in the U.S. Fresh scallops are sold in bagged or canned form to wholesalers and high-end restaurants in the U.S.

Individually Quick Frozen. Individually quick frozen products are skinless fillets or scallops frozen into individual portions rather than blocks. The individually quick frozen portions are of various sizes and are processed for conversion into “center of the plate” and breaded and battered products. Most of our individually quick frozen products are produced from catfish and scallops. We sell most of our individually quick frozen products to foodservice customers and retailers in the U.S.

Our product sales value in dollars and as a percentage of total sales, broken out by product type and geographic region for 2002 in our ocean harvested whitefish segment, excluding sales of PLC, are as follows (pricing can vary from year to year):

	2002
	Amount of Sales		Percent of Total Sales
	(dollars in millions)
Roe	$	85.7	28.4	%
Block		110.9	36.8
Surimi		83.9	27.8
Fishmeal		10.0	3.3
Other		11.0	3.7

Total	$	301.5	100.0	%


	2002
	Amount of Sales		Percent of Total Sales
	(dollars in millions)
North America	$	89.6	29.7	%
Japan		131.0	43.4
Europe		49.1	16.3
Asia (other than Japan)		31.8	10.6

Total	$	301.5	100.0	%

Our sales of catfish and scallops for 2002, assuming the acquisition of Southern Pride had occurred on January 1, 2002, would have been $99.8 million and $16.8 million, respectively, approximately 98% of which would have been sold in North America.

We are continually designing and employing new factory technologies. We employ a full time technical engineer who investigates and designs processing factory improvements. We seek to increase the value of the products produced aboard our vessels and to reduce labor and associated costs wherever possible. One example of these efforts is a patented new machine that successfully takes the fish head (which previously went entirely to fishmeal) and removes a large section of meat used for higher-value surimi or minced products. We are also investigating new technology that will grade fillets automatically with the use of computers and scanners and that could potentially reduce our labor costs.

Sales, Marketing and Distribution

Overview. We have an international marketing network with offices in the United States, Japan and Denmark. We market, sell and distribute products for two distinct types of customers: the industrial market; and the foodservice/retail market. The products we produce through primary processing on board our catcher-processor vessels or in our primary processing catfish facilities in Alabama are sold as a raw material into the industrial market and used by our customers to produce ready to consume end products. The products we produce through secondary processing at our facility in Massachusetts and at our catfish facilities in Alabama are sold in a ready to consume format to the foodservice and retail markets.

In 2002, industrial customers and foodservice/retail customers comprised approximately 63.5% and 36.5% of our revenues, respectively. Our industrial sales force consists of sales representatives and brokers targeting an international group of customers primarily in Asia, Europe and North America regions. Our foodservice and retail sales and marketing operations include a network of 37 brokers throughout the U.S. This network sells and distributes on average in excess of one million pounds of processed, ready to consume catfish, scallops and breaded pollock or cod per week.

The opening of our Copenhagen, Denmark office in 2001 reflects our strategy to build a long-term presence in the European markets that will enable us to capitalize on seafood consumption growth trends in previously underserved markets such as France, Spain, Italy and Germany. In addition, we have recently expanded our Japanese office in an effort to increase direct distribution to end-users and to gain an entryway into growing markets such as South Korea and China.

Industrial Market. Our primary processing operations focus on products used as raw materials by secondary processors serving end markets throughout the world. We harvest, manufacture and market frozen at-sea products from the Bering Sea and North Pacific. The products produced onboard our catcher-processors are specifically made for industrial processors that convert the frozen fillet blocks and surimi into breaded portions and surimi-based products like imitation crab meat. Roe is salted and dyed by processors in Asia for sale to consumers. Roe is sold to consumers as fresh or frozen whole skeins, or as bags of eggs removed from the skeins. The whole skeins are considered a high-end gourmet food product and are used for gift giving in Japan. We develop annual marketing and sales plans for our products based on anticipated demand and market pricing. We review these plans continuously and, if necessary, adjust them during the season. Because most of our vessels can easily switch between producing surimi and fillet blocks, we constantly monitor and adjust the product mix to meet market demand.

Depending on the product and customer, we negotiate either seasonal or long-term contracts. We have traditionally entered into revolving arrangements in which several larger customers commit to purchase all surimi produced on a specific vessel. Prior to each fishing season, we typically enter into sales commitments for 70% to 90% of our expected production. Final pricing usually occurs during the season or shortly thereafter, based on general pricing in the market. Over the years, we have built good relationships with our core customer base.

We generally sell our pollock roe through a combination of direct sales and silent auctions to Japanese industrial customers. Prior to the commencement of the pollock “A” season, we enter into agreements to sell a specified percentage of the roe production from each vessel to a particular customer. In 2003, that percentage was 50% for each of our vessels. The parties agree that the sales price will be identical to the price at which the remaining 50% is sold at auction. Depending on the quantity of production, the roe of the pollock “B” season is sold through a similar procedure, entirely by auction or through direct negotiated sales with major customers.

Through our brand names “Pride of the Sea” and “Southern Pride Catfish,” we are a well recognized supplier of industrial products, and we maintain a strong market position in Japan, the United States, parts of Europe and parts of Asia.

Foodservice and Retail Markets. We focus on selling, marketing and distributing seafood products produced in our three secondary processing facilities to the foodservice and retail channels utilizing a national broker network.

We market products such as breaded fish sticks, fillets and single serve portions under our national brands “Frionor,” “Arctic Cape” and “Southern Pride Catfish,” as well as under private label brands. The majority of our retail sales are in the foodservice channel and about one third of our products are sold retail through either seafood specialty shops, grocery or club stores. We market sea scallops in the retail grocery channel under the Bayside Bistro and private label brands. Additionally, we intend to capitalize on an industry trend toward fresh and chilled seafood by developing strategic alliances with seafood distributors to supply fresh and chilled seafood, primarily to the seafood counters of retail grocery and club stores. Product mix is about ²/3 frozen and ¹/3 fresh. Approximately 45% of our foodservice and retail products are delivered through our own fleet of trucks.

We are increasingly emphasizing direct selling, particularly to national restaurant chains in the growth segments of the foodservice industry. We focus our marketing efforts on a consultative selling approach featuring culinary and resource support that assists customers to develop their seafood businesses. We complement our marketing efforts by developing innovative high quality products that also solve specific customers’ challenges, such as scarce labor and food safety.

Customers

We have established long-term relationships with a number of key customers worldwide. Our customer base includes industrial importers, foodservice distributors, food retailers, restaurants and reprocessing companies.

For surimi and roe products, our customers have primarily been Japanese and South Korean importers and large scale distributors. Over the past few years, we have focused on broadening our customer base and have been building closer relationships directly with key Japanese food manufacturers. We have recently penetrated the growing European surimi market, particularly in France and Spain.

The United States is our primary market for pollock deepskin blocks and catfish products. For pollock deepskin product, we have established long-term customer relationships, including multi-year or multi-season supply contracts with three of the largest U.S. pollock deepskin customers. Our catfish products are sold to a diversified customer base made up of retail, foodservice and specialty seafood distributors.

With the decline of Russian pollock supply, we have increased production of pin bone out, pin bone in and minced pollock blocks to capture additional European market share. In addition to the United States, Europe is a primary market for these products. The growth in European block demand led to the establishment of our European office in Copenhagen, Denmark, which leverages our existing relationships with broker alliances.

The table below lists alphabetically our 15 largest customers in our ocean harvested whitefish segment by revenues in 2002:

Customer	Product	Market Segment	Country
Bumble Bee Seafoods	Surimi	Retail manufacturer	United States
Coland Development Ltd.	Fishmeal	Industrial	China
Hanwa American Corp.	Surimi/roe	Importer/manufacturer	United States
Kibun Trading Inc.	Surimi	Importer/retail manufacturer	Japan
Long John Silver’s	Deepskin block	Foodservice-quick service restaurants	United States
Mitsubishi International Corp.	Roe	Importer	Japan
Nichimo Co. Ltd.	Surimi/roe	Importer/retail manufacturer	Japan
Nichiro	Surimi/roe	Importer/distributor	Japan
Pickenpack Tiefkuhlgesellscha	Hake and pollock blocks	Retail manufacturer	Germany
Royal Greenland Seafood	Hake and pollock blocks	Retail manufacturer	Germany
Samho America Inc.	Surimi/roe	Importer	South Korea
The Forman Group	Deepskin block	Foodservice-quick service restaurants	United States
Tokai Denpun	Surimi/roe, fishmeal	Importer	Japan
Western Alaska Fisheries	Surimi/roe	Importer/manufacturer	United States
Young Ocean Inc.	Roe	Importer	Japan

The table below lists alphabetically our 15 largest customers in our other seafood products segment, including Southern Pride, by revenues in 2002:

Customer	Product	Market Segment	Country
Bi-Lo LLC	Frozen scallops	Retailer	United States
C & S Wholesaler	Frozen scallops	Wholesaler	United States
Darden Restaurant Group	Frozen catfish and scallops	Restaurants	United States
Dot Foods, Inc.	Frozen catfish fillets	Foodservice	United States
Eastern Fisheries	Fresh scallops	Processor	United States
Gordon Foodservice	Frozen scallops	Foodservice distributor	United States
Market Fisheries	Fresh catfish fillets	Foodservice	United States
Midway Distributors	Fresh catfish fillets	Foodservice	United States
Moo & Oink	Fresh catfish fillets	Retail	United States
National One	Frozen scallops	Importer & distributor	France
Schnucks Market, Inc.	Fresh/frozen catfish fillets	Retail	United States
Seacliff Seafood	Fresh/frozen catfish fillets	Retail	United States
Star Fisheries Corporation	Fresh/frozen catfish fillets	Retail	United States
State Street	Fresh catfish fillets	Foodservice	United States
SYSCO Food Services	Frozen catfish fillets	Foodservice	United States

In 2002, our largest customer accounted for less than 8% of our total revenues. We also sell a portion of our fish to our secondary processing operations.

Operations

Ocean harvested whitefish

Harvesting operations. Our vessel captain and fishmaster utilize highly sophisticated fish finding technology to identify the size of the fish and the location and density of the school, allowing the vessels to optimize the catch and resource value. Once the fishmaster identifies a fishing area, a mid-water trawl net, which includes cone-shaped nets, is towed behind the vessel. The fishing captain monitors the catch sensors attached along the portion of the net that holds the fish. When the optimal catch level is reached and the net is wound in, the fish are immediately dropped into tanks to await processing.

Processing operations. Within hours, harvested fish are converted into primary processed products utilizing highly automated, continuous production processes. In the first phase of processing, fish are released from the holding tanks onto a conveyer, sorted according to size and diverted into hoppers at the head of one of the several processing lines. Headed and gutted pollock are run through an additional line which extracts roe skeins intact. These skeins are weighed, graded, packaged in groups according to grade and frozen. Fish that have been headed and gutted are either frozen as-is or filleted for conversion into either surimi or frozen fillets.

Breaded and battered operations. Pollock is the primary whitefish used in low cost, breaded and battered fish products for the foodservice and frozen product markets. We convert raw fish blocks, primarily pollock blocks produced by our harvesting operations, into market ready, frozen, cut or formed, breaded and battered portions. Our products include raw breaded, pre-cooked, batter fried, glazed and dusted products.

Shipping and cold storage logistics. We have established relationships with shipping agents throughout Europe and Asia to take advantage of favorable distribution and cold storage rates and service, and we have secured cold storage space in the U.S., Canada, Europe and South Korea to ensure timely delivery of quality products at the most cost efficient rate. Also, through our integrated structure, our harvesting operations utilize the cold storage facility of our secondary processing operations for East Coast shipments, further reducing storage costs.

Other seafood products

Catfish. The catfish we buy are raised in ponds by independent catfish farmers with whom we have contractual relationships. Prior to harvesting catfish, sample fish are tested. They are loaded into baskets and then placed in

our aerated tank trucks for live shipment to our processing plants. Unlike a large number of our competitors that depend on farmers to deliver catfish to their plants, we operate our own in-house harvest and live-haul departments, the largest in the nation. Prior to the trucks being unloaded into our plant, sample fish are again tested. At the plant, live catfish are transferred from aerated trucks to the processing lines. The catfish are cleaned, processed, and placed on ice or frozen using an individually quick-frozen method that preserves the taste and quality of the catfish. The frozen catfish can also be breaded and battered. The processing lines and the production processes are highly automated and generally similar to those onboard our catcher-processor vessels, with the exception of some secondary processing operations.

Scallop processing operations. We operate a state-of-the-art wet-fish processing facility focused primarily on grading and processing scallops. We purchase scallops from scallop harvesters. Scallops are graded by size and quality and processed into either premium or standard products. We utilize industry leading processing equipment and food technology in the production of our scallops which significantly reduce production time and manual labor.

Vessels and Facilities

We operate the largest fleet within the catcher-processor sector of the U.S. Bering Sea pollock fishery. Our catcher-processor vessels range in length from approximately 260 to 340 feet, generate between 6,500 and 10,000 horsepower each in their main engines (allowing the vessels to operate under extreme sea conditions) and each carry between 90 to 125 crew members. Each of our catcher-processors meets the rigorous seaworthiness requirements of Det Norske Veritas, the highest vessel classification standard in the world. The catcher-processors targeting pollock have the capability to produce between 110 metric tons and 150 metric tons of frozen product daily and can harvest approximately 100 metric tons of fish per haul. An appraisal conducted in 2002 estimated that our fleet has a replacement cost of approximately $545.0 million.

Between 1996 and 1998, we made significant investments on our vessels immediately following their acquisition. Because of this previous capital investment, our annual capital expenditures are primarily made only to maintain our vessels at their current state-of-the-art condition. Our entire fleet is currently equipped with highly sophisticated instruments and we do not believe that any significant further capital expenditure is required to maintain the level of performance of our vessels. Within the pollock fishery, we believe that ours is the only catcher-processor fleet with significant incremental capacity. Each vessel is equipped with highly sophisticated instruments and equipment such as fish finding technology to locate schools of the targeted species, cod ends (nets) with volume sensors and an integrated computer system enabling constant, real-time communication between each vessel and the corporate office. Our port engineers oversee the maintenance of each vessel to help ensure deployment of fit vessels for every fishing trip. Our trawling fleet consists of the following vessels:

Vessel	Vessel type	Built	Length (feet)
American Dynasty	Catcher-Processor	1989	272
American Triumph	Catcher-Processor	1991	285
Ocean Rover	Catcher-Processor	1990	256
Northern Hawk	Catcher-Processor	1991	341
Northern Eagle	Catcher-Processor	1988	341
Northern Jaeger	Catcher-Processor	1991	336
Katie Ann	Catcher-Processor	1986	296
American Challenger(1)	Catcher-Vessel	1992	106

(1)	Represents a vessel that is listed as a catcher-vessel in the American Fisheries Act and therefore may not process pollock in the U.S. Bering Sea pollock fishery. We do not operate this vessel.

All of our vessels targeting pollock are equipped with both surimi and fillet lines and fishmeal plants. Within hours, these flexible factory platforms can shift production plans between surimi and block products, allowing us to control daily output to meet changing market demands.

We own and operate two catfish processing facilities located in Greensboro and Demopolis, Alabama. Combined, these processing facilities operate a total of thirteen processing lines and are capable of processing approximately 400,000 pounds of live catfish per day. In 2001, we installed a new, state of the art trim line. The additional trim line utilizes advanced technology to increase both throughput and yield, producing an estimated additional 6 million pounds of catfish per year. We own live hauling equipment, including 15 aerated tank trucks used to harvest and transport the live catfish to our processing facilities. We own and operate a fleet of 25 trucks used for distribution of our products.

We also own and operate a facility in New Bedford, Massachusetts comprised of a secondary processing facility for frozen and block products, a cold storage space for over 9,100 pallets and a corporate office. This facility also includes a state-of-the-art wet-fish processing facility focused primarily on grading and processing scallops.

Our corporate headquarters are located in Seattle, Washington. We benefit from a preferential docking agreement with the Port of Seattle which provides for the docking of all of our vessels during the off-season. We also lease office space in Copenhagen, Denmark and Tokyo, Japan. Additionally, in Dutch Harbor, Alaska we lease office space and warehouse facilities and use several docking facilities during the fishing season.

We believe that our existing vessels and facilities are adequate for our current operations.

Capital Expenditures

In 2001 and 2002, our total capital expenditures were $9.2 million and $9.4 million, respectively. The majority of our capital expenditures relate to our catcher-processor fleet and include items such as fishing gear, improvements to vessel factory processing equipment and major scheduled vessel maintenance. Major scheduled vessel maintenance costs relate principally to our periodic overhauls and replacements performed generally on a three-year cycle. In addition to capital expenditures, we spend approximately $7 million per year on routine vessel maintenance, which is expensed in the year it is incurred.

Between 1996 and 1998, we made significant investments on our vessels immediately following their acquisition. Our entire fleet is currently equipped with highly sophisticated instruments and we do not believe that any significant further capital expenditure is required to maintain the level of performance of our vessels.

With the recent acquisition of Southern Pride, we estimate that we will have maintenance capital expenditure requirements of approximately $10.0 million in each of 2003 and 2004.

Government Regulation

Fisheries Regulation

All U.S. fisheries in which we operate are regulated and subject to total allowable catch limits. Participants in U.S. federal fisheries are required to obtain a federal government permit.

We operate in the groundfish fisheries within the U.S. Exclusive Economic Zone, 3 to 200 nautical miles off the coasts of Alaska, Washington and Oregon. According to the National Marine Fisheries Service, no species in the U.S. Bering Sea is deemed to be overfished. Credit for these healthy stocks and profitable fisheries can be attributed in large part to two pieces of federal legislation.

Magnuson-Stevens Fishery Conservation and Management Act. The Magnuson-Stevens Fishery Conservation and Management Act of 1976 provides the broad framework for conserving and managing marine fisheries within the U.S. Exclusive Economic Zone. The councils that oversee the fisheries in which we participate are the North Pacific Fishery Management Council in Alaska and the Pacific Fishery Management Council in Washington and Oregon. The councils’ two primary areas of responsibility are (1) the establishment of annual

maximum catch levels and (2) the development of fishery management plans that regulate who can fish, when and how they can fish and how much they can catch. The fishery management plans are then implemented and given legal force through regulations promulgated by the National Marine Fisheries Service, a division of the Department of Commerce. These regulations are then strictly enforced by both the U.S. Coast Guard and the National Marine Fisheries Service.

Each of the fisheries in which we participate is managed on a maximum sustainable yield basis. At the end of each year, the councils’ Scientific and Statistical Committees, which are composed of scientists from federal, state and academic positions, make recommendations on total allowable catch by species or species group. The total allowable catch is typically set equal to or less than the acceptable biological catch depending upon a variety of factors. The councils also set prohibited species catch limits to limit by-catch of non-target species. These limits are set mainly to protect and preserve crab, halibut, salmon and other non-target species for other fisheries. After being reviewed by the National Marine Fisheries Service, the councils’ recommendations are implemented.

American Fisheries Act. In 1998, Congress passed a second piece of legislation, the American Fisheries Act, which introduced several major changes in the management of the U.S. Bering Sea pollock fishery. In 2001, the North Pacific Fishery Management Council provided a report to Congress on the implementation and effects of the American Fisheries Act. In light of the extremely positive report, which described the positive impacts of the American Fisheries Act on almost all aspects of the U.S. Bering Sea pollock fishery, Congress passed legislation in 2001 permanently removing the original sunset provision of the American Fisheries Act. The American Fisheries Act and its implementing regulations include the following key provisions:

Limitation on participants in the U.S. Bering Sea pollock fishery:

Only a defined group of 20 named catcher-processors, of which 19 catcher-processors are currently eligible to operate in the fishery, and the catcher-vessels that historically delivered to them, are eligible to harvest pollock for processing by catcher-processors. As part of the implementation agreement, eight of our vessels were scrapped and one was permanently removed from the fishery, reducing the overall fleet from 29 to 20;

Only a defined group of catcher-vessels may harvest pollock for delivery to motherships, and only three named motherships may process pollock; and

Only inshore processors that processed more than 2,000 metric tons of pollock during each of 1996 and 1997 may receive an unlimited amount of pollock for processing; those that processed less during those years may only receive and process under 2,000 metric tons annually. Subsequently, the council imposed a processing cap limiting the amount of pollock that can be processed by any single entity to 30% of the directed pollock catch in any given year.

Prohibition on any entity harvesting more than 17.5% of the directed pollock catch in any given year. Allocations purchased from community development quota partners do not count against this percentage.

Prohibition on the entry of additional large fishing industry vessels into any U.S. fishery.

Reallocation of the pollock total allowable catch in the U.S. Bering Sea pollock fishery between the various sectors, increasing the community development quota and inshore allocations, while reducing the catcher-processor and the mothership sector allocations:

approximately 3.5% of the total allowable catch is set aside for pollock by-catch in other fisheries;

the remaining 86.5% of the total allowable catch (the “directed pollock catch”) is allocated as follows:

50% of the directed pollock catch is allocated to catcher-vessels delivering to inshore factories;

40% of the directed pollock catch is allocated to catcher-processors, and catcher-vessels that deliver to catcher-processors; and

10% of the directed pollock catch is allocated to the catcher-vessels that deliver to at-sea processor vessels called motherships, which do not harvest.

The American Fisheries Act requires that vessels engaged in U.S. fisheries be owned by entities that are at least 75% U.S. citizen owned and controlled. This requirement applies at each tier of ownership and must also be examined in the aggregate. The Maritime Administration made a favorable determination with respect to the U.S. citizenship of the entities owning our vessels in January 2002. Last spring, we applied for and obtained confirmation that after completion of the proposed changes in our ownership structure in connection with the recapitalization of Holdings and its affiliates in April 2002, the Maritime Administration would issue a renewed U.S. citizenship determination. On December 17, 2002, we filed annual affidavits of U.S. citizenship and on February 21, 2003, the Maritime Administration made a favorable determination of continuing eligibility with respect to the citizenship requirements of the American Fisheries Act.

In order to maintain our eligibility to participate in U.S. fisheries, our existing governance documents contain restrictions on transfers of interests in ASLP or Holdings to non-U.S. citizens, as well as provisions allowing us to require evidence of U.S. citizenship from our equity owners and providing for the automatic redemption of interests held by non-U.S. citizens to the extent necessary to keep the percentage held by non-U.S. citizens below 22%, a safe harbor percentage we thought prudent to provide a margin of error beneath the 25% maximum. To maintain our eligibility following the consummation of this offering, we will put in place charter provisions (i) limiting to 20% the aggregate percentage ownership of the Issuer’s capital stock by non-U.S. citizens, (ii) limiting to 9% the portion of the Issuer’s capital stock that can be held through The Canadian Depository for Securities Limited system and prohibiting transfers that increase the portion of the Issuer’s capital stock that is held through that system at any time, (iii) requiring each 5% owner of the Issuer’s capital stock to provide an affidavit of U.S. citizenship, (iv) requiring that either at least 98% of the Issuer’s capital stock (exclusive of the portion held through The Canadian Depository for Securities Limited system) or % of all of the Issuer’s capital stock be held by beneficial owners with U.S. addresses, (v) limiting the right to vote to holders that certify that they are U.S. citizens, and (vi) declaring any holding in violation of the foregoing null and void, or voidable, and providing the Issuer with various remedies including mandatory redemptions and sales. Related provisions will permit us at any time to require record and beneficial owners of such common stock or IDSs to provide information and affidavits concerning citizenship status.

As a condition to the consummation of this offering, we must receive confirmation from the Maritime Administration, or suitable assurances of counsel, that adoption of and adherence to the foregoing procedures will satisfy the applicable requirements of the American Fisheries Act.

officials, we believe the intention of the Maritime Administration is to prevent provisions couched as loan covenants from serving as a device to shift control to non-U.S. citizens, and not to impede conventional market based loans and credit facilities.

For purposes of the American Fisheries Act, a U.S. citizen is:

(i) Any individual who is a citizen of the United States by birth, naturalization or as otherwise authorized by law; or

(ii) Any entity (A) that is organized under the laws of the United States or of a State, (B) of which not less than 75% of the interest in such entity, at each tier of ownership of such entity and in the aggregate, is owned and controlled (including beneficial ownership and control) by U.S. citizens, and (C) with respect to which no voting or other agreements confer control to non-U.S. citizens.

Special rules applicable to corporations, limited liability companies, partnerships, trusts and other entities limit the number of non-U.S. citizen directors to a minority of a quorum of the board of directors, and require that certain principal officers and managers (including the chief executive officer, the chairman of the board of directors, trustees and general partners, and persons authorized to act in the absence or disability of such persons) be U.S. citizens.

The Pollock Conservation Cooperative. By limiting participation in the U.S. Bering Sea pollock fishery, the American Fisheries Act facilitated the formation of a cooperative agreement. In December 1998, the companies owning the 20 catcher-processors named in the American Fisheries Act formed the Pollock Conservation Cooperative. The Pollock Conservation Cooperative controls 36.6% of the directed pollock catch, with the remaining 3.4% of the sector’s 40.0% controlled by seven catcher-vessels that historically delivered to the catcher-processors. The original division of share among the companies was based primarily on historical performance and was reached by the mutual agreement of the participants. In December 1999, Alaska Trawl Fisheries, one of the original Pollock Conservation Cooperative members, agreed to sell its interest to the remaining Pollock Conservation Cooperative members and its vessel, ENDURANCE, has been permanently removed from U.S. fisheries, leaving 19 eligible catcher-processors.

Under the terms of the Pollock Conservation Cooperative membership agreement, each participating company is allocated a percentage of the directed pollock catch by private contractual arrangement. Pollock and other groundfish allocation rights under the Pollock Conservation Cooperative are freely transferable to other participants pursuant to the membership agreement, without the prior consent or approval of the other participants. Participants can then harvest and process their quota shares at their own pace with vessels named in the American Fisheries Act, within certain seasonal restrictions. The stable nature of the U.S. Bering Sea pollock fishery is partly a function of the regulatory and cooperative structure that governs its activities. In addition, the change in fishery management introduced by the American Fisheries Act allowed the catcher-processor sector to: slow the harvesting pace in order to optimize the value per ton of harvested round fish; reduce operating costs; and minimize by-catch and discards.

In 2001 and 2002, we harvested an aggregate of 17.9% of the total allowable catch. We are allocated 16.8% of the directed pollock catch under our Cooperative agreements, and we lease the right to harvest another 0.7% of

the directed pollock catch from other vessels in our fishery, bringing us to 17.5% of the directed pollock catch (which is the maximum permitted harvesting allocation of the directed pollock catch by any single entity). Our share of the directed pollock catch represented 15.1% of the total allowable catch. We supplemented our share of the directed pollock catch in 2001 and 2002 by purchasing 28.0% of the community development quota (or 2.8% of the total allowable catch) from two Alaska Community Development Groups, both of which are equity investors in our company. The Alaska Community Development Groups are mostly comprised of native Alaskan villages and their residents.

The overall allocation of the total allowable catch, as well as our allocation and quota we have purchased, is illustrated in the following chart of the 2003 total allowable catch.

LOGO

The Pollock Conservation Cooperative membership agreement will continue through the remainder of the named vessels’ lives, unless certain events occur, none of which we expect is likely to occur in the foreseeable future.

The following is a summary of the Pollock Conservation Cooperative current members and their allocations for 2003:

Company	Vessels	% of Directed Pollock Catch
American Seafoods	7	16.572	%
Trident Seafoods	5	6.824
Arctic Storm/Fjord	2	3.633
Glacier Fish Ltd.	2	3.218
Alaska Ocean	1	3.004
Highland Light	1	1.764
Starbound Ltd.	1	1.585

Total	19	36.600	%

In December 1998, the owners of the seven catcher-vessels listed in the American Fisheries Act as eligible to deliver or sell pollock to the Pollock Conservation Cooperative members formed the High Seas Catchers’ Cooperative. As with the Pollock Conservation Cooperative, the 3.4% of the directed pollock catch allocated to the seven catcher-vessels was divided by private contractual arrangement based primarily on historical catch performance. The members of the High Seas Catchers’ Cooperative and their respective allocations are listed below:

Company	Vessels	% of Directed Pollock Catch
Sea Storm	1	0.8226	%
Neahkanie	1	0.6679
Tracy Anne	1	0.4642
Muir Milach	1	0.4538
Ocean Harvester	1	0.4325
American Seafoods	1	0.3149
Forum Star	1	0.2441

Total	7	3.4000	%

The Pollock Conservation Cooperative and the High Seas Catchers’ Cooperative have entered into an agreement that allows the High Seas Catchers’ Cooperative members to lease their allocations directly to the Pollock Conservation Cooperative members. As a result, 100% of the High Seas Catchers’ Cooperative allocation is now harvested directly by Pollock Conservation Cooperative members.

The agreement governing our current arrangements with the Alaska Community Development Groups for purchasing community development quota expires at the end of 2005. We believe that we should be able to continue to purchase such quota based on the relationships we have developed with those groups, of which two are equity investors in our company.

Food Safety

The manufacture, processing, packaging, storage, distribution and labeling of food products are subject to extensive foreign, federal, state and local regulation. We are regulated by the Food and Drug Administration, the U.S. Department of Agriculture, the U.S. Department of Commerce, European Union regulators and various U.S. local and state health and agricultural agencies. In addition, some of our facilities are subject to regular on-site inspections and our production and distribution facilities are subject to various federal, state and local environmental and workplace and food safety regulations. Failure to comply with all applicable laws and regulations could subject us to civil remedies, including fines, injunctions, recalls or seizures, and criminal sanctions, any of which or all of which could have a material adverse effect on our business, financial condition and results of operations. None of our products has been subject to such a recall. Additionally, we expect that the food safety regulatory environment in the U.S., Europe and Asia will become more stringent. We believe that we are in substantial compliance with all such laws and regulations. Compliance with current or future laws or regulations could require us to make material expenditures or otherwise adversely affect our business, prospects, results of operations and financial condition.

Environmental Matters

Our vessels and facilities are subject to numerous foreign, federal, state and local laws and regulations relating to the storage, handling, emission and discharge of materials into the environment, including the Clean Water Act, the Clean Air Act, the Resource Conservation and Recovery Act, the Emergency Planning and Community Right-To-Know Act, the Comprehensive Environmental Response, Compensation and Liability Act, and their state and local counterparts. Under some of these laws the owner or operator of real property may be liable for

the costs of removal or remediation of hazardous or toxic substances on, under, or in such property, regardless of whether the owner or operator knew of or was responsible for the presence of such hazardous or toxic substance and regardless of whether the release or disposal of such substances was legal at the time it occurred. We believe that we are in substantial compliance with all such laws and regulations. We also believe that none of the environmental laws and regulations that regulate our business is expected to have a material impact on our business.

Under certain environmental laws and regulations currently in effect, we will be required to expend capital in the future in order to remain in compliance. We do not believe that such capital expenditures required by environmental laws currently in effect will be material.

Competition

Our main competitors in the ocean harvested whitefish segment are the other members of the Pollock Conservation Cooperative, including Trident Seafoods and Glacier Fish. We also compete with inshore processors, including Maruha and Nissui, and motherships, which rely on catcher-vessels to harvest and deliver fish. In addition, we compete with other pollock fisheries, particularly the Russian pollock fishery in the Sea of Okhotsk.

We compete in selling roe primarily on the basis of quality. The price of pollock roe is heavily influenced by the size and condition of roe skeins, color and freshness and the maturity of the fish caught. In addition, pollock roe prices are influenced by anticipated Russian and U.S. production and Japanese inventory carryover, as pollock roe is consumed almost exclusively in Japan. Roe is primarily sold at auction, where we compete to sell into the Japanese market with other participants in our fishery, as well as with Russian producers. The prices of surimi and fillets are influenced primarily by expected production in the U.S. and Russian pollock fisheries, and other factors such as carryover inventories and changes in demand. Because surimi and fillet blocks often are composed of the same raw material, the demand for one product can influence the price of the other. Surimi and fillet blocks are also produced utilizing species of fish other than pollock, such as hake or itoyori species. However, due to differences in flesh attributes between pollock and other species, the surimi and block produced from other species are generally not used as substitutes for pollock products and thus have minimal influence on pollock pricing.

As of December 2002, there were approximately 24 U.S. catfish processing companies, including Confish, Heartland, America’s Catch and Delta Pride. We are the largest, processing over 15% of the U.S. farmed catfish processing market. The top five and top ten U.S. catfish companies processed, in the aggregate, approximately 60% and 83% of the U.S. farmed catfish harvest, respectively.

In secondary processing, we compete both for raw materials and customers with numerous other processors. Competition for sales is based largely on price. Our competitors range from large volume, well established secondary processors to small independent importers and brokers. Our major competitors are Fishery Products International, Coldwater Seafoods, Iceland Seafood Corp. and Trident Seafoods.

Litigation

General. We are from time to time party to litigation, administrative proceedings and union grievances that arise in the ordinary course of our business. Except as described below, we do not have pending any litigation that, separately or in the aggregate, would in the opinion of management have a material adverse effect on our

results of operations or financial condition. However, given the inherent unpredictability of litigation, it is possible that an adverse outcome could, from time to time, have a material adverse effect on our operating results or cash flows in any particular quarterly or annual periods.

Crew Member Class Action. On April 27, 2000, an action was filed in the United States District Court for the Western District of Washington against us by two of our former vessel crew members alleging that we breached the terms of their crew member agreements, resulting in the underpayment of the individuals’ crew shares for the 2000 “A” season. The plaintiffs also claimed that we had violated certain federal requirements that entitle them to be paid the highest rate of wages paid to similarly rated crew members aboard other vessels. On October 11, 2000, the action was certified as a class action, with the plaintiff class consisting of all of the crew members on all of our vessels during the 2000 “A” season. The plaintiffs’ claim requested damages of approximately $23 million.

On January 8, 2002, the District Court ruled in favor of the plaintiffs on one of their four specific claims after finding they had proved that we diluted each individual’s crew share by dividing each individual share by a number that was larger than the number of shares assigned to the whole crew, thereby depriving the crew members of their full wages. The court awarded damages in the aggregate amount of $1,607,254 and attorneys’ fees and expenses in an aggregate amount to be determined. We have accrued for the amount we estimate that we may have to pay relating to this matter in 2001. The plaintiffs have requested attorneys’ fees of approximately $600,000 (on April 29, 2002, the court awarded $383,234 in attorneys’ fees and expenses, and an additional $103,588 to be paid out of the plaintiffs’ award at no additional cost to us). The court further found that our underpayment of crew shares was not willful. The court also found that we did not estimate roe prices in good faith for the third fishing trip of each vessel in the 2000 “A” season. The court did not award the plaintiffs any damages with respect to this finding because we had paid the crew members a bonus amount in excess of any damages that resulted from the roe price estimates. The plaintiffs have filed a Notice of Appeal in connection with one of the three claims that the court rejected. The appealed claim alleges that the crew contracts did not comply with the provisions of the applicable statutes which govern the form and content of crew member contracts. We have filed a separate Notice of Appeal with respect both to the grant of attorneys’ fees and the award of damages against us. Oral argument was heard on May 6, 2003. We cannot assure you that the plaintiffs will not prevail or that we will not be required to pay significant damages to resolve this litigation, which could have a material adverse effect on our business, results of operations or financial condition.

Subsequent Crew Member Lawsuits. On October 19, 2001, a complaint was filed in the United States District Court for the Western District of Washington and the Superior Court of Washington for King County. An amended complaint was filed in both courts on January 15, 2002. The amended complaint was filed against us by a former vessel crew member on behalf of himself and a class of over 500 seamen, although neither the United States District Court nor the Superior Court have certified this action as a class action. On June 13, 2002, the complaint filed in the Superior Court was voluntarily dismissed by the plaintiffs. The complaint filed alleges that we breached our contract with the plaintiff by underestimating the value of the catch in computing the plaintiff’s wages. The plaintiff demanded an accounting of his crew shares pursuant to federal statutory law. In addition, the plaintiff requested relief under a Washington statute that would render us liable for twice the amount of wages withheld, as well as judgment against us for compensatory and exemplary damages, plus interest, attorneys’ fees and costs, among other things. The plaintiff also alleged that we fraudulently concealed the underestimation of product values, thereby preventing the discovery of the plaintiff’s cause of action. The conduct alleged took place prior to January 28, 2000, the date our business was acquired by Centre Partners and others through ASLP. This litigation is in a preliminary stage and its ultimate outcome is uncertain. We have denied the allegations made and intend to vigorously defend the claims. We cannot assure you that the plaintiff will not prevail or that we will not be required to pay significant damages to resolve this litigation, which could have a material adverse effect on our business, results of operations or financial condition.

Insurance

We carry customary insurance coverage, including policies on each of our vessels which provide for the payment of an assessed amount corresponding to “fair market value” (generally approximately one-half of current replacement cost) in the event of a loss of a vessel. Additionally, all of our catcher-processor vessels have a further layer of umbrella insurance which provides coverage for 80% of the difference between such fair market value and the total replacement cost for one vessel during each one-year policy term. We also carry insurance covering product liability claims. We believe that we carry adequate insurance coverage for our business activities. However, such coverage may prove to be inadequate or may not continue to be available to us. If such coverage proves to be inadequate, the sinking or destruction of, or substantial damage to, any of our vessels could have a material adverse effect on our business, financial condition or results of operations.

Employees

As of December 31, 2002, we employed more than 1,000 full-time personnel, including approximately 100 corporate staff employees and approximately 900 employees at our catfish and secondary processing facilities. Of the full-time personnel, approximately 70 employees are hourly-paid Teamsters’ Union workers and approximately 930 employees are non-union employees. In addition to the full-time personnel, we also employ a seasonal vessel crew, either full-time or part-time, of between 700 and 1,000 people, depending on the season. We have an annual retention rate of over 70% and we consider relations with our employees to be good.

In addition to their regular compensation, all corporate staff participate in an incentive plan to reward achievement of performance targets.

All vessel employees are compensated based upon a pre-season estimated value per product applied to actual production and actual roe value achieved by their vessel.

Management

Directors and Executive Officers

The following table identifies as of the completion of this offering the directors, executive officers and key employees of the Issuer.

Name	Age	Position
Bernt O. Bodal	50	Chairman and Chief Executive Officer, Director
Jeffrey Davis	53	Chief Operating Officer
Michael J. Hyde	47	General Counsel. President of American Seafoods Company LLC
Brad Bodenman	40	Chief Financial Officer and Treasurer
Amy Wallace	37	Vice President of Finance and Secretary
Inge Andreassen	39	Vice President of Operations of American Seafoods Company LLC
Morgen Crow	40	Director
John M. Fluke, Jr.	60	Director
George L. Majoros, Jr.	43	Director
Scott Perekslis	35	Director

Bernt O. Bodal. Mr. Bodal has been the Chairman and Chief Executive Officer of the Issuer since May 2003 and holds Class C preferred stock of the Issuer. He has been the President of ASC Management, Inc., the general partner of ASLP, the Chairman and Chief Executive Officer of ASG since January 2000, and a director of ASC Management, Inc. since January 2000. From 1994 to 1998, Mr. Bodal served as President and Chief Executive Officer of American Seafoods Company and RGI Seafoods, a subsidiary of Norway Seafoods. Between 1998 and 2000, Mr. Bodal pursued personal investment activities. Mr. Bodal is a resident of Seattle, Washington.

Jeffrey Davis. Mr. Davis has been the Chief Operating Officer of the Issuer since May 2003. He has been the Chief Operating Officer of ASG, and the Chief Executive Officer of American Seafoods International LLC since January 2000. Mr. Davis was the President and Chief Executive Officer of Baader North America Corporation, a wholly-owned U.S. subsidiary of Baader Beteligungs GMBH, a manufacturer of fish and poultry processing machines, from 1980 to December 1999. Mr. Davis is a resident of Naples, Florida.

Michael J. Hyde. Mr. Hyde has been the General Counsel of the Issuer since May 2003. He has been the President of American Seafoods Company LLC since 2000. American Seafoods Company LLC is a subsidiary of ASG through which we conduct our at-sea pollock harvesting and processing operations. From 1998 to 2000, Mr. Hyde was President of American Seafoods Company. Prior to 1998, Mr. Hyde practiced law in Seattle at Mundt MacGregor LLP, where he was a partner from 1991 to 1998. Mr. Hyde is a resident of Seattle, Washington.

Brad Bodenman. Mr. Bodenman has been the Chief Financial Officer and Treasurer of the Issuer since May 2003. He has been the Chief Financial Officer of ASG since May 1, 2002 and Treasurer since March 2002. From April 2000 to December 2001, Mr. Bodenman was the Chief Financial Officer and Treasurer of Essential Markets, Inc., a developer of proprietary software, and from 1997 to 2000, Mr. Bodenman was the Chief Financial Officer and Treasurer of Muzak, LLC., a business music provider. Mr. Bodenman is a resident of Seattle, Washington.

Amy Wallace. Ms. Wallace has been the Vice President of Finance and Secretary of the Issuer since May 2003. She has been the Vice President of Finance of ASG since 2002. Ms. Wallace was the Vice President of Corporate Development of ASG from 2000 to 2002 and the Business Development Manager of American Seafoods Company from 1996 to 2000. Ms. Wallace is a resident of Seattle, Washington.

Inge Andreassen. Mr. Andreassen has been the Vice President of Operations of American Seafoods Company LLC since 2000. From 1996 to 2000, Mr. Andreassen was the Vice President of Operations of American Seafoods Company. Mr. Andreassen is a resident of Seattle, Washington.

Morgen Crow. Mr. Crow has served as a director of the Issuer since May 2003. He has been a director of ASC Management, Inc. since 2000. Mr. Crow has been the Executive Director of Coastal Villages Region Fund since 1998. Mr. Crow was a comptroller, accountant and systems analyst of Lower Kuskokwim School District from 1988 to 1998. Mr. Crow is a member of the board of directors of the Marine Conservation Alliance and the Pollock Conservation Cooperative. Mr. Crow is a resident of Anchorage, Alaska.

John M. Fluke, Jr. Mr. Fluke has served as a director of the Issuer since May 2003. He has been a director of ASC Management, Inc. since 2002. Since 1974, Mr. Fluke has served as the Chairman of Fluke Capital Management, LP, a venture capital firm he founded. Mr. Fluke has served as a director of PACCAR Inc. since 1984 and on its audit committee since 2002. Mr. Fluke has served as a director of Cell Therapeutics, Inc. since 2002. Mr. Fluke is a resident of Seattle, Washington.

George L. Majoros, Jr. Mr. Majoros has served as a director of the Issuer since May 2003. He has served as a director of ASC Management, Inc. since 2002. Mr. Majoros has been President and Chief Operating Officer of Wasserstein & Co., LP since its inception in January 2001. From 1993 to 2001, Mr. Majoros was a Managing Director of Wasserstein Perella & Co., Inc. and the Chief Operating Officer of its Merchant Banking Group. Mr. Majoros also serves on the board of directors of American Lawyer Media Holdings, Inc., American Lawyer Media, Inc. and numerous private companies. Mr. Majoros is a resident of New York, New York.

Scott Perekslis. Mr. Perekslis has been a director of the Issuer since May 2003. He has been a director of ASC Management, Inc. since 2000. Mr. Perekslis has been a Managing Director of Centre Partners Management LLC, one of our equity investors, since 2001. He has served in various capacities for Centre Partners and its affiliates since 1991. Mr. Perekslis is the Chairman of Hyco International, Inc. and is a member of the board of directors of Firearms Training Systems, Inc. and KIK Corporation Holdings Inc. Mr. Perekslis is a resident of New York, New York.

We anticipate that our board will have a total of at least seven members and not more than 13 members. The term of office for each director will be until his successor is elected or appointed. Our certificate of incorporation will provide that our board of directors will be divided into three classes of even number or nearly even number, with each class elected for staggered three-year terms expiring in successive years, , and are Class A directors, , and are Class B directors and , and are Class C directors.

We have obtained insurance that indemnifies our directors and officers against certain liabilities.

Directors’ and Executive Officers’ Compensation

Compensation of Directors

The members of the board of directors of the Issuer will receive for serving as directors and for serving on each committee of our board of directors.

Compensation of Executive Officers

The following table sets forth information concerning the compensation of the chief executive officer and each of the four most highly compensated executive officers of operating subsidiaries of Holdings during each of the last three fiscal years.

Summary Compensation Table

	Annual Compensation(1)					Long Term Compensation Awards Securities Underlying Options/ SARs*		All Other Compensation
Name and Principal Position	Fiscal Year	Salary		Bonus				All Other Compensation
Bernt O. Bodal	2002	$	392,708	$	341,344	75,067	(2)	$	15,938	(3)
Chairman and Chief Executive Officer	2001	$	375,000	$	166,407	—		$	15,805	(4)
	2000	$	375,000	$	37,500	68,500	(5)	$	1,493	(6)

Michael J. Hyde	2002	$	335,625	$	290,142	15,666	(7)	$	72,114	(8)
General Counsel. President of American Seafoods Company LLC	2001	$	325,000	$	186,907	—		$	63,931	(9)
	2000	$	325,000	$	39,000	9,999	(10)	$	69,598	(11)

Jeffrey Davis	2002	$	335,624	$	290,142	27,900	(12)	$	6,669	(13)
Chief Operating Officer	2001	$	325,000	$	154,407	—			—
	2000	$	325,000	$	32,500	22,500	(14)		—

Brad Bodenman(15)	2002	$	146,459	$	125,000	5,550	(16)		—
Chief Financial Officer and Treasurer	2001		—		—	—			—
	2000		—		—	—			—

Inge Andreassen	2002	$	192,709	$	170,672	7,615	(17)	$	2,880	(18)
Vice President of Operations of American Seafoods Company LLC	2001	$	175,000	$	88,407	—		$	2,878	(19)
	2000	$	175,000	$	33,086	5,550	(20)	$	358	(21)

*	As of the date of this prospectus, ASLP held 99.4% of the beneficial interests in Holdings and had 810,842 units outstanding. Following the completion of the transactions contemplated by this offering, a unit of ASLP will be exchangeable for IDSs.

(1)

Includes amounts deferred under the American Seafoods Group Deferred Compensation Plan. The American Seafoods Group Deferred Compensation Plan also provides for a company match of $0.25 for each dollar deferred (up to a maximum of 15% of compensation) (for amounts, see All Other Compensation column).

(2)	Includes a grant under the Unit Option Plan of 8,250 Series E options and 66,817 repriced options.

(3)	Includes a company match under the American Seafoods Group Deferred Compensation Plan of $14,063 and $1,875 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(4)	Includes a company match under the American Seafoods Group Deferred Compensation Plan of $14,063 and $1,742 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(5)	Includes grants under the Unit Option Plan of 16,840 Series A options; 16,830 Series B options; 16,830 Series C options and 18,000 Series D options.

(6)	Represents the cost of life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(7)	Includes a grant under the Unit Option Plan of 6,000 Series E options and 9,666 repriced options.

(8)

Includes a payment under an agreement which provides that the company shall continue making annual $50,000 payments until 2005; company match under the American Seafoods Group Deferred Compensation Plan of $20,614 and $1,500 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(9)	Include the $50,000 payment pursuant to the agreement described in note 8 above, and a company match under the American Seafoods Group Deferred Compensation Plan of $12,562 and $1,369 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(10)	Includes grants under the Unit Option Plan of 3,333 Series A options; 3,333 Series B options and 3,333 Series C options.

(11)	Includes the $50,000 payment pursuant to the agreement described in note 8 above, and a company match under the American Seafoods Group Deferred Compensation Plan of $18,378 and $1,220 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(12)	Includes a grant of 6,000 Series E options under the Unit Option Plan and 21,900 repriced options.

(13)	Includes a company match under the American Seafoods Group Deferred Compensation Plan of $5,000 and $1,669 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(14)	Includes grants under the Unit Option Plan of 6,000 Series A options; 6,000 Series B options; 6,000 Series C options and 4,500 Series D options.

(15)	Mr. Bodenman served as our Treasurer from March 2002 through May 1, 2002, and as our Chief Financial Officer since May 1, 2002.

(16)	Includes grants under the Unit Option Plan of 1,850 Series A options; 1,850 Series E options and 1,850 Series F options.

(17)	Includes a grant of 2,250 Series E options under the Unit Option Plan and 5,365 repriced options.

(18)	Includes a company match under the American Seafoods Group Deferred Compensation Plan of $2,500 and $380 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(19)	Includes a company match under the American Seafoods Group Deferred Compensation Plan of $2,500 and $378 for life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

(20)	Includes grants under the Unit Option Plan of 1,850 Series A options; 1,850 Series B options and 1,850 Series C options.

(21)	Represents the cost of life insurance coverage provided pursuant to the American Seafoods Group Executive Life Insurance Plan.

Aggregated Option Exercises and Fiscal Year-End Option Value(1)

The following table sets forth certain information regarding option exercises by the Named Executive Officers during the fiscal year ended December 31, 2002, and options held by the Named Executive officers at December 31, 2002.

	Units Acquired on Exercise (#)	Value Realized ($)		Number of Securities Underlying Unexercised Options at FY End		Value of Unexercised In-the-Money Options at FY End
	Units Acquired on Exercise (#)	Value Realized ($)		Exercisable	Unexercisable	Exercisable		Unexercisable
Bernt O. Bodal	38,842	$	4,967,380	2,930	33,295	$	43,975	$	6,015,843
Jeffrey Davis	12,890	$	1,770,593	1,350	13,660	$	31,982	$	2,079,906
Michael J. Hyde	5,913	$	983,663	1,017	8,736	$	31,982	$	1,008,258
Brad Bodenman	—	$	—	185	5,365	$	8,011	$	232,324
Inge Andreassen	3,282	$	545,991	456	3,877	$	11,993	$	304,129

(1)

During the period from December 31, 2001 through May 1, 2002, all of the outstanding exercisable options were exercised as part of the recapitalization. Additional options have become exercisable since May 1, 2002. As of the date of this prospectus, ASLP held 99.4% of the beneficial interests in Holdings and had 810,842 units outstanding.

After the completion of this offering, only the Issuer and ASLP will own equity interests in Holdings. In addition, members of management will have unvested options to acquire equity interests in ASLP, a portion of which will vest based either on the option holders’ continued employment or on a combination of such continued employment and the achievement by Holdings of performance targets. The options that vest in this compensatory manner will be structured so that the resulting dilution is shared ratably by the Issuer and ASLP. Other management options to acquire equity interests in ASLP will dilute only the owners of ASLP. See “—ASLP Unit Option Plan.”

Committees of the Board

The standing committees of our board of directors will consist of an audit committee, a compensation committee and a corporate governance committee.

Audit Committee

The principal duties and responsibilities of our audit committee will be as follows:

to monitor our financial reporting process and internal control system;

to appoint and replace our independent outside auditors from time to time, determine their compensation and other terms of engagement and oversee their work;

to oversee the performance of our internal audit function; and

to oversee our compliance with legal, ethical and regulatory matters.

The audit committee will have the power to investigate any matter within the scope of its duties. It will also have the authority to retain counsel and advisors to fulfill its responsibilities and duties.

We plan to appoint two members to the audit committee within three months following this offering and the third member within 12 months following this offering. Each member of the audit committee will be independent.

Compensation Committee

The principal duties and responsibilities of the compensation committee will be as follows:

to provide oversight on the development and implementation of the compensation policies, strategies, plans and programs for our key employees and outside directors and disclosure relating to these matters;

to review and approve the compensation of our chief executive officer and the other executive officers of us and our subsidiaries; and

to provide oversight concerning selection of officers, management succession planning, performance of individual executives and related matters.

The members of the compensation committee will be selected within three months after this offering.

Corporate Governance Committee

The principal duties and responsibilities of the corporate governance committee will be as follows:

to establish criteria for board and committee membership and recommend to our board of directors proposed nominees for election to the board of directors and for membership on committees of the board of directors;

to make recommendations regarding proposals submitted by our shareholders; and

to make recommendations to our board of directors regarding corporate governance matters and practices.

The members of the committee on corporate governance will be selected within three months after this offering.

Employment Agreements

Each of Bernt O. Bodal, Jeffrey Davis, Michael J. Hyde, Brad Bodenman and Inge Andreassen has an employment agreement with ASLP and ASG, which will be amended in connection with the offering to include Holdings and the Issuer as employer parties. The employment agreements expire in 2005, and are subject to automatic extensions for succeeding terms of one year each unless terminated by delivery of notice by either party in accordance with the terms of the contract. Pursuant to these contracts, each executive may receive, in addition to his base salary, a discretionary and nondiscretionary bonus. Any discretionary bonus will be determined by the board of directors of the Issuer in its sole discretion. The nondiscretionary bonus will be awarded if the Adjusted EBITDA of Holdings and its subsidiaries exceeds certain targets, but the nondiscretionary bonuses will not be payable if, at the time of payment or at any time during the year of measurement, we are in default under any credit agreement relating to indebtedness for borrowed money.

If we terminate any of these executives’ employment with cause or if any of these executives terminates his employment without good reason, the executive is entitled only to payment of his unpaid base salary for the period prior to termination. If an executive’s employment terminates because of his death, or we terminate the executive’s employment upon his disability, then the executive is entitled to his unpaid salary and a pro-rated share of the nondiscretionary portion of the bonus to which he would otherwise have been entitled in respect of the year during which termination occurred. If we terminate an executive’s employment for any other reason or if the executive terminates for good reason, he is entitled to all of the foregoing, as well as severance compensation equal to the amount of his actual aggregate base salary for the 12 month period immediately prior to such termination payable over a 24 month period.

In addition to the generic terms described above, the executives’ particular employment agreements will provide the following specific terms:

Bernt O. Bodal. Mr. Bodal will serve as the Chairman and Chief Executive Officer of the Issuer. Under the terms of his employment agreement, Mr. Bodal will receive a base salary of $375,000, which may be adjusted but not decreased below $375,000. The employment agreement also provides, with certain exceptions, that

Mr. Bodal may not participate in any entity that competes with us or any of our subsidiaries, or any line of business which we or any of our subsidiaries is contemplating, for a period between 12 months and 24 months after the employment term and severance pay period, if applicable, depending on the method of termination. In addition, the employment agreement imposes certain non-solicitation obligations on Mr. Bodal for a 36 month period after the employment term and severance pay period, if applicable.

Michael J. Hyde. Mr. Hyde will serve as the General Counsel of the Issuer and President of American Seafoods Company LLC. Under the terms of his employment agreement, Mr. Hyde will receive a base salary of $325,000, which may be adjusted but not decreased below $325,000. The employment agreement also provides, with certain exceptions, that Mr. Hyde may not participate in any entity whose primary business involves the catching, processing or selling of pollock for a period of 12 to 24 months after the employment term and severance pay period, if applicable, depending on the method of termination. However, the agreement does not prevent Mr. Hyde from providing independent legal services under certain circumstances. In addition, the employment agreement imposes certain non-solicitation obligations on Mr. Hyde for a 12 month to 36 month period after termination of employment and the severance pay period, if applicable, depending on the method of termination.

Jeffrey Davis. Mr. Davis will serve as the Chief Operating Officer of the Issuer. Under the terms of his employment agreement, Mr. Davis will receive a base salary of $325,000, which may be adjusted but not decreased below $325,000. The employment agreement also provides, with certain exceptions, that Mr. Davis may not participate in any entity that competes with us or any of our subsidiaries, or any line of business which we or any of our subsidiaries is contemplating, for a period between 12 months and 24 months after the employment term and severance pay period, if applicable, depending on the method of termination. In addition, the employment agreement imposes certain non-solicitation obligations on Mr. Davis for a 36 month period after the employment term and severance pay period, if applicable.

Brad Bodenman. Mr. Bodenman will serve as the Chief Financial Officer and Treasurer of the Issuer. Under the terms of his employment agreement, Mr. Bodenman will receive a base salary of $185,000, which may be adjusted but not decreased below $185,000. The employment agreement also provides, with certain exceptions, that Mr. Bodenman may not participate in any entity that competes with ASG or any of its subsidiaries, or any line of business which ASG or its subsidiaries is contemplating for a period of 12 months after the employment term and severance pay period, if applicable, depending on the method of employment termination. In addition, the employment agreement imposes certain non-solicitation obligations on Mr. Bodenman for a 36 month period after termination of employment and the severance pay period, if applicable, depending on the method of employment termination.

Inge Andreassen. Mr. Andreassen will serve as Vice President of Operations of American Seafoods Company LLC. Under the terms of his employment agreement, Mr. Andreassen will receive a base salary of $175,000, which may be adjusted but not decreased below $175,000. The employment agreement also provides, with certain exceptions, that Mr. Andreassen may not participate in any entity that competes with us or any of our subsidiaries, or any line of business which we or any of our subsidiaries is contemplating, for a period of 12 months after the employment term and severance pay period, if applicable. In addition, the employment agreement imposes certain non-solicitation obligations on Mr. Andreassen for a 36 month period after the employment term and severance pay period, if applicable.

ASLP Unit Option Plan

ASLP adopted a Unit Option Plan on January 28, 2000, which was amended and restated effective December 16, 2002. Options to acquire units in ASLP were granted under the plan to officers and certain key employees. The purpose of the Unit Option Plan was to promote the success of ASLP and the interests of its partners by attracting, motivating, retaining and rewarding eligible participants.

The ASLP Unit Option Plan has been administered by the entire board of directors of ASC Management, Inc. The board has selected eligible participants for participation in the Unit Option Plan and determined the number

of partnership units subject to each option granted thereunder, the exercise price of such option, the time and condition of exercise of such option and all other terms and conditions of such option, including the form of the option agreement setting forth the terms and conditions of such option.

As of June 30, 2003 there were a total of 103,552 options outstanding under the ASLP Unit Option Plan, of which 7,850 were vested. In addition, we expect that 14,403 options will vest immediately prior to the consummation of this offering. The unvested options will consist of 10,550 Series A Options (which vest based upon the passage of time), 16,740 Series C Options (which vest when Centre Partners ceases to be a direct or indirect equity investor in Holdings), 11,272 Series D Options (which also vest when Centre Partners ceases to be a direct or indirect equity investor in Holdings), 34,035 Series E Options (which will vest based upon the achievement of certain specified EBITDA targets), and 8,473 Series F Options (which vest based upon the timing of Centre Partners’ exit and the returns achieved by Centre Partners).

In connection with this offering, ASLP will receive parallel or mirror options to acquire Holdings equity and notes in amounts corresponding to the outstanding Series A Options and Series E Options (other than in respect of a portion of the Series A Options, the vesting of which will be accelerated immediately prior to the offering). The effect of these arrangements will be to cause these options, which vest based on term of employment and performance, respectively, to dilute holders of IDSs and holders of ASLP units ratably. If all such options vested and were exercised, the holders of IDS would be diluted by approximately 1.6%. Following the consummation of this offering, the outstanding Series C Options, Series D Options and Series F Options will also remain outstanding at ASLP but ASLP will not receive any corresponding parallel or mirror options. Thus, the dilution caused by exercise of these options will be borne by the holders of ASLP units.

We may in the future adopt a long-term incentive plan to provide incentive compensation for any new members of management or to supplant the existing options once they have been exercised or have lapsed.

Security Ownership of Certain Beneficial Owners and Management

The following table and accompanying footnotes provide information regarding the direct or indirect beneficial ownership of equity interests in Holdings before and after the completion of this offering. The persons listed below include: (i) each person known to us to beneficially own 5% or more of the equity interests in Holdings; (ii) each named executive officer of the Issuer, Holdings and ASG; (iii) each director of the Issuer; (iv) all named executive officers and directors as a group; and (v) the U.S. Equity Partners Funds.

The persons listed on the following table own, prior to the completion of this offering, equity interests in Holdings directly or indirectly through ASLP and other entities. After the completion of this offering, only the Issuer and ASLP will own direct equity interests in Holdings; the current holders of direct interests in Holdings will have exchanged their interests in Holdings for interests in ASLP. Under the ASLP Unit Option Plan, certain members of management will have unvested options to acquire interests in ASLP which in turn represent, among other things, existing interests in debt and equity of Holdings. In addition, certain members of management will have unvested options to acquire interests in ASLP which will represent interests in debt and equity of Holdings that have not yet been issued. See “Management—ASLP Unit Option Plan.” And under the ASLP Exchange and Registration Rights Agreement, holders of interests in ASLP will have rights to exchange their interests in ASLP with the Issuer for IDSs. Upon any such exchange, the Issuer will have the right to direct ASLP to deliver to it, in redemption of the ASLP units received by the Issuer on such exchange, a ratable portion of the Holdings equity and the Holdings notes held by ASLP. See “Related Party Transactions—ASLP Exchange and Registration Rights Agreement.” Following the completion of this offering, the correlation between Holdings units held by the Issuer and IDSs will be one to one. As of the date of this prospectus, ASLP held 99.4% of the beneficial interests in Holdings and had 810,842 units outstanding.

The information in the “Before the Completion of the Offering” columns is based on the equity ownership of Holdings as of July 1, 2003 and the information in the “After the Completion of this Offering” columns is projected ownership following completion of this offering and all transactions described herein. Because all outstanding and currently vested options will be exercised prior to the completion of this offering, both the “Before the Completion of this Offering” and the “After the Completion of this Offering” columns treat all such vested options as exercised to provide a clearer illustration of the effects of this offering. In addition, upon the consummation of the transactions contemplated by this offering, a portion of the currently outstanding and unvested options to acquire interests in ASLP will become vested and will be immediately exercised. Accordingly, the “After the Completion of this Offering” columns treat all such vesting options as exercised, again to provide a clearer illustration of the effects of this offering. Further, because the only direct holders of equity interests in Holdings after the completion of this offering will be the Issuer and ASLP, and because each holder of an ASLP unit will have the right to exchange that unit for equity and debt of the Issuer, the ownership information shown for Holdings in the columns headed “After the Completion of this Offering” in the following table would be the same for the Issuer if all holders of ASLP units exercised their rights to exchange their ASLP units for IDSs.

Centre Partners, Coastal Village Pollock LLC and Mr. Bernt O. Bodal as, respectively, the owners of the Issuer’s Series A, B and C preferred stock will each have the right to elect one director of the Issuer’s board. We anticipate that our board will have a total of at least seven members and not more than 13 members.

	Before the Completion of this Offering			Pro Forma After the Completion of this Offering
Name of Beneficial Holder(1)	Number of Holdings Units (2)(3)	Percentage of Holdings Units(4)		Number of Holdings Units (5)(6)	Percentage of Holdings Units(7)
Centre Partners(8)	2,345,130	23.45	%	4,317,044	8.58	%
Coastal Villages(9)	3,693,705	36.94	%	6,799,575	13.52	%
Bernt O. Bodal(10)	2,220,931	22.34	%	4,251,532	8.45	%
U.S. Equity Partners Funds(11)	424,330	4.24	%	660,577	1.31	%
Jeffrey Davis	425,430	4.25	%	834,073	1.66	%
Inge Andreassen	123,057	1.23	%		*
Michael J. Hyde		*			*
Brad Bodenman		*			*
Amy Wallace		*			*
Morgen Crow(12)		—			—
John Fluke		—			—
George L. Majoros, Jr.(13)		—			—
Scott Perekslis(14)		—			—
All directors and executive officers as a group (10 persons)	2,936,499	29.36	%	5,662,191	11.26	%

*	Less than 1%

(1)	Unless otherwise indicated below, the persons named in the table above have sole voting and investment power with respect to the number of securities set forth opposite their names.

(2)

Except for Mr. Bodal, who beneficially owns directly and indirectly through various entities 22.34% of the units in Holdings, Mr. Davis, who beneficially owns indirectly through ASLP 4.25% of the units in Holdings, and Mr. Andreassen, who beneficially owns indirectly through ASLP 1.23% of the units in Holdings, no director or named executive officer beneficially owns 1% or more of the units in Holdings. In each case this percentage is based upon the assumed exercise by the pertinent holder of such holder’s options referenced in Note 3 below.

(3)

Includes indirect interests in Holdings resulting from the assumed exercise of currently exercisable options to purchase the following numbers of units in ASLP: Mr. Bodal—2,930 units; Mr. Davis—1,350 units; Mr. Hyde—1,017 units; Mr. Andreassen—456 units; Mr. Bodenman—185 units; other executive officers as a group—688 units.

(4)	Applicable percentage of ownership is based on 810,842 limited partnership units in ASLP and 10,000,000 units in Holdings outstanding as of July 1 2003 plus 7,850 ASLP units that will be issued upon exercise of exercisable ASLP options.

(5)	Consists of an aggregate of membership interests in ASLP converted into an equivalent membership interest in Holdings based on ASLP’s projected direct ownership of 33.5% of the equity interests in Holdings following completion of this offering and all transactions described herein.

(6)

Includes indirect interests in Holdings resulting from the assumed exercise of options, which will vest and become exercisable in connection with this offering, to purchase the following numbers of units in ASLP Mr. Bodal—7,576 units; Mr. Davis—2,364 units; Mr. Hyde—879 units; Mr. Andreassen 485 units; Mr. Bodenman—434 units.

(7)

Applicable percentage of ownership is based on 854,971 limited partnership units in ASLP and 10,000,000 units in Holdings outstanding as of July 1, 2003 plus 22,254 ASLP units that will be issued upon the assumed exercise of both currently exercisable options and options which will vest and become exercisable in connection with this offering.

(8)

Consists of an aggregate of 200,502 limited partnership units in ASLP: (a) 153,181 limited partnership units in ASLP owned of record by Centre Capital Investors III, L.P. (“Investors III”), (b) 18,534 limited partnership units in ASLP owned of record by Centre Partners III Tax Exempt Holdings (“CPIII”), (c) 19,195 limited partnership units in ASLP owned of record by ASC Offshore Holding Corporation (“Holdings Corp.”), (d) 1,120 limited partnership units in ASLP owned of record by Centre Capital Individual Investors III, L.P. (“Individual III”), (e) 8,371 limited partnership units in ASLP owned of record by Centre Capital Partners Coinvestment III, L.P. (“Coinvestment III”). Investors III, Individual III and Coinvestment III are limited partnerships, of which the general partner of each is Centre Partners III, L.P., and (f) 100 limited partnership units in ASLP owned of record by ASC Management, Inc.

(9)

The columns include an aggregate of 23,706 membership interests in ASLP beneficially owned by Coastal Villages through its purchase of an interest in CPIII and Holdings Corp. Coastal Villages is shown as the beneficial owner of its proportionate share of the membership interests in ASLP held by CPIII and Holdings Corp. because Coastal Villages can vote the membership interests on certain important matters and CPIII and Holdings Corp. are special purpose entities formed solely to hold membership interests.

(10)

The columns include an aggregate of 13,873 membership interests in ASLP beneficially owned by Mr. Bodal through his purchase of an interest in CPIII. Mr. Bodal is shown as the beneficial owner of his proportionate share of the membership interests in ASLP held by CPIII because Mr. Bodal can vote the membership interests on certain important matters and CPIII is a special purpose entity formed solely to hold membership interests.

(11)	In addition to the U.S. Equity Partners warrants, the U.S. Equity Partners Funds own a preferred equity interest in Holdings for which they paid $20.2 million and a note with a principal amount of $4.3 million for which they paid $3.8 million.

(12)

Mr. Crow is a director of Coastal Villages Region Fund, the parent of Coastal Villages Pollock LLC, and as such may be deemed to beneficially own and share the power to vote or dispose of the limited partnership units held by Coastal Villages Pollock LLC. Mr. Crow disclaims beneficial ownership of such limited partnership units.

(13)	Mr. Majoros is President and Chief Operating Officer of Wasserstein & Co., LP and as such may be deemed to beneficially own and share the power to vote or dispose of the interests held by the U.S. Equity Partners Funds. Mr. Majoros disclaims beneficial ownership of such interests.

(14)	Scott Perekslis is Managing Director of Centre Partners and as such may be deemed to beneficially own and share the power to vote or dispose of the securities held by Investors III, Individual III and Coinvestment III. Mr. Perekslis disclaims beneficial ownership of such securities.

The addresses of the beneficial owners shown in the table above who are beneficial owners of five percent or more of Holdings’ membership interests are as follows: Centre Partners Management LLC, 30 Rockefeller Plaza, Suite 5050, New York, New York 10020; Coastal Villages Pollock LLC, 711 H Street, Suite 200, Anchorage, Alaska 99501; and Bernt O. Bodal, American Seafoods Group, Market Place Tower, 2025 First Avenue, Suite 1200, Seattle, Washington 98121.

Related Party Transactions

Agreements Relating to ASLP and Holdings

ASLP Exchange and Registration Rights Agreement

Effective upon the consummation of this offering, the Issuer, Holdings and ASLP will enter into the ASLP Exchange and Registration Rights Agreement, under which (i) the Issuer will issue to all ASLP partners and option holders exchange warrants permitting such holders to exchange their ASLP limited partnership units for IDSs, and (ii) the Issuer will provide such partners and option holders with certain demand, piggy back and shelf registration rights.

The exchange warrants and registration rights give effect to and replace the exchange and registration rights provisions in the original Securityholders Agreement for ASLP referenced below, which contemplated a public offering of equity of a managing member or general partner of Holdings. Under the exchange rights, each holder of an ASLP unit may, at such holder’s option, exchange some or all of such holder’s ASLP units for shares of common stock and notes represented by IDSs provided that, to reduce administrative complexity, such exchanges will only be permitted in connection with registrations or underwritings of IDSs or on two specific dates each year. Following any exchange, the Issuer will have the right to direct ASLP to deliver to it, in redemption of the ASLP units received by the Issuer on such exchange, a ratable portion of the Holdings equity and the Holdings notes held by ASLP. The amount of IDSs delivered by the Issuer on any such exchange will bear the same relationship to the amount of Holdings equity and Holdings notes that would be receivable by the Issuer in such redemption as the aggregate amount of outstanding IDSs bears to the aggregate amount of Holdings equity and Holdings notes held by the Issuer. If the Issuer requests that ASLP units received by it on any exchange be redeemed as described above within 30 days of such exchange, ASLP will agree to indemnify the Issuer for any liabilities associated with such redemption. In the event of any such redemption, the Issuer will not receive any interest in assets of ASLP other than the Holdings notes and equity so distributed, and the exchanging unitholder will retain an interest in ASLP that tracks such unitholders’ interest in such other assets or liabilities.

The ASLP Exchange and Registration Rights Agreement will (i) require the Issuer to furnish a shelf registration statement from and after the first anniversary of the closing of the offering covering the IDSs issuable upon exercise of the Issuer’s exchange warrants which registration statement shall, with customary exceptions, remain effective for not less than years; (ii) provide to each of Centre Partners, Coastal Villages Pollock LLC and Bernt O. Bodal 3 demand registration rights which, at any time when the shelf registration is effective, may in the alternative be exercised to require the Issuer to cooperate in an underwritten offering; and (iii) provide to all holders of exchange warrants unlimited piggy back registration rights and rights to participate in any such underwritten offering. In addition, the agreement requires the consent of ASLP with respect to tax and other matters that could have a disparate impact on ASLP and its members’ interests in Holdings. Finally, the agreement contains provisions (i) restricting the activities of the Issuer to those of a holding company and requiring that it conduct all business activities through Holdings unless otherwise agreed in writing by ASLP, (ii) restricting ASLP from incurring material liabilities and (iii) providing the Issuer with certain rights to enforce, and prevent the amendment of, the foreign ownership restrictions pertinent to the ownership of ASLP units.

ASLP Securityholders Agreement

The holders of options and units in ASLP are party to a Securityholders Agreement that was originally entered into on January 28, 2000 and that has been amended from time to time. As in effect on the date of this prospectus, the ASLP Securityholders Agreement imposes restrictions on transfers of securities in ASLP, contains provisions intended to ensure that the percentage of Holdings held by non-U.S. citizens does not exceed 22%, provides “first offer,” “tag-along” and “drag along” rights with respect to certain transfers of securities and deals with certain other governance matters. In addition, the ASLP Securityholders Agreement contains provisions specifying the composition of the board of directors of ASC Management, Inc., the general partner of ASLP. Under those provisions, Centre Partners currently has the right to elect a majority of that board.

In connection with this offering, the ASLP Securityholders Agreement will be amended to provide that Centre Partners, Coastal Villages Pollock LLC and Bernt O. Bodal will initially each have the right to elect two directors of ASC Management, Inc., to make various conforming changes and to reflect this offering and the new structure.

Holdings Partnership Agreement

Simultaneous with the application of proceeds from this offering, Holdings will convert to a limited partnership and the Issuer and ASLP will execute the Agreement of Limited Partnership of Holdings. Under this agreement, the Issuer will, as general partner, have management authority over Holdings and its subsidiaries, including authority over the business and the right to cause Holdings to issue additional notes and equity.

Expense Reimbursement Agreement

Simultaneously with the application of proceeds from this offering, ASG, Holdings, ASLP and the Issuer will enter into our Expense Reimbursement Agreement under which ASG will reimburse (1) the Issuer and Holdings for their respective operating and administrative expenses following the consummation of this offering and (2) ASLP for certain administrative expenses up to $50,000 per year.

Agreement Relating to Coastal Villages

Coastal Villages Region Fund is the parent of Coastal Villages Pollock LLC, which is a substantial equity holder of ASLP and will be a holder of our Class B preferred stock and will be entitled to designate one of our directors. We are party to an agreement, dated October 12, 2000, with Coastal Villages Region Fund, pursuant to which Coastal Villages Region Fund has granted us an exclusive license to harvest and process the entire portion of the total allowable catch allocated to Coastal Villages Region Fund under the Alaska Community Development Quota program for the 2001 and 2002 pollock seasons. Pursuant to this agreement, we paid to Coastal Villages Region Fund $4.1 million in 2000, $10.9 million in 2001 and $9.3 million in 2002 based on tons harvested. Coastal Villages Region Fund’s quota for the 2002 season was 2.4% of the total allowable catch. Under the agreement, we are also committed to certain job training and community development initiatives for the benefit of Coastal Villages Region Fund’s member communities. The agreement is scheduled to terminate on December 31, 2005; however, we expect that it will be extended. Our agreement with Coastal Villages Region Fund is on arm’s-length terms, which we believe are no less favorable to us than those that would have been obtained in a comparable transaction with an unaffiliated third party.

Transactions and Agreements Relating to Pacific Longline Company LLC

Distribution. Holdings is currently the owner of an 80% equity interest in PLC, which was formed in August 2001 to conduct longliner cod harvesting and processing operations. Holdings is also a guarantor of certain indebtedness of PLC. Prior to the consummation of this offering, this equity interest will be distributed to ASLP. In connection with those distributions, Holdings will be released from its guarantee of indebtedness of PLC and ASLP will enter into a limited recourse guarantee of such indebtedness.

Services Agreement. An affiliate of ASG is a party to a Services Agreement with PLC dated August 15, 2001. Pursuant to the terms of the agreement, that affiliate provides to PLC a variety of management services including accounting, payroll, engineering and logistics in return for payment of a $15,000 monthly fee.

Marketing Agreement. An affiliate of ASG is a party to a Marketing Agreement with PLC dated January 1, 2002. Pursuant to the terms of the agreement, that affiliate markets all of the fish products produced aboard the three freezer longline vessels operated by PLC in return for a marketing fee of 2.5% of the gross sales proceeds.

The foregoing Services Agreement and Marketing Agreement will remain in effect following this offering. We believe that our transactions and agreements with PLC are on arm’s-length terms no less favorable to us than those that would have been obtained in comparable transactions with an unaffiliated third party.

Transactions and Agreements Relating to Our Management

Loans. On January 28, 2000, in connection with the purchase of our company by ASLP, ASLP entered into a loan agreement with Bernt O. Bodal, pursuant to which ASLP loaned Mr. Bodal $3.8 million to finance his purchase of equity interests in ASLP. On August 21, 2000, we loaned $200,000 to Mr. Bodal for personal purposes and on January 31, 2002, Holdings loaned to Mr. Bodal $500,000 to finance Mr. Bodal’s purchase of equity interests in Holdings. These loans were fully repaid in connection with the recapitalization of Holdings and its affiliates in April 2002.

On July 2, 2002, ASG loaned $6 million to Mr. Bodal to finance his purchase of equity interests in ASLP. The interest rate on this loan resets each January 1, April 1, July 1 and October 1 to the prime rate plus ¹/2%. The current rate is 5.25% per annum. This loan matures in 2012. Mr. Bodal is obligated to apply the amount of any distributions he receives on his ASLP units, after payment of applicable income taxes, to repay this loan. In connection with the transactions contemplated by this offering, (i) all of ASG’s rights with respect to this loan will be distributed to Holdings and (ii) Mr. Bodal will repay this loan in full.

Various members of management acquired equity interests in ASLP from existing equity holders in October 2002. A portion of these purchases were funded with loans from Holdings. The aggregate amount of such loans was $700,000. The interest rates on these loans reset each January 1, April 1, July 1 and October 1 to the prime rate plus ½%. The current rate is 5.25% per annum. In connection with the transactions contemplated by this offering, (i) immediately prior to the consummation of this offering, Holdings’ rights with respect to these loans will be distributed to ASLP and (ii) such members of management shall apply any distributions received by them on their ASLP units as a result of the consummation of the transactions contemplated by this offering, after payment of applicable income taxes, to repay such loans. We expect these loans to be repaid in full as a result of the transactions consummated in connection with this offering.

Aircraft Charters. From time to time, ASLP has chartered an aircraft owned and operated by BJ Aviation LLC and Seattle Jet Services, Inc., companies in which Bernt O. Bodal initially had a 50% equity interest. During 2002 Mr. Bodal’s interest in BJ Aviation LLC was increased to 100% and his interest in Seattle Jet Services, Inc. was eliminated. ASLP chartered these aircraft to transport its and ASG’s executive officers and financial advisors. ASG distributed cash to ASLP to pay BJ Aviation LLC and Seattle Jet Services, Inc. a total of $15,533 in 2000 and $552,204 in 2001. In 2002, ASLP paid BJ Aviation LLC and Seattle Jet Services, Inc. a total of $1,225,354. No amounts were paid directly to Mr. Bodal with respect to these charters, other than reimbursement of expenses incurred in the ordinary course of business. We believe that the foregoing transactions among ASLP and BJ Aviation LLC and Seattle Jet Services, Inc. were on arm’s-length commercial terms no less favorable than those that would have been obtained in comparable transactions with an unaffiliated third party. On December 31, 2002, the aircraft that ASLP had chartered was returned by BJ Aviation LLC to its lender and immediately thereafter leased on a long term basis by that lender to ASLP. In connection with that lease, Mr. Bodal agreed to indemnify and hold harmless ASLP from costs and losses associated with the extent to which that long term lease is at a notional cost or value in excess of $5.7 million. Prior to the consummation of this offering, ASG and ASLP will enter into a four-year operating lease under which ASG will lease this aircraft for a base rent of $58,000 per month. We believe the terms of this lease are no less favorable to ASG than those that would have been obtained from an unaffiliated third party.

Certain Payments Relating to the 2000 Acquisition and the 2002 Recapitalization

In 2000, in connection with the purchase of our company by ASLP, we paid Centre Partners, Norway Seafoods and Bernt O. Bodal $4.6 million, $460,000 and $116,664, respectively, for providing management and financial consulting services to us, and reimbursed them for out-of-pocket expenses they incurred.

In connection with the recapitalization of Holdings and its affiliates in April 2002, $5.7 million was paid to Centre Partners out of the distribution to our equityholders for providing management and financial consulting services to us. In addition, we reimbursed Centre Partners for out-of-pocket expenses they incurred in connection with the recapitalization.

Certain Payments Relating to this Offering

In connection with the consummation of the transactions contemplated by this offering, we expect that Centre Partners, Bernt O. Bodal and Coastal Villages will receive $39.6 million, $39.1 million and $62.5 million, respectively, of the proceeds from this offering. In addition, all vested options issued by ASLP (including certain options that will vest in connection with this offering) will be exercised and the holders of such options will also receive distributions. See “Management—ASLP Unit Option Plan.”

On October 4, 2002, the U.S. Equity Partners Funds purchased from Holdings a combination of redeemable preferred equity securities and notes, and purchased from ASLP warrants to purchase ASLP units, for a total purchase price of $27.3 million. In the transactions contemplated by this offering, Holdings will use $33.7 million of the proceeds received to redeem the preferred equity interests and notes held by the U.S. Equity Partners Funds. A portion of the U.S. Equity Partners Funds warrants will be exercised in connection with the offering and a portion will be amended to become exercisable for Holdings equity and then transferred to the Issuer in exchange for IDSs and cash. An aggregate of $6.1 million will be paid to the U.S. Equity Partners Funds in connection with the transfer or exercise of such warrants.

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Detailed Transaction Steps

Prior to and in connection with the consummation of this offering, ASLP and its subsidiaries and affiliates will take a number of steps to rationalize our structure and prepare for this offering. More particularly:

1.	Holdings will distribute to ASLP Holdings’ 80% interest in PLC, an entity engaged in the cod fishing business.

2.	Holdings’ wholly owned subsidiary, American Seafoods Consolidated LLC, will be liquidated.

3.	Two Delaware corporations that have no assets other than equity interests in ASLP will exchange those interests for equity interests in Holdings. We refer to these corporations as the “Corporate Partners.”

4.	A warrant to acquire equity interests in ASLP held by an investment fund managed by Wasserstein & Co. will be amended so that it becomes exerciseable for an equivalent equity interest in Holdings. We refer to this warrant as the “U.S. Equity Warrant.”

In this offering, we expect that the Issuer will sell 31,700,288 IDSs and receive approximately $522.5 million in net proceeds assuming an initial public offering price of $17.35 per IDS. Substantially simultaneously, but in the order set forth below, the following transactions will take place:

The Issuer will acquire from the shareholders of the Corporate Partners 100% of the stock of each such corporation for consideration consisting of a total of 1,636,635 IDSs and $14.7 million in cash. This amount of cash will equal the amount of cash that would have been payable in respect of the equity held by the Corporate Partners under step 7(iii) below.

2.	The Issuer will acquire the U.S. Equity Warrant for consideration consisting of a total of 102,640 IDSs and $0.9 million in cash. This amount of cash will equal the amount of cash that would have been payable in respect of the net equity covered by the U.S. Equity Warrant under step 7(iii) below.

The Issuer will use the remaining net proceeds from the offering to acquire from Holdings (i) a general partnership interest in Holdings (which will simultaneously convert from a limited liability company into a limited partnership) (approximately $130.4 million in net proceeds); (ii) 100% of the stock of ASC, Inc., a Delaware corporation that owns preferred and common interests in ASG (approximately $114 million in net proceeds); and (iii) $262.5 million principal amount of Holdings notes (approximately $262.5 million in net proceeds).

4.	ASC, Inc. will contribute its preferred and common interests in ASG to Holdings in exchange for equity interests in Holdings.

5.	Two current Holdings equity holders, one of whom is our chairman and chief executive officer, will exchange their equity interests in Holdings for ASLP limited partnership units.

6.	Holdings will issue $132.3 million principal amount of Holdings notes to ASLP in redemption of Holdings equity interests held by ASLP.

Holdings will use the proceeds it receives from the Issuer, as well as proceeds from the repayment of a management loan, to (i) make a contribution to ASG (approximately $325.9 million in net proceeds); (ii) redeem its outstanding preferred equity interests and subordinated notes (approximately $33.7 million in net proceeds); and (iii) make a distribution to ASLP in redemption of a portion of its equity interests outstanding prior to the transaction (other than the equity interests held by the Corporate Partners and those represented by the U.S. Equity Warrant) (approximately $153.5 million in net proceeds).

ASG will use the remaining net proceeds received, together with $220.0 million of borrowings under the new credit facility, to repay all outstanding borrowings under the existing credit facility and to pay amounts due in connection with the repayment of the existing credit facility and the closing of the tender offer and consent solicitation.

9.	Holdings will guarantee the Issuer’s notes included in the IDSs. ASG and its principal operating subsidiaries will guarantee, on a subordinated basis, the Issuer’s notes included in the IDSs, as well as the Holdings

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notes held by the Issuer and ASLP. ASG’s obligations under the new credit facility will be senior to all such guarantees, and the principal operating subsidiaries of ASG will guarantee, on a senior basis, all of ASG’s obligations under the new credit facility.

10.	ASLP will distribute to its partners the proceeds it receives from Holdings (approximately $153.5 million) as well as amounts it receives in repayment of management loans and as the exercise price of various options (approximately $2.0 million).

After giving effect to these transactions, the Issuer will own directly or indirectly approximately 66.5% of the economic interests in Holdings and indirectly in ASG, and ASLP will own the remaining 33.5%. In addition, members of management will have unvested options to acquire equity interests in ASLP, a portion of which will vest based either on the option holders’ continued employment or on a combination of such continued employment and the achievement by Holdings of performance targets. The options that vest in this compensatory manner will be structured so that the resulting dilution is shared ratably by the Issuer and ASLP. Other management options to acquire equity interests in ASLP will dilute only the owners of ASLP.

In connection with the offering, the Issuer will issue to all ASLP partners and option holders exchange warrants permitting such holders to exchange their ASLP limited partnership units for IDSs. Upon any such exchange, the Issuer would then have the right to exchange the ASLP units received by it for equity interests in Holdings and Holdings notes. If all such exchange warrants, other than those associated with compensatory options, were exercised in full, the ASLP partners and option holders would receive an aggregate of 16,858,853 IDSs (or 33.5% of the total IDSs that would be outstanding following such exercise), and the Issuer would own 100% of the economic interests in Holdings.

The Issuer will also issue preferred stock to three partners of ASLP—Centre Partners, Bernt Bodal, our chairman and chief executive officer, and Coastal Villages Pollock LLC. The preferred stock will entitle each such holder to elect one member of the Issuer’s board of directors which will have a total of at least seven members and not more than 13 members. The preferred shares of each class will be redeemable by us for nominal consideration (i) if the holders thereof sell shares of our common stock or equity in ASLP such that their indirect equity interest in Holdings is reduced below 5% (or at anytime after their indirect equity interest in Holdings has otherwise been reduced below 5%) or (ii) at such time as, for any reason, the indirect equity interest in Holdings of the holders of such class falls below 2%. The preferred shares will not entitle the holders thereof to receive dividends or distributions of any kind, other than nominal redemption consideration.

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The following charts reflect our capital structure prior to and after giving effect to the transactions contemplated hereby:

LOGO

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Description of Certain Indebtedness

New Credit Facility

Holdings, ASG and its subsidiaries will enter into a new credit facility with a syndicate of financial institutions with CIBC World Markets Corp. as sole placement agent, lead arranger and bookrunner and various other lenders, which will replace our existing credit facility. ASG will be the borrower under the new credit facility. As the terms of the new credit facility have not been agreed upon, the final terms of the new credit facility may differ from those described below, and such differences may be significant. The closing of this IDSs offering is conditioned upon the closing of the proposed new credit facility.

We expect that the new credit facility will provide for borrowings by ASG and will consist of:

a revolving credit facility in a total principal amount of up to $80.0 million, the “new revolver;”

a term loan in a total principal amount of $80.0 million, the “new term loan;” and

senior secured notes in an aggregate principal amount of $140.0 million, the “new senior notes.”

We intend to use the proceeds of the new credit facility to repay the outstanding indebtedness under ASG’s 10.125% senior subordinated notes due 2010 and all amounts outstanding under our existing credit facility, and to consummate other transactions in connection with the IDSs offering described in this prospectus.

The new credit facility will mature 5 years after the closing of this offering.

We expect that the new credit facility will have several features similar to credit facilities of this nature, including but not limited to:

Interest Rate and Fees. Borrowings will bear interest, at our option, for the new revolver facility and for the new term loan at either (a) the eurodollar rate plus the eurodollar rate applicable margin or (b) the Base Rate, as such term will be defined in the new credit facility, plus the base rate applicable margin. We expect that the new senior notes facility will bear interest at a rate per annum equal to the sum of the five-year U.S. Treasury rate which will be fixed as of the closing date plus a spread to be determined.

The initial eurodollar rate applicable margin and the initial base rate applicable margin are expected to be 3% and 2%, respectively, subject to subsequent adjustments depending on our total leverage ratio. The interest on the new credit facility will be payable monthly in arrears beginning one month after the closing date.

The new revolver will provide payment to the lenders of a commitment fee on any unused commitments equal to 0.50% per annum.

Mandatory Prepayments. The new credit facility will require us to prepay outstanding loans under the new term loan and the new senior notes (a) with, subject to certain conditions and exceptions, 100% of the net cash proceeds received by us from any sale, transfer or other disposition of any assets, 100% of net casualty insurance proceeds, 100% of the net cash proceeds from the incurrence of any indebtedness by ASG and its subsidiaries, 50% of the net proceeds of any issuance or sale of equity by ASG, and (b) during any dividend deferral period or interest deferral period, as described below under “—Limitations on Distributions to Holdings and the Issuer.”

Voluntary Prepayments. The new credit facility will provide for voluntary prepayments of the new credit facility and voluntary commitment reductions of the new revolver, subject to certain conditions and restrictions.

Covenants. The new credit facility will require that we meet certain financial tests, including, without limitation, a minimum interest coverage ratio test.

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Our new credit facility will contain customary covenants and restrictions, including, among others, limitations or prohibitions on declaring dividends and other distributions, redeeming and repurchasing our other indebtedness, loans and investments, additional indebtedness, liens, sale-leaseback transactions, capital expenditures, recapitalizations, mergers, acquisitions and asset sales and transactions with affiliates.

Limitations on Distributions to Holdings and the Issuer. Our new credit facility will permit dividends and distributions from ASG to Holdings and the Issuer so long as the interest coverage ratio of Holdings is at least . If such interest coverage ratio is below , we expect that ASG will not be allowed to make distributions to us, other than distributions necessary to enable Holdings and the Issuer to pay interest on the intercompany notes and the notes, respectively, and certain other permitted distributions, such as to pay taxes (a “dividend deferral period”). During any dividend deferral period, ASG will be required to use 75% of its cash available after distributions made or permitted to be made by it, including distributions to allow Holdings and the Issuer to pay interest or pay or prepay deferred interest on the intercompany notes and the notes, as applicable, to prepay the loans outstanding under the new credit facility as described above. In addition, if the interest coverage ratio of Holdings is less than , we expect that ASG will not be allowed to make distributions necessary to enable Holdings and the Issuer to pay interest on the intercompany notes and the notes, respectively, and will be prohibited from making any other distributions to us (other than certain permitted distributions, such as to pay taxes) (an “interest deferral period”). During any interest deferral period, ASG will be required to use 50% of the lesser of (i) the cash that would have been distributed to Holdings and the Issuer to enable them to pay interest on the intercompany notes and the notes, as applicable (exclusive of any accrued and deferred interest) and (ii) Available Cash (as such term will be defined in the new credit facility), to prepay the loans outstanding under the new credit facility as described above. When the interest coverage ratio of Holdings is such that an interest deferral period is required under the new credit facility, interest will also be deferred on the Issuer’s notes and Holdings’ intercompany notes. See “Description of Notes—Interest Deferral.” However, we expect that the interest deferral periods under our new credit facility will not be subject to the 24 month limitation that is contained in the indenture relating to deferral of interest on the notes. Accordingly, if the Issuer may no longer defer interest on the notes but the interest coverage ratio of Holdings remains below a specified threshold and the new credit facility prohibits ASG and its subsidiaries from making distributions to the Issuer, we may not have sufficient funds to pay interest on the notes. See “Risk Factors—We may not have sufficient funds to pay interest on the notes if our performance is below a specified threshold.”

Collateral. The new credit facility will be guaranteed by all material domestic subsidiaries of ASG. Holdings will pledge 100% of the equity interests in ASG to secure the new credit facility and issue a limited recourse guarantee to the extent of such pledge. In addition, ASG and its subsidiaries will provide to the administrative agent on behalf of each lender collateral consisting of, without limitation, 100% of the capital stock of all wholly-owned domestic subsidiaries of ASG and a security interest in substantially all assets of ASG and its subsidiaries.

Events of Default. Our new credit facility will contain customary events of default, including but not limited to, failure to pay principal, interest or other amounts when due, default in other agreements, breach of covenants or representations, and certain events of bankruptcy and insolvency.

Existing Senior Subordinated Notes

As of December 31, 2002, ASG had $175.0 million aggregate principal amount of 10.125% senior subordinated notes due 2010 outstanding. The closing of the consent solicitation and tender with respect to these notes is a condition to this offering. See “Summary—Existing Senior Subordinated Notes.”

Existing Credit Facility

Holdings, ASG and various subsidiaries of Holdings and ASG entered into a senior credit facility with various financial institutions, with Bank of America, N.A. acting as the administrative agent, pursuant to which ASG borrowed $360.0 million in term loans and obtained a revolving credit facility of $75.0 million. All amounts outstanding under the existing credit facility will be repaid with the proceeds of this offering.

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Description of IDSs

General

We are offering 31,700,288 IDSs. Each IDS represents:

one share of our common stock; and

$7.85 aggregate principal amount of our % notes.

The ratio of common stock to principal amount of notes represented by an IDS is subject to change in the event of a stock split, recombination or reclassification of our common stock.

Holders of IDSs are the beneficial owners of the common stock and notes represented by such IDSs and will have exactly the same rights, privileges and preferences, including voting rights, rights to receive distributions, rights and preferences in the event of a default under the notes indenture, ranking upon bankruptcy and rights to receive communications and notices as a direct holder of the common stock and notes, as applicable.

The IDSs will be available in book-entry form only. As discussed below under “—Book-Entry Settlement and Clearance,” a nominee of the book-entry clearing system will be the sole registered holder of the IDSs. That means you will not be a registered holder of IDSs or be entitled to receive a certificate evidencing your IDSs. You must rely on the procedures used by your broker or other financial institution that will maintain your book-entry position to receive the benefits and exercise the rights of a holder of IDSs that are described below. We urge you to consult with your broker or financial institution to find out what those procedures are.

Voluntary Separation

Holders of IDSs may, at any time after the earlier of 180 days from the date of original issuance or the occurrence of a change of control under the indenture, through their broker or other financial institution, separate their IDSs into the shares of common stock and notes represented thereby. Similarly, any holder of shares of our common stock and notes may, at any time, through their broker or other financial institution, combine the applicable number of shares of common stock and principal amount of notes to form IDSs. See “—Book-Entry Settlement and Clearance” below for more information on the method by which delivery and surrender of IDSs and delivery of shares of common stock and our notes will be effected.

Automatic Separation

Upon the occurrence of any of the following, the IDSs will be automatically separated into the shares of common stock and notes represented thereby:

exercise by the Issuer of its right to redeem all or a portion of the notes, which may be represented by IDSs at the time of such redemption,

the date on which principal on the notes becomes due and payable, whether at the stated maturity date or upon acceleration thereof, or

if DTC is unwilling or unable to continue as securities depository with respect to the IDSs or ceases to be a registered clearing agency under the Securities Exchange Act of 1934 and we are unable to find a successor depository.

Book-Entry Settlement and Clearance

DTC will act as securities depository for the IDSs, the notes and shares of common stock represented by the IDSs, which we refer to collectively as the “securities.” The notes and the shares of our common stock represented by the IDSs will be represented by one or more global notes and global stock certificates. The global notes and global stock certificates will be issued in fully-registered form in the name of DTC’s partnership nominee, Cede & Co.

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Book-entry procedures. If you intend to purchase IDSs in the manner provided by this prospectus you must do so through the DTC system or through direct and indirect participants, including The Canadian Depository for Securities Limited, known as CDS. The participant that you purchase through will receive a credit for the applicable security on DTC’s records. If you purchase IDSs in the Canadian offering you will hold the interest in the IDSs through the DTC participant account maintained by CDS. The ownership interest of each actual purchaser of the applicable security, who we refer to as a “beneficial owner,” is to be recorded on the participant’s records. Beneficial owners will not receive written confirmation from DTC of their purchases, but beneficial owners are expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the DTC or CDS participant through which the beneficial owner entered into the transaction.

All interests in the securities will be subject to the operations and procedures of DTC and CDS. The operations and procedures of each settlement system may be changed at any time.

DTC has advised us as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a “banking organization” within the meaning of the New York State Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “clearing agency” registered under Section 17A of the Securities Exchange Act of 1934. DTC was created to hold securities for its participants and to facilitate the clearance and settlement of securities transactions between its participants through electronic book-entry changes to the accounts of its participants. DTC’s participants include securities brokers and dealers, including the underwriters, banks and trust companies, clearing corporations and other organizations. Indirect access to DTC’s system is also available to others such as banks, brokers, dealers and trust companies. These indirect participants clear through or maintain a custodial relationship with a DTC participant, either directly or indirectly. The rules that apply to DTC and its participants are on file with the SEC.

To facilitate subsequent transfers, all securities deposited by direct participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co. The deposit of securities with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the securities. DTC’s records reflect only the identity of the direct participants to whose accounts such securities are credited, which may or may not be the beneficial owners. The participants will remain responsible for keeping account of their holdings on behalf of their customers.

Transfers of ownership interests in the securities are to be accomplished by entries made on the books of participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates representing their ownership interests in the applicable security except in the event that use of the book-entry system for the securities is discontinued.

Cross-market transfers between DTC participants, on the one hand, and CDS participants, on the other hand, will be effected within DTC through the DTC participant that is acting as depositary for CDS. To deliver or receive an interest in securities held in a CDS account, an investor must send transfer instructions to CDS under the rules and procedures of that system and within the established deadlines of that system. If the transaction meets its settlement requirements, CDS will send instructions to its DTC depositary to take action to effect final settlement by delivering or receiving interests in the securities in DTC and making or receiving payment under normal procedures for same-day funds settlement applicable to DTC. CDS participants may not deliver instructions directly to the DTC depositary that is acting for CDS.

Separation and recombination. Holders of IDSs may, at any time after 180 days from the date of original issuance or such earlier date upon a Change of Control, as defined in the indenture, through their broker or other financial institution, separate their IDSs into the shares of common stock and notes represented thereby. Similarly, any holder of shares of our common stock and notes may, at any time, through their broker or other financial institution, combine the applicable number of shares of common stock and principal amount of notes to form IDSs.

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In addition, the IDSs will be automatically separated into the shares of common stock and notes represented thereby upon the occurrence of the following:

exercise by the Issuer of its right to redeem all or a portion of the notes, which may be represented by IDSs at the time of such redemption,

the date on which principal on the notes becomes due and payable, whether at the stated maturity date or upon acceleration thereof, or

Any voluntary or automatic separation of IDSs and any subsequent combination of IDSs from notes and common stock, are to be accomplished by entries made by the DTC participants (or, in the case of CDS, by its participants) acting on behalf of beneficial owners. In any such case, the participant’s account through which a separation or recombination is effected, will be credited and debited for the applicable securities on DTC’s records (and, if applicable, on CDS’s records). There may be certain transactional fees imposed upon you by brokers or other financial intermediaries in connection with separation or recombination of IDSs and you are urged to consult your broker regarding any such transactional fees.

Conveyance of notices and other communications by DTC to direct participants, by direct participants to indirect participants, and by participants to beneficial owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.

Neither DTC nor Cede & Co. will consent or vote with respect to the securities. Under its usual procedures, DTC would mail an omnibus proxy to us as soon as possible after the record date. The omnibus proxy assigns Cede & Co.’s consenting or voting rights to those direct participants to whose accounts the securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). CDS will send a similar omnibus proxy assigning consenting or voting rights to its participants in whose accounts securities are credited.

We and the trustee will make any payments on the securities to DTC. DTC’s practice is to credit direct participants’ accounts on the payment date in accordance with their respective holdings shown on DTC’s records unless DTC has reason to believe that it will not receive payment on the payment date. CDS’s practice is to implement similar processes. Payments by participants to beneficial owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such participant and not of DTC (or CDS, if applicable), us or the trustee, subject to any statutory or regulatory requirements as may be in effect from time to time.

We or the trustee will be responsible for the payment of all amounts to DTC. DTC will be responsible for the disbursement of those payments to its participants (and in the case of CDS it will be responsible for disbursements to its participants), and the participants will be responsible for disbursements of those payments to beneficial owners.

DTC may discontinue providing its service as securities depository with respect to the IDSs, the shares of our common stock or our notes at any time by giving reasonable notice to us or the trustee. If DTC discontinues providing its service as securities depository with respect to the IDSs and we are unable to obtain a successor securities depository, you will automatically take a position in the component securities. If DTC discontinues providing its service as securities depository with respect to the shares of our common stock or our notes and we are unable to obtain a successor securities depository, we will print and deliver to you certificates for those securities and you will automatically take a position in the other component securities.

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Also, in case we decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository) we will print and deliver to you certificates for the various certificates of common stock and notes you may own.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that we believe to be reliable, including DTC.

Neither we nor any trustee nor the underwriters will have any responsibility or obligation to participants, or the persons for whom they act as nominees, with respect to:

the accuracy of the records of DTC, its nominee, CDS (if applicable), or any participant, any ownership interest in the securities, or

any payments to, or the providing of notice, to participants or beneficial owners.

Procedures relating to subsequent issuances. The indenture governing the notes and the agreements with DTC will provide that, in the event there is a subsequent issuance of notes which are substantially identical to the notes initially represented by the IDSs, each holder of notes or IDSs (as the case may be) agrees that a portion of such holder’s notes (whether held directly in book-entry form, or held as part of IDSs) will be exchanged for a portion of the notes acquired by the holders of such subsequently issued notes. Consequently, following each such subsequent issuance and exchange, each holder of notes or IDSs (as the case may be) will own notes of each separate issuance in the same proportion as each other holder. Immediately following any exchange resulting from a subsequent offering, a new cusip number will be assigned to represent an inseparable unit consisting of the notes outstanding prior to the subsequent issuance and the notes issued in the subsequent issuance. Accordingly, the notes issued in the original offering cannot be separated from the notes issued in any subsequent offering. In addition, immediately following any exchange resulting from a subsequent offering, the IDSs will consist of the inseparable unit described above representing the proportionate principal amounts of each issuance of notes (but with the same aggregate principal amount as the note (or inseparable unit) represented by the IDSs immediately prior to such subsequent issuance and exchange) and the common stock. All accounts of DTC participants with a position in the securities will be automatically revised to reflect the new cusip numbers.

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Description of Notes

The following is a description of the material terms of the Indenture under which our Notes will be issued, a copy of the form of which will be filed with the Commission as an exhibit to the registration statement of which this prospectus is a part. This description does not restate the Indenture in its entirety. We urge you to read the Indenture and the collateral documents. Capitalized terms used in this “Description of Notes” section and not otherwise defined have the meanings set forth in the section “—Certain Definitions” or in the Indenture.

General

The Notes are to be issued under an Indenture, to be dated as of , 2003 (the “Indenture”), among American Seafoods Corporation (the “Issuer”), the Guarantors and , as Trustee (the “Trustee”). The Trustee will act as the initial paying agent.

The following summary of certain provisions of the Indenture is subject to, and is qualified in its entirety by reference to, all the provisions of the Indenture, including the definitions of certain terms therein and those terms made a part thereof by the Trust Indenture Act of 1939, as amended.

The Notes will be issued in an aggregate principal amount of $262.5 million. The Indenture will provide for the issuance of an unlimited aggregate principal amount of additional notes having substantially identical terms and conditions to the notes offered hereby (the “Additional Notes”), subject to compliance with the covenants contained in the Indenture. Any Additional Notes will be part of the same issue as the Notes offered hereby and will vote on all matters with the Notes offered hereby. The Additional Notes will be deemed to have the same accrued current period interest, Deferred Interest and defaults as the Notes issued in this offering and will be deemed to have used up Standstill Periods, Payment Blockage Periods and interest deferral periods to the same extent as the Notes issued in this offering.

The Notes will be issued only in fully registered form, without coupons.

The Notes will be senior secured obligations of the Issuer. Contemporaneously with the application of proceeds from this offering, the Issuer will lend $394.8 million to Holdings pursuant to intercompany notes and, substantially contemporaneously with issuing intercompany notes to the Issuer, Holdings will issue identical intercompany notes to ASLP in redemption of a portion of the Holdings’ equity interests held by ASLP. Such Holdings intercompany notes issued to the Issuer and ASLP, which are referred to herein as the “Intercompany Notes,” will contain the same payment and interest terms and substantially similar other provisions as the Notes and will contain cross-default provisions such that an Event of Default under the Notes will trigger an event of default under the Intercompany Notes. The Intercompany Notes will be senior obligations of Holdings. The Notes and the Intercompany Notes will have the benefit of guarantees of ASG and various of its subsidiaries. These guarantees will be subordinated to the senior indebtedness of ASG (including senior indebtedness under the Senior Credit Documents) and the guarantees of such senior indebtedness by various subsidiaries of ASG. In addition, Holdings will guarantee the Notes on an unsecured subordinated basis. The Notes will be secured by a pledge by the Issuer (i) of all of the Intercompany Notes held by the Issuer and (ii) of the Issuer’s partnership interests in Holdings, and by a pledge by ASC and the Blocker Corporations of their minority partnership interests in Holdings. These arrangements are described under “Guarantees and Pledge.” The Notes will mature on , 2013. The Issuer may extend the maturity of the Notes for up to two additional successive five-year terms if the Fixed Charge Coverage Ratio of Holdings for the most recent twelve month period ended on the last day of the fiscal quarter ended at least 45 days before the end of the then current term is equal to or greater than , and provided that as of the scheduled maturity date:

(i) no Event of Default has occurred and is continuing with respect to the Notes;

(ii) no event of default has occurred and is continuing with respect to any Indebtedness of the Issuer or a Significant Subsidiary; and

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(iii) there is no interest due but unpaid on the Notes or any Indebtedness of the Issuer, other than Indebtedness that is not Indebtedness for borrowed money up to an aggregate amount of $ .

The Notes will bear interest at a rate per annum of % from , or from the most recent date to which interest has been paid or provided for, payable monthly in arrears on the 20^th day of each month, to Holders of record at the close of business on the first business day of such month, commencing , 2003.

Interest Deferral

Prior to , 2008, the Issuer will be required to defer interest payments on the Notes if and for so long as the most recently calculated (i) Fixed Charge Coverage Ratio of Holdings for a twelve-month period ended on December 31, June 30 or September 30 is less than or (ii) Adjusted Fixed Charge Coverage Ratio of Holdings for a period ended on March 31 is less than , unless, in each case, a default in payment of interest, principal or premium, if any, on the Notes has occurred and is continuing, or any other Event of Default with respect to the Notes has occurred and is continuing and the Notes have been accelerated as a result of the occurrence of such Event of Default (any such period, a “Mandatory Interest Deferral Period”). The interest payments will be deferred under this provision from the time the Issuer provides the Trustee with a calculation demonstrating that such deferral is required (provided, however, that such calculation shall be provided to the Trustee not later than 45 days after the end of the applicable fiscal quarter) until such time as the Issuer provides the Trustee with a calculation demonstrating that such deferral is no longer required (provided, however, that such calculation shall be provided to the Trustee not later than 45 days after the end of the applicable fiscal quarter) or, if earlier, until such time as a default in payment of interest, principal or premium, if any, on the Notes has occurred or any other Event of Default with respect to the Notes has occurred and is continuing and the Notes have been accelerated as a result of the occurrence of such Event of Default. Interest payments on the Notes will not be deferred under this provision for more than 24 months in the aggregate or beyond , 2008.

In addition, between , 2008 and , 2013, the Issuer may at its election defer interest on the Notes on one occasion for not more than 10 months (the “Optional Interest Deferral Period”) by delivering to the Trustee a certificate of the Board of Directors to the effect that such deferral is reasonably necessary for bona fide cash management purposes, or to reduce the likelihood of or avoid a default on the Senior Credit Facility; provided no such deferral may be commenced, and any ongoing deferral shall cease, if a default in payment of interest, principal or premium, if any, on the Notes has occurred and is continuing, or any other Event of Default with respect to the Notes has occurred and is continuing and the Notes have been accelerated as a result of the occurrence of such Event of Default.

Deferred interest on the Notes will bear interest at a rate per annum of % until paid in full. Following the end of any Mandatory Interest Deferral Period, the Issuer will resume monthly payments of interest on the Notes, including interest on deferred interest. At the end of any Mandatory Interest Deferral Period, all interest on the Notes deferred at any time prior to the end of such Mandatory Interest Deferral Period (including during any prior Mandatory Interest Deferral Period), together with interest accrued on such deferred interest during any such Mandatory Interest Deferral Period (such amount, as determined at the end of any Mandatory Interest Deferral Period, the “Deferred Interest”), will be repaid by the Issuer in one or more equal quarterly installments beginning on the third interest payment date following the quarter in which the Fixed Charge Coverage Ratio, or the Adjusted Fixed Charge Coverage Ratio, as applicable, of Holdings was equal to or greater than , and ending on , 2008. The Issuer may prepay all or part of the Deferred Interest, at any time other than during an interest deferral period. If the Issuer prepays less than all of the Deferred Interest, the Trustee will apply such prepayment in the order of maturity to the remaining Deferred Interest payments. If a subsequent Mandatory Interest Deferral Period commences before the Deferred Interest is paid in full the Issuer will discontinue the quarterly repayments of Deferred Interest for the duration of such period and the amount of Deferred Interest shall be recalculated at the end of such subsequent Mandatory Interest Deferral Period and repaid in one or more equal quarterly installments as described above. At the end of the Optional Interest Deferral Period, the Issuer

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must pay all deferred interest and accrued interest thereon. During any interest deferral period, or so long as any Deferred Interest remains unpaid, the Issuer will not pay any dividends or make any distribution to holders of the Issuer’s common stock. See “—Certain Covenants—Limitation on Restricted Payments.”

The Intercompany Notes will contain interest deferral provisions identical to those in the Notes and interest on the Intercompany Notes will be deferred at the same times and for the same periods as interest on the Notes.

Optional Redemption

At any time and from time to time on or after , 2008, the Notes will be redeemable, at the Issuer’s option, in whole or in part upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each Holder’s registered address. Any such redemption and notice may, in the Issuer’s discretion, be subject to the satisfaction of one or more conditions precedent. The Notes will be so redeemable at the following redemption prices (expressed as a percentage of principal amount), plus accrued and unpaid interest, if any, to the relevant redemption date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date), if redeemed during the 12-month period commencing on of the years set forth below:

Period	Redemption Price
2008	%
2009	%
2010	%
2011 and thereafter	100.00	%

At any time prior to , 2008, the Notes may also be redeemed in whole or in part at the option of the Issuer, upon not less than 30 nor more than 60 days’ prior notice mailed by first-class mail to each Holder’s registered address, at a redemption price equal to the sum of the present values of the redemption price of such Note at the first optional redemption date described above and all required interest payments (excluding accrued but unpaid interest) due on such Note through the first optional redemption date, discounted to the date of such redemption (the “Redemption Date”) on a monthly basis (assuming 360-day years consisting of twelve 30-day months) at the Treasury Rate plus basis points, plus accrued and unpaid interest to the Redemption Date (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date).

A partial redemption of the Notes will result in an automatic separation of the IDSs.

Selection

In the case of any partial redemption, selection of the Notes for redemption will be made by the Trustee on a pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with the applicable legal and regulatory requirements). If any Note is to be redeemed in part only, the notice of redemption relating to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the redemption date, interest will cease to accrue on Notes or portions thereof called for redemption, so long as the Issuer has deposited with the depositary funds sufficient to pay the principal of, plus accrued and unpaid interest on, the Notes to be redeemed.

Ranking

On the Issue Date, the Notes will be the only indebtedness of the Issuer. The Notes will rank pari passu in right of payment with any future Senior Indebtedness of the Issuer. In addition, the Intercompany Notes and the Note Guarantee will be the only indebtedness of Holdings, except that Holdings will pledge its equity in ASG, and

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issue a limited recourse guarantee to the extent of such pledge, to secure the Guarantor Senior Indebtedness of ASG. Because the Issuer is a holding company and conducts no independent operations, the Notes will be structurally subordinate to the obligations of the Issuer’s subsidiaries. Similarly, because Holdings is a holding company and conducts no independent operations, the Intercompany Notes and Holdings’ Note Guarantee will be structurally subordinate to the obligations of Holdings’ subsidiaries. Notwithstanding the above, to the extent that Holders are able to exercise their rights and remedies under the Note Guarantees or under the Pledge (as defined below) and indirectly under the guarantees of the Intercompany Notes, all of which are described below, the Holders should effectively be in the same position they would have been in, had the Notes ranked pari passu with all indebtedness of ASG and its subsidiaries other than Guarantor Senior Indebtedness and Indebtedness of foreign Subsidiaries. Payment from the money or the proceeds of U.S. Government Obligations held in any defeasance trust described under “—Defeasance” below is not subordinated to any Guarantor Senior Indebtedness or subject to the restrictions described herein.

The Indebtedness evidenced by each Guarantee will be unsecured subordinated indebtedness of the applicable Guarantor, and will be subordinated in right of payment, as set forth in the Indenture, with all existing and future Guarantor Senior Indebtedness of the applicable Guarantor, pari passu with all other Indebtedness of such Guarantor that does not expressly provide that it is subordinated to the guarantees and senior to all future debt of subsidiary guarantors that expressly provides that it is subordinated to the Guarantees. See “—Guarantees and Pledge—Standstill Periods with respect to the Guarantees” and “—Guarantees and Pledge—Subordination of Guarantees.” As of the Issue Date, the only Guarantor Senior Indebtedness of Holdings outstanding is represented by the pledge by Holdings of its equity in ASG to secure the indebtedness of ASG under the Senior Credit Facility and a limited recourse guarantee to the extent of such pledge, which does not constitute Designated Senior Indebtedness. The provisions relating to the Standstill Periods and Payment Blockage Periods described below will not apply to the Holdings Note Guarantee so long as Holdings does not have any Designated Senior Indebtedness.

As of March 31, 2003, after giving pro forma effect to the transactions contemplated by this prospectus, including the tender offer and consent solicitation, the new credit facility, the offering of the IDSs and, in each case, the use of the proceeds therefrom, as if such transactions had occurred on March 31, 2003, ASG and its subsidiaries would have had approximately $ million of Indebtedness and trade payables outstanding. Approximately $220.0 million of this amount would constitute Guarantor Senior Indebtedness, which would rank senior to the Guarantees, and approximately $ million, would rank pari passu with the Guarantees. The remaining $ million of Indebtedness and trade payables consists of liabilities of our foreign Subsidiaries which are not guarantors of the Notes or the Intercompany Notes. Although the Indenture will contain limitations on the amount of additional Indebtedness and additional Guarantor Senior Indebtedness which the Issuer, Holdings and the Restricted Subsidiaries may Incur, these limitations are subject to important exceptions and qualifications, and the amount of such additional Indebtedness, including Guarantor Senior Indebtedness, could be substantial. See “—Limitations on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” below.

We will rely entirely on dividends, distributions and other payments from ASG and its subsidiaries to make payments on the notes. The Senior Credit Facility contains limitations on the ability of ASG and its subsidiaries to make distributions to us. See “Description of Certain Indebtedness—New Credit Facility.”

Guarantees and Pledge

Guarantees

Holdings and all of Holdings’ direct and indirect existing Wholly Owned Subsidiaries organized under the laws of any state of the United States of America on the Issue Date and certain future Subsidiaries of Holdings (the “Guarantors”), as primary obligors and not merely as sureties, will irrevocably, jointly and severally guarantee on an unsecured subordinated basis the performance and punctual payment when due, whether at stated maturity, by

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acceleration or otherwise, of all obligations of the Issuer under the Notes, whether for payment of principal of, premium, if any, or interest on the Notes, expenses, indemnification or otherwise (all such guarantee obligations by such Guarantors are referred to as the “Note Guarantees”). In addition, all Guarantors other than Holdings (the “Intercompany Guarantors”), as primary obligors and not merely as sureties, will irrevocably, jointly and severally guarantee on an unsecured subordinated basis the performance and punctual payment when due, whether at stated maturity, by acceleration or otherwise, of all obligations of Holdings under the Intercompany Notes, whether for payment of principal of, premium, if any, or interest on the Intercompany Notes, expenses, indemnification or otherwise (all such guarantee obligations by such Guarantors are referred to as the “Intercompany Guarantees,” and, together with the Note Guarantees, the “Guarantees”).

Each Guarantee will be limited in amount to an amount not to exceed the maximum amount that can be guaranteed by the applicable Guarantor without rendering the Guarantee, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. After the date of issuance of the Notes and Intercompany Notes, Issuer or Holdings, as applicable, will cause each Restricted Subsidiary organized under the laws of the United States of America or any state or territory thereof that Incurs Indebtedness or issues shares of Disqualified Stock or Preferred Stock to execute and deliver to the Trustee, or to the Issuer (with a copy to the Trustee), as applicable, a Note Guarantee pursuant to which such Restricted Subsidiary will guarantee payment of the Notes and the Intercompany Notes. See “—Certain Covenants—Future Guarantors.” Pursuant to the terms of the Intercompany Notes, the Guarantors (other than Holdings) will be required to issue Intercompany Guarantees to the Issuer and ASLP simultaneously with issuing the Note Guarantees.

Each Guarantee is a continuing guarantee and shall (i) remain in full force and effect until payment in full of all the Notes or the Intercompany Notes, as applicable, (ii) be binding upon each such Guarantor and its successors, and (iii) inure to the benefit of and be enforceable by the Holders, their successors, transferees and assigns, or, in the case of any Intercompany Guarantee, by the Issuer or the Trustee in accordance with the Pledge (as described below). Under the Indenture, the Issuer will covenant that it will not enforce any Intercompany Guarantee issued to the Issuer or the Intercompany Notes issued by Holdings to the Issuer unless instructed to do so by the Trustee on behalf of the Holders of the Notes. Any amount that the Trustee or the Holders collect on any Note Guarantee will be credited against the amount that can be collected from the applicable Guarantor under the Intercompany Guarantee issued by such Guarantor to the Issuer (or, in the case of Holdings, its Intercompany Notes issued to the Issuer). If the Trustee instructs the Issuer to enforce any Intercompany Guarantee or the Intercompany Notes issued by Holdings to the Issuer, any amount collected by the Issuer under the Intercompany Guarantee (or, in the case of Holdings, its Intercompany Notes issued to the Issuer) will be credited against the amount that can be collected from such Guarantor under its Note Guarantee.

The Note Guarantee of a Guarantor will be released:

(1) in connection with any sale or disposition (by merger or otherwise) of a Guarantor to a Person that is not (either before or after giving effect to such transaction) an affiliate of the Issuer in compliance with the Indenture; or

(2) if the Issuer properly designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary; or

(3) upon the merger or consolidation of a Guarantor with and into the Issuer or another Guarantor that is the surviving Person of such merger or consolidation; or

(4) upon legal defeasance of the Issuer’s and all Guarantors’ obligations under the Notes and the Note Guarantees or satisfaction and discharge of the Indenture, in each case, in accordance with the provisions of the Indenture.

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Standstill Periods with respect to the Guarantees

Pursuant to the subordination provisions of the Indenture, for so long as any Designated Senior Indebtedness (including any guarantee of other Designated Senior Indebtedness) of any Guarantor shall be outstanding, the liabilities under the Note Guarantees will not become due and the Trustee acting on behalf of the Holders of the Notes will not be entitled to commence any action, suit or proceeding to enforce the Note Guarantee against such Guarantor (each, an “Enforcement Action”) unless and until (a) an Event of Default under the Notes has occurred, (b) the Trustee has served a default notice on the Representative of Designated Senior Indebtedness, and (c) the Standstill Period has expired. “Standstill Period” means the period commencing on the date when the Trustee serves a default notice on the Representative of Designated Senior Indebtedness and expiring on the earliest of the date on which (a) 90 days shall have elapsed following the date on which the Trustee shall have served a default notice to the Representative of Designated Senior Indebtedness, (b) the Designated Senior Indebtedness of such Guarantor shall be due and payable in full, or shall have been declared to be due in full, or there shall have been a demand for payment in full thereof, or any enforcement or collection action shall have been commenced with respect thereto, (c) any other Indebtedness of one or more Guarantors in excess of $500,000 in the aggregate shall be due and payable in full, or shall have been declared to be due in full, or there shall have been a demand for payment in full thereof, or any enforcement or collection action shall have been commenced with respect thereto, and (d) an Event of Default described in clause (vii), (viii), (ix), (x) or (xi) under “—Defaults” shall have occurred; provided, however, that in the event that there has been any prior Standstill Period in the immediately preceding twelve-month period, the duration of the Standstill Period will be automatically reduced by the cumulative duration of all prior Standstill Periods that occurred during the preceding twelve-month period (it being understood that the Standstill Period may terminate immediately after commencing pursuant to this proviso). The Guarantors will agree to pay, in addition to the amount stated above, any and all expenses (including reasonable counsel fees and expenses) incurred by the Trustee acting on behalf of the Holders of Notes in enforcing any rights under the Note Guarantees. The Intercompany Notes and the Intercompany Guarantees will contain provisions substantially similar to those described above.

Pledge

Pursuant to the Indenture the Issuer will grant, assign and pledge (the “Pledge”) to the Trustee, for its benefit and for the benefit of the Holders of the Notes, a security interest in the Intercompany Notes held by the Issuer and related Intercompany Guarantees, along with the Issuer’s partnership interests in Holdings and all dividends, distributions, cash, instruments and other property and proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any of the foregoing, and each of ASC and the Blocker Corporations will Pledge to the Trustee, for its benefit and for the benefit of the Holders of the Notes, a security interest in its partnership interests in Holdings and all dividends, distributions, cash, instruments and other property and proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any of the foregoing, (collectively, the “Collateral”), other than in each case such Collateral that may be released from the Pledge in accordance with the Indenture. The security interest in the Collateral shall be a first priority security interest. However, absent any Default, the Issuer, ASC and the Blocker Corporations will be able to exercise all rights under their respective partnership interests in Holdings, provided that no amendment, modification or waiver of the terms of the Intercompany Notes or Intercompany Guarantees shall be made without the prior consent of the Holders of a majority of the aggregate principal amount of Notes outstanding, other than certain immaterial amendments which do not adversely affect the value of the Collateral or the rights of the Holders. However, without the consent of each Holder of an outstanding Note, no amendment to the Intercompany Notes may, among other things, (i) reduce the percentage of Holders who must consent to an amendment, (ii) reduce the rate of or extend the time for payment of interest, (iii) reduce the principal of or extend the stated maturity, (iv) reduce the premium payable upon the redemption or change the time at which the Intercompany Notes may be redeemed, (v) make any Intercompany Note payable in money other than U.S. dollars, (vi) make any change to the subordination provisions of the Intercompany Guarantees that adversely affects the rights of any holder of Intercompany Notes, or (vii) impair the right of any holder of Intercompany Notes to receive payment of principal of, premium, if any, and interest on such holder’s Intercompany Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such

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holder’s Intercompany Notes. In addition, the Issuer will covenant not to enforce any Intercompany Guarantee issued to it or the Intercompany Notes issued to it by Holdings unless instructed to do so by the Trustee on behalf of the Holders of the Notes.

The Indenture will require that additional Collateral be pledged in connection with the issuance of any Additional Notes and that such additional Collateral be of the same type as the existing Collateral and that such additional Collateral bears the same proportionate relationship to the principal amount of the Additional Notes as the then existing Collateral bears to the principal amount of the Notes then outstanding.

In connection with or after a redemption of Notes in part, or a purchase of Notes in part pursuant to the provisions described under “Change of Control” and the offer to purchase provisions under “Asset Sales,” the Indenture permits the Issuer to request a pro rata release of the Collateral, based on the percentage of the Notes redeemed or purchased.

If an Event of Default occurs under the Indenture, the Trustee, on behalf of the Holders of the Notes, in addition to any rights or remedies available to it under the Indenture, may take such action as it deems advisable to protect and enforce its rights in the Collateral, including the institution of foreclosure proceedings. The proceeds received by the Trustee from any foreclosure will be applied by the Trustee first to pay the expenses of such foreclosure and fees and other amounts then payable to the Trustee under the Indenture and, thereafter, to make payments on the Notes.

Subordination of the Guarantees

The Indebtedness evidenced by each Guarantee will be subordinated in right of payment to all existing and future Guarantor Senior Indebtedness of the applicable Guarantor and will rank pari passu with any other Indebtedness of such Guarantor. Under the subordination provisions of the Indenture with respect to the Note Guarantees and under the Intercompany Guarantees, no Guarantor may make any payment of principal of, or premium (if any) or interest on, the Guarantees (collectively, “pay the Guarantees”) if (i) a default in the payment of the principal of, premium, if any, or interest on any Guarantor Senior Indebtedness shall have occurred and be continuing beyond any applicable grace period, or (ii) any other default on such Guarantor Senior Indebtedness occurs and the maturity of such Guarantor Senior Indebtedness is accelerated in accordance with its terms unless, in either case, the default has been cured or waived and any such acceleration has been rescinded or such Guarantor Senior Indebtedness has been paid in full. During the continuance of any default (other than a default described in clause (i) or (ii) of the second preceding sentence) with respect to any Designated Senior Indebtedness pursuant to which the maturity thereof may be accelerated immediately without further notice (except such notice as may be required to effect such acceleration) or upon the expiration of any applicable grace periods, no Guarantor may pay the Guarantees for a period (a “Payment Blockage Period”) commencing upon the receipt by ASG (with a copy to the Trustee) of written notice (a “Blockage Notice”) of such default from the Representative of Designated Senior Indebtedness specifying an election to effect a Payment Blockage Period and ending 89 days thereafter (or earlier if such Payment Blockage Period is terminated (i) by written notice to ASG (with a copy to the Trustee) from the Person or Persons who gave such Blockage Notice, (ii) by repayment in full of Designated Senior Indebtedness or (iii) because the default giving rise to such Blockage Notice is no longer continuing). Notwithstanding the provisions described in the immediately preceding sentence (but subject to the provisions contained in the second sentence of this paragraph and in the next paragraph), unless the holders of such Designated Senior Indebtedness or the Representative of such holders have accelerated the maturity of such Designated Senior Indebtedness, the Guarantor may pay the Guarantees, after the end of such Payment Blockage Period. Not more than one Blockage Notice may be given in any consecutive 360-day period, irrespective of the number of defaults with respect to Designated Senior Indebtedness during such period. For purposes of this provision, no default or event of default that existed or was continuing on the date of the commencement of any Payment Blockage Period with respect to the Designated Senior Indebtedness initiating such Payment Blockage Period shall be, or be made, the basis of the commencement of a subsequent Payment Blockage Period by the Representative of such Designated Senior Indebtedness, unless such default or event of default shall have been cured or waived for a period of not less than 90 consecutive days.

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“Designated Senior Indebtedness,” with respect to any Guarantor, means:

(1) any Indebtedness of such Guarantor under the Senior Credit Documents; and

(2) after payment in full of all obligations under the Senior Credit Documents, any other Guarantor Senior Indebtedness permitted by the Indenture, the principal amount of which is $25 million or more and that has been designated by the Issuer or such Guarantor as “Designated Senior Indebtedness;”

provided, however, that the pledge by Holdings of the equity interests in ASG to secure the Indebtedness of ASG under the Senior Credit Documents and the limited recourse guarantee to the extent of such pledge issued by Holdings shall not be Designated Senior Indebtedness.

Upon any payment or distribution of the assets of any Guarantor upon a total or partial liquidation or dissolution or reorganization of or similar proceeding relating to the Guarantor or its property, the holders of Guarantor Senior Indebtedness will be entitled to receive payment in full of the Guarantor Senior Indebtedness before the Holders of Notes or Intercompany Notes are entitled to receive any payment under the pertinent Guarantee, and until the Guarantor Senior Indebtedness is paid in full, any payment or distribution to which the Holders of Notes or Intercompany Notes would be entitled but for the subordination provisions of the Guarantees will be made to holders of the Guarantor Senior Indebtedness as their interests may appear (except that Holders of Notes or Intercompany Notes may receive and retain (i) Permitted Junior Securities, and (ii) payments made from the trust described under “—Defeasance” so long as, on the date or dates the respective amounts were paid into the trust, such payments were made with respect to the Notes or the Intercompany Notes without violating the subordination provisions in the Guarantees). If a distribution is made to the Holders or the Trustee for the benefit of the Holders, that due to the subordination provisions of the Guarantees should not have been made to them, the Holders or the Trustee, as applicable, will be required to hold it in trust for the holders of Guarantor Senior Indebtedness and pay it over to them as their interests may appear.

By reason of such subordination provisions contained in the Guarantees, in the event of insolvency, creditors of Holdings, ASG and the other Guarantors who are holders of Guarantor Senior Indebtedness may recover more, ratably, than the Holders of Notes.

Change of Control

Unless the Issuer has exercised its right to redeem all of the Notes as described under “—Optional Redemption”, upon the occurrence of any of the following events (each, a “Change of Control”), each Holder will have the right to require the Issuer to repurchase all or any part of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase (subject to the right of Holders of record on the relevant record date to receive interest due on the relevant interest payment date): (i) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the Issuer’s or Holdings’ assets to any person or group (as such term is used in Section 13(d)(3) of the Exchange Act), (ii) the adoption of a plan relating to the liquidation or dissolution of the Issuer or Holdings (provided that such clause shall not apply with respect to Holdings at any time that the Issuer owns 100% of the equity interests of Holdings), (iii) the direct or indirect acquisition by any person or group (as such term is used in Section 13(d)(3) of the Exchange Act) other than the Permitted Holders of a direct or indirect interest in more than 45% of the ownership of the Issuer, or the voting power of the voting stock of the Issuer, by way of purchase, merger or consolidation or otherwise (other than the creation of a holding company that does not involve a change in the beneficial ownership of the Issuer as a result of such transaction), (iv) the merger or consolidation of the Issuer with or into another Person or the merger of another Person into the Issuer with the effect that immediately after such transaction the stockholders of the Issuer immediately prior to such transaction hold, directly or indirectly, less than 35% of the total voting power of all securities generally entitled to vote in the election of directors, managers, or trustees of the Person surviving such merger or consolidation or (v) the first day on which a majority of the members of the Board of Directors of the Issuer are not Continuing Directors.

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In the event that at the time of such Change of Control the terms of the Senior Credit Documents restrict or prohibit distributions from ASG and its subsidiaries to Holdings and the Issuer which would be necessary to purchase Notes pursuant to this covenant, then prior to the mailing of the notice to Holders provided for in the immediately following paragraph but in any event within 30 days following any Change of Control, the Issuer shall (i) repay in full all amounts owing under the Senior Credit Documents or offer to repay in full all amounts owing under the Senior Credit Documents and repay each lender under the Senior Credit Documents who has accepted such offer or (ii) obtain the requisite consent under the agreements governing the Senior Credit Documents to permit payments on the Intercompany Notes which would in turn permit the repurchase of the Notes as provided for in the immediately following paragraph.

Unless the Issuer has exercised its right to redeem all of the Notes as described under “— Optional Redemption,” within 30 days following any Change of Control (or, at the Issuer’s option, prior to such Change of Control but after public announcement thereof), unless the Issuer has exercised its right to redeem the Notes as described under “—Optional Redemption”, the Issuer shall mail a notice (a “Change of Control Offer”) to each Holder with a copy to the Trustee stating: (1) that a Change of Control has occurred or will occur and that such Holder has (or upon the occurrence will have) the right to require the Issuer to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on a record date to receive interest on the relevant interest payment date); (2) the circumstances and relevant facts and financial information regarding such Change of Control; (3) the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed); (4) the instructions determined by the Issuer, consistent with this covenant, that a Holder must follow in order to have its Notes purchased; and (5) if such Offer is made prior to such Change of Control, that payment is conditioned on the occurrence of such Change of Control. In order for a holder of IDSs to exercise its right to require the Issuer to repurchase the Notes, such holder must voluntarily separate its IDSs.

The Issuer will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

The Issuer will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other applicable U.S. and Canadian securities laws or regulations in connection with the repurchase of Notes pursuant to this covenant. To the extent that the provisions of any securities laws or regulations conflict with provisions of this covenant, the Issuer will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Indenture by virtue thereof.

The Change of Control purchase feature is a result of negotiations between the Issuer, the existing investors and the underwriters. The Issuer has no present intention to engage in a transaction involving a Change of Control, although it is possible that we would decide to do so in the future. Subject to the limitations discussed below, we could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings.

The occurrence of events which would constitute a Change of Control would constitute a default under the Senior Credit Documents. In addition, the terms of the Senior Credit Documents will prohibit ASG and its subsidiaries from making distributions to Holdings and the Issuer if the interest coverage ratio of Holdings is lower than , other than certain permitted distributions, such as to pay interest on the Notes and to pay taxes. Any future credit agreements and other agreements relating to the senior indebtedness of our subsidiaries may contain similar restrictions and provisions or may require such indebtedness to be repurchased upon a Change of Control. In the event that a Change of Control occurs at a time when the Issuer’s Restricted Subsidiaries are prohibited from distributing funds to the Issuer to enable it to purchase the Notes, we would seek consent of the lenders under the Guarantor Senior Indebtedness to the purchase of the Notes or would attempt to refinance the

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borrowings that contain such prohibition, as described above. If we do not obtain such consent or refinance such borrowings, the Issuer will be unable to purchase the Notes. In such case, the Issuer’s failure to purchase tendered Notes would constitute an Event of Default under the Indenture, which would, in turn, constitute a default under the Guarantor Senior Indebtedness. In such circumstances, because of the structural subordination of the Notes to the Guarantor Senior Indebtedness, there can be no assurance that ASG and its subsidiaries will have sufficient funds to repay the Guarantor Senior Indebtedness and make sufficient distributions to the Issuer to enable it to repay the Notes. Moreover, the exercise by the Holders of their right to require the Issuer to repurchase the Notes could cause a default under our Guarantor Senior Indebtedness, even if the Change of Control itself does not, due to the financial effect of such repurchase on the Issuer and its subsidiaries. Finally, the Issuer’s ability to pay cash to the Holders upon a repurchase may be limited by the Issuer’s then existing financial resources. Sufficient funds may not be available when necessary to make any required repurchases.

The definition of Change of Control includes a phrase relating to the sale, lease or transfer of “all or substantially all” the assets of ours and our Subsidiaries taken as a whole. Although there is a developing body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a Holder of Notes to require us to repurchase such Notes as a result of a sale, lease or transfer of less than all of the assets of ours and our Subsidiaries taken as a whole to another Person or group may be uncertain.

Certain Covenants

The Indenture will contain covenants including, among others, the following:

Limitations on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock. The Indenture will provide that (i) the Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) or issue any shares of Disqualified Stock and (ii) the Issuer will not permit any of its Restricted Subsidiaries to issue any shares of Preferred Stock; provided, however, that the Issuer and any Restricted Subsidiary may Incur Indebtedness (including Acquired Indebtedness) or issue shares of Disqualified Stock and any Restricted Subsidiary may issue shares of Preferred Stock if the Fixed Charge Coverage Ratio of Holdings for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred or such Disqualified Stock or Preferred Stock is issued would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred, or the Disqualified Stock or Preferred Stock had been issued, as the case may be, and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.

The foregoing limitations will not apply to:

(a) the Incurrence by the Issuer’s Restricted Subsidiaries of Indebtedness under the Senior Credit Documents and the issuance and creation of letters of credit and bankers’ acceptances thereunder (with letters of credit and bankers’ acceptances being deemed to have a principal amount equal to the face amount thereof), and, without limiting the foregoing, any refinancing or refunding indebtedness in respect thereof, up to an aggregate principal amount of $ million outstanding at any one time;

(b) the Incurrence by the Issuer and the Restricted Subsidiaries of Indebtedness represented by the Notes, the Pledge, the Note Guarantees, the Intercompany Notes and the Intercompany Guarantees, as applicable;

(d) Indebtedness (including Capitalized Lease Obligations) Incurred by the Issuer or any of its Restricted Subsidiaries, to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount which, when aggregated with the principal amount of all other Indebtedness

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then outstanding and Incurred pursuant to this clause (d) and all Refinancing Indebtedness (as defined below) Incurred to refund, refinance or replace any Indebtedness Incurred pursuant to this clause (d), does not exceed the greater of 5% of Total Assets at the time of Incurrence or $20 million;

(e) Indebtedness Incurred by the Issuer or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including without limitation letters of credit in respect of workers’ compensation and personal injury claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance, or with respect to agreements to provide services, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit, such obligations are reimbursed within 30 days following such drawing;

(f) Indebtedness arising from agreements of the Issuer or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, Incurred in connection with the disposition of any business, assets or a Subsidiary of the Issuer in accordance with the terms of the Indenture, other than guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition;

(g) Indebtedness of the Issuer to a Restricted Subsidiary of the Issuer; provided that any such Indebtedness (other than Indebtedness held by a Guarantor) is subordinated in right of payment to the Notes; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary of the Issuer or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary) shall be deemed, in each case to be an Incurrence of such Indebtedness;

(h) shares of Preferred Stock or Disqualified Stock of a Restricted Subsidiary issued to the Issuer or another Restricted Subsidiary of the Issuer; provided that any subsequent issuance or transfer of any Capital Stock or any other event which results in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such shares of Preferred Stock or Disqualified Stock (except to the Issuer or another Restricted Subsidiary of the Issuer) shall be deemed, in each case, to be an issuance of shares of Preferred Stock or Disqualified Stock;

(i) Indebtedness of a Restricted Subsidiary to the Issuer or another Restricted Subsidiary of the Issuer; provided that any such Indebtedness of a Restricted Subsidiary to the Issuer is made pursuant to a written instrument; provided further that any subsequent issuance or transfer of any Capital Stock or any other event which results in any Restricted Subsidiary lending such Indebtedness ceasing to be a Restricted Subsidiary or any other subsequent transfer of any such Indebtedness (except to the Issuer or another Restricted Subsidiary of the Issuer) shall be deemed, in each case, to be an Incurrence of such Indebtedness;

(j) Hedging Obligations that are incurred in the ordinary course of business (1) for the purpose of fixing or hedging interest rate risk with respect to any Indebtedness that is permitted by the terms of the Indenture to be outstanding, (2) for the purpose of fixing or hedging currency exchange rate risk with respect to any currency exchanges or (3) for the purpose of fixing or hedging commodity price risk with respect to any commodity purchases;

(k) obligations in respect of performance, bid and surety bonds and completion guarantees provided by the Issuer or any Restricted Subsidiary in the ordinary course of business;

(l) Indebtedness or Disqualified Stock of the Issuer and any Restricted Subsidiary not otherwise permitted hereunder in an aggregate principal amount, which when aggregated with the principal amount or liquidation preference of all other Indebtedness and Disqualified Stock then outstanding and Incurred pursuant to this clause (1), does not exceed the greater of 5% of Total Assets or $20 million at any one time outstanding; provided, however, that Indebtedness of Foreign Subsidiaries, when aggregated with the principal amount of all other Indebtedness of Foreign Subsidiaries then outstanding and Incurred pursuant to

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this clause (l), shall not exceed $10 million (or the equivalent thereof in any other currency) at any one time outstanding (it being understood that any Indebtedness Incurred under this clause (l) shall cease to be deemed Incurred or outstanding for purposes of this clause (l) but shall be deemed to be Incurred for purposes of the first paragraph of this covenant from and after the first date on which the Issuer could have Incurred such Indebtedness under the first paragraph of this covenant without reliance upon this clause (l));

(m) any guarantee by the Issuer or a Restricted Subsidiary of Indebtedness or other obligations of the Issuer or any of its Restricted Subsidiaries so long as the Incurrence of such Indebtedness Incurred by the Issuer or such Restricted Subsidiary is permitted under the terms of the Indenture;

(n) the Incurrence by the Issuer or any of its Restricted Subsidiaries of Indebtedness which serves to refund or refinance any Indebtedness Incurred as permitted under the first paragraph of this covenant and clauses (b), (c), (d), (l), (n) and (o) of this paragraph, or any Indebtedness issued to so refund or refinance such Indebtedness (subject to the following proviso, “Refinancing Indebtedness”) prior to its respective maturity; provided, however, that such Refinancing Indebtedness:

(i) has a Weighted Average Life to Maturity at the time such Refinancing Indebtedness is Incurred which is not less than the remaining Weighted Average Life to Maturity of the Indebtedness being refunded or refinanced;

(ii) has a Stated Maturity which is no earlier than the Stated Maturity of the Indebtedness being refunded or refinanced;

(iii) to the extent such Refinancing Indebtedness refinances Indebtedness pari passu with the Notes, the Guarantees or the obligations of the Restricted Subsidiaries that are obligors under the Intercompany Notes or Intercompany Guarantees, as applicable, is pari passu with the Notes, the Guarantees, or the obligations of such Subsidiaries under the Intercompany Notes or Intercompany Guarantees, as applicable;

(iv) is Incurred in an aggregate principal amount (or if issued with original issue discount, an aggregate issue price) that is equal to or less than the aggregate principal amount (or if issued with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being refinanced plus premium and fees Incurred in connection with such refinancing; and

(v) shall not include Indebtedness of the Issuer or a Restricted Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary;

and provided further that subclauses (i) and (ii) of this clause (n) will not apply to any refunding or refinancing of any Guarantor Senior Indebtedness;

(o) Indebtedness or Disqualified Stock of Persons that are acquired by the Issuer or any of its Restricted Subsidiaries or merged into a Restricted Subsidiary in accordance with the terms of the Indenture; provided, however, that such Indebtedness or Disqualified Stock is not Incurred in contemplation of such acquisition or merger or to provide all or a portion of the funds or credit support required to consummate such acquisition or merger; provided further, however, that after giving effect to such acquisition and the Incurrence of such Indebtedness either (i) the Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of this covenant or (ii) the Fixed Charge Coverage Ratio would be greater than immediately prior to such acquisition;

(p) Contribution Indebtedness;

(q) the Incurrence of the Issuer’s Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an Incurrence of Indebtedness by a Restricted Subsidiary;

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(r) Indebtedness arising by reason of a Lien created or permitted to exist in compliance with the covenant “—Liens”;

(s) Indebtedness arising from honoring a check, draft or similar instrument drawn against insufficient funds, provided that such Indebtedness is extinguished within five Business Days of its incurrence;

(t) the Incurrence by the Issuer or its Restricted Subsidiaries of obligations in respect of performance, appeal and surety bonds, completion guarantees, insurance bonds and other similar bonds provided by the Issuer or such Restricted Subsidiary in the ordinary course of business;

(u) Indebtedness underlying the IDSs or to be issued in the form of Additional Notes upon the exchange of any ASLP Units or the exercise of any options or warrants to acquire Additional Notes and Common Stock of the Issuer or the issuance of Additional Notes or other Senior Indebtedness evidenced by a different series of notes in connection with the issuance of shares of Common Stock of the Issuer and Indebtedness evidenced by Intercompany Notes, if any, and Intercompany Guarantees, if any, issued in connection with Incurrence of such Indebtedness, provided that (i) the ratio of the aggregate principal amount of such Additional Notes or other Senior Indebtedness over the number of such additional shares shall not exceed the equivalent ratio with respect to the Notes and Common Stock outstanding prior to such issuance and (ii) (A) if the Issuer issues such additional Indebtedness in exchange for cash, the Issuer uses such cash to acquire additional Intercompany Notes such that the principal amount of the Intercompany Notes and Intercompany Guarantees subject to the Pledge remains equal to the outstanding principal amount of the Notes and (B) if the Issuer issues such additional Indebtedness in exchange for other property, and in connection with such issuance acquires additional Intercompany Notes, such Intercompany Notes are made subject to the Pledge and Intercompany Guarantees; and

(v) Indebtedness in the form of Intercompany Notes issued to ASLP upon exercise of management options to acquire units in ASLP in an aggregate principal amount not to exceed $ million.

For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (a) through (q) above or is entitled to be Incurred pursuant to the first paragraph of this covenant, the Issuer shall, in its sole discretion, classify or reclassify such item of Indebtedness in any manner that complies with this covenant and such item of Indebtedness will be treated as having been Incurred pursuant to only one of such clauses or pursuant to the first paragraph hereof. Any other obligation of the obligor on such Indebtedness (or any other person who could have incurred such Indebtedness under this covenant) arising under any Guarantee, Lien or letter of credit supporting such Indebtedness shall be disregarded to the extent that such Guarantee, Lien or letter of credit secures the principal amount of such Indebtedness. The amount of Indebtedness issued at a price less than the principal amount thereof shall be equal to the amount of liability in respect thereof determined in accordance with GAAP. Accrual of interest, the accretion of accreted value and the payment of interest in the form of additional Indebtedness will not be deemed to be an Incurrence of Indebtedness for purposes of this covenant.

Limitation on Restricted Payments. The Indenture will provide that the Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(i) declare or pay any dividend or make any distribution on account of the Issuer’s or any of its Restricted Subsidiaries’ Equity Interests, including any payment made in connection with any merger or consolidation involving the Issuer (other than (A) dividends or distributions by the Issuer payable solely in Equity Interests (other than Disqualified Stock) of the Issuer or (B) dividends or distributions by a Restricted Subsidiary so long as, in the case of any dividend or distribution payable on or in respect of any class or series of securities issued by a Restricted Subsidiary other than a Wholly Owned Restricted Subsidiary, the Issuer or a Restricted Subsidiary receives at least its pro rata share of such dividend or distribution in accordance with its Equity Interests in such class or series of securities);

(ii) purchase or otherwise acquire or retire for value any Equity Interests of the Issuer or any Restricted Subsidiary held by Persons other than the Issuer or another Restricted Subsidiary, other than exchanges of

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ASLP Units for Common Stock and Notes pursuant to and in accordance with the ASLP Unit Exchange Agreement; or

(iii) make any Restricted Investment (all such payments and other actions set forth in this clause (iii) and clauses (i) and (ii) above being collectively referred to as “Restricted Payments”),

unless, at the time of such Restricted Payment:

(a) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

(b) immediately after giving effect to such transaction on a pro forma basis, the Issuer could Incur $1.00 of additional Indebtedness under the provisions of the first paragraph of “—Limitations on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”; and

(c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Issuer and its Restricted Subsidiaries after the Issue Date (including Restricted Payments permitted by clauses (1), (4), (5), (6), (7) and (14) of the next succeeding paragraph, but excluding all other Restricted Payments permitted by the next succeeding paragraph), is less than the sum of, without duplication:

(i) 50% of the Consolidated Net Income of the Issuer for the period (taken as one accounting period) from the fiscal quarter that first begins after the Issue Date to the end of the Issuer’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Consolidated Net Income for such period is a deficit, minus 100% of such deficit), plus

(ii) 100% of the aggregate net proceeds, including cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash, received by the Issuer since the Issue Date from the issue or sale of Equity Interests of the Issuer (excluding Refunding Capital Stock (as defined below), Designated Preferred Stock, Excluded Contributions and Disqualified Stock), excluding Equity Interests issued upon exchange of ASLP Units or conversion of Indebtedness or upon exercise of warrants or options (other than an issuance or sale to a Subsidiary of the Issuer or an employee stock ownership plan or trust established by the Issuer or any of its Subsidiaries), plus

(iii) 100% of the aggregate amount of contributions to the capital of the Issuer received in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash since the Issue Date (other than Excluded Contributions, Refunding Capital Stock, Designated Preferred Stock and Disqualified Stock), plus

(iv) 100% of the aggregate amount received in cash and the Fair Market Value (as determined in accordance with the next succeeding sentence) of property other than cash received from (A) the sale or other disposition (other than to the Issuer or a Restricted Subsidiary) of Restricted Investments made by the Issuer and its Restricted Subsidiaries and from repurchases and redemptions of such Restricted Investments from the Issuer and its Restricted Subsidiaries by any Person (other than the Issuer or any of its Subsidiaries) and from repayments of loans or advances which constituted Restricted Investments, (B) the sale (other than to the Issuer or a Subsidiary) of the Capital Stock of an Unrestricted Subsidiary or (C) a distribution or dividend from an Unrestricted Subsidiary, plus

(v) in the event any Unrestricted Subsidiary has been redesignated as a Restricted Subsidiary or has been merged, consolidated or amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, the Issuer or a Restricted Subsidiary, the Fair Market Value (as determined in good faith by the Board of Directors) of the Investment of the Issuer in such Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable), after deducting any Indebtedness associated with the Unrestricted Subsidiary so designated or combined or any Indebtedness associated with the assets so transferred or conveyed, not to exceed,

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in the case of any Unrestricted Subsidiary, the amount of Investments previously made by the Issuer or any Restricted Subsidiary in such Unrestricted Subsidiary, which amount was included in the calculation of the amount of Restricted Payments, plus

(vi) the amount of all Specified Cash Contributions.

The Fair Market Value of property other than cash covered by clauses (ii), (iii) and (iv) above shall be determined in good faith by the Issuer and (A) in the event of property with a Fair Market Value in excess of $ million, shall be set forth in an Officers’ Certificate or (B) in the event of property with a Fair Market Value in excess of $ million, shall be set forth in a resolution approved by at least a majority of the Board of Directors.

The foregoing provisions will not prohibit:

(1) the payment of any dividend or distribution within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of the Indenture;

(2) (a) the repurchase, retirement or other acquisition of any Equity Interests (“Retired Capital Stock”) or Subordinated Indebtedness of the Issuer or Holdings, in exchange for, or out of the proceeds of the substantially concurrent sale of, Equity Interests of the Issuer or Holdings, as applicable, or contributions to the equity capital of the Issuer or Holdings, as applicable (other than any Disqualified Stock or any Equity Interests sold to a Subsidiary of the Issuer or Holdings, as applicable, or to an employee stock ownership plan or any trust established by the Issuer or Holdings, as applicable, or any of their respective Subsidiaries) (collectively, including any such contributions, “Refunding Capital Stock”) and (b) the declaration and payment of accrued dividends on the Retired Capital Stock out of the proceeds of the substantially concurrent sale (other than to a Subsidiary of the Issuer or Holdings or to an employee stock ownership plan or any trust established by the Issuer or Holdings or any of their respective Subsidiaries) of Refunding Capital Stock;

(3) the purchase of Equity Interests by the Issuer on behalf of a long term incentive plan or of other employee benefit plans in an account not to exceed $2 million in any 12 month period;

(4) the declaration and payment of dividends or distributions to holders of any class or series of Disqualified Stock of the Issuer or any of its Restricted Subsidiaries issued or incurred in accordance with the covenant entitled “—Limitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock”;

(5) the declaration and payment of dividends or distributions to holders of any class or series of Designated Preferred Stock issued after the Issue Date; provided, however, that (A) for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date of issuance of such Designated Preferred Stock, after giving effect to such issuance (and the payment of dividends or distributions) on a pro forma basis, Holdings would have had a Fixed Charge Coverage Ratio of at least 2.00 to 1.00 and (B) the aggregate amount of dividends declared and paid pursuant to this clause (5) does not exceed the net cash proceeds received by the Issuer from the sale of Designated Preferred Stock issued after the Issue Date;

(6) Investments in Unrestricted Subsidiaries having an aggregate Fair Market Value, taken together with all other Investments made pursuant to this clause (6) that are at that time outstanding, not to exceed $2.5 million (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(7) the payment of dividends on the shares of the Issuer’s common stock underlying outstanding IDSs or on shares of the Issuer’s common stock outstanding upon exchange of any IDSs for or separation of any IDSs into the underlying securities or issued in connection with the issuance of Additional Notes or other Senior Indebtedness evidenced by a different series of notes, the payment of dividends on the shares of the

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Issuer’s common stock, provided, that the aggregate amount of dividends per share paid in any fiscal quarter may not exceed ¼ of the sum of (i) $ , and (ii) 90% of the Issuer’s Adjusted EBITDA per share in excess of $ for the twelve-month period ended on the last day of the most recent fiscal quarter for which financial statements are available;

(8) Investments that are made with Excluded Contributions;

(9) repurchases of Equity Interests deemed to occur upon exercise of stock options and warrants if such Equity Interests represent a portion of the exercise price of such options or warrants, or cash paid in lieu of fractional Equity Interests in an aggregate amount not to exceed $50,000;

(10) the making of distributions by Holdings, provided that distributions shall be concurrently made to the Issuer, ASLP, ASC and the Blocker Corporations in proportion to their respective ownership of Holdings;

(11) the exchange of ASLP Units for the Issuer’s Notes and shares of its common stock in accordance with the ASLP Unit Exchange Agreement;

(12) Permitted Payments;

(13) the Transactions; and

(14) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Issuer, Holdings, ASLP or any Restricted Subsidiary of the Issuer held by any member of the Issuer’s (or any of its Restricted Subsidiaries’) or ASLP’s management pursuant to any management equity subscription agreement or stock option agreement in effect as of the date of the Indenture or adopted by the Board of Directors of the Issuer after the Issue Date, or dividends or distributions to effect such transactions; provided that the aggregate price paid, dividended or distributed for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $2 million in any twelve-month period;

provided, however, that at the time of, and after giving effect to, any Restricted Payment permitted under clauses (1), (4), (5), (6) and (7), no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; provided further, however, that for purposes of determining the aggregate amount expended for Restricted Payments in accordance with clause (c) of the immediately preceding paragraph, only the amounts expended under clauses (1), (4), (5), (6), (7) and (14) shall be included.

Notwithstanding the foregoing: (a) the Issuer may not pay any dividends or make any distributions to the holders of its Capital Stock, and the Restricted Payments described in clauses (3), (4), (5), (6), (7), (8), (9) and (14) shall be prohibited, if and so long as the Fixed Charge Coverage Ratio of Holdings (with respect to any twelve-month period ended on December 31, June 30 or September 30) or the Adjusted Fixed Charge Coverage Ratio of Holdings (with respect to any period ended on March 31), in each case, for the period ended on the last day of the most recent fiscal quarter for which the financial statements are available, is less than ; and (b) the Issuer may not pay any dividends or make any distributions to the holders of its Capital Stock, and the Restricted Payments described in clauses (1), (2), (3), (4), (5), (6), (7), (8), (9), (13) and (14) shall be prohibited, during any interest deferral period or, after the end of any interest deferral period, so long as any Deferred Interest has not been paid in full.

As of the Issue Date, some of the Issuer’s Subsidiaries will be Restricted Subsidiaries. The Issuer will not permit any Restricted Subsidiary to become a Unrestricted Subsidiary except pursuant to the definition of “Unrestricted Subsidiary.” For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Issuer and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated will be deemed to be Restricted Payments in an amount determined as set forth in the last sentence of the definition of “Investments.” Such designation will only be permitted if a Restricted Payment in such amount would be permitted at such time (whether pursuant to the first paragraph of this covenant or under clause (6), or (8)) and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

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Dividend and Other Payment Restrictions Affecting Subsidiaries. The Indenture will provide that the Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

(a) (i) pay dividends or make any other distributions to the Issuer or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with respect to any other interest or participation in, or measured by, its profits, or (ii) pay any Indebtedness owed to the Issuer or any of its Restricted Subsidiaries;

(b) make loans or advances to the Issuer or any of its Restricted Subsidiaries; or

except in each case for such encumbrances or restrictions existing under or by reason of:

(1) contractual encumbrances or restrictions in effect on the Issue Date, including pursuant to the Credit Agreement and the other Senior Credit Documents;

(2) the Indenture, the Notes, the Intercompany Notes and the Intercompany Note Guarantees;

(3) applicable law or any applicable rule, regulation or order;

(4) any agreement or other instrument relating to Indebtedness of a Person acquired by the Issuer or any Restricted Subsidiary which was in existence at the time of such acquisition (but not created in contemplation thereof or to provide all or any portion of the funds or credit support utilized to consummate such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired;

(5) any restriction with respect to a Restricted Subsidiary imposed pursuant to an agreement entered into for the sale or disposition of all or substantially all the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition;

(6) Indebtedness otherwise permitted to be Incurred pursuant to the covenants described under “—Limitations on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” and “—Liens” that limit the right of the debtor to dispose of the assets securing such Indebtedness;

(7) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business;

(8) customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business;

(9) customary provisions contained in leases, agreements to provide services and other similar agreements entered into in the ordinary course of business that impose restrictions of the type described in clause (c) above;

(10) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in clause (c) above; or restrictions on the transfer of property or assets required by any regulatory authority having jurisdiction over the Issuer or any Restricted Subsidiary or any of their businesses; or

(11) any encumbrances or restrictions of the type referred to in clauses (a), (b) and (c) above imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (1) through (10) above; provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Board of

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Directors, no more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing.

Asset Sales. The Indenture will provide that the Issuer will not, and will not permit any of its Restricted Subsidiaries to, cause or make an Asset Sale, unless (x) the Issuer, or its Restricted Subsidiaries, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as determined in good faith by the Issuer) of the assets sold or otherwise disposed of and (y) except in the case of a Permitted Asset Swap, at least 75% of the consideration therefor received by the Issuer, or such Restricted Subsidiary, as the case may be, is in the form of Cash Equivalents; provided that the amount of:

(a) any liabilities (as shown on the Issuer’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto) of the Issuer or any Restricted Subsidiary that are assumed by the transferee of any such assets;

(b) any notes or other obligations or other securities received by the Issuer or such Restricted Subsidiary from such transferee that are converted by the Issuer or such Restricted Subsidiary into cash within 180 days of the receipt thereof (to the extent of the cash received); and

(c) any Designated Noncash Consideration received by the Issuer or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Noncash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed 7.5% of Total Assets (with the Fair Market Value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value)

shall be deemed to be Cash Equivalents for the purposes of this provision.

Within 365 days after the Issuer’s or any Restricted Subsidiary’s receipt of the Net Proceeds of any Asset Sale, the Issuer or such Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at its option:

(i) to permanently reduce Obligations under the Senior Credit Documents (and, in the case of revolving Obligations, to correspondingly reduce commitments with respect thereto) or other Senior Indebtedness or Guarantor Senior Indebtedness (provided that if the Issuer shall so reduce Obligations under Senior Indebtedness, it will offer to equally and ratably reduce Obligations under the Notes by making an offer (in accordance with the procedures set forth below for an Asset Sale Offer) to all Holders to purchase at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, the pro rata principal amount of Notes) or Indebtedness of a Restricted Subsidiary, in each case other than Indebtedness owed to the Issuer or a Restricted Subsidiary of the Issuer;

(ii) to an investment in any one or more Persons, businesses, capital expenditures or acquisitions of other assets in each case engaged, used or useful in a Similar Business; and/or

(iii) to make an investment in properties or assets that replace the properties and assets that are the subject of such Asset Sale.

Pending the final application of any such Net Proceeds, the Issuer or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Proceeds in Cash Equivalents or Investment Grade Securities. The Indenture will provide that any Net Proceeds from any Asset Sale that are not applied as provided and within the time period set forth in the first sentence of this paragraph will be deemed to constitute “Excess Proceeds.” When the aggregate amount of Excess Proceeds exceeds $12.5 million, the Issuer shall make an offer to all Holders of Notes (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes that may be purchased out of the share of such Excess Proceeds payable to the Issuer in respect of the Intercompany Notes at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date fixed for the closing of such offer, in

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accordance with the procedures set forth in the Indenture. The Issuer will commence an Asset Sale Offer with respect to Excess Proceeds within ten Business Days after the date that Excess Proceeds exceed $12.5 million by mailing the notice required pursuant to the terms of the Indenture, with a copy to the Trustee. To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the Issuer’s share of such Excess Proceeds, any Excess Proceeds remaining after distribution on the Intercompany Notes sufficient to cause the Issuer to receive the amount necessary to repurchase the Notes so tendered may be used by the Issuer and its subsidiaries for general corporate purposes. If the aggregate principal amount of Notes surrendered by Holders thereof exceeds the Issuer’s share of such Excess Proceeds, the Trustee shall select the Notes to be purchased in the manner described below. Upon completion of any such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

The Issuer will comply with the requirements of Rule 14e-1 under the Exchange Act and the applicable Canadian securities laws and any other securities laws and regulations to the extent such laws or regulations are applicable in connection with the repurchase of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the Indenture by virtue thereof. If more Notes are tendered pursuant to an Asset Sale Offer than the Issuer is required to purchase, selection of such Notes for purchase will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which such Notes are listed, or if such Notes are not so listed, on a pro rata basis, by lot or by such other method as the Trustee shall deem fair and appropriate (and in such manner as complies with applicable legal requirements).

Notices of an Asset Sale Offer shall be mailed by first class mail, postage prepaid, at least 30 but not more than 60 days before the purchase date to each Holder of Notes at such Holder’s registered address. If any Note is to be purchased in part only, any notice of purchase that relates to such Note shall state the portion of the principal amount thereof that has been or is to be purchased.

A partial redemption of the Note will result in automatic separation of IDSs. A new Note in principal amount equal to the unpurchased portion of any Note purchased in part will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the purchase date unless the Issuer defaults in payment of the purchase price, interest shall cease to accrue on Notes or portions thereof purchased.

The terms of the Senior Credit Documents will provide that certain asset sales with respect to ASG and its subsidiaries constitute a default thereunder. In addition, the terms of the Senior Credit Documents will prohibit ASG and its subsidiaries from making distributions to Holdings and the Issuer if the interest coverage ratio of Holdings is lower than , other than certain permitted distributions, such as to pay interest on the Notes and to pay taxes. Any future credit agreements and other agreements relating to the senior indebtedness of our subsidiaries may contain similar restrictions and provisions. In the event that after the occurrence of an Asset Sale the Issuer’s Restricted Subsidiaries are prohibited from distributing funds to the Issuer to enable it to purchase the Notes, we could seek consent of the lenders under the Guarantor Senior Indebtedness to the purchase of the Notes or could attempt to refinance the borrowings that contain such prohibition. If we don’t obtain such consent or refinance such borrowings, the Issuer will be unable to purchase the Notes. In such case, the Issuer’s failure to purchase tendered Notes would constitute an Event of Default under the Indenture, which would, in turn, constitute a default under the Guarantor Senior Indebtedness. In such circumstances, because of the structural subordination of the Notes to the Guarantor Senior Indebtedness, there can be no assurance that ASG and its subsidiaries will have sufficient funds to repay the Guarantor Senior Indebtedness and make sufficient distributions to the Issuer to enable it to repay the Notes.

Transactions with Affiliates. The Indenture will provide that the Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction or series of transactions, contract, agreement, understanding, loan, advance or guarantee

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with, or for the benefit of, any Affiliate of the Issuer (each of the foregoing, an “Affiliate Transaction”) involving aggregate consideration in excess of $50,000, unless:

(a) such Affiliate Transaction is on terms that are not materially less favorable to the Issuer or the relevant Restricted Subsidiary than those that could have been obtained in a comparable transaction by the Issuer or such Restricted Subsidiary with an unrelated Person; and

(b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5 million, the Issuer delivers to the Trustee a resolution adopted by the majority of the Board of Directors of the Issuer, approving such Affiliate Transaction and set forth in an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (a) above.

The foregoing provisions will not apply to the following:

(i) transactions between or among the Issuer and/or any of its Restricted Subsidiaries;

(ii) Permitted Investments and Restricted Payments permitted by the provisions of the Indenture described above under the covenant “—Limitation on Restricted Payments”;

(iii) the payment of reasonable and customary fees and other compensation paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of the Issuer or any Restricted Subsidiary;

(iv) transactions in which the Issuer or any of its Restricted Subsidiaries, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Issuer or such Restricted Subsidiary from a financial point of view or meets the requirements of clause (a) of the preceding paragraph;

(v) payments or loans to employees or consultants in the ordinary course of business which are approved by a majority of the Board of Directors of the Issuer or a Restricted Subsidiary, as applicable in good faith;

(vi) any agreement as in effect as of the Issue Date (including, without limitation, any agreement with ASLP and the Expense Reimbursement Agreement) or any amendment thereto (so long as any such amendment is not disadvantageous to the holders of the Notes in any material respect) or any transaction contemplated thereby;

(vii) the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including the ASLP Unit Exchange Agreement and any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any similar agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by the Issuer or any of its Restricted Subsidiaries of its obligations under any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (vii) to the extent that the terms of any such amendment or new agreement are not otherwise disadvantageous to the Holders of the Notes in any material respect;

(viii) transactions with customers, clients, suppliers or purchasers or sellers of goods or services, in each case in the ordinary course of business and otherwise in compliance with the terms of the Indenture, which are fair to the Issuer and its Restricted Subsidiaries in the reasonable determination of the Board of Directors or the senior management of the Issuer, or are on terms at least as favorable as might reasonably have been obtained at such time from an unaffiliated party;

(ix) the Transactions; and

(x) the issuance of Capital Stock (other than Disqualified Stock) of the Issuer or IDSs in respect of the Issuer’s securities (including such underlying securities) or Additional Notes and related Intercompany Notes and Intercompany Guarantees or other Senior Indebtedness evidenced by a different series of notes or shares of the Issuer’s Capital Stock to any Permitted Holder.

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Liens. The Indenture will provide that the Issuer will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, Incur or suffer to exist any Lien on any asset or property of the Issuer or such Restricted Subsidiary, or any income or profits therefrom, or assign or convey any right to receive income therefrom, that secures any obligations of the Issuer or any of its Subsidiaries (such lien, the “Initial Lien”) unless the Notes are equally and ratably secured with (or on a senior basis to, in the case of obligations subordinated in right of payment to the Notes) the obligations so secured or until such time as such obligations are no longer secured by a Lien. Any such Lien thereby created in favor of the Notes will be automatically and unconditionally released and discharged upon (i) the release and discharge of the Initial Lien to which it relates, or (ii) any sale, exchange or transfer to any Person not an Affiliate of the Issuer of the property or assets secured by such Initial Lien. The preceding sentence will not require the Issuer or any Restricted Subsidiary to secure the Notes if the Lien consists of a Permitted Lien.

The Indenture will provide that no Guarantor will directly or indirectly create, Incur or suffer to exist any Lien on any asset or property of such Restricted Subsidiary or any income or profits therefrom, or assign or convey any right to receive income therefrom, that secures any obligation of such Restricted Subsidiary (other than Guarantor Senior Indebtedness of such Restricted Subsidiary) (such lien, the “Initial Lien”) unless the Note Guarantee of such Guarantor is equally and ratably secured with (or on a senior basis to, in the case of obligations subordinated on right of payment to such Note Guarantee) the obligations so secured or until such time as such obligations are no longer secured by a Lien. Any such Lien thereby created in favor of the Notes will be automatically and unconditionally released and discharged upon (i) the release and discharge of the Initial Lien to which it relates, or (ii) any sale, exchange or transfer to any Person not an Affiliate of the Issuer of the property or assets secured by such Initial Lien, or of all of the Capital Stock held by the Issuer or any Guarantor in, or all or substantially all the assets of, any Guarantor creating such Initial Lien. The preceding sentence will not require any Guarantor to secure its Note Guarantee if the Lien consists of a Permitted Lien.

Reports and Other Information. The Indenture will provide that notwithstanding that the Issuer may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act or otherwise report on an annual and quarterly basis on forms provided for such annual and quarterly reporting pursuant to rules and regulations promulgated by the Commission, the Issuer will file with the Commission (and provide the Trustee and Holders with copies thereof, without cost to each Holder, within 15 days upon their request), documents and reports that are specified in Sections 13 and 15(d) of the Exchange Act within the time periods specified therein; provided, however, the Issuer shall not be so obligated to file such documents and other reports with the Commission if the Commission does not permit such filing, in which event the Issuer will make available such information to prospective purchasers of Notes, in addition to providing such information to the Trustee and the Holders upon their request, in each case within 15 days after the time the Issuer would be required to file such information with the Commission if it were subject to Section 13 or 15(d) of the Exchange Act.

Future Guarantors. The Indenture will provide that the Issuer will cause each Restricted Subsidiary organized under the laws of the United States of America or any state or territory thereof that Incurs Indebtedness or issues shares of Disqualified Stock or Preferred Stock to execute and deliver to the Trustee a supplemental indenture pursuant to which such Subsidiary will guarantee payment of the Notes. Each Note Guarantee will be limited to an amount not to exceed the maximum amount that can be guaranteed by that Subsidiary without rendering the Note Guarantee, as it relates to such Subsidiary, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

Merger, Consolidation, or Sale of All or Substantially All Assets

The Indenture will provide that the Issuer may not consolidate or merge with or into or wind up into (whether or not the Issuer is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions, to any Person unless (i) the Issuer is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than the Issuer) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been

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made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (the Issuer or such Person, as the case may be, being herein called the “Successor Issuer”); (ii) the Successor Issuer (if other than the Issuer) expressly assumes all the obligations of the Issuer under the Indenture and the Notes pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee; (iii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Issuer or any of its Restricted Subsidiaries as a result of such transaction as having been Incurred by the Successor Issuer or such Restricted Subsidiary at the time of such transaction) no Default or Event of Default shall have occurred and be continuing; (iv) immediately after giving pro forma effect to such transaction, as if such transaction had occurred at the beginning of the applicable four-quarter period, either (A) the Successor Issuer would be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first sentence of the covenant described under “—Limitations on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock” or (B) the Fixed Charge Coverage Ratio for the Successor Issuer and its Restricted Subsidiaries would be greater than or equal to such ratio for the Issuer and its Restricted Subsidiaries immediately prior to such transaction; (v) each Guarantor, unless they are the other party to the transactions described above, shall have by supplemental indenture or other instrument or document reasonably satisfactory to the Trustee confirmed that its Note Guarantee shall apply to such Person’s obligations under the Indenture and the Notes; and (vi) the Issuer shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture, provided that (x) in giving such opinion such counsel may rely on officer’s certificate as to any matters of fact (including without limitation as to clauses (iii) and (iv) above), and (y) no Opinion of Counsel will be required for a consolidation, merger or transfer described in the last sentence of this paragraph. The Successor Issuer will succeed to, and be substituted for, the Issuer under the Indenture and the Notes. Notwithstanding the foregoing clauses (iii) and (iv), (a) any Restricted Subsidiary may consolidate with, merge into or transfer all or part of its properties and assets to the Issuer or to another Restricted Subsidiary and (b) the Issuer may merge with an Affiliate incorporated solely for the purpose of reincorporating the Issuer in another state of the United States so long as the amount of Indebtedness of the Issuer and its Restricted Subsidiaries is not increased thereby.

The Indenture will further provide that, subject to certain limitations described in the Indenture governing release of a Note Guarantee upon the sale or disposition of a Guarantor, each Guarantor will not, and the Issuer will not permit a Guarantor to, consolidate or merge with or into or wind up into (whether or not such Guarantor is the surviving corporation), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets in one or more related transactions to, any Person unless (i) such Guarantor is the surviving corporation or the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, lease, conveyance or other disposition will have been made is a corporation, partnership or limited liability company organized or existing under the laws of the United States, any state thereof, the District of Columbia, or any territory thereof (such Guarantor or such Person, as the case may be, being herein called the “Successor Guarantor”); (ii) the Successor Guarantor (if other than such Guarantor) expressly assumes all the obligations of such Guarantor under the Indenture and such Guarantor’s Note Guarantee pursuant to a supplemental indenture or other documents or instruments in form reasonably satisfactory to the Trustee; (iii) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any of its Subsidiaries as a result of such transaction as having been Incurred by the Successor Guarantor or such Subsidiary at the time of such transaction) no Default or Event of Default shall have occurred and be continuing; and (iv) the Guarantor shall have delivered or caused to be delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with the Indenture, provided that (x) in giving such opinion such counsel may rely on officer’s certificate as to any matters of fact (including without limitation as to clause (iii) above) and (y) no Opinion of Counsel will be required for a consolidation, merger or transfer described in the last sentence of this paragraph. Subject to certain limitations described in the Indenture, the Successor Guarantor will succeed to, and be substituted for, such Guarantor under the Indenture and such Guarantor’s Note Guarantee. Notwithstanding the foregoing clause (iii), a Guarantor may merge with

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an Affiliate incorporated solely for the purpose of reincorporating such Guarantor in another state of the United States so long as the amount of Indebtedness of the Guarantor is not increased thereby.

Defaults

An Event of Default will be defined in the Indenture as (i) a default in any payment of interest on any Note or on any Deferred Interest when due, continued for 30 days, provided that deferral of interest payments in accordance with the Indenture shall not constitute a default, (ii) a default in the payment of principal or premium, if any, of any Note when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise, (iii) a default in the payment of (1) Deferred Interest when due following the end of any Mandatory Interest Deferral Period, or (2) any deferred interest and accrued interest thereon at the end of the Optional Interest Deferral Period, (iv) the failure by the Issuer to comply with its obligations under the covenant described under “—Merger, Consolidation or Sale of All or Substantially All Assets” above, (v) the failure by the Issuer to comply for 30 days after notice with any of its obligations under the covenants described under “—Change of Control” or “—Certain Covenants” above (in each case, other than a failure to purchase the Notes), (vi) the failure by the Issuer to comply for 60 days after notice with its other agreements contained in the Notes or the Indenture, (vii) the failure by the Issuer or any Significant Subsidiary to pay any Indebtedness (other than Indebtedness owing to the Issuer or a Restricted Subsidiary) within any applicable grace period after final maturity or the acceleration of any such Indebtedness by the holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated exceeds $5 million or its foreign currency equivalent (the “cross acceleration provision”), (viii) the Issuer or any of its Significant Subsidiaries, pursuant to or within the meaning of Bankruptcy Law, commences a voluntary case, consents to the entry of an order for relief against it in an involuntary case, consents to the appointment of a custodian of it or for all or substantially all of its property, makes a general assignment for the benefit of its creditors, or generally is not paying its debts as they become due; (ix) a court of competent jurisdiction enters an order or decree under any bankruptcy law that (x) is for relief against the Issuer or any of its Significant Subsidiaries, in an involuntary case, (y) appoints a custodian of the Issuer or any of its Significant Subsidiaries or for all or substantially all of the property of the Issuer or any of its Significant Subsidiaries, or (z) orders the liquidation of the Issuer or any of its Significant Subsidiaries, and any such order or decree remains unstayed and in effect for 60 consecutive days; (x) the rendering of any judgment or decree for the payment of money (other than judgments which are covered by enforceable insurance policies issued by solvent carriers) in excess of $5 million or its foreign currency equivalent against the Issuer or a Significant Subsidiary if (A) an enforcement proceeding thereon is commenced and not discharged or stayed within days thereafter or (B) such judgment or decree remains outstanding for a period of 60 days following such judgment and is not discharged, waived or stayed (the “judgment default provision”) or (xi) any Note Guarantee ceases to be in full force and effect, except as contemplated by the terms thereof, or any Guarantor denies or disaffirms its obligations under its Note Guarantee, except as contemplated by the terms thereof, and the Default continues for 10 days.

The foregoing will constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

However, a default under clause (v) or (vi) will not constitute an Event of Default until the Trustee or the Holders of 25% in principal amount of the outstanding Notes notify the Issuer of the default and the Issuer does not cure such default within the time specified in clauses (v) and (vi) hereof after receipt of such notice.

If an Event of Default (other than a Default under clauses (viii) or (ix)) relating to certain events of bankruptcy, insolvency or reorganization of the Issuer) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the outstanding Notes by notice to the Issuer may declare the principal of, premium, if any, and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal, premium and interest will be due and payable immediately. If an Event of Default under clauses (viii) or (ix) occurs, the principal of, premium, if any, and interest on all the Notes will become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

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After a declaration of acceleration has been made, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the holders of greater than 50% in aggregate principal amount of Notes outstanding, by written notice to the Issuer and the Trustee, may annul such declaration and its consequences if (a) the Issuer has paid or deposited with the Trustee a sum sufficient to pay (1) all sums paid or advanced by the Trustee under the Indenture and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, (2) all overdue interest and principal, if any, on all Notes, and (3) to the extent that payment of such interest is lawful, interest upon overdue interest at the stated rate of interest on the Notes; and (b) all Events of Default, other than the non-payment of principal of the Notes which have become due solely by such declaration of acceleration, have been cured or waived.

The holders of greater than 50% in aggregate principal amount of the Notes outstanding may on behalf of the holders of all the Notes waive any past default under the Indenture and its consequences, except a default in the payment of the principal of, or premium, if any, or interest on any Note, or in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the holder of each Note outstanding and affected by such modification or amendment.

Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Notes unless (i) such Holder has previously given the Trustee notice that an Event of Default is continuing, (ii) Holders of at least 25% in principal amount of the outstanding Notes have requested the Trustee to pursue the remedy, (iii) such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity, and (v) the Holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. The Holders of a majority in principal amount of the outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee will be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

The Indenture will provide that if a Default occurs and is continuing and is actually known to the Trustee, the Trustee must mail to each Holder notice of the Default within the earlier of 90 days after it occurs or 30 days after it is actually known to a Trust Officer or written notice of it is received by the Trustee. Except in the case of a Default in the payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold notice if and so long as a committee of its Trust Officers in good faith determines that withholding notice is in the interests of the Holders. In addition, the Issuer is required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. The Issuer also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action the Issuer is taking or proposes to take in respect thereof.

Amendments and Waivers

Except as provided below, the Indenture may be amended with the consent of the Holders of a majority in principal amount of the Notes then outstanding of all series affected by such amendment and any past default or compliance with any provisions may be waived with the consent of the Holders of a majority in principal amount of the Notes of all series affected by such amendment then outstanding. However, without the consent of each

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Holder of an outstanding Note affected, no amendment may, among other things, (i) reduce the amount of Notes whose Holders must consent to an amendment, (ii) reduce the rate of or extend the time for payment of interest on any Note, (iii) reduce the principal of or extend the Stated Maturity of any Note, (iv) reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed as described under “Optional Redemption” above, (v) make any Note payable in money other than that stated in the Note, (vi) make any change to the subordination provisions of the Indenture that adversely affects the rights of any Holder, (vii) impair the right of any Holder to receive payment of principal of, premium, if any, and interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes, (viii) make any change in the amendment provisions which require each Holder’s consent or in the waiver provisions, or (xi) modify any of the provisions of the Indenture or the related definitions affecting the subordination or ranking of any Note Guarantee in any manner adverse to the Holders.

Without the consent of any Holder, the Issuer and Trustee may amend the Indenture to cure any ambiguity, omission, defect or inconsistency, to provide for the assumption by a successor corporation, partnership or limited liability company of the obligations of the Issuer under the Indenture, to provide for uncertificated Notes in addition to or in place of certificated Notes (provided that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Internal Revenue Code, or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Internal Revenue Code), to add guarantees with respect to the Notes, to secure the Notes, to add to the covenants of the Issuer for the benefit of the Holders or to surrender any right or power conferred upon the Issuer, to make any change that does not adversely affect the rights of any Holder, to comply with any requirement of the SEC in connection with the qualification of the Indenture under the Trust Indenture Act of 1939 to make changes to the Indenture to provide for the issuance of Additional Notes or to release a Note Guarantee in accordance with the provisions of the Indenture. However, no amendment may be made to the subordination provisions of the Indenture that adversely affects the rights of any holder of Guarantor Senior Indebtedness then outstanding unless the holders of such Guarantor Senior Indebtedness (or any group or representative thereof authorized to give a consent) consent to such change.

The consent of the Holders is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

Defeasance

The Issuer at any time may terminate all its obligations under the Notes and the Indenture (“legal defeasance”), except for certain obligations, including those respecting the defeasance trust and obligations to register the transfer or exchange of the Notes, to replace mutilated, destroyed, lost or stolen Notes and to maintain a registrar and paying agent in respect of the Notes. The Issuer at any time may terminate its obligations under the covenants described under “Certain Covenants,” the operation of the cross acceleration provision, the bankruptcy provisions with respect to Subsidiaries and the judgment default provision described under “—Defaults” above and the limitations contained in clause (iv) of the first paragraph under “Merger, Consolidation or Sale of All or Substantially All Assets” above (“covenant defeasance”). If the Issuer exercises its legal defeasance option or its covenant defeasance option, each Guarantor will be released from all of its obligations with respect to its Note Guarantee.

The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option. If the Issuer exercises its legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default with respect thereto. If the Issuer exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in clause (v), (vii), (viii) with respect only to Significant Subsidiaries or (x) with respect only to Significant Subsidiaries under “—Defaults” above or because of the failure of the Issuer to comply with clause (iv) of the first paragraph under “—Merger, Consolidation or Sale of All or Substantially All Assets” above.

In order to exercise either defeasance option, the Issuer must irrevocably deposit in trust (the “defeasance trust”) with the Trustee money or U.S. Government Obligations for the payment of principal, premium (if any) and

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interest on the Notes to redemption or maturity, as the case may be, and must comply with certain other conditions, including delivery to the Trustee of an Opinion of Counsel to the effect that holders of the Notes will not recognize income, gain or loss for U.S. federal or Canadian income tax purposes as a result of such deposit and defeasance and will be subject to U.S. federal or Canadian income tax on the same amount and in the same manner and at the same times as would have been the case if such deposit and defeasance had not occurred (and, in the case of legal defeasance only, such Opinion of Counsel must be based on a ruling of the IRS or the Canada Customs and Revenue Agency or other change in applicable U.S. federal or Canadian income tax law).

Concerning the Trustee

is to be the Trustee under the Indenture.

Governing Law

The Indenture will provide that it and the Notes will be governed by, and construed in accordance with, the laws of the State of New York.

Certain Definitions

“Acquired Indebtedness” means, with respect to any specified Person:

(i) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person; and

(ii) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person,

in each case, other than Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired by such Person, or such asset was acquired by such person, as applicable.

“Adjusted EBITDA” for any period means th

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