UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of
1934
Date
of
Report (Date of Earliest Event Reported): February
27, 2006
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Vail
Resorts, Inc.
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(Exact
name of registrant as specified in its charter)
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Delaware
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1-9614
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51-0291762
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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137
Benchmark Road Avon, Colorado
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81620
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code:
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(970)
845-2500
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Not
applicable
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(Former
name or former address, if changed since last report)
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Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any
of the following provisions:
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[
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Written communications pursuant to Rule 425 under the Securities
Act
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[
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Soliciting materials pursuant to Rule 14a-12 under the Exchange
Act
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[
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act
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[
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act
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Item
1.01. Entry
into a Material Definitive Agreement.
Appointment
of Chief Executive Officer
On
February 28, 2006, Vail Resorts, Inc. (the “Company”) announced that Robert A.
Katz had been named the Company’s new chief executive officer, effective
immediately. In addition, in connection with Mr. Katz’s appointment, the Company
announced that former chief executive officer Adam Aron had relinquished his
positions as chief executive officer and chairman of the Company’s board of
directors. A copy of the press release announcing Mr. Katz’s appointment as
chief executive officer is attached as Exhibit 99.1 to this current report.
In
connection with the Company’s appointment of Mr. Katz as chief executive
officer, the Company and Mr. Katz entered into an employment agreement, dated
as
of February 28, 2006, which provides for the following:
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a
starting base salary of $815,000
annually
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a
target bonus of 80% of base salary
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a
grant of 30,000 shares of restricted stock of the Company which shall
vest
in equal monthly installments over a period of three
years
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a
grant of 300,000 stock-settled stock appreciation rights with a ten
year
term which shall vest in equal monthly installments over a period
of three
years
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a
payment of $69,917 for services performed by Mr. Katz prior to the
effective date of the agreement.
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In
the
event of a change of control of the Company (as defined in the agreement),
all
of Mr. Katz’s rights with respect to stock appreciation rights and restricted
shares will vest immediately. In addition, upon either his termination following
a change of control or a termination by the Company without cause, or by Mr.
Katz for good reason, Mr. Katz is entitled to receive certain benefits. Such
benefits include (i) payment of Mr. Katz’s then current base salary through his
final date of employment and for a period of twenty-four months thereafter
(or
through the end of the remaining term of the agreement, if greater), (ii) a
prorated bonus (provided that performance targets are met) for the portion
of
the year in which the termination occurs and (ii) immediate vesting of all
stock
appreciation rights and restricted shares. Mr. Katz is also entitled to certain
benefits upon termination of his employment as a result of death or disability.
In addition, Mr. Katz is entitled to annual membership in any clubs owned or
managed by the Company and certain ski related privileges for him and his
immediate family. The agreement also provides for gross-up payments to Mr.
Katz
for the amount, if any, that “golden parachute” excise taxes imposed on him are
increased due to his prior service as a non-employee director of the Company.
Mr. Katz is subject to a 24-month non-compete clause upon
termination.
The
foregoing description of Mr. Katz’s employment agreement is qualified in its
entirety by reference to the agreement attached as Exhibit 10.1 to this current
report.
In
connection with the appointment of Mr. Katz as chief executive officer, on
February 27, 2006, the Company entered into a separation agreement with Mr.
Aron. Pursuant to the separation agreement, the Company will pay Mr. Aron full
payment of any amounts owing to him in respect of his base salary for services
rendered through February 27, 2006 on March 3, 2006. In addition, Mr. Aron
will
receive $1,508,795 on August 31, 2006 and $1,141,000 on September 20, 2006.
The
separation agreement also contains a mutual release and waiver by both parties
for matters pertaining to or arising out of Mr. Aron’s employment. In connection
with the separation agreement, Mr. Aron’s employment agreement was
terminated.
The
foregoing description of Mr. Aron’s separation agreement is qualified in its
entirety by reference to the agreement attached as Exhibit 10.2 to this current
report.
Amendment
of Credit Facility
On
March
2, 2006, The Vail Corporation (“Vail Corp.”), a wholly-owned subsidiary of the
Company, entered into an amendment (the “Amendment”) of its existing Fourth
Amended and Restated Credit Agreement (“Credit Agreement”) between Vail Corp.,
Bank of America, N.A., as administrative agent, U.S. Bank National Association
and Wells Fargo Bank, National Association as co-syndication agents, Deutsche
Bank Trust Company Americas and LaSalle Bank National Association as
Co-Documentation Agents and the Lenders party thereto.
The
Amendment aligns the covenant on Distributions under and as defined in the
Credit Agreement with the limitation on Restricted Payments under and as defined
in the indenture governing the Company’s
6
¾%
Senior Subordinated Notes due 2014.
The
foregoing description of the Amendment is qualified in its entirety by reference
to the Amendment, which is attached as Exhibit 10.3 to this current
report.
Adoption
of Restricted Stock Award and Stock Option Agreements
The
Company has adopted a form of Restricted Stock Award Agreement and a form of
Stock Option Agreement to be used in connection with grants of restricted stock
and stock options under the Company’s incentive plans. The restricted stock and
stock option award agreements are attached as Exhibits 10.4 and 10.5 to this
current report. Each of these agreements may be used for future grants of stock
options and restricted stock to the Company’s employees.
On
March
2, 2006 the Company and Jeffrey Jones, the Company’s chief financial officer,
signed a restricted share agreement and a stock option letter relating to the
Company's previously disclosed grant on September 30, 2005 of 40,000 shares
of
restricted stock and 100,000 stock options to Mr. Jones. Mr. Jones’ agreements
are substantially similar to the form of restricted stock award agreement and
form of stock option agreement recently adopted by the Company for all of its
employees except that, as disclosed to Mr. Jones on the grant date, Mr. Jones’
agreements provide that his stock options and shares of restricted stock all
vest on the third anniversary of the grant as opposed to vesting in one-third
annual increments. However, if Mr. Jones is terminated without cause or
terminates his employment for good reason prior to the third anniversary of
the
grant, his options and restricted stock awards will accelerate such that he
will
become vested in the grants in one-third annual increments. In addition, Mr.
Jones’ agreements provide for the automatic vesting of all his stock options and
shares of restricted stock in the event of a change in control (as defined
in the agreements) unless (i) there is no control party (as defined in the
agreements) with respect to the Company after the change in control and Mr.
Jones remains as the chief financial officer of the Company, or (ii) there
is a publicly traded control party with respect to the Company after the change
in control and Mr. Jones is the chief financial officer of such control
party. Mr. Jones’ restricted stock and stock option award agreements are
attached as Exhibits 10.6 and 10.7 to this current report.
Item
5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
On
February 28, 2006, the Company announced the appointment of Robert A. Katz
as
the Company’s chief executive officer, as described under Item 1.01 above, which
description, along with the description of Mr. Katz’s employment agreement, is
incorporated by reference into this Item 5.02.
Mr.
Katz,
39, was appointed a director of the Company in June 1996 and, until his
appointment as chief executive officer, had been designated by the Board as
the
Lead Director and had served as a member of the Company’s compensation and audit
committees. Since 1990, Mr. Katz has been associated in various capacities
including as a Senior Partner of Apollo Management, L.P. Mr. Katz is a
director and member of the compensation committee of iPCS, Inc.
As
previously disclosed by the Company, in fiscal 2005, the Company paid a fee
of
$83,000 to Apollo Advisors, L.P., an affiliate of Apollo Management, L.P (Mr.
Katz was formerly associated with Apollo Management, L.P.)., for management
services and expenses related thereto. The original management fee of $500,000
per year was approved by the Company’s board of directors in March 1993 and was
terminated effective October 1, 2004.
There
are
no family relationships between Mr. Katz and any of the Company’s directors or
officers.
On
February 28, 2006, the Company announced that Mr. Aron, the Company’s former
chief executive officer, had resigned as chief executive officer and as a member
of the Company’s board of directors, as described under Item 1.01 above, which
description is incorporated by reference into this Item 5.02. Mr. Aron had
been
chairman of the board of directors and a member of the executive committee.
No
disagreement between Mr. Aron and the Company that would require disclosure
under Item 5.02(a) of Form 8-K has occurred.
Item
9.01.
Financial Statements and Exhibits.
Exhibits.
The following exhibits are filed herewith:
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Exhibit
No.
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Description
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10.1
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Employment
Agreement, dated as of February 28, 2006, between Vail Resorts, Inc.
and
Robert A. Katz.
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10.2
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Separation
Agreement and General Release, dated as of February 27, 2006, between
Adam
M. Aron and Vail Resorts, Inc.
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10.3
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Second
Amendment to Fourth Amended and Restated Credit Agreement among The
Vail
Corporation, the Required Lenders and Bank of America, as Administrative
Agent.
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10.4
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Form
of Restricted Share Agreement
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10.5
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Form
of Stock Option Agreement
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10.6
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Stock
Option Letter Agreement between Vail Resorts, Inc. and Jeffrey W.
Jones.
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10.7
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Restricted Share
Agreement between Vail Resorts, Inc. and Jeffrey W.
Jones.
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99.1
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Press
Release dated February 28,
2006.
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Dated:
March 3, 2006
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Vail
Resorts, Inc.
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By:
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/s/
Martha
D. Rehm
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Martha
D. Rehm
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Executive
Vice President and General Counsel
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EMPLOYMENT
AGREEMENT (the “Agreement”) entered into as of February 28, 2006, by and between
Vail Resorts, Inc., a Delaware corporation with its principal office in Avon,
Colorado (the “Company”), and Robert A. Katz (“Executive”).
WHEREAS,
the Company wishes to employ Executive as its Chief Executive Officer and both
parties desire to enter into an employment agreement to reflect Executive’s new
capacity upon the terms and conditions set forth herein:
NOW,
THEREFORE, the parties hereto, intending to be legally bound, hereby agree
as
follows:
1. Employment.
The
Company hereby employs Executive as its Chief Executive Officer. Executive
shall
also serve as a member of the Company’s Board of Directors (the “Board”) and its
Executive Committee. Executive shall also serve as Chairman of each of the
Company’s principal subsidiaries. Executive hereby accepts such employment and
agrees to perform his duties and responsibilities in accordance with the terms,
conditions and provisions hereinafter set forth. The Company may have a
non-executive Chairman of the Board.
1.1. Employment
Term.
The
term of Executive’s employment under this Agreement shall commence as of the
date hereof (the “Effective Date”) and shall continue until February 28, 2009;
provided,
however, that on and after March 1, 2007, the Agreement shall automatically
renew with the term of the Agreement always being at least two years.
Notwithstanding the foregoing, Executive’s employment and this Agreement may be
terminated in accordance with Section 5 hereof. The period commencing on the
Effective Date and ending on the date on which the term of Executive’s
employment under the Agreement shall terminate is hereinafter referred to as
the
“Employment Term.”
1.2. Duties
and Responsibilities.
Executive shall serve as the Company’s Chief Executive Officer and in such other
senior positions, if any, to which he may be elected by the Board during the
Employment Term. During the Employment Term, Executive shall perform all duties
and accept all responsibilities incident to, and not inconsistent with, such
positions as may be reasonably assigned to him by the Board.
1.3. Extent
of Service.
During
the Employment Term, Executive agrees to use his best efforts to carry out
his
duties and responsibilities under Section 1.2 hereof and, consistent with the
other provisions of this Agreement, to devote substantially all his business
time, attention and energy thereto except to the extent required by Executive’s
outside board directorships, civic or charitable activities. Executive agrees
not be become engaged in any other business, civic or charitable activity which,
in his reasonable judgment, is likely to materially interfere with his ability
to discharge his duties and responsibilities to the Company. Executive agrees
to
resign from or discontinue any other business, civic or charitable activity
which, in the reasonable judgment of the Board, is likely to materially
interfere with his ability to discharge his duties and responsibilities to
the
Company.
1.4. Base
Salary.
For all
the services rendered by Executive hereunder, the Company shall pay Executive
a
base salary (“Base Salary”), commencing on the Effective Date, at the annual
rate of $815,000, payable in installments at such times as the Company
customarily pays its other senior level executives (but in any event no less
often than monthly). Executive’s Base Salary for each fiscal year of the Company
commencing after the Effective Date (beginning with the first salary review
by
the Board in 2006) shall be reviewed for appropriate adjustment (but shall
not
be reduced in any case) by the Board pursuant to its normal performance review
policies for senior level executives. For services rendered by Executive to
the
Company prior to the Effective Date, the Company shall pay Executive the sum
of
$67,917, payable on the date the Executive receives the first installment
payment of Base Salary after the Effective Date.
1.5. Retirement
and Benefit Coverages.
During
the Employment Term, Executive shall be entitled to participate in all (a)
employee pension and retirement plans and programs (“Retirement Plans”) and (b)
welfare benefit plans and programs (“Benefit Coverages”), in each case as made
available to the Company’s senior level executives as a group or to its
employees generally and as such Retirement Plans or Benefit Coverages may be
in
effect from time to time. In addition, Executive shall be entitled to (i) the
Company’s regular holiday and vacation policy, (ii) annual membership in any
clubs owned or managed by the Company (which shall terminate concurrently with
the date of termination of the Employment Term), and (iii) at no cost to
Executive (A) an annual ski pass for Executive and his immediate family members
at each of the Company’s resorts, (B) the use of up to 2 ski instructors when
Executive or his immediate family members are at a Company ski resort; (C)
lodging in the Company’s hotels (up to 2 rooms) and condominiums (up to a
three-bedroom unit) for Executive and his immediate family members; and (D)
up
to $10,000 per year of discretionary spending at the Company’s properties for
Executive’s personal use.
1.6. [Reserved].
1.7. Annual
Incentive/Long-Term Incentive Program.
Executive shall be entitled to participate in a short-term or long-term
incentive compensation program established by the Company for its senior level
executives generally. Payments under such programs shall depend upon achievement
of certain business performance targets specified and approved annually in
advance by the Board (or a Committee thereof) in its sole discretion;
provided,
however, that Executive’s “target opportunity” under the annual bonus incentive
program for each year shall be at least 80% of the Executive’s Base Salary, if
the Company’s budget is fully achieved for such year. The parties hereto further
agree to negotiate annually in good faith a sliding scale of varying payouts
based on varying levels of performance. However, Executive acknowledges that
the
annual bonsuses shall depend upon achieving the specific business performance
targets set in advance of each fiscal year by the Board in its sole discretion,
or by the Committee acting in its stead. For fiscal year 2006 of the Company,
Executive will be entitled to a pro rated bonus for five months, and such pro
rated bonus shall be paid on the same basis as bonuses paid to other senior
executives of the Company. For the avoidance of doubt, no bonus shall be
guaranteed to the Executive. Executive’s short-term and long-term incentive
compensation shall be paid to him in the same form and at the same times that
such compensation is paid to the Company’s senior level executives generally.
Executive specifically acknowledges that a portion of such incentive
compensation may be deferred subject to subsequent year financial performance
of
the
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Company,
if such a provision is consistent with the Company’s then-existing compensation
program for other senior level executives.
1.8. Restricted
Stock.
Executive shall be entitled to receive, as of the Effective Date, 30,000
restricted shares of the Company’s common stock, $.01 par value (the “Restricted
Stock”). The certificates representing the Restricted Stock shall be retained by
the Company until such shares have vested. Except as provided in Sections 5
and
6 below, Executive’s right to such shares shall vest in 36 equal monthly
installments over 3 years, beginning on the first monthly anniversary of the
Effective Date. Prior to vesting, Executive shall be entitled to vote the shares
of Restricted Stock and to be credited with any dividends attributable to such
shares; provided,
however, that no payment of such dividends shall be made unless and until,
and
only to the extent that, the related shares are vested. Upon termination of
the
Employment Term for any reason, that portion of the Restricted Stock that is
not
vested (after giving effect to any acceleration of vesting pursuant to Sections
5 and 6) shall be forfeited by Executive. Executive will be eligible to receive
additional grants of restricted stock, as determined by the Board or
Compensation Committee from time to time.
1.9. Share
Appreciation Rights.
Executive shall receive, as of the Effective Date, share appreciation rights
with respect to 300,000 shares of the Company’s common stock (“SARs”) pursuant
to the Company’s 2002 Long Term Incentive and Share Award Plan (the “Plan”). The
exercise price of the SARs will be equal to the fair market value per share
of
the Company common stock on the date of grant, as determined under the Plan.
Except as provided in Sections 5 and 6 below, the SARs shall vest and become
exercisable in 36 equal monthly installments over 3 years, beginning on the
first monthly anniversary of the Effective Date. Upon exercise, the SARs will
be
settled with shares of Company common stock. Upon termination of the Employment
Term for any reason, unvested SARs (after giving effect to any acceleration
of
vesting pursuant to Sections 5 and 6) shall expire and be forfeited. The SARs
shall have a 10 year term; provided,
however, that in the event of earlier termination of the Employment Term, the
SARs shall expire 90 days after the date of such termination if such termination
is pursuant to Sections 5.3 or 5.6, and shall expire nine months after the
date
of such termination if such termination is for any other reason. Subject to
compliance with Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), Executive shall be credited with any dividends attributable to
shares covered by the SARs other than regular dividends paid out of the
Company’s current earnings in accordance with a multi-year dividend policy
adopted and consistently applied by the Board (it being understood that, since
the Company’s current policy is not to pay regular dividends, the payment of
dividends under a new dividend policy that is intended in good faith to result
in periodic dividends over a multi-year period shall be deemed regular
dividends). Subject to compliance with Section 409A of the Code, payment of
such
credited dividends shall be made at the time of, and only if and to the extent
that, the SARs become vested and are exercised. Executive will be eligible
to
receive additional grants of SARs, as determined by the Board or Compensation
Committee from time to time.
1.10. Reimbursement
of Expenses.
Executive shall be reimbursed for customary travel, entertainment and other
out-of-pocket expenses reasonably incurred by him on behalf of the Company
in
the performance of his duties hereunder, which reimbursement shall be made
in
accordance with the Company’s normal reimbursement policies.
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2. Confidential
Information.
Executive recognizes and acknowledges that, by reason of his employment by
and
service to the Company before, during and, if applicable, after the Employment
Term, he has had and will continue to have access to certain confidential and
proprietary information relating to the Company’s business, which may include,
but is not limited to, trade secrets, trade “know-how”, customer information,
supplier information, cost and pricing information, marketing and sales
techniques, strategies and programs, computer programs and software and
financial information (collectively referred to as “Confidential Information”).
Executive acknowledges that such Confidential Information is a valuable and
unique asset of the Company and Executive covenants that he will not at any
time
during the course of his employment use any Confidential Information or divulge
or disclose any Confidential Information to any person, firm or corporation
except in connection with Executive’s good faith belief as to the proper
performance of his duties for the Company. Executive also covenants that, at
any
time after the termination of his employment, he will not directly or indirectly
use any Confidential Information for any purpose or divulge or disclose any
Confidential Information to any person, firm or corporation, unless such
information is in the public domain through no fault of Executive or except
when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or over Executive or
by
any administrative or legislative body (including a committee thereof) with
apparent jurisdiction to order him to divulge, disclose or make accessible
such
information, in which case Executive will inform the Company in writing promptly
of such required disclosure.
3. Non-Competition,
Non-Solicitation and Non-Disparagement.
(a) In
consideration for the agreements by the Company set forth in Sections 5.4,
5.5
and 6, during his employment by the Company and for a period of two years
thereafter, Executive will not, except with the prior written consent of the
Board, directly or indirectly own, manage, operate, join, control, finance
or
participate in the ownership, management, operation, control or financing of,
or
be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit his name to
be
used in connection with, any business or enterprise that is engaged in a
“Competing Enterprise,” which is defined as an entity whose operations are
conducted within the ski industry in North America or in the real estate
development, lodging or hospitality industries in the State of Colorado.
Notwithstanding the foregoing, Executive may participate, own, finance, manage,
obtain employment or otherwise be connected with a larger regional, national
or
international business or enterprise (a “New Employer”) which owns or operates a
Competing Enterprise as a brand, branch, division, subsidiary or affiliate
provided that (i) the Competing Enterprise accounts for less than 10% of the
New
Employer’s annual revenues and annual net income on both a historical or pro
forma basis for the New Employer’s most recently completed fiscal year, and (ii)
Executive’s duties for the New Employer are not primarily related to the conduct
of such Competing Enterprise.
(b) The
foregoing restrictions shall not be construed to prohibit the ownership by
Executive of less than five percent (5%) of any class of securities of any
corporation which is engaged in any of the foregoing businesses having a class
of securities registered pursuant to the Securities Exchange Act of 1934 (the
“Exchange Act”), provided that such ownership represents a passive investment
and that neither Executive nor any group of persons including Executive in
any
way, either directly or indirectly, manages or exercises control of any such
corporation,
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guarantees
any of its financial obligations, otherwise takes any part in its business
(other than exercising his rights as a shareholder), or seeks to do any of
the
foregoing.
(c) In
consideration for the agreements by the Company set forth in Sections 5.4,
5.5
and 6, Executive further covenants and agrees that, during his employment by
the
Company and for the period of two years thereafter, Executive will not solicit
for another business or enterprise any person who is a managerial or higher
level employee of the Company at the time of Executive’s
termination.
(d) During
Executive’s employment and for a period of five years thereafter, Executive
agrees that he shall not make any public statements disparaging of the Company
or its subsidiaries, the Board, or the officers, directors, stockholders, or
employees of the Company or its subsidiaries. The Company shall similarly not
disparage Executive following such termination. Notwithstanding the foregoing,
the parties may respond truthfully to inquiries from governmental agencies
or
from prospective employers of Executive. Similarly, nothing in this provision
is
intended to prevent either party from seeking to enforce the provisions of
this
Agreement through appropriate proceedings.
4. Equitable
Relief.
(a) Executive
acknowledges and agrees that the restrictions contained in Sections 2 and 3
are
reasonable and necessary to protect and preserve the legitimate interests,
properties, goodwill and business of the Company, that the Company would not
have entered into this Agreement in the absence of such restrictions and that
irreparable injury will be suffered by the Company should Executive breach
any
of the provisions of those Sections. Executive represents and acknowledges
that
(i) he has been advised by the Company to consult his own legal counsel in
respect of this Agreement, and (ii) that he has had full opportunity, prior
to
execution of this Agreement, to review thoroughly this Agreement with his
counsel.
(b) Executive
further acknowledges and agrees that a breach of any of the restrictions in
Sections 2 and 3 cannot be adequately compensated by monetary damages. Executive
agrees that the Company shall be entitled to preliminary and permanent
injunctive relief, without the necessity of proving actual damages, as well
as
an equitable accounting of all earnings, profits and other benefits arising
from
any violation of Sections 2 or 3 hereof, which rights shall be cumulative and
in
addition to any other rights or remedies to which the Company may be entitled.
In the event that any of the provisions of Sections 2 or 3 hereof should ever
be
adjudicated to exceed the time, geographic, service, or other limitations
permitted by applicable law in any jurisdiction, it is the intention of the
parties that the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable law, that
such
amendment shall apply only within the jurisdiction of the court that made such
adjudication and that the provision otherwise be enforced to the maximum extent
permitted by law.
5. Termination.
The
Employment Term shall terminate upon the occurrence of any one of the following
events:
5.1. Disability.
The
Company may terminate the Employment Term if Executive is unable substantially
to perform his duties and responsibilities hereunder to the full extent
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required
by the Board by reason of illness, injury or incapacity for six consecutive
months, or for more than nine months in the aggregate during any period of
12
calendar months (a “Disability”); provided,
however, that the Company shall continue to pay Executive his Base Salary until
the Company acts to terminate the Employment Term and Executive shall be
entitled to all Restricted Stock and SARs that are vested as of the date of
such
termination. In addition, in the event Executive executes a written release
in
connection with such termination (such release to be effective only if the
Company executes such release) substantially in the form attached hereto as
Annex I (the “Release”),
Executive shall be entitled to receive (i) upon the achievement of the Company’s
performance targets for such year, a pro rata portion of the incentive
compensation Executive would have received under the plans described in Section
1.7 for the year in which such termination occurred, which amounts shall be
payable in accordance with the terms of the applicable plan, (ii) all deferred
incentive compensation earned by Executive with respect to prior years, which
amounts shall be payable in accordance with the terms of the applicable plan,
(iii) all amounts (including accrued vacation pay but excluding severance
compensation) to which Executive is then entitled upon termination of employment
under applicable plans and programs of the Company then in effect, and (iv)
all
other amounts then due and payable to Executive pursuant to the terms of this
Agreement with respect to services rendered prior to termination of employment.
In addition, if Executive executes the Release, all unvested shares of
Restricted Stock and SARs (including grants of restricted stock, options, SARs
or other equity incentives made subsequent to the Effective Date) shall
automatically become 100% vested upon termination of the Employment Term
pursuant to this Section 5.1. The Company shall have no further liability or
obligation to Executive for compensation under this Agreement. In the event
of
any dispute under this Section 5.1 and to the extent determined by the Board
to
be job-related and consistent with business necessity, Executive shall submit
to
a physical examination by a licensed physician selected by the Board and
approved by Executive, such approval not to be unreasonably
withheld.
5.2. Death.
The
Employment Term shall terminate in the event of Executive’s death. In such
event, the Company shall pay to Executive’s executors, legal representatives or
administrators, as applicable, an amount equal to the installment of his Base
Salary set forth in Section 1.4 hereof for the month in which he dies. In
addition, Executive’s estate shall be entitled to receive (i) previously vested
shares of Restricted Stock and SARs, (ii) upon the achievement of the Company’s
performance targets for such year, a pro rata portion of the incentive
compensation Executive would have received under the plans described in Section
1.7 for the year in which such termination occurred, which amounts shall be
payable in accordance with the terms of the applicable plan, (iii) all deferred
incentive compensation earned by Executive with respect to prior years, which
amounts shall be payable in accordance with the terms of the applicable plan,
(iv) all amounts (including accrued vacation pay but excluding severance
compensation) to which Executive is then entitled upon termination of employment
under applicable plans and programs of the Company then in effect, and (v)
all
other amounts then due and payable to Executive pursuant to the terms of this
Agreement with respect to services rendered prior to termination of employment.
In addition, all unvested shares of Restricted Stock and SARs (including grants
of restricted stock, options, SARs or other equity incentives made subsequent
to
the Effective Date) shall automatically become 100% vested upon termination
of
the Employment Term pursuant to this Section 5.2. The Company shall have no
further liability or obligation under this Agreement to his executors, legal
representatives, administrators, heirs or assigns or any other person claiming
under or through him.
-6-
5.3. Cause.
The
Company may terminate the Employment Term at any time for “cause” upon written
notice to Executive, in which event all payments under this Agreement shall
cease, except for (i) Base Salary to the extent already earned or accrued,
(ii)
previously vested shares of Restricted Stock and SARs, (iii) all amounts
(including accrued vacation pay but excluding severance compensation) to which
Executive is then entitled upon termination of employment under applicable
plans
and programs of the Company then in effect, and (iv) all other amounts then
due
and payable to Executive pursuant to the terms of this Agreement with respect
to
services rendered prior to termination of employment. For purposes of this
Agreement, Executive’s employment may be terminated for “cause” if (i) Executive
is convicted of a felony, (ii) in the reasonable determination of the Board,
Executive has (x) committed an act of fraud, embezzlement, or theft in
connection with Executive’s duties in the course of his employment with the
Company, or (y) engaged in gross mismanagement or gross negligence in the course
of his employment with the Company or (iii) Executive has breached his
obligations under this Agreement, including inattention to or neglect of duties,
and shall not have remedied such breach within 30 days after receiving written
notice from the Board specifying the details thereof; provided,
however, that in any case under clause (ii) or (iii), the act or failure to
act
by Executive is materially harmful to the reputation, goodwill or business
position of the Company or its subsidiaries.
5.4. Termination
Without Cause.
(a) The
Company may terminate the Employment Term at any time without cause upon written
notice to Executive; provided, however, that in the event that such notice
is
given, Executive shall be under no obligation to render any additional services
to the Company and shall be allowed to seek other employment, subject to the
restrictions set forth in Section 3(a). Upon any such termination, except as
provided in Section 5.4(b) below, Executive shall be entitled to receive, as
liquidated damages for the failure of the Company to continue to employ
Executive, only the amount due to Executive under the Company’s then-current
severance pay plan for employees and (i) Base Salary to the extent already
earned or accrued, (ii) all deferred incentive compensation earned by Executive
with respect to prior years, which amounts shall be payable in accordance with
the terms of the applicable plans, (iii) previously vested shares of Restricted
Stock and SARs, (iv) all amounts (including accrued vacation pay) to which
Executive is then entitled upon termination of employment under applicable
plans
and programs of the Company then in effect, and (v) all other amounts then
due
and payable to Executive pursuant to the terms of this Agreement with respect
to
services rendered prior to termination of employment. The Company shall have
no
further liability or obligation to Executive for compensation under this
Agreement.
(b) Notwithstanding
the foregoing, upon such termination, in the event that Executive executes
the
Release, Executive shall be entitled to receive, in lieu of the payments
described in subsection (a) hereof, which Executive agrees to waive, as
liquidated damages for the failure of the Company to continue to employ
Executive, (i) two years’ of Executive’s Base Salary in accordance with Section
1.4 or, if greater, for the balance of the current Employment Term (without
regard to Executive’s removal), payable in accordance with the Company’s normal
payroll practices over such period, provided that, to the extent required by
Section 409A of the Code, amounts otherwise payable under this clause (i) within
six months after the Executive’s termination of employment shall be deferred to
and paid on the day following the six
-7-
month
anniversary of such termination of employment, (ii) previously vested shares
of
Restricted Stock and SARs, (iii) upon the achievement of the Company’s
performance targets for such year, a pro rata portion of the incentive
compensation Executive would have received under the plans described in Section
1.7 for the year in which such termination occurred, which amounts shall be
payable in accordance with the terms of the applicable plan, (iv) all deferred
incentive compensation earned by Executive with respect to prior years, which
amounts shall be payable in accordance with the terms of the applicable plan,
(v) all amounts (including accrued vacation pay but excluding severance
compensation) to which Executive is then entitled upon termination of employment
under applicable plans and programs of the Company then in effect, and (vi)
all
other amounts then due and payable to Executive pursuant to the terms of this
Agreement with respect to services rendered prior to termination of employment.
In addition, if Executive executes the Release, all unvested shares of
Restricted Stock and SARs (including grants of restricted stock, options, SARs
or other equity incentives made subsequent to the Effective Date) shall
automatically become 100% vested upon termination of the Employment Term
pursuant to this Section 5.4. The Company shall have no further liability or
obligation to Executive for compensation under this Agreement.
5.5. Constructive
Termination Without Cause.
(a) Resignation
by Executive for good reason (“Constructive Termination Without Cause”) shall
mean a termination of Executive’s employment at his initiative following the
occurrence, without Executive’s written consent, of (i) a material diminution in
Executive’s duties, responsibilities, authority, or status (including the
appointment of an executive Chairman of the Board), (ii) a reduction in
Executive’s Base Salary below $815,000 per year or such higher amount as
increased by the Board in future years or failure to pay Executive’s bonus or
incentive compensation in violation of Section 1.7, (iii) a failure to convey,
within 10 business days after written request of Executive, any vested
Restricted Shares or any shares owed to Executive upon the exercise of any
SARs,
(iv) the assignment to Executive of duties or obligations despite his stated
written objection to the Board which would require Executive to violate any
law,
or interpretation thereof, of any governmental body of the United States or
the
state of Colorado, (v) an involuntary relocation of Executive’s office outside
of the Denver metropolitan area or away from the Company’s principal executive
offices, (vi) a failure of the Company to comply with any of the material terms
of this Agreement, or (vii) the occurrence of a Change of Control (as defined
below).
(b) In
the
event of a Constructive Termination Without Cause, if Executive executes the
Release, Executive shall be entitled to receive (i) two years’ of Executive’s
Base Salary in accordance with Section 1.4 or, if greater, for the balance
of
the current Employment Term (without regard to Executive’s removal), payable in
accordance with the Company’s normal payroll practices over such period,
provided that, to the extent required by Section 409A of the Code, amounts
otherwise payable under this clause (i) within six months after the Executive’s
termination of employment shall be deferred to and paid on the day following
the
six month anniversary of such termination of employment, (ii) previously vested
shares of Restricted Stock and SARs, (iii) upon the achievement of the Company’s
performance targets for such year, a pro rata portion of the incentive
compensation Executive would have received under the plans described in Section
1.7 for the year in which such termination occurred, which amounts shall be
payable in accordance with the terms of the applicable plan, (iv) all deferred
incentive compen-
-8-
sation
earned by Executive with respect to prior years, which amounts shall be payable
in accordance with the terms of the applicable plan, (v) all amounts (including
accrued vacation pay but excluding severance compensation) to which Executive
is
then entitled upon termination of employment under applicable plans and programs
of the Company then in effect, and (vi) all other amounts then due and payable
to Executive pursuant to the terms of this Agreement with respect to services
rendered prior to termination of employment. In addition, if Executive executes
the Release, all unvested shares of Restricted Stock and SARs (including grants
of restricted stock, options, SARs or other equity incentives made subsequent
to
the Effective Date) shall automatically become 100% vested upon termination
of
the Employment Term pursuant to this Section 5.5. In the event Executive refuses
to execute the Release, he shall receive, as liquidated damages for the failure
of the Company to continue to employ Executive, only the amount due to Executive
under the Company’s then current severance pay plan for employees and (i) Base
Salary to the extent already earned or accrued, (ii) all deferred incentive
compensation earned by Executive with respect to prior years, which amounts
shall be payable in accordance with the terms of the applicable plans, (iii)
previously vested shares of Restricted Stock and SARs, (iv) all amounts
(including accrued vacation pay) to which Executive is then entitled upon
termination of employment under applicable plans and programs of the Company
then in effect, and (v) all other amounts then due and payable to Executive
pursuant to the terms of this Agreement with respect to services rendered prior
to termination of employment. The Company shall have no further liability or
obligation to Executive for compensation under this Agreement.
(c) Prior
to
resigning under this Section, Executive shall give written notice to the Board
and offer a 30-day period for the Company to cure. If, and only if, the Company
cures an issue raised by the Executive under this Section, and Executive again
feels it necessary to resign under this Section, Executive shall again given
written notice to the Board and offer a new 30-day period for the Company to
cure. If no cure has been effected by the end of the applicable cure period,
Executive may resign immediately in accordance with the provisions of
subsections (a) and (b) above. After two such cure periods, only written notice
must be given but no cure period will be required.
5.6. Voluntary
Termination.
Executive may voluntarily terminate the Employment Term upon 30 days’ prior
written notice for any reason. In such event, Executive shall be entitled only
to (i) Base Salary to the extent already earned or accrued, (ii) previously
vested shares of Restricted Stock and SARs, (iii) all amounts (including accrued
vacation pay but excluding severance compensation) to which Executive is then
entitled upon termination of employment under applicable plans and programs
of
the Company then in effect, and (iv) all other amounts then due and payable
to
Executive pursuant to the terms of this Agreement with respect to services
rendered prior to termination of employment. The Company shall have no further
liability or obligation to Executive for compensation under this Agreement.
A
voluntary termination under this Section 5.6 shall not be deemed a breach of
this Agreement.
6. Acceleration
of Vesting Upon a Change of Control.
In the
event of a Change of Control of the Company, all of Executive’s rights under the
SARs and to the Restricted Stock shall immediately vest. For purposes hereof,
“Change of Control” means
an
event or series of events by which:
-9-
(I)
any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, but excluding any employee benefit plan of
such
person or its subsidiaries, and any person or entity acting in its capacity
as
trustee, agent, or other fiduciary or administrator of any such plan) becomes
the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934), directly or indirectly, of 35% or more of the equity
securities of the Company entitled to vote for members of the Board or
equivalent governing body of the Company on a fully diluted basis;
or
(II) during
any period of 24 consecutive months, 35% of the members of the Board or other
equivalent governing body of the Company cease to be composed of individuals
(i)
who were members of that Board or equivalent governing body on the first day
of
such period, (ii) whose election or nomination to that board or equivalent
governing body was approved by individuals referred to in clause
(i)
above
constituting at the time of such election or nomination at least a majority
of
that Board or equivalent governing body, or (iii) whose election or nomination
to that Board or other equivalent governing body was approved by individuals
referred to in clauses
(i)
and
(ii)
above
constituting at the time of such election or nomination at least a majority
of
that Board or equivalent governing body (excluding, in the case of both
clause
(ii)
and
clause
(iii),
any
individual whose initial nomination for, or assumption of office as, a member
of
that Board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal
of
one or more directors by any person or group other than a solicitation for
the
election of one or more directors by or on behalf of the Board).
7. Survivorship.
The
respective rights and obligations of the parties hereunder shall survive any
termination of Executive’s employment and the Employment Term to the extent
necessary to the intended preservation of such rights and
obligations.
8. No
Mitigation.
Executive shall not be required to mitigate the amount of any payment or benefit
provided for in this Agreement by seeking other employment or otherwise and
there shall be no offset against amounts due Executive under this Agreement
on
account of any remuneration attributable to any subsequent employment that
he
may obtain. All payments to be made by the Company to Executive hereunder shall
be made without any offset or deduction for any amounts owed by Executive to
the
Company.
9. Arbitration;
Expenses.
(a) In
the
event of any dispute under the provisions of this Agreement other than a dispute
in which the primary relief sought is an equitable remedy such as an injunction,
the parties shall be required to have the dispute, controversy or claim settled
by arbitration in the City of New York, New York in accordance with the National
Rules for the Resolution of Employment Disputes then in effect of the American
Arbitration Association, before a panel of three arbitrators, two of whom shall
be selected by the Company and Executive, respectively, and the third of whom
shall be selected by the other two arbitrators. Any award entered by the
arbitrators shall be final, binding and nonappealable and judgment may be
entered thereon by either
-10-
party
in
accordance with applicable law in any court of competent jurisdiction. This
arbitration provision shall be specifically enforceable. The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement. The Company shall be responsible
for all of its own legal fees and other expenses relating to such arbitration.
The fees of the American Arbitration Association and the legal fees and expenses
of Executive relating to such arbitration shall be borne in the manner
determined by order of the arbitrators.
(b) The
Company shall, upon receipt of an invoice from Executive, reimburse Executive
for all reasonable legal fees and expenses incurred by Executive in connection
with the negotiation and execution of this Agreement.
10. Notices.
All
notices and other communications required or permitted hereunder or necessary
or
convenient in connection herewith shall be in writing and shall be deemed to
have been given when hand delivered or mailed by registered or certified mail,
as follows (provided that notice of change of address shall be deemed given
only
when received):
If
to the
Company, to:
Vail
Resorts, Inc.
P.O.
Box
7
Vail,
CO
81658
Attention:
General Counsel
If
to
Executive, to:
Robert
A.
Katz
c/o
Vail
Resorts, Inc.
P.O.
Box
7
Vail,
CO
81658
or
to
such other names or addresses as the Company or Executive, as the case may
be,
shall designate by notice to each other person entitled to receive notices
in
the manner specified in this Section.
11. Contents
of Agreement; Amendment and Assignment.
(a) This
Agreement supersedes all prior agreements and sets forth the entire
understanding between the parties hereto with respect to the subject matter
hereof and cannot be changed, modified, extended or terminated except as
provided herein or upon written amendment approved by the Company and executed
on its behalf by a duly authorized officer and by Executive.
(b) All
of
the terms and provisions of this Agreement shall be binding upon and inure
to
the benefit of and be enforceable by the respective heirs, executors,
administrators, legal representatives, successors and assigns of the parties
hereto, except that the duties and responsibilities of Executive hereunder
are
of a personal nature and shall not be assignable or delegatable in whole or
in
part by Executive. The Company shall require any successor (whether
-11-
direct
or
indirect, by purchase, merger, consolidation, reorganization or otherwise)
to
all or substantially all of the business or assets of the Company, by agreement
in form and substance satisfactory to Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the extent the Company
would
be required to perform if no such succession had taken place, and upon request
by the Company Executive shall acknowledge, by agreement in form and substance
reasonably acceptable to such successor, that this Agreement may be enforced
against Executive by such successor.
12. Severability.
If any
provision of this Agreement or application thereof to anyone or under any
circumstances is adjudicated to be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect any other provision or
application of this Agreement which can be given effect without the invalid
or
unenforceable provision or application and shall not invalidate or render
unenforceable such provision or application in any other jurisdiction. If any
provision is held void, invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.
13. Remedies
Cumulative; No Waiver.
No
remedy conferred upon a party by this Agreement is intended to be exclusive
of
any other remedy, and each and every such remedy shall be cumulative and shall
be in addition to any other remedy given hereunder or now or hereafter existing
at law or in equity. No delay or omission by a party in exercising any right,
remedy or power hereunder or existing at law or in equity shall be construed
as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary
by
such party in its sole discretion.
14. Beneficiaries/References.
Executive shall be entitled, to the extent permitted under any applicable law,
to select and change a beneficiary or beneficiaries to receive any compensation
or benefit payable hereunder following Executive’s death by giving the Company
written notice thereof. In the event of Executive’s death or a judicial
determination of his incompetence, references in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or
other
legal representative.
15. Miscellaneous.
All
section headings used in this Agreement are for convenience only. This Agreement
may be executed in counterparts, each of which is an original. It shall not
be
necessary in making proof of this Agreement or any counterpart hereof to produce
or account for any of the other counterparts.
16. Withholding.
The
Company may withhold from any payments under this Agreement all federal, state
and local taxes as the Company is required to withhold pursuant to any law
or
governmental rule or regulation. Executive shall bear all expense of, and be
solely responsible for, all federal, state and local taxes due with respect
to
any payment received hereunder.
17. Indemnification
and Insurance.
Executive shall be indemnified with respect to his services hereunder to the
full extent provided in the Company’s by-laws, and the Company agrees during the
Employment Term to maintain directors’ and officers’ liability insurance with
coverage and other terms that are customary for similarly situated
companies.
-12-
18. Section
409A.
It is
intended that this Agreement will comply with Section 409A of the Code (and
any
regulations and guidelines issued thereunder) to the extent the Agreement is
subject thereto, and the Agreement shall be interpreted on a basis consistent
with such intent. If an amendment of the Agreement is necessary in order for
it
to comply with Section 409A, the parties hereto will negotiate in good faith
to
amend the Agreement in a manner that preserves the original intent of the
parties to the extent reasonably possible.
19. Excise
Tax.
(a) Anything
in this Agreement to the contrary notwithstanding, in the event it shall
be determined
that any payment, award, benefit or distribution (including, without limitation,
the acceleration of any payment, award, distribution or benefit), by the Company
or its subsidiaries to or for the benefit of the Executive (whether pursuant
to
the terms of this Agreement or otherwise, but determined without regard to
any
additional payments required under this Section 19) (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Code or any
corresponding provisions of state or local tax law, or any interest or penalties
are incurred by the Executive with respect to such excise tax (such excise
tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then the Executive shall be entitled to
receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by the Executive of all taxes (including any Excise Tax, income
tax or employment tax) imposed upon the Gross-Up Payment and any interest or
penalties imposed with respect to such taxes, the Executive retains from the
Gross-Up Payment an amount equal to the excess, if any, of (i) the Excise Tax
imposed upon the Payments, and (ii) the Excise Tax, if any, that would have
been
imposed on the Payments if the Executive had not served as a nonemployee
director of the Company prior to the Effective Date (and, therefore, the
Executive’s nonemployee director compensation had not been taken into account in
the Excise Tax computation). The payment of a Gross-Up Payment under this
Section 19(a) shall not be conditioned upon the Executive’s termination of
employment. Notwithstanding the foregoing provisions of this Section 19, if
it shall be determined that the Executive is entitled to a Gross-Up Payment,
but
that the portion of the Payments that would be treated as “parachute payments”
under Section 280G of the Code does not exceed the Safe Harbor Amount (as
defined in the following sentence) by more than $100,000, then no Gross-Up
Payment shall be made to the Executive and the amounts payable under this
Agreement shall be reduced so that the Payments, in the aggregate, are reduced
to the Safe Harbor Amount. The “Safe Harbor Amount” is the greatest amount of
payments in the nature of compensation that are contingent on a Change in
Control for purposes of Section 280G of the Code that could be paid to the
Executive without giving rise to any Excise Tax. The reduction of the amounts
payable hereunder, if applicable, shall be made by reducing the cash payments
under Section 5. For purposes of reducing the payments to the Safe Harbor
Amount, only amounts payable under this Agreement (and no other Payments) shall
be reduced. If the reduction of the amounts payable under this Agreement would
not result in a reduction of the Payments to the Safe Harbor Amount, no amounts
payable under this Agreement shall be reduced pursuant to this
Section 19(a).
(b) Subject
to the provisions of Section 19(c), all determinations required to be made
under
this Section 19, including the determination of whether a Gross-Up Payment
is
required and of the amount of any such Gross-up Payment, shall be made by the
Company's independent auditors or such other accounting firm agreed by the
parties hereto (the “Accounting
-13-
Firm”),
which shall provide detailed supporting calculations to the Company within
15
business days after the receipt of notice from the Company that the Executive
has received a Payment, or such earlier time as is requested by the Company,
provided that any determination that an Excise Tax is payable by the Executive
shall be made on the basis of substantial authority. The Company will promptly
provide copies of such supporting calculations to the Executive. The initial
Gross-Up Payment, if any, as determined pursuant to this Section 19(b), shall
be
paid to the Executive (or for the benefit of the Executive to the extent of
the
Company’s withholding obligation with respect to applicable taxes) no later than
the later of (i) the due date for the payment of any Excise Tax, and
(ii) the receipt of the Accounting Firm’s determination. If the Accounting
Firm determines that no Excise Tax is payable by the Executive, it shall furnish
the Company with a written opinion that substantial authority exists for the
Executive not to report any Excise Tax on his Federal income tax return and,
as
a result, the Company is not required to withhold Excise Tax from payments
to
the Executive. The Company will promptly provide a copy of any such opinion
to
the Executive. Any determination by the Accounting Firm meeting the requirements
of this Section 19(b) shall be binding upon the Company and the Executive.
As a
result of the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm hereunder, it
is
possible that Gross-Up Payments which will not have been made by the Company
should have been made (“Underpayment”), consistent with the calculations
required to be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 19(c) and the Executive thereafter is required
to
make a payment of Excise Tax, the Accounting Firm shall determine the amount
of
the Underpayment, if any, that has occurred and any such Underpayment shall
be
promptly paid by the Company to or for the benefit of the Executive. The fees
and disbursements of the Accounting Firm shall be paid by the
Company.
(c) The
Executive shall notify
the Company in writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Company of a Gross-Up Payment.
Such
notification shall be given as soon as practicable but not later than ten
business days after the Executive receives written notice of such claim and
shall apprise the Company of the nature of such claim and the date on which
such
Claim is requested to be paid. The Executive shall not pay such claim prior
to
the expiration of the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies
the
Executive in writing prior to the expiration of such period that it desires
to
contest such claim, the Executive shall:
(i)
give
the Company any information reasonably requested by the Company relating to
such
claim,
(ii)
take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii)
cooperate with the Company in good faith in order effectively to contest such
claim, and
(iv)
permit the Company to participate in any proceedings relating to such claim;
-14-
provided,
however,
that
the Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest
and
shall indemnify and hold the Executive harmless, on an after-tax basis, for
any
Excise Tax, income tax or employment tax, including interest and penalties
with
respect thereto, imposed as a result of such representation and payment of
costs
and expenses. Without limitation on the foregoing provisions of this
Section 19(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with
the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and sue for a refund or contest
the
claim in any permissible manner, and the Executive agrees to prosecute such
contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided,
however,
that if
the Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive on an
interest-free basis and shall indemnify and hold the Executive harmless, on
an
after-tax basis, from any Excise Tax, income tax or employment tax, including
interest or penalties with respect thereto, imposed with respect to such advance
(except that if such a loan would not be permitted under applicable law, the
Company may not direct the Executive to pay the claim and sue for a refund);
and
further provided
that any
extension of the statute of limitations relating to the payment of taxes for
the
taxable year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore,
the
Company’s control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall
be
entitled to settle or contest, as the case may be, any other issue raised by
the
Internal Revenue Service or any other taxing authority.
(d) If,
after
the receipt by the Executive of an amount advanced by the Company pursuant
to
Section 19(c), the Executive becomes entitled to receive any refund with respect
to such claim, the Executive shall (subject to the Company’s complying with the
requirements of Section 19(c)) promptly pay to the Company the amount of
such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 19(c), a determination is made
that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent
to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required
to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of the Gross-Up Payment required to be paid.
20. Governing
Law.
This
Agreement shall be governed by and interpreted under the laws of the State
of
New York without giving effect to any conflict of laws provisions.
-15-
IN
WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed
this Agreement as of the date first above written.
|
VAIL
RESORTS, INC.
By:
/s/ Martha D. Rehm
Martha
D. Rehm
Sr.
Vice President and
General
Counsel
|
EXECUTIVE
/s/
Robert A. Katz
Robert
A. Katz
|
-16-
MUTUAL
RELEASE
This
mutual release (this “Release”) is entered into as of this ____ day of ______,
____ (the “Release Date”) by Robert A. Katz (“Katz”), on the one hand and Vail
Resorts, Inc. (“VRI”) on the other hand.
1. Reference
is hereby made to the employment agreement dated February 28, 2006 (the
“Employment Agreement”) by the parties hereto setting forth the agreements among
the parties regarding the termination of the employment relationship between
Katz and VRI. Capitalized terms used but not defined herein have the meanings
ascribed to them in the Employment Agreement.
2. Katz,
for
himself, his wife, heirs, executors, administrators, successors, and assigns,
hereby releases and discharges VRI and its respective direct and indirect
parents and subsidiaries, and other affiliated companies, and each of their
respective past and present officers, directors, agents and employees, from
any
and all actions, causes of action, claims, demands, grievances, and complaints,
known and unknown, which Katz or his wife, heirs, executors, administrators,
successors, or assigns ever had or may have at any time through the Release
Date. Katz acknowledges and agrees that this Release is intended to and does
cover, but is not limited to, (i) any claim of employment discrimination of
any
kind whether based on a federal, state, or local statute or court decision,
including the Age Discrimination in Employment Act with appropriate notice
and
recision periods observed; (ii) any claim, whether statutory, common law, or
otherwise, arising out of the terms or conditions of Katz’s employment at VRI
and/or Katz’s separation from VRI; enumeration of specific rights, claims, and
causes of action being released shall not be construed to limit the general
scope of this Release. It is the intent of the parties that by this Release
Katz
is giving up all rights, claims and causes of action occurring prior to the
Release Date, whether or not any damage or injury therefrom has yet occurred.
Katz accepts the risk of loss with respect to both undiscovered claims and
with
respect to claims for any harm hereafter suffered arising out of conduct,
statements, performance or decisions occurring before the Release
Date.
3. VRI
hereby releases and discharges Katz, his wife, heirs, executors, administrators,
successors, and assigns, from any and all actions, causes of actions, claims,
demands, grievances and complaints, known and unknown, which VRI ever had or
may
have at any time through the Release Date. VRI acknowledges and agrees that
this
Release is intended to and does cover, but is not limited to, (i) any claim,
whether statutory, common law, or otherwise, arising out of the terms or
conditions of Katz’s employment at VRI and/or Katz’s separation from VRI, and
(ii) any claim for attorneys’ fees, costs, disbursements, or other like
expenses. The enumeration of specific rights, claims, and causes of action
being
released shall not be construed to limit the general scope of this Release.
It
is the intent of the parties that by this Release VRI is giving up all of its
respective rights, claims, and causes of action occurring prior to the Release
Date, whether or not any damage or injury therefrom has yet occurred. VRI
accepts the risk of loss with respect to both undiscovered claims and with
respect to claims for any harm hereafter suffered arising out of conduct,
statements, performance or decisions occurring before the Release
Date.
-17-
4. This
Release shall in no event (i) apply to any claim by either Katz or VRI arising
from any breach by the other party of its obligations under the Employment
Agreement occurring on or after the Release Date, (ii) waive Katz’s claim with
respect to compensation or benefits earned or accrued prior to the Release
Date
to the extent such claim survives termination of Katz’s employment under the
terms of the Employment Agreement, or (iii) waive Katz’s right to
indemnification under the by-laws of the Company.
5. This
Mutual Release shall be effective as of the Release Date and only if executed
by
both parties.
IN
WITNESS WHEREOF, each party hereto, intending to be legally bound, has executed
this Mutual Release on the date indicated below.
|
______________________________________
Robert
A. Katz
Date:
_______________________________________
|
VAIL
RESORTS, INC.
By:
___________________________________________
Date:
__________________________________________
|
-18-
This
Separation Agreement and General Release (referred to as the “Agreement”) dated
as of February 27, 2006, is by and between Adam
M. Aron
(referred to as the “EXECUTIVE”) and Vail
Resorts, Inc.
(referred to as the “COMPANY”). The EXECUTIVE and the COMPANY may be referred to
collectively as the “Parties”.
WHEREAS,
the EXECUTIVE is the Chairman of the Board of Directors and the Chief Executive
Officer of the COMPANY; and
WHEREAS,
the EXECUTIVE and the COMPANY agree that on the EXECUTIVE’S Final Date of
Employment, as hereinafter defined, the EXECUTIVE will no longer perform
services as an employee of the COMPANY or its subsidiaries, will no longer
be a
member of the Board of Directors of the COMPANY or its subsidiaries, and will
cease to be eligible to participate in benefit plans for active employees of
the
COMPANY; and
WHEREAS,
the EXECUTIVE has served the COMPANY for almost a decade; and
WHEREAS,
the EXECUTIVE acknowledges that, as of the Final Date of Employment, he has
no
entitlement to continued pay or benefits under the Employment Agreement between
the EXECUTIVE and the COMPANY dated as of July 29, 1996, as amended (the
“Employment Agreement”); and
WHEREAS,
the COMPANY wishes to provide the EXECUTIVE with equitable compensation,
notwithstanding his resignation, to compensate him for his service and the
EXECUTIVE’S assistance in providing the COMPANY with an orderly transition of
management; and
WHEREAS,
the COMPANY, therefore, wishes to pay the EXECUTIVE the amounts set forth
herein, less statutory and authorized deductions;
In
consideration of the mutual promises contained in this Agreement, the COMPANY
and the EXECUTIVE agree as follows:
1. As
used
herein, the following terms, when capitalized, shall have the following
meanings:
(a) “Companies”
shall mean the COMPANY and all of its subsidiaries and controlled
affiliates.
(b) “Confidential
Information” shall mean budgets, business plans, financial projections, terms of
transactions under consideration, strategies, financial statements and results,
plans or drawings, lease terms, customer lists and information, prospect lists,
club membership rolls, trade secrets, and other information, whether in tangible
or electronic media format, pertaining to the business and operations of the
Companies. In addition, without in any way limiting the foregoing, Confidential
Information includes any and all information in the EXECUTIVE’S possession or of
which the EXECUTIVE has knowledge relating to or arising out of any actual
or
threatened regulatory investigation or proceeding or settlement or any other
litigation, claim, investigation, suit, action or other proceeding involving
or
relating to the Companies, whether such investigation,
or
proceeding, settlement, claim, litigation, suit, action or other proceeding
or
the EXECUTIVE’S knowledge thereof occurred or was obtained during or prior to or
after the term of the EXECUTIVE’S employment by the COMPANY. Confidential
Information does not include any information which is generally available to
the
public or hereafter becomes available to the public without the fault of the
EXECUTIVE, and it shall not include club membership rolls sent to the EXECUTIVE
in his capacity as a member of the applicable club, provided that the EXECUTIVE
agrees that he will use such club membership rolls only in accordance with
the
rules and regulations of the applicable club.
(c) “Constituting
Documents” shall mean the articles or certificates of incorporation, bylaws, or
similar organizational documents for each of the Companies.
(d) “Final
Date of Employment” shall mean February 27, 2006.
(e) “Legal
Proceeding” shall mean any claim, demand, pending or threatened legal,
regulatory or administrative proceeding and any other action of any nature,
whether known or unknown.
(f) “Released
Person” shall mean each of the Companies, and any of their current and former
officers, directors, employees, shareholders, partners, members, agents,
representatives, legal representatives, accountants, and their successors and
assigns.
2. The
employment relationship between the EXECUTIVE and the COMPANY will terminate
on
the Final Date of Employment. This Agreement shall constitute the EXECUTIVE’S
resignation from the Board of Directors of the COMPANY and all other officer,
director and employee positions with the Companies, in each case effective
on
the Final Date of Employment. The parties hereto acknowledge that, following
the
Final Date of Employment, the EXECUTIVE shall not be considered an executive
officer of the COMPANY.
3. In
consideration for the EXECUTIVE entering into this Agreement:
(a) conditioned
on the execution and non-revocation, pursuant to Section 14 hereof, of this
Agreement, the
COMPANY agrees to pay the
EXECUTIVE,
on
August 31, 2006 the
sum
of $1,508,795 and
on
September 30, 2006,
the
sum
of $1,141,000,
in each
case less statutory and authorized deductions; and
(b) the
COMPANY agrees to pay the
EXECUTIVE,
on
March 3, 2006, full payment of
any
amount owing to the EXECUTIVE in respect of base salary
for the period through February 27, 2006, as well as accrued
and unused paid time off,
less a
pro-rated Mandatory Time Off deduction, through such date (as reflected on
the
human resources records of the COMPANY).
4. In
addition to that set forth in Section 3 above, the following shall be applicable
as a result of
the
EXECUTIVE’S separation:
-2-
(a) After
the
Final Date of Employment: (i) the EXECUTIVE shall neither accrue salary nor
paid
time off nor participate in (A) COMPANY Medical and Dental Plans (other
than as required under COBRA at the EXECUTIVE’S sole expense), (B) Short
Term or Long Term Disability Insurance, (C) COMPANY sponsored Life or ADD
insurance programs, or (D) any other compensation or benefit plans,
programs or arrangements maintained or contributed to by any of the Companies;
(ii) he shall have no right to make contributions or earn COMPANY Matching
Contributions in the COMPANY’S 401(k) Plan (except
for any COMPANY Matching Contributions due but not yet made or for any excess
EXECUTIVE or COMPANY contributions, and attributable earnings, to be refunded
to
him for fiscal year 2005);
and
(iii) except as otherwise provided in Sections 4(f) and 5 below, he shall no
longer be entitled to any perquisites made available to active executives or
employees of the COMPANY, including, but not limited to parking or the use
of
COMPANY owned and promotional vehicles. The EXECUTIVE’S rights with respect to
his accrued benefits, as of the Final Date of Employment, under the COMPANY’S
401(k) Plan will be as set forth in the applicable plan documents, and any
conversion or continuation right the EXECUTIVE may have under any other COMPANY
employee benefit plan will be as set forth in the applicable plan document
and
shall be at his sole expense. Other than as expressly set forth in this
Agreement, the EXECUTIVE will have no continuing rights under any employee
benefit plan or arrangement of the Companies following the Final Date of
Employment.
(b) The
EXECUTIVE shall not be eligible to earn and receive a bonus award for fiscal
year 2006.
(c) Any
stock
options, restricted stock or other equity-based compensation awards held by
the
EXECUTIVE that are not vested and, in the case of stock options, exercisable
as
of the EXECUTIVE’S Final Date of Employment will be immediately cancelled and
forfeited.
(d) Notwithstanding
anything in this or another document to the contrary, all vested
options to purchase stock of the COMPANY held by the EXECUTIVE after the Final
Date of Employment (each of which is listed on Annex A hereto) shall continue
to
be exercisable until May 28, 2006 (but in no event beyond the full term of
the
option). Any such options that are not exercised by May 28, 2006 shall
be forfeited.
(e) The
COMPANY shall reimburse the EXECUTIVE for reasonable expenses incurred by him
in
the course of performing his duties with the COMPANY prior to the Final Date
of
Employment (or expenses specifically authorized in advance by the COMPANY in
connection with his performance of any services requested of him by the COMPANY
pursuant to Section 7(a) below), so long as such expenses were incurred in
compliance with the COMPANY’S policies with respect to travel, entertainment and
other business expenses, and the EXECUTIVE has complied with the COMPANY’S
requirements with respect to submitting, reporting and documentation of such
expenses. In
addition, the EXECUTIVE may use a credit of the COMPANY at the Mirabelle
-3-
restaurant
toward expenses incurred for the March 20, 2006 Executive Committee Dinner
now
scheduled to be held in his residence.
(f) For
the
period through the end of the 2006 ski season the EXECUTIVE and his immediate
family members shall continue to have ski privileges and ski school privileges
equivalent to those given to non-employee members of the Board of Directors
of
the COMPANY.
(g) For
the
period through August 28, 2006, the COMPANY shall maintain (i) an appropriate
forwarding message recorded by the EXECUTIVE and approved by the COMPANY on
voicemail for the EXECUTIVE’S former COMPANY telephone number, and (ii) an
autoresponse on the email address adama@vailresorts.com with an appropriate
forwarding email response created by the EXECUTIVE and approved by the COMPANY.
In addition, through August 28, 2006, the Company shall forward to the
EXECUTIVE, at an address he may reasonably provide from time to time, any first
class mail addressed to the EXECUTIVE at the COMPANY’s offices which the COMPANY
determines is his personal mail.
(h) The
COMPANY shall pay the EXECUTIVE’S
reasonable legal fees and expenses (not to exceed $12,500) incurred by him
in
negotiating and executing this Agreement.
5. The
COMPANY further agrees that the EXECUTIVE shall retain the following club
memberships previously vested in the EXECUTIVE in connection with his employment
with the COMPANY: (i) one transferable charter membership in the Beaver Creek
Club which
shall carry a value as if the EXECUTIVE paid a $60,000 cash initiation fee
for
such membership, (ii) two transferable
memberships in the Red Sky Ranch Golf Club which
shall carry a value as if the EXECUTIVE paid a $175,000 cash initiation fee
for
each such membership,
and
(iii) one nontransferable honorary membership in the Game Creek Club. After
September 26, 2006 (May 1, 2006 in the case of the Beaver Creek Club), the
EXECUTIVE will be responsible for payment of all annual dues, fees and
assessments and shall assume all obligations relating to such club memberships
held by the EXECUTIVE. The EXECUTIVE may transfer his
Beaver Creek Club membership to the purchaser of his Beaver Creek home, or
may
otherwise resign the membership per the standard terms of the Beaver Creek
Club.
The EXECUTIVE may transfer
one or
both of the Red Sky Ranch Golf Club memberships if and when and to whom the
lot
purchased by the EXECUTIVE in the Red Sky Ranch golf community pursuant to
his
employment agreement with the Company is sold, without restriction by the Red
Sky Ranch Club and with no membership initiation fee or transfer fee being
owed,
or
the
EXECUTIVE may otherwise resign such memberships per the standard terms of the
Red Sky Ranch Golf Club, except that if he resigns from one or both of his
Red
Sky Ranch Golf Club memberships, the amount refunded to the EXECUTIVE following
the resale of his memberships after such resignation shall be $175,000 per
membership.
6. (a)
In
return for the consideration and other promises by the COMPANY set forth in
this
Agreement, the EXECUTIVE for himself and his representatives, heirs, and
assigns, hereby releases and discharges each of the Released Persons from all
Legal Proceedings, known or unknown, that he may have against any of the
Released Persons, including, but not limited to,
-4-
claims
that in any manner relate to, arise out of or involve any aspect of his
employment with the COMPANY, and his separation from that employment, including,
but not limited to, any rights or claims under the Federal Worker Adjustment
and
Restraining Notification Act, 29 U.S.C. §2101 et seq.;
the
Colorado Anti-Discrimination Act, Colo. Rev. Stat. §21-34-401, et seq.;
the
Family and Medical Leave Act, 29 U.S.C. §2601 et seq.;
the
Age Discrimination in Employment Act, 29 U.S.C. §621 et seq.;
the
Civil Rights Act of 1964, as amended, 42 U.S.C., §2000e, et seq.;
the
Americans with Disabilities Act, 42 U.S.C. §12101, et seq.;
the
Sarbanes-Oxley Act of 2002, 18 U.S.C. §800 et seq.;
Executive Order 11246; the Civil Rights Act of 1866, as reenacted, 42 U.S.C.
§1981; and any and all other municipal, state, and/or federal statutory,
executive order, or constitutional provisions pertaining to an employment
relationship. This release and waiver also specifically includes, but is not
limited to, any Legal Proceedings in the nature of tort or contract claims,
including specifically claims of wrongful discharge, breach of contract,
promissory estoppel, intentional or negligent infliction of emotional distress,
interference with contract, libel, slander, breach of covenant of good faith
and
fair dealing, or other such claims, including, but not limited to, those arising
out of or involving any aspect of his employment or separation from employment
with the COMPANY. Except as provided in Section 4(h) above, this release
includes any and all claims seeking attorney fees, costs, and other expenses
related to the claims released herein.
However,
this release and waiver shall not apply to: (i) any rights which, by law, may
not be waived; (ii) rights and claims that arise from acts or events occurring
after the effective date of this Agreement; (iii) claims with respect to the
EXECUTIVE’S accrued benefits, as of the Final Date of Employment, under the
COMPANY’S 401(k) Plan which will be as set forth in the applicable plan
documents, or any conversion or continuation right the EXECUTIVE may have under
any other COMPANY employee benefit plan which will be as set forth in the
applicable plan document and shall be at his sole expense; (iv) rights to
indemnification or advancement of expenses under the Amended and Restated
Certificate of Incorporation and Amended and Restated Bylaws of the COMPANY;
(v)
rights as a shareholder of the COMPANY; (vi) rights under an executory purchase
and sale agreement for real estate, and rights as an owner of real estate,
in
either case constructed and sold by the COMPANY as to which the EXECUTIVE is
the
purchaser; or (vi) claims for breach by the COMPANY of this
Agreement.
The
EXECUTIVE also specifically covenants and represents that he has not and will
not bring suit or file any charge, grievance or complaint, of any nature in
relation to any claim or right waived herein, against the Released
Persons.
SUMMARY
OF RELEASE AND WAIVER OF CLAIMS:
Please read the three immediately preceding paragraphs carefully and have them
explained to you by your attorney. In summary, what the paragraphs say and
what
you, the EXECUTIVE, agree to do by executing this Agreement is to give up your
right to pursue any legal claim that you might have against the COMPANY (Vail
Resorts, Inc.) and related companies (including Vail Resorts Development
Company, The Vail Corporation and Vail Summit Resorts, Inc.), their current
and
former, officers, directors, shareholders, agents, and/or employees. It applies
whether or not you are aware of the claims. It applies to claims that arose
(meaning the important facts and occurrences which create or support the claim
happened) at any time up to and including the time of your execution of this
Agreement. It does not apply to any claims that might arise (meaning that the
important facts or occurrences that
-5-
create
or support the claim happen) after the date of execution of this Agreement.
As
stated above, the release and waiver includes, but is not limited to, any and
all claims arising from your employment or your separation from employment
with
the COMPANY. Such claims would include claims of employment discrimination
or
wrongful discharge and claims arising under any federal, state, and local laws,
including, but not limited to, those listed by name above. Once you have entered
into this Agreement, you will have agreed not to seek to bring those claims
in a
court or other forum at any time in the future. In effect, you are exchanging
your right to bring or pursue those claims, whether they are worth anything
or
not, for the actions to be taken for your benefit by the COMPANY and other
promises in this Agreement.
(b) In
return
for the consideration and other promises by the EXECUTIVE set forth in this
Agreement, the Companies hereby release and discharge the EXECUTIVE, and his
representatives, heirs and assigns (the “EXECUTIVE Released Persons”) from all
Legal Proceedings, known or unknown, that they may have against any of the
the
EXECUTIVE Released Persons, including but not limited to, claims that in any
manner relate to, arise out of or involve any aspect of the EXECUTIVE’S
employment with the COMPANY, and his separation from that employment. This
release and waiver also specifically includes, but is not limited to, any Legal
Proceedings in the nature of tort or contract claims, including specifically
claims of wrongful discharge, breach of contract, promissory estoppel,
intentional or negligent infliction of emotional distress, interference with
contract, libel, slander, breach of covenant of good faith and fair dealing,
or
other such claims, including, but not limited to, those arising out of or
involving any aspect of his employment or separation from employment with the
COMPANY. This release includes any and all claims seeking attorney fees, costs,
and other expenses related to the claims released herein. However,
this release and waiver shall not apply to: (i) any rights which, by law, may
not be waived; (ii) rights and claims that arise from acts or events occurring
after the effective date of this Agreement; (iii)
rights
under any executory purchase and sale agreement for real estate constructed
and
sold by the COMPANY as to which the EXECUTIVE is the purchaser, and
(iv)
claims
for breach of any provision of this Agreement by the EXECUTIVE.
The
Companies also specifically covenant and represent that they have not and will
not bring suit or file any charge, grievance or complaint, of any nature in
relation to any claim or right waived herein against the EXECUTIVE.
(c)
The
parties acknowledge the continuing validity, after the Final Date of Employment,
of the Undertaking for Advancement of Expenses dated October 15, 2004 (the
“Undertaking”) and of any right or claims that the COMPANY or any of the other
Companies, as applicable, may have or assert in accordance with the Undertaking,
the Amended and Restated Certificate of Incorporation and Amended and Restated
Bylaws of the COMPANY, or other Constituting Documents applicable to the
EXECUTIVE, for reimbursement of attorneys’ fees, indemnity sums, or any other
sums paid or incurred in the EXECUTIVE’S defense by the COMPANY, or any of the
Companies, in connection with any Legal Proceeding.
7. The
EXECUTIVE agrees to the following:
(a) The
EXECUTIVE shall cooperate
with and assist the COMPANY whenever reasonably possible, when reasonably
requested to do so by the COMPANY
-6-
through
December 31, 2006, so that all of the EXECUTIVE’S duties, responsibilities and
pending matters can be transferred in an orderly way.
(b) The
EXECUTIVE shall remove all of his personal possessions from his office by no
later than March 31, 2006, provided that the EXECUTIVE shall not return to
his
office after the Final Date of Employment other than at such time agreed to
by
the COMPANY in order to remove his personal possessions. The
EXECUTIVE shall return
all COMPANY materials that may have been issued to the EXECUTIVE, including,
but
not limited to, keys, written or electronic Confidential Information, and credit
cards, and to promptly file any outstanding final expense report; provided,
however,
that
EXECUTIVE will be entitled to retain his laptop computer and
related home docking station. The EXECUTIVE shall pay Vailnet for its high-speed
ISP service to his residence commencing as of the Final Date of
Employment.
Subject
to compliance with his obligations herein with respect to the use and disclosure
of Confidential Information, the EXECUTIVE will be entitled to retain his
electronic rolodex and schedule.
(c) The
EXECUTIVE shall not
use or
disclose to anyone not connected with the COMPANY, or use for his own benefit
or
that of third parties, any Confidential Information or trade secrets that the
EXECUTIVE obtained during his employment with the COMPANY, except as required
in
any judicial or administrative proceeding.
(d) The
EXECUTIVE shall not
make any
copies for his own use or for the benefit of unrelated third parties, of any
prospect lists, any memoranda, books, records, or documents, whether in tangible
or electronic media form, which contain Confidential Information or trade
secrets belonging to the COMPANY, except as required in any judicial or
administrative proceeding.
(e) For
the
period through the first anniversary of the Final Date of Employment, the
EXECUTIVE will not, except with the prior written consent of the Board of
Directors of the COMPANY, directly or indirectly own, manage, operate, join,
control, finance or participate in the ownership, management, operation, control
or financing of, or be connected as an officer, director, employee, partner,
principal, agent, representative, consultant or otherwise with, or use or permit
his name to be used in connection with, any business or enterprise that is
engaged in a “Competing Enterprise,” which is defined as an entity whose
operations are conducted within the ski industry in North America or in the
real
estate development, lodging or hospitality industries in the State of Colorado.
Notwithstanding the foregoing, the EXECUTIVE may participate, own, finance,
manage, obtain employment or otherwise be connected with a larger regional,
national or international business or enterprise (a “New Employer”) which owns
or operates a Competing Enterprise as a brand, branch, division, subsidiary
or
affiliate provided that (i) the Competing Enterprise accounts for less than
10%
of the New Employer’s annual revenues and annual net income on both a historical
or pro forma basis for the New Employer’s most recently completed fiscal year,
and (ii) the EXECUTIVE’S duties for the New Employer are not primarily related
to the conduct of such Competing Enterprise. The foregoing restrictions shall
not be construed to prohibit the ownership by the EXECUTIVE of less than five
percent (5%) of any class of securities of any corporation which is engaged
in
any of the foregoing businesses having
-7-
a
class
of securities registered pursuant to the Securities Exchange Act of 1934 (the
“Exchange Act”), provided that such ownership represents a passive investment
and that neither the EXECUTIVE nor any group of persons including the EXECUTIVE
in any way, either directly or indirectly, manages or exercises control of
any
such corporation, guarantees any of its financial obligations, otherwise takes
any part in its business (other than exercising his rights as a shareholder),
or
seeks to do any of the foregoing.
(f) The
EXECUTIVE further covenants and agrees that through the first anniversary of
the
Final Date of Employment, the EXECUTIVE will not solicit for another business
or
enterprise any person who is a managerial or higher level employee of the
Company at the time of the EXECUTIVE’S termination.
(g) The
EXECUTIVE agrees that, through June 28, 2006, he will not (and he will direct
his immediate family to not) make any public statements (whether positive or
negative) with respect to any of the Companies unless prior written approval
of
the statement is given to the EXECUTIVE by a successor Chief Executive Officer
of the COMPANY.
For the
purposes hereof, “Public Statements” shall mean statements, written, electronic
or oral, given to any media person or outlet, to securities analysts, to persons
known to the EXECUTIVE to be shareholders of the COMPANY or made to a group
of 4
or more people or statements made under circumstances where it is reasonable
to
believe that they would become public. Public Statements shall not include
private conversations to persons not just described unless statements are made
under circumstances where it is reasonable to believe that they would become
public.
In
addition, for a period of five years after the Final Date of Employment, the
EXECUTIVE agrees that he shall not make any statements, public or private,
disparaging of the COMPANY or other Companies, the Board, or the officers,
directors, stockholders, or employees of the COMPANY or other Companies. The
Companies shall similarly not disparage, and the COMPANY shall direct its
executive officers to (and request that its directors) similarly not disparage,
the EXECUTIVE for a period of five years following the Final Date of Employment.
Notwithstanding any of the foregoing in this subsection, the parties may respond
truthfully to inquiries from governmental agencies or from the prospective
employers of the EXECUTIVE. Similarly, nothing in this Agreement is intended
to
prevent either party from seeking to enforce the provisions of this Agreement
through appropriate proceedings.
The
parties acknowledge that the COMPANY retains the right, together with any other
legal remedy the COMPANY may have, to discontinue the payments and benefits
described in Sections 3 or 4, at any time upon written notice to the EXECUTIVE,
in the event that the COMPANY determines, in good faith, that (i) the EXECUTIVE
is violating or has violated any of the obligations of Sections 7(e), (f) or
(g)
above, or (ii) the EXECUTIVE is violating in any material respect or has
violated in any material respect any of the obligations of Sections 7(a), (b),
(c) or (d) above. In
such
an event, the EXECUTIVE may seek a determination, pursuant to the provisions
of
Section 15 below, that such action by the COMPANY was not justified and should
be remedied. Nothing
in this Agreement shall prohibit or restrict the EXECUTIVE from testifying
truthfully as may be required by the Securities and Exchange Commission or
other
governmental or judicial body acting in its official capacity.
-8-
8. The
EXECUTIVE acknowledges and agrees that the restrictions contained in Section
7
(c)-(g) are reasonable and necessary to protect and preserve the legitimate
interests, properties, goodwill and business of the COMPANY, that the COMPANY
would not have entered into this Agreement in the absence of such restrictions
and that irreparable injury will be suffered by the COMPANY should the EXECUTIVE
breach any of such provisions. The EXECUTIVE further acknowledges and agrees
that a breach of any of such restrictions cannot be adequately compensated
by
monetary damages. The EXECUTIVE agrees that the COMPANY shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits
and
other benefits arising from any violation of such restrictions, which rights
shall be cumulative and in addition to any other rights or remedies to which
the
COMPANY may be entitled. In the event that any of such restrictions should
ever
be adjudicated to exceed the time, geographic, service, or other limitations
permitted by applicable law in any jurisdiction, it is the intention of the
parties that the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable law, that
such
amendment shall apply only within the jurisdiction of the court that made such
adjudication and that the provision otherwise be enforced to the maximum extent
permitted by law.
9. The
entry
into this Agreement by the Parties is not and shall not be construed to be
an
admission of any act, practice or policy by the COMPANY in violation of any
statute, common law duty, constitution, or administrative rule or regulation.
Further, this Agreement shall not constitute evidence of any such proscribed
or
wrongful act, practice or policy by the COMPANY.
10. The
Parties agree that this Agreement shall not be tendered or admissible as
evidence in any proceeding by either Party for any purpose, except in a
proceeding involving one or both of the Parties in which this Agreement or
any
part of this Agreement, an alleged breach of this Agreement, the enforcement
of
this Agreement, and/or the validity of any term of this Agreement is at
issue.
11. The
COMPANY advises the EXECUTIVE to consult an attorney before signing this
Agreement, and the EXECUTIVE acknowledges that he has consulted an attorney
before signing this Agreement.
12. The
EXECUTIVE acknowledges the adequacy and sufficiency of the consideration for
his
promises set forth in this Agreement. The EXECUTIVE is estopped from raising,
and hereby expressly waives any defense regarding the receipt and/or legal
sufficiency of the consideration provided under this Agreement.
13. The
EXECUTIVE hereby acknowledges his understanding that, had he wished to do so,
he
could have taken up to twenty-one (21) days to consider this Agreement, that
he
has read this Agreement and understands its terms and significance, and that
he
executes this Agreement voluntarily and with full knowledge of its effect,
having carefully read and considered all terms of this Agreement and, if he
has
chosen to consult with an attorney, having had all terms and their significance
fully explained to him by his attorney.
-9-
14. The
EXECUTIVE understands that he may revoke this Agreement, as it applies to him,
within seven (7) days following execution of this Agreement and that this
Agreement, as it applies to him, shall not become effective or enforceable
until
that revocation period has expired. Any such revocation must be effected by
delivery of a written notification of revocation of the Agreement to the General
Counsel of the COMPANY prior to the end of such 7 day revocation period. In
the
event that the Agreement is revoked by the EXECUTIVE, the COMPANY shall have
no
obligations under the Agreement, no amounts will be payable under this
Agreement, and this Agreement shall be deemed to be void ab initio and of no
further force or effect.
15. Any
controversy or claim arising out of, or relating to, this Agreement, or its
breach, shall be governed by the laws of the State of Colorado, without giving
effect to the principles of conflict of laws thereof, and shall be resolved
by
final and binding arbitration, in accordance with the rules for contractual
disputes then applicable, of the Judicial Arbiter Group, Denver, Colorado,
and
judgment on the award rendered may be entered in any court having
jurisdiction.
16. The
EXECUTIVE shall be responsible for paying all income taxes attributable to
payments and benefits received under this Agreement, and all payments and
benefits provided to the EXECUTIVE shall be net of applicable income, employment
or other taxes required to be withheld therefrom.
17. This
Agreement represents the complete agreement between the EXECUTIVE and the
COMPANY concerning the subject matter in this Agreement, and it supersedes
all
prior agreements or understandings, written or oral, including the Employment
Agreement. This Agreement may not be amended or modified otherwise than by
a
written agreement executed by the Parties hereto or their respective successors
and legal representatives.
18. Each
of
the Sections contained in this Agreement shall be enforceable independently
of
every other Section in this Agreement, and the invalidity or unenforceability
of
any Section shall not invalidate or render unenforceable any other Section
contained in this Agreement.
-10-
IN
WITNESS WHEREOF, the parties have executed this Agreement on the dates set
forth
below, intending to be legally bound by this Agreement.
|
EXECUTIVE
|
VAIL
RESORTS, INC.
|
|
/s/
Adam M. Aron
|
By:
/s/ Martha D. Rehm
|
|
Adam
M. Aron
|
Name:
Martha D. Rehm
Title:
Sr. Vice President and General Counsel
|
|
Date:
February 27, 2006
|
Date:
February 27, 2006
|
-11-
ANNEX
A
|
ADAM
M. ARON
|
|||||||||||||||||||||||||
|
Stock
Options Outstanding and Exercisable As Of
2/27/2006 |
|||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
Grant
|
Grant
|
Options
|
Option
|
Options
Vested
|
|||||||||||||||||||||
|
Date
|
Plan
ID
|
Type
|
Granted
|
Price
|
&
Exercisable
|
||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||
|
9/14/1999
|
1999Plan
|
Non-Qualified
|
60,000
|
$19.0625
|
60,000
|
||||||||||||||||||||
|
9/28/1999
|
1999Plan
|
Non-Qualified
|
65,000
|
$21.1250
|
65,000
|
||||||||||||||||||||
|
9/12/2000
|
1999Plan
|
Non-Qualified
|
100,000
|
$19.1250
|
100,000
|
||||||||||||||||||||
|
12/9/2002
|
1996Plan
|
Non-Qualified
|
120,000
|
$17.3350
|
120,000
|
||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||
|
11/20/2003
|
2002Plan
|
Non-Qualified
|
120,000
|
$14.7300
|
80,000
|
||||||||||||||||||||
|
9/28/2004
|
2002Plan
|
Non-Qualified
|
120,000
|
$18.7300
|
40,000
|
||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
Current
Non-forfeited Optionee Total
|
465,000
|
||||||||||||||||||||||||
FOURTH
AMENDED AND
RESTATED CREDIT AGREEMENT
THIS
SECOND AMENDMENT TO FOURTH AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”)
is
dated as of February 17, 2006, but effective as of the Effective Date
(hereinafter defined), among THE
VAIL CORPORATION,
a
Colorado corporation doing business as “Vail Associates, Inc.” (the
“Company”),
the
Required Lenders (as defined in the Credit Agreement referenced below) party
hereto, and BANK
OF AMERICA, N.A.,
as
Administrative Agent (hereinafter defined).
R
E C I T A L S
A. The
Company has entered into that certain Fourth Amended and Restated Credit
Agreement dated as of January 28, 2005, with Bank of America, N.A., as
Administrative Agent (in such capacity, the “Administrative
Agent”),
and
certain other agents and lenders party thereto, as amended by that certain
First
Amendment to Fourth Amended and Restated Credit Agreement dated as of June
29,
2005 (as amended, the “Credit
Agreement”),
providing for revolving credit loans, letters of credit, and swing line loans
in
the aggregate principal amount of up to $400,000,000. Unless otherwise indicated
herein, all capitalized terms used herein shall have the meanings set forth
in
the Credit Agreement, and all Section references herein shall be references
to
sections in the Credit Agreement.
B. The
Company has requested the ability to make Distributions to the extent permitted
pursuant to the Indenture, dated as of January 29, 2004, among Vail Resorts,
Inc., as Issuer (“VRI”),
The
Bank of New York, as Trustee, and certain of VRI’s subsidiaries, as Guarantors,
governing VRI’s 6¾% Senior Subordinated Notes due 2014, as in effect on the date
hereof.
C. The
Required Lenders have agreed to amend the Credit Agreement to permit such
Distributions.
In
consideration of the foregoing and the mutual covenants contained herein, the
Company, the Required Lenders, the Guarantors (by execution of the attached
Guarantors’ Consent and Agreement), and the Administrative Agent agree as
follows:
1. Amendments.
(a) New
Definitions.
Section
1.1
is
hereby amended by inserting the following new definitions alphabetically to
read
as follows:
(i) “Restricted
Payment Capacity
means,
on any date of determination, the Dollar value of Restricted Payments (as
defined in the VRI Indenture) that VRI and its Restricted Subsidiaries are
permitted to make under, and in accordance with, Section
4.10 (Limitation on Restricted Payments) of
the
VRI Indenture on such date, without regard to whether VRI and its Subsidiaries
are permitted to make a Restricted Payment (as defined in the VRI Indenture)
on
such date as a result of its failure to satisfy any condition to the making
of a
Restricted Payment (as defined in the VRI Indenture) as set forth in the VRI
Indenture.”
(ii) “VRI
Indenture
means
the Indenture, dated as of January 29, 2004, between VRI, as Issuer, the
guarantors party thereto, and The Bank of New York, as Trustee, as in effect
on
the date hereof, without giving effect to any further amendments, restatements,
supplements, or modifications thereof; provided,
that,
the
terms and provisions of the VRI Indenture referenced in this Agreement shall
continue to be incorporated herein by reference if the VRI Indenture is
-1-
terminated,
the Debt evidenced thereby is repaid, or the VRI Indenture ceases to be in
full
force and effect for any reason.”
(b) Modifications
to Distributions Covenant.
Section
10.9
(Distributions) is hereby amended as follows:
(i) Clause
(d)
is
amended in its entirety to read as follows (and the calculations demonstrating
compliance with clause
(d) in
the
calculations worksheet attached to the Compliance Certificate shall be
deemed amended to reflect the revised provision below):
“(d) if
no
Default or Potential Default exists or arises or would result after giving
effect thereto, VRI and its Restricted Subsidiaries may make additional
Distributions not otherwise permitted under this Section
10.9,
and
loans, advances, and investments not otherwise permitted under Section
10.8,
so long
as, on any date of determination, the aggregate amount of Distributions
permitted under this clause
(d)
and such
loans, advances, and investments not otherwise permitted under Section
10.8 does
not
exceed the Restricted Payment Capacity. (For example and for illustrative
purposes only, if VRI and its Restricted Subsidiaries are permitted to make
Restricted Payments (as
defined in the VRI Indenture) under
the
VRI Indenture in an amount not to exceed $10.0 million (without
regard to whether any conditions to the making of such Restricted Payments
(as
defined in the VRI Indenture) are satisfied),
then
the Restricted Companies will be permitted to make Distributions not otherwise
permitted under this Section
10.9 and
loans, advances, and investments not otherwise permitted under Section
10.8
in an
amount not to exceed $10.0 million, if no Default or Potential Default exists
or
arises or would result after giving effect thereto.)”
(ii) Clause
(f) shall
be
amended by inserting “and” at the end thereof, clause
(g) shall
be
amended by replacing “; and” at the end thereof with “.”, and clause
(h)
shall be
deleted in its entirety.
2. Representations
and Warranties.
As a
material inducement to the Required Lenders and the Administrative Agent to
execute and deliver this Amendment, the Company represents and warrants to
the
Required Lenders and the Administrative Agent (with the knowledge and intent
that Required Lenders are relying upon the same in entering into this Amendment)
that (a) the Company
and the Guarantors have all requisite authority and power to execute, deliver,
and perform their respective obligations under this Amendment and the Guarantor
Consent and Agreement, as the case may be, which execution, delivery, and
performance have been duly authorized by all necessary action, require
no Governmental Approvals, and do not violate the respective certificates of
incorporation or its bylaws, or other documents of such Companies; (b)
upon
execution and delivery by the Company, the Guarantors, the Administrative Agent,
and the Required Lenders, this Amendment will constitute the legal and binding
obligation of the Company and each Guarantor, enforceable against such entities
in accordance with this Amendment’s terms, except
as that
enforceability may be limited by general principles of equity or by bankruptcy
or insolvency laws or similar laws affecting creditors’ rights generally, (c)
all representations and warranties in the Loan Papers are true and correct
in
all material respects as though made on the date hereof, except
to the
extent that any of them speak to a specific date or the facts on which any
of
them are based have been changed by transactions contemplated or permitted
by
the Credit Agreement, and (d) no Default or Potential Default has occurred
and
is continuing.
3. Conditions
Precedent to Effectiveness.
This
Amendment shall be effective on the date (the “Effective
Date”)
upon
which Administrative Agent receives (i) counterparts of this Amendment executed
by the Company, Administrative Agent, and Required Lenders, (ii) the Guarantors’
Consent and
-2-
Agreement
executed by each Guarantor, and (iii) a copy of the Senior Subordinated
Indenture as in effect on the Effective Date, accompanied by a certificate
of a
Responsible Officer certifying that such copy is true and correct as of such
date.
4. Expenses.
The
Company shall pay all reasonable costs, fees, and expenses paid or incurred
by
the Administrative Agent incident to this Amendment, including, without
limitation, the reasonable fees and expenses of the Administrative Agent’s
counsel in connection with the negotiation, preparation, delivery, and execution
of this Amendment and any related documents.
5. Miscellaneous.
Unless
stated otherwise herein, (a) the singular number includes the plural, and
vice
versa,
and
words of any gender include each other gender, in each case, as appropriate,
(b)
headings and captions shall not be construed in interpreting provisions of
this
Amendment, (c) this Amendment shall be governed by and construed in accordance
with the laws of the State of New York, (d) if any part of this Amendment is
for
any reason found to be unenforceable, all other portions of it shall
nevertheless remain enforceable, (e) this Amendment may be executed in any
number of counterparts with the same effect as if all signatories had signed
the
same document, and all of those counterparts shall be construed together to
constitute the same document, (f) this Amendment is a “Loan
Paper”
referred to in the Credit Agreement, and the provisions relating to Loan Papers
in Section
14
of the
Credit Agreement are incorporated herein by reference, (g) this Amendment,
the
Credit Agreement, as amended by this Amendment, and the other Loan Papers
constitute
the entire agreement and understanding among the parties hereto and supercede
any and all prior agreements and understandings, oral or written, relating
to
the subject matter hereof, and (h) except as provided in this Amendment, the
Credit Agreement, the Notes, and the other Loan Papers are unchanged and are
ratified and confirmed.
6. Parties.
This
Amendment binds and inures to the benefit of the Company, the Guarantors, the
Administrative Agent, the Lenders, and their respective successors and
assigns.
The
parties hereto have executed this Amendment in multiple counterparts as of
the
date first above written.
Remainder
of Page Intentionally Blank.
Signature
Pages to Follow.
-3-
|
THE
VAIL CORPORATION (D/B/A “VAIL
ASSOCIATES, INC.”), as the Company By:
/s/
Martha D. Rehm
Name: Martha
D. Rehm
Title: Executive
Vice President
Dated: March 2, 2006
|
|
BANK
OF AMERICA, N.A.,
as
Administrative Agent
By: /s/
David A.
Johanson
Name: David
A. Johanson
Title: Vice
President
BANK
OF AMERICA, N.A.,
as
an L/C
Issuer, a Swing Line Lender, and a Lender
By: /s/
David McCauley
Name: David
McCauley
Title: Vice
President
U.S.
BANK NATIONAL ASSOCIATION,
as
Co-Syndication Agent, a Swing Line Lender, and a Lender
By: /s/
Rob L. Stuart
Name: Rob
L.
Stuart
Title: Vice
President
WELLS
FARGO BANK, NATIONAL ASSOCIATION,
as Co-Syndication Agent, an L/C Issuer, and a Lender
as Co-Syndication Agent, an L/C Issuer, and a Lender
By: /s/
Susan K. Petri
Name: Susan
K. Petri
Title: Vice
President
DEUTSCHE
BANK TRUST COMPANY
AMERICAS, as Co-Documentation Agent and a Lender
AMERICAS, as Co-Documentation Agent and a Lender
By: /s/
Brenda Casey
Name: Brenda
Casey
Title: Director
By: /s/
Joanna Sollman
Name: Joanna
Sollman
Title: Assistant
Vice President
LASALLE
BANK NATIONAL ASSOCIATION,
as
Co-Documentation Agent and a Lender
By: /s/
Darren Lemkov
Name: Darren
Lemkov
Title: Senior
Vice President
CALYON
NEW YORK BRANCH,
as
a
Lender
By: /s/
Joseph A. Asciolla /s/
David Bowers
Name: Joseph
A. Asciolla
David
Bowers
Title: Managing
Director
Director
JPMORGAN
CHASE BANK, NA,
as
a
Lender
By: /s/
Kent Kaiser
Name: Kent
Kaiser
Title: Vice
President
COMPASS
BANK,
as
a
Lender
By: /s/
Eric R. Long
Name: Eric
R. Long
Title: Senior
Vice President
GUARANTY
BANK,
as
a
Lender
By: /s/
Robert S. Hays
Name: Robert
S. Hays
Title: Senior
Vice President
COMERICA
WEST INCORPORATED,
as
a
Lender
By: /s/
Kevin T. Urban
Name: Kevin
T. Urban
Title: Assistant
Vice President
GUARANTORS’
CONSENT AND AGREEMENT
As
an
inducement to Administrative Agent and Required Lenders to execute, and in
consideration of Administrative Agent’s and Required Lenders’ execution of the
foregoing Second Amendment to Fourth Amended and Restated Credit Agreement,
the
undersigned hereby consent thereto and agree that the same shall in no way
release, diminish, impair, reduce or otherwise adversely affect the respective
obligations and liabilities of each of the undersigned under each Guaranty
described in the Credit Agreement, or any agreements, documents or instruments
executed by any of the undersigned to create liens, security interests or
charges to secure any of the indebtedness under the Loan Papers, all of which
obligations and liabilities are, and shall continue to be, in full force and
effect. This consent and agreement shall be binding upon the undersigned, and
the respective successors and assigns of each, and shall inure to the benefit
of
Administrative Agent and Lenders, and the respective successors and assigns
of
each.
Vail
Resorts, Inc.
Vail
Holdings, Inc.
Beaver
Creek Associates, Inc.
Beaver
Creek Consultants, Inc.
Beaver
Creek Food Services, Inc.
Breckenridge
Resort Properties, Inc.
Complete
Telecommunications, Inc.
Gillett
Broadcasting, Inc.
Grand
Teton Lodge Company
Heavenly
Valley, Limited Partnership
Jackson
Hole Golf and Tennis Club, Inc.
JHL&S
LLC
Keystone
Conference Services, Inc.
Keystone
Development Sales, Inc.
Keystone
Food and Beverage Company
Keystone
Resort Property Management Company
Larkspur
Restaurant & Bar, LLC
Lodge
Properties, Inc.
Lodge
Realty, Inc.
Mountain
Thunder, Inc.
Property
Management Acquisition Corp., Inc.
Rockresorts
International, LLC
Rockresorts
LLC
Rockresorts
Cheeca, LLC
Rockresorts
Equinox, Inc.
Rockresorts
LaPosada, LLC
Rockresorts
Wyoming, LLC
Rockresorts
Casa Madrona, LLC
Rockresorts
Cordillera Lodge Company, LLC
Rockresorts
Rosario, LLC
SOHO
Development, LLC
SSV
Holdings, Inc.
Teton
Hospitality Services, Inc.
The
Village at Breckenridge Acquisition Corp., Inc.
Timber
Trail, Inc.
VA
Rancho
Mirage I, Inc.
VA
Rancho
Mirage II, Inc.
VA
Rancho
Mirage Resort, L.P.
Vail/Arrowhead,
Inc.
Vail
Hotel Management Company, LLC
Vail
Associates Holdings, Ltd.
Vail
Associates Investments, Inc.
Vail
Associates Real Estate, Inc.
Vail/Beaver
Creek Resort Properties, Inc.
Vail
Food
Services, Inc.
Vail
Resorts Development Company
Vail
RR,
Inc.
Vail
Summit Resorts, Inc.
Vail
Trademarks, Inc.
VAMHC,
Inc.
VR
Heavenly I, Inc.
VR
Heavenly II, Inc.
VR
Holdings, Inc.
By: /s/
Martha D. Rehm
Name:
Martha Dugan Rehm
Title
Executive Vice President
VAIL
RESORTS, INC.
RESTRICTED
SHARE AGREEMENT
THIS
AGREEMENT, dated as of [date], is between Vail Resorts, Inc., a Delaware
corporation (the “Company”), and [name of employee] (the
“Employee”).
WHEREAS,
the Employee has been granted the following award under the Company’s [insert
applicable plan] Long Term Incentive and Share Award Plan (the
“Plan”);
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein, and for other good and valuable consideration, the parties hereto agree
as follows.
1. Award
of Shares. Pursuant
to the provisions of the Plan, the terms of which are incorporated herein by
reference, the Employee is hereby awarded [number of shares] Restricted Shares
(the “Award”), subject to the terms and conditions of the Plan and those herein
set forth. The Award is granted as of [date] (the “Date of Grant”). Capitalized
terms used herein and not defined shall have the meanings set forth in the
Plan.
In the event of any conflict between this Agreement and the Plan, the Plan
shall
control.
2. Terms
and Conditions. It
is understood and agreed that the Award of Restricted Shares evidenced hereby
is
subject to the following terms and conditions:
(a) Vesting
of Award.
Subject
to Section 2(b) below and the other terms and conditions of this Agreement,
this Award shall become vested in three equal annual installments, commencing
on
the first anniversary of the Date of Grant and continuing on each of the
following two anniversaries of the Date of Grant. Unless otherwise provided
by
the Committee, all dividends and other amounts receivable in connection with
any
adjustments to the Shares under Section 4(c) of the Plan shall be subject to
the
vesting schedule in this Section 2(a).
(b) Termination
of Service; Forfeiture of Unvested Shares.
In the
event of a termination of the Employee’s employment with the Company and its
Subsidiaries prior to the date the Award otherwise becomes vested, the unvested
portion of the Award shall immediately be forfeited by the Employee and become
the property of the Company.
(c) Certificates. Each
certificate or other evidence of ownership issued in respect of Restricted
Shares awarded hereunder shall be deposited with the Company, or its designee,
together with, if requested by the Company, a stock power executed in blank
by
the Employee, and shall bear a legend disclosing the restrictions on
transferability imposed on such Restricted Shares by this Agreement (the
“Restrictive Legend”). Upon the vesting of Restricted Shares pursuant to
Section 2(a) hereof and the satisfaction of any withholding tax liability
pursuant to Section 5 hereof, the certificates evidencing such vested
Shares, not bearing the Restrictive Legend, shall be delivered to the Employee
or other evidence of vested Shares shall be provided to the
Employee.
(d) Rights
of a Stockholder. Prior
to the time a Restricted Share is fully vested hereunder, the Employee shall
have no right to transfer, pledge, hypothecate or otherwise encumber such
Restricted Share. During such period, the Employee shall have all other rights
of a stockholder, including, but not limited to, the right to vote and to
receive dividends (subject to Section 2(a) hereof) at the time paid on such
Restricted Shares.
(e) No
Right to Continued Employment.
This
Award shall not confer upon the Employee any right with respect to continuance
of employment by the Company nor shall this Award interfere with the right
of
the Company to terminate the Employee’s employment at any time.
3. Transfer
of Shares.
The
Shares delivered hereunder, or any interest therein, may be sold, assigned,
pledged, hypothecated, encumbered, or transferred or disposed of in any other
manner, in whole or in part, only in compliance with the terms, conditions
and
restrictions as set forth in the governing instruments of the Company,
applicable federal and state securities laws or any other applicable laws or
regulations and the terms and conditions hereof.
4. Expenses
of Issuance of Shares.
The
issuance of stock certificates hereunder shall be without charge to the
Employee. The Company shall pay any issuance, stamp or documentary taxes (other
than transfer taxes) or charges imposed by any governmental body, agency or
official (other than income taxes) by reason of the issuance of
Shares.
5. Withholding.
No
later than the date of vesting of (or the date of an election by the Employee
under Section 83(b) of the Code with respect to) the Award granted
hereunder, the Employee shall pay to the Company or make arrangements
satisfactory to the Committee regarding payment of any federal, state or local
taxes of any kind required by law to be withheld at such time with respect
to
such Award and the Company shall, to the extent permitted or required by law,
have the right to deduct from any payment of any kind otherwise due to the
Employee, federal, state and local taxes of any kind required by law to be
withheld at such time. The Employee may elect to have the Company withhold
Shares to pay any applicable withholding taxes resulting from the Award, in
accordance with any rules or regulations of the Committee then in
effect.
6. References. References
herein to rights and obligations of the Employee shall apply, where appropriate,
to the Employee’s legal representative or estate without regard to whether
specific reference to such legal representative or estate is contained in a
particular provision of this Agreement.
7. Notices. Any
notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or
by
courier, or sent by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the party concerned at the address
indicated below or to such changed address as such party may subsequently by
similar process give notice of:
|
If
to the Company:
|
Vail
Resorts, Inc.
|
|
Attention:
|
General
Counsel
|
|
Via
U.S. Mail:
|
P.O.
Box 7
|
|
Vail,
Colorado 81658
|
|
Via
Hand Delivery:
|
137
Benchmark Road
|
|
Avon,
Colorado 81620
|
|
If
to the Employee:
|
At
the Employee’s most recent address shown on the Company’s corporate
records, or at any other address which the Employee may specify in
a
notice delivered to the Company in the manner set forth
herein.
|
8. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of
Colorado, without giving effect to principles of conflict of laws.
9. Counterparts. This
Agreement may be executed in two counterparts, each of which shall constitute
one and the same instrument.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
VAIL
RESORTS, INC.
By:
Name:
__________________________
Title:
___________________________
EMPLOYEE:
___________________________
[Typewritten
Name of Employee]
[Employee
Name]
[Address]
[City,
State, Zip]
RE: Grant
of
Stock Option
Dear
[Name of Employee]:
Vail
Resorts, Inc. (the "Company") is pleased to confirm, as you were advised on
[date], that were granted an award of an Option on that date on the terms set
forth herein. Your Option is granted pursuant to the Company's [insert
applicable plan] Long Term Incentive and Share Award Plan, the terms of which
are incorporated herein by reference. Capitalized terms used and not defined
herein have the meanings set forth in the Plan.
1. Option
Terms.
(a) Grant.
On
[date] (the "Grant Date"), you were granted an Option to purchase up to [Number]
shares of the Company's Common Stock, having $.01 par value (the "Option
Shares"), at an exercise price per Option Share equal to [Amount] (the "Exercise
Price"), payable upon exercise as set forth in paragraph 3 below. Your Option
will expire at the close of business on the tenth anniversary of the Grant
Date
(the "Expiration Date"), subject to earlier expiration in connection with the
termination of your employment as provided below. Your Option is not intended
to
be an "incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
(b) Exercisability/Vesting.
Your
Option will be exercisable only to the extent it has vested. Your Option will
be
vested with respect to 33-1/3% of the Option Shares (rounded to the nearest
whole share) on each of the first through third anniversaries of the Grant
Date,
if and only if you have been continuously employed by the Company and/or its
Subsidiaries from the date of this Agreement through such dates. Upon the
termination of your employment for any reason, by you or by the Company and/or
its Subsidiaries, with or without cause, all of your unvested options shall
expire and be of no further force or effect. Any such termination shall not
affect your vested options, which shall remain exercisable pursuant to paragraph
1(c) below.
(c) Exercise
Upon Sale of the Company.
(i) As
used
in this Agreement, "Sale of the Company" shall mean the acquisition of 90%
of
the Company's outstanding common stock pursuant to a merger, consolidation,
business combination, purchase of stock, or otherwise that is approved by the
Company's Board of Directors.
(ii) In
connection with the Sale of the Company, the Company may, on not less than
20
days' notice to you, provide that any portion of your vested Options which
have
not been exercised prior to or in connection with the Sale of the Company will
be forfeited. In lieu of requiring such exercise, the Company may: (1) provide
for the cancellation of the exercisable portion of your Option in exchange
for a
payment equal to the excess (if any) of the consideration per share of Common
Stock receivable in connection with such Sale of the Company over the exercise
price; and/or (2) provide for the cancellation of the non-vested portion of
your
Option in exchange for the creation of a cash escrow account in lieu thereof
in
an amount equal to the excess (if any) of the consideration per share of Common
Stock receivable in connection with such Sale of the Company over the Exercise
Price, which amount, plus accrued interest thereon, shall be paid to you
pro
rata
over the
time periods and in the same percentages as such canceled unvested Options
would
have vested in accordance with the provisions of Section 1(b) above and subject
to the same termination and forfeiture provisions of Section 1(d) below and
to
the other terms and provisions of this Agreement.
(d) Termination
of Option.
In no
event shall any part of your Option be exercisable after the Expiration Date
set
forth in paragraph 1(a). If your employment with the Company and/or its
Subsidiaries terminates for any reason, that portion of your Option that is
not
vested and exercisable on the date of termination of your employment shall
expire and be forfeited. The portion of your Option that is vested and
exercisable on the date of such termination shall, to the extent not theretofore
exercised, expire on the 90th
day
after
such date of termination.
2. Procedure
for Option Exercise.
You
may,
at any time or from time to time, to the extent permitted hereby, exercise
all
or any portion of your vested portion of your Option by delivering, to the
attention of the Company's General Counsel at the address set forth in paragraph
8 below, written notice to the Company accompanied by payment in full, in a
manner acceptable to the Company, of an amount equal to the product of the
Exercise Price and the number of Option Shares to be acquired. The Company
may
delay effectiveness of any exercise of your Option for such period of time
as
may be necessary to comply with any legal or contractual provisions to which
it
may be subject relating to the issuance of its securities, it being understood
that such exercise shall be effective immediately upon completion of such
compliance notwithstanding the occurrence of the Expiration Date.
3. Option
Not Transferable.
Your
Option is personal to you and is not transferable by you, other than by will
or
by the laws of descent and distribution. During your lifetime, only you (or
your
guardian or legal representative) may exercise your Option. In the event of
your
death, your Option may be exercised only by the executor or administrator of
your estate or the person or persons to whom your rights under the Option shall
pass by will or by the laws of intestate succession.
4. Conformity
with Plan.
Your
Option is intended to conform in all respects with, and is subject to, all
applicable provisions of the Plan, the terms and conditions of which are
incorporated herein by reference. Any inconsistencies between this Agreement
and
the Plan shall be resolved in accordance with the Plan. By executing and
returning a copy of this Agreement, you acknowledge your receipt of this
Agreement and the Plan and agree to be bound by all the terms of this Agreement
and the Plan.
5. Rights
of Participants.
Nothing
in this Agreement shall interfere with or limit in any way the right of the
Company and/or its Subsidiaries to terminate your employment at any time (with
or without cause), or confer upon you any right to continue in the employ of
the
Company and/or its Subsidiaries for any period of time or to continue to receive
your current (or other) rate of compensation. Nothing in this Agreement shall
confer upon you any right to be selected to receive additional awards under
the
Plan or otherwise.
6. Withholding
of Taxes.
The
Company may, if necessary or desirable, withhold from any amounts due and
payable to you by the Company or a Subsidiary (or secure payment from you in
lieu of withholding) the amount of any withholding or other tax due from the
Company or Subsidiary with respect to the issuance or exercise of your Option,
and the Company may defer such issuance or exercise unless indemnified by you
to
its satisfaction against the payment of any such amount.
7. Adjustments.
In
the
event that the Committee shall determine that any dividend in Shares,
recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, or other
similar corporate transaction or event affects the Shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of your
rights under this Option, then the Committee shall make such equitable changes
or adjustments as it deems appropriate and adjust, in such manner as it deems
equitable, any or all of: (i) the number and kind of Shares, other securities
or
other consideration issued or issuable with respect to this Option; and (ii)
the
exercise price of this Option.
8. Notice.
Any
notice required or permitted to be given to the Company under this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or by courier, or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Company as
follows:
If
by
mail:
Vail
Resorts, Inc.
Post
Office Box 7
Vail,
Colorado 81658
Attention:
General Counsel
If
by
hand
delivery:
Vail
Resorts, Inc.
137
Benchmark Road
Avon,
Colorado 81620
Attention:
General Counsel
9. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Colorado without reference to the principles of conflict of
laws.
[Signature
Page Follows]
To
confirm your understanding and acceptance of the terms and provisions set forth
in this Agreement, please execute the extra copy of this Agreement in the space
below and return it to the attention of the Company's General Counsel at the
address set forth in paragraph 8 above.
Very
truly yours,
VAIL
RESORTS, INC.
By:
_____________________
Name:
___________________
Title:
____________________
The
undersigned hereby acknowledges that he or she has read this Agreement and
has
received a copy of the Plan and hereby agrees to be bound by all the provisions
set forth in this Agreement and in the Plan.
_________________________________
[Name
of
Employee]
Date:
_____________________________
STOCK
OPTION LETTER
Dear
Mr.
Jones:
Vail
Resorts, Inc. (the “Company”) is pleased to confirm its grant to you of an
option on the terms set forth herein.
Your
Option was granted pursuant to the Company’s 2002 Long Term Incentive and Share
Award Plan (the “Plan”), a copy of which is enclosed. Capitalized terms used and
not defined herein have the meanings set forth in the Plan.
1. Option
Terms.
(a) Grant.
On
September 30, 2005 (the “Grant Date”), you were granted an option (the “Option”)
to purchase up to 100,000 shares of the Company’s Common Stock, having $.01 par
value (the “Shares”), at an exercise price per Share equal to $28.08 (the
“Exercise Price”), payable upon exercise as set forth in Section 2 below. Your
Option will expire at the close of business on the tenth anniversary of the
Grant Date (the “Expiration Date”), subject to earlier expiration in connection
with the termination of your employment as provided below. Your Option is not
intended to be an “incentive stock option” within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended.
(b) Exercisability/Vesting.
Your
Option will be exercisable only to the extent it has vested. Except as otherwise
set forth in this Section 1(b) or in Sections 1(c) or (d) below, your
Option will become vested with respect to 100% of the Option Shares on the
third
anniversary of the Grant Date, if and only if you have been continuously
employed by the Company and/or its Subsidiaries from the date of this Agreement
through such date. In the event of termination of your employment with the
Company and its Subsidiaries by the Company or a Subsidiary not for Cause (as
defined in the Amended and Restated Employment Agreement dated as of September
29, 2004 by and between the Company and you (the “Employment Agreement”)) or by
you for Good Reason (as defined in the Employment Agreement), a portion of
the
Option will become vested and exercisable at the time of such termination of
employment determined by multiplying the number of Shares subject to the Option
by a fraction, the numerator of which is the number of completed years from
the
Grant Date to the date of termination, and the denominator of which is three.
Upon the termination of your employment other than as set forth in the
immediately preceding sentence or in Section 1(d) below, all of your unvested
Options shall expire and be of no further force or effect. Any such termination
shall not affect your vested Options, which shall remain exercisable pursuant
to
paragraph 1(e) below.
(c) Exercise
Upon Sale of the Company.
(i) As
used
in this Agreement, “Sale of the Company” shall mean the acquisition of 90% of
the Company’s outstanding common stock pursuant to a merger, consolidation,
business combination,
-2-
purchase
of stock, or otherwise that is approved by the Company’s Board of
Directors.
(ii) In
connection with the Sale of the Company, the Company may, on not less than
20
days’ notice to you, provide that any portion of your vested Options which have
not been exercised prior to or in connection with the Sale of the Company will
be forfeited. In lieu of requiring such exercise, the Company may: (1) provide
for the cancellation of the exercisable portion of your Option in exchange
for a
payment equal to the excess (if any) of the consideration per share of Common
Stock receivable in connection with such Sale of the Company over the exercise
price; and/or (2) provide for the cancellation of the non-vested portion of
your
Option in exchange for the creation of a cash escrow account in lieu thereof
in
an amount equal to the excess (if any) of the consideration per share of Common
Stock receivable in connection with such Sale of the Company over the Exercise
Price, which amount, plus accrued interest thereon, shall be paid to you
pro
rata
over the
time periods and in the same percentages as such canceled unvested Options
would
have vested in accordance with the provisions of Sections 1(b) and (c) hereof
and subject to the same termination and forfeiture provisions of Section 1(e)
below and to the other terms and provisions of this Agreement.
(d) Change
in Control.
Notwithstanding any provision of this Agreement to the contrary, in the event
of
a Change in Control (as defined in Annex A hereto), the Option, if not
already vested and exercisable under Section 1(b) above, will vest and become
exercisable in full at the time of the Change in Control; provided,
however,
the
vesting and exercisability of this Option shall not accelerate pursuant to
this
Section 1(d) if (i) there is no Control Party with respect to the Company
after the Change in Control and you remain as the chief financial officer of
the
Company, or (ii) there is a publicly traded Control Party with respect to the
Company after the Change in Control and you are the chief financial officer
of
such Control Party; provided
further, however,
if your
employment is terminated by the Company or such Control Party, as the case
may be, not for Cause after a Change in Control, the Option shall
immediately vest in full upon such termination. "Control Party" is defined
as a "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of
the Exchange Act, but excluding any employee benefit plan of such person or
its
subsidiaries, and any person or entity acting in its capacity as trustee, agent,
or other fiduciary or administrator of any such plan) that is the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more
than
40% or more of the equity securities of the Company entitled to vote for members
of the Board or equivalent governing body of the Company on a fully-diluted
basis.
(e) Termination
of Option.
In no
event shall any part of your Option be exercisable after the Expiration Date
set
forth in Section 1(a). If your employment with the Company and/or its
Subsidiaries terminates for any reason (other than as provided in Section 1(d)),
that portion of your Option that is not vested and exercisable on the date
of
termination of your employment shall expire and be forfeited. The portion of
your Option that is vested and exercisable on the date of such termination
shall, to the extent not theretofore exercised, expire on the 90th
day
after
such date of termination.
2. Procedure
for Option Exercise.
You
may,
at any time or from time to time, to the extent permitted hereby, exercise
all
or any portion of the vested portion of your Option by delivering, to the
attention of the Company’s General Counsel at the address set forth in Section 8
below, written notice to the Company accompanied by payment in full, in a manner
acceptable to the Company, of an amount equal to the product of the Exercise
Price and the number of Shares to be acquired on exercise (the “Exercise
Amount”). In addition, you may exercise all or any portion of your vested Option
by pro-
-3-
viding
notice of exercise to the attention the Company’s General Counsel at the address
set forth in Section 8 below, and electing to pay the exercise price of the
Option by having the Company withhold from the Shares received on exercise
a
number of Shares having a Fair Market Value equal to the Exercise Amount. The
Company may also require that any exercise of your vested Option be in
accordance with the procedure set forth in the immediately preceding sentence.
The Company may delay effectiveness of any exercise of your Option for such
period of time as may be necessary to comply with any legal or contractual
provisions to which it may be subject relating to the issuance of its
securities, it being understood that such exercise shall be effective
immediately upon completion of such compliance notwithstanding the occurrence
of
the Expiration Date.
3. Option
Not Transferable.
Your
Option is personal to you and is not transferable by you, other than by will
or
by the laws of descent and distribution. During your lifetime, only you (or
your
guardian or legal representative) may exercise your Option. In the event of
your
death, your Option may be exercised only by the executor or administrator of
your estate or the person or persons to whom your rights under the Option shall
pass by will or by the laws of intestate succession.
4. Conformity
with Plan.
Your
Option is intended to conform in all respects with, and is subject to, all
applicable provisions of the Plan, the terms and conditions of which are
incorporated herein by reference. Any inconsistencies between this Agreement
and
the Plan shall be resolved in accordance with the Plan. By executing and
returning a copy of this Agreement, you acknowledge your receipt of this
Agreement, the Plan and the Plan Prospectus and agree to be bound by all the
terms of this Agreement and the Plan.
5. Rights
of Participants.
Nothing
in this Agreement shall interfere with or limit in any way the right of the
Company and/or its Subsidiaries to terminate your employment at any time (with
or without Cause), or confer upon you any right to continue in the employ of
the
Company and/or its Subsidiaries for any period of time or to continue to receive
your current (or other) rate of compensation. Nothing in this Agreement shall
confer upon you any right to be selected to receive additional awards under
the
Plan or otherwise.
-4-
6. Withholding
of Taxes.
The
Company may, if necessary or desirable, withhold from any amounts due and
payable to you by the Company or a Subsidiary (or secure payment from you in
lieu of withholding) the amount of any withholding or other tax due from the
Company or Subsidiary with respect to the issuance or exercise of your Option,
and the Company may defer such issuance or exercise unless indemnified by you
to
its satisfaction against the payment of any such amount. You may elect to have
the Company withhold Shares to pay any applicable withholding taxes resulting
from the Award, in accordance with any rules or regulations of the Committee
then in effect.
| 7. |
Adjustments.
|
In
the
event that the Committee shall determine that any dividend in Shares,
recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, or other
similar corporate transaction or event affects the Shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of your
rights under this Option, then the Committee shall make such equitable changes
or adjustments as it deems appropriate and adjust, in such manner as it deems
equitable, any or all of: (i) the number and kind of Shares, other securities
or
other consideration issued or issuable with respect to this Option; and (ii)
the
exercise price of this Option.
| 8. |
Notice.
|
Any
notice required or permitted to be given to the Company under this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or by courier, or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Company as
follows:
|
If
by mail:
|
Vail
Resorts, Inc.
Post
Office Box 7
Vail,
Colorado 81658
Attention:
General Counsel
|
|
If
by hand delivery:
|
Vail
Resorts, Inc.
137
Benchmark Road
Avon,
Colorado 81620
Attention:
General Counsel
|
-5-
9. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Colorado without reference to the principles of conflict of
laws.
To
confirm your understanding and acceptance of the terms and provisions set forth
in this Agreement, please execute the extra copy of this Agreement in the space
below and return it to the attention of the Company’s General Counsel at the
address set forth in Section 8 above.
Very
truly yours,
VAIL
RESORTS, INC.
By:
/s/ Martha Dugan Rehm
Martha
Dugan Rehm
Executive
Vice President and
General
Counsel
Date:
March 2, 2006
The
undersigned hereby acknowledges that he or she has read this Agreement and
has
received a copy of the Plan and the Plan Prospectus and hereby agrees to be
bound by all the provisions set forth in this Agreement and in the
Plan.
/s/
Jeffrey W. Jones
Jeffrey
W. Jones
Date:
March 2, 2006
Annex
A
Definition
of Change in Control
For
purposes of this Agreement, “Change in Control” shall mean an event or series of
events by which:
(a) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent,
or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of 40% or more of the equity securities of the Company entitled
to
vote for members of the Board or equivalent governing body of the Company on
a
fully-diluted basis; or
(b) during
any period of twenty four (24) consecutive months, a majority of the members
of
the Board or other equivalent governing body of the Company cease to be composed
of individuals (i) who were members of that Board or equivalent governing body
on the first day of such period, (ii) whose election or nomination to that
Board
or equivalent governing body was approved by individuals referred to in clause
(i) above constituting at the time of such election or nomination at least
a
majority of that Board or equivalent governing body, or (iii) whose election
or
nomination to that Board or other equivalent governing body was approved by
individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that Board or equivalent
governing body (excluding, in the case of both clause (ii) and clause (iii),
any
individual whose initial nomination for, or assumption of office as, a member
of
that Board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal
of
one or more directors by any person or group other than a solicitation for
the
election of one or more directors by or on behalf of the Board); or
(c) any
person or two or more persons acting in concert shall have acquired, by contract
or otherwise, control over the equity securities of the Company entitled to
vote
for members of the Board or equivalent governing body of the Company on a
fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right)
representing 51% or more of the combined voting power of such
securities.
VAIL
RESORTS, INC.
RESTRICTED
SHARE AGREEMENT
THIS
AGREEMENT, effective as of September 30, 2005, between Vail Resorts, Inc. (the
“Company”), a Delaware corporation, and Jeffrey W. Jones (the
“Employee”).
WHEREAS,
40,000 Restricted Shares (the “Award”) were granted to the Employee on September
30, 2005 under the Company’s 2002 Long Term Incentive and Share Award Plan (the
“Plan”).
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein, and for other good and valuable consideration, the parties hereto agree
as follows.
1. Award
of Shares. The
Award was granted on September 30, 2005 (the “Date of Grant”) pursuant to the
Plan, the terms of which are incorporated herein by reference. Capitalized
terms
used herein and not defined shall have the meanings set forth in the Plan.
The
Award is subject to the terms and conditions of the Plan and those set forth
herein. In the event of any conflict between this Agreement and the Plan, the
Plan shall control.
2. Terms
and Conditions. It
is understood and agreed that the Award of Restricted Shares evidenced hereby
is
subject to the following terms and conditions:
(a) Vesting
of Award.
Subject
to Section 2(b) and 2(c) below and the other terms and conditions of this
Agreement, this Award shall become vested in full on the third anniversary
of
the Date of Grant. Unless otherwise provided by the Committee, all dividends
and
other amounts receivable in connection with any adjustments to the Shares under
Section 4(c) of the Plan shall be subject to the vesting schedule in this
Agreement.
(b) Termination
of Service; Forfeiture of Unvested Shares.
In the
event of a termination of the Employee’s employment with the Company and its
Subsidiaries by the Company or a Subsidiary not for Cause (as defined in the
Amended and Restated Employment Agreement dated as of September 29, 2004 by
and
between the Company and the Employee (the “Employment Agreement”)) or by the
Employee for Good Reason (as defined in the Employment Agreement), a number
of
Restricted Shares subject to the Award will become vested at the time of such
termination of employment determined by multiplying the number of the Restricted
Shares subject to the Award by a fraction, the numerator of which is the number
of completed years from the Date of Grant to the date of termination, and the
denominator of which is three. In the event of a termination of the Employee’s
employment with the Company and its Subsidiaries prior to the date the Award
otherwise becomes vested other than as set forth in the preceding sentence
or
Section 2(c) below, the unvested portion of the Award shall immediately be
forfeited by the Employee and become the property of the Company.
-2-
(c) Change
in Control.
Notwithstanding any provision of this Agreement to the contrary, in the event
of
a Change in Control (as defined in Annex A hereto), the Award, if not
already vested under Section 2(a) or 2(b) above, will vest in full at the time
of the Change in Control; provided,
however,
the
vesting of this Award shall not accelerate pursuant to this Section 2(c) if
(i) there is no Control Party (as defined below) with respect to the Company
after the Change in Control and the Employee remains as chief financial officer
of the Company, or (ii) there is a publicly traded Control Party with respect
to
the Company after the Change in COntrol and the Employee is the chief financial
officer of such Control Party; provided further,
however, if the Employee’s employment is terminated by the Company or such
Control Party, as the case may be, not for Cause after a Change in Control,
the Award shall immediately vest in full upon such termination. "Control
Party" is defined as a "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan
of
such person or its subsidiaries, and any person or entity acting in its capacity
as trustee, agent, or other fiduciary or administrator of any such plan) that
is
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act) of more than 40% or more of the equity securities of the Company entitled
to vote for members of the Board or equivalent governing body of the Company
on
a fully-diluted basis.
(d) Certificates. Each
certificate or other evidence of ownership issued in respect of Restricted
Shares awarded hereunder shall be deposited with the Company, or its designee,
together with, if requested by the Company, a stock power executed in blank
by
the Employee, and shall bear a legend disclosing the restrictions on
transferability imposed on such Restricted Shares by this Agreement (the
“Restrictive Legend”). Upon the vesting of Restricted Shares hereunder and the
satisfaction of any withholding tax liability pursuant to Section 5 hereof,
the certificates evidencing such vested Shares, not bearing the Restrictive
Legend, shall be delivered to the Employee or other evidence of vested Shares
shall be provided to the Employee.
(e) Rights
of a Stockholder. Prior
to the time a Restricted Share is fully vested hereunder, the Employee shall
have no right to transfer, pledge, hypothecate or otherwise encumber such
Restricted Share. During such period, the Employee shall have all other rights
of a stockholder, including, but not limited to, the right to vote and to
receive dividends (subject to Section 2(a) hereof) at the time paid on such
Restricted Shares.
(f) No
Right to Continued Employment.
This
Award shall not confer upon the Employee any right with respect to continuance
of employment by the Company nor shall this Award interfere with the right
of
the Company to terminate the Employee’s employment at any time.
3. Transfer
of Shares.
The
Shares delivered hereunder, or any interest therein, may be sold, assigned,
pledged, hypothecated, encumbered, or transferred or disposed of in any other
manner, in whole or in part, only in compliance with the terms, conditions
and
restrictions as set forth in the governing instruments of the Company,
applicable federal and state securities laws or any other applicable laws or
regulations and the terms and conditions hereof.
4. Expenses
of Issuance of Shares.
The
issuance of stock certificates hereunder shall be without charge to the
Employee. The Company shall pay any issuance, stamp or documentary taxes (other
than transfer taxes) or charges imposed by any governmental body, agency or
official (other than income taxes) by reason of the issuance of
Shares.
-3-
5. Withholding.
No
later than the date of vesting of (or the date of an election by the Employee
under Section 83(b) of the Code with respect to) the Award granted
hereunder, the Employee shall pay to the Company or make arrangements
satisfactory to the Committee regarding payment of any federal, state or local
taxes of any kind required by law to be withheld at such time with respect
to
such Award and the Company shall, to the extent permitted or required by law,
have the right to deduct from any payment of any kind otherwise due to the
Employee, federal, state and local taxes of any kind required by law to be
withheld at such time. The Employee may elect to have the Company withhold
Shares to pay any applicable withholding taxes resulting from the Award, in
accordance with any rules or regulations of the Committee then in
effect.
6. References. References
herein to rights and obligations of the Employee shall apply, where appropriate,
to the Employee’s legal representative or estate without regard to whether
specific reference to such legal representative or estate is contained in a
particular provision of this Agreement.
7. Notices. Any
notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given when delivered personally or
by
courier, or sent by certified or registered mail, postage prepaid, return
receipt requested, duly addressed to the party concerned at the address
indicated below or to such changed address as such party may subsequently by
similar process give notice of:
If
to the
Company:
Vail Resorts, Inc.
P.O. Box 7
Vail, CO 81658
Attention: General Counsel
If
to the
Employee:
At
the
Employee’s most recent address shown on the Company’s corporate records, or at
any other address which the Employee may specify in a notice delivered to the
Company in the manner set forth herein.
8. Governing
Law. This
Agreement shall be governed by and construed in accordance with the laws of
New
York, without giving effect to principles of conflict of laws.
9. Counterparts. This
Agreement may be executed in two counterparts, each of which shall constitute
one and the same instrument.
-4-
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
VAIL
RESORTS, INC.
By:
/s/ Martha D. Rehm
Name:
Martha D. Rehm
Title: Executive Vice President &
General Counsel
Date: March 2, 2006
/s/ Jeffrey W. Jones
Employee
Date:
March 2, 2006
Annex
A
Definition
of Change in Control
For
purposes of this Agreement, “Change in Control” shall mean an event or series of
events by which:
(a) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent,
or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of 40% or more of the equity securities of the Company entitled
to
vote for members of the Board or equivalent governing body of the Company on
a
fully-diluted basis; or
(b) during
any period of twenty four (24) consecutive months, a majority of the members
of
the Board or other equivalent governing body of the Company cease to be composed
of individuals (i) who were members of that Board or equivalent governing body
on the first day of such period, (ii) whose election or nomination to that
Board
or equivalent governing body was approved by individuals referred to in clause
(i) above constituting at the time of such election or nomination at least
a
majority of that Board or equivalent governing body, or (iii) whose election
or
nomination to that Board or other equivalent governing body was approved by
individuals referred to in clauses (i) and (ii) above constituting at the time
of such election or nomination at least a majority of that Board or equivalent
governing body (excluding, in the case of both clause (ii) and clause (iii),
any
individual whose initial nomination for, or assumption of office as, a member
of
that Board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal
of
one or more directors by any person or group other than a solicitation for
the
election of one or more directors by or on behalf of the Board); or
(c) any
person or two or more persons acting in concert shall have acquired, by contract
or otherwise, control over the equity securities of the Company entitled to
vote
for members of the Board or equivalent governing body of the Company on a
fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right)
representing 51% or more of the combined voting power of such
securities.
N e w s
R e l e a s eFor
Immediate Release
Media
Relations:
Kelly
Ladyga, (970) 845-5720, kladyga@vailresorts.com
Investor
Relations: Jeff
Jones, CFO, (970) 845-2552, jwjones@vailresorts.com
VAIL
RESORTS NAMES ROBERT KATZ AS NEW CEO
AVON,
Colo.--Feb. 28, 2006
--Vail
Resorts, Inc. (NYSE: MTN) has named Robert Katz as Chief Executive Officer,
effective today. He will succeed former Chairman and CEO Adam Aron, who
announced plans on January 30, 2006, to resign from the Company and relinquished
those positions and board seat today. The Company also announced that Joe
R.
Micheletto has been elected as Chairman of the Board.
Mr.
Micheletto issued the following statement on behalf of the board regarding
the
appointment of Mr. Katz to CEO:
“Rob
Katz
is uniquely qualified to serve Vail Resorts as its next CEO by virtue of
his
talent, dedication and experience as a hands-on director whose guidance has
been
instrumental in supporting every major milestone achieved by the Company
over
the last 14 years. We are confident in Rob’s ability to provide resolute focus
toward continuing the growth of our mountain resorts, realizing the full
potential of our real estate holdings, maximizing the profitability and selected
growth of our lodging operations, and pursuing future strategic acquisitions.”
Mr.
Katz,
39, most recently served as the Company's Lead Director and has been intricately
involved in guiding Vail Resorts' strategic direction and operations since
1992.
Since 1990, he has been associated in various capacities including as a Senior
Partner of Apollo Management, L.P., an affiliate of the former majority
shareholder in Vail Resorts. He graduated with a bachelor's degree in economics
from the University of Pennsylvania Wharton School in 1988, and has lived
in
Boulder, Colorado since 2002.
“I
am
honored by the opportunity to work with the industry’s best management team and
employees in continuing Vail Resorts’ legacy as the nation’s premier mountain
resorts company,” said Mr. Katz. “After many years with the Company as a
shareholder and board member, I am looking forward to guiding the Company’s
strategic initiatives, including the many exciting resort upgrades, development
opportunities and marketing programs already underway. I intend to keep my
focus
on our core value of providing our guests unforgettable vacation
experiences.”
-more-
VAIL
RESORTS CEO
2-2-2
Mr.
Micheletto was previously CEO of Ralcorp Holdings and currently serves as
its
Vice Chairman. Mr. Micheletto was also CEO and President of Ralston Resorts,
which included Keystone, Breckenridge and Arapahoe Basin. He joined the
Company’s Board of Directors in 1996 following the sale of those properties to
Vail Resorts.
Outgoing
CEO Adam Aron complimented the Company’s Board of Directors on Mr. Katz’
appointment. “Rob thoroughly understands the vision and mission of Vail Resorts,
and his considerable financial and management skills will leverage the talents
of our outstanding cadre of officers who each day do a tremendous job in
managing the Company’s resorts,” said Mr. Aron. “I look forward to helping
ensure a smooth, seamless transition.”
About
Vail Resorts
Vail
Resorts, Inc. is the leading mountain resort operator in the United States.
The
Company's subsidiaries operate the mountain resorts of Vail, Beaver Creek,
Breckenridge and Keystone in Colorado, Heavenly in California and Nevada,
and
the Grand Teton Lodge Company in Jackson Hole, Wyo. The Company's subsidiary,
RockResorts, a luxury resort hotel company, manages casually elegant properties
across the United States. Vail Resorts Development Company is the real estate
planning, development and construction subsidiary of Vail Resorts, Inc. Vail
Resorts is a publicly held company traded on the New York Stock Exchange
(NYSE:
MTN). The Vail Resorts company website is www.vailresorts.com
and
consumer website is www.snow.com.
Statements
in this press release, other than statements of historical information, are
forward- looking statements that are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. Readers are cautioned
not to place undue reliance on these forward-looking statements which speak
only
as of the date hereof. Investors are also directed to other risks discussed
in
the Company's Annual Report on Form 10-K for the fiscal year ended July 31,
2005
and other documents filed by the Company with the Securities and Exchange
Commission.
###