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): June
21, 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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[
] Written communications pursuant to Rule 425 under the Securities
Act
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[
] Soliciting materials pursuant to Rule 14a-12 under the Exchange
Act
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[
] Pre-commencement communications pursuant to Rule 14d-2(b) under
the
Exchange Act
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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.
On
June 21, 2006, The Vail Corporation (“Vail”), a wholly-owned subsidiary of Vail
Resorts, Inc. (the “Company”), and Jeffrey W. Jones, the Company’s Senior
Executive Vice President and Chief Financial Officer, entered into a Housing
Agreement (the “Housing Agreement”) to contribute to the purchase of Mr. Jones’
primary residence in connection with Mr. Jones’ employment and the relocation of
the Company’s headquarters, following the satisfaction of the terms of a
previously executed similar agreement by Mr. Jones and the sale of the residence
purchased under that agreement in Eagle County, Colorado.
Pursuant
to the Housing Agreement, Vail will invest up to 50% of the purchase price,
not
to exceed $650,000, for the purchase of a primary residence for Mr. Jones and
his family in the Denver/Boulder, Colorado area. Upon making the investment,
Vail will hold a proportionate undivided ownership interest in such residence
in
an amount equal to the amount contributed by Vail divided by the total purchase
price of the residence. Upon the earlier of the resale of the residence or
the
acquisition by Mr. Jones of the residence following termination of Mr. Jones’
employment with the Company, Vail is entitled to receive its proportionate
share
of the resale price, or fair value if purchased by Mr. Jones, of the residence,
net of customary closing costs and less certain deductions for material home
improvements.
The
foregoing description of the Housing Agreement is qualified in its entirety
by
reference to the agreement attached
hereto as Exhibit 10.1 and incorporated herein by reference.
Item
9.01.
Financial Statements and Exhibits.
(d) Exhibits.
The following exhibit is filed herewith:
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Exhibit
No.
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Description
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10.1
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Housing
Agreement, dated as of June 21, 2006, between Jeffrey W. Jones and
The
Vail Corporation.
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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:
June 23, 2006
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Vail
Resorts, Inc.
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By:
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/s/
Jeffrey W. Jones
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Jeffrey
W. Jones
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Senior
Executive Vice President and Chief Financial
Officer
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Exhibit
Index
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Exhibit
No.
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Description
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10.1
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Housing
Agreement, dated as of June 21, 2006, between Jeffrey W. Jones and
The
Vail Corporation.
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Exhibit
10.1
HOUSING
AGREEMENT
THIS
HOUSING AGREEMENT (this "Agreement") is dated as of June 21, 2006 by and between
THE VAIL CORPORATION, a Colorado corporation (d/b/a Vail Associates, Inc. and
referred to herein as "VA") and JEFFREY W. JONES ("Executive").
RECITALS
A. Vail
Resorts, Inc., a Delaware corporation ("VRI") and Executive are parties to
that
certain Amended and Restated Employment Agreement dated as of September 29,
2004
("Employment Agreement") whereby Executive agreed to render certain services
and
serve in the employ of VRI under the terms and conditions provided for in the
Employment Agreement; and
B. Vail
Resorts Development Company ("VRDC") and Executive are parties to that certain
Addendum dated as of August 29, 2003 (the "Original Agreement"), and referred
to
in Section 2(g) of the Employment Agreement, pursuant to which VA made a
contribution toward the purchase of Executive’s primary residence in Eagle
County, Colorado (the "Eagle Residence"), and pursuant to which Executive has
recently sold the Eagle Residence and satisfied the terms of the Original
Agreement in connection with VRI’s relocation of its headquarters from Avon,
Colorado to Broomfield, Colorado, and Executive’s execution of VRI’s relocation
agreement in connection therewith; and
C. VA,
a wholly-owned subsidiary of VRI, wishes to enter into this Agreement with
Executive regarding the acquisition by Executive of a primary residence in
the
Denver/Boulder, Colorado area to continue a similar arrangement between
Executive and VA as was contemplated in the Original Agreement; and
D. VA's
contribution towards the purchase price of a primary residence in the
Denver/Boulder, Colorado area is for the convenience of VA as such contribution
allows the Executive to reside in close proximity to VA's headquarters in
Broomfield, CO, and therefore, be readily available at all times to perform
his
duties of employment. VA's contribution towards the purchase price of the
Residence is also for the convenience of VA as it allows the Residence to be
used as a home office for the Executive which is critical to the successful
performance of his duties of employment.
COVENANTS
NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
1. Purchase
Contribution.
If the Executive elects to purchase a primary residence in the Denver/Boulder,
Colorado area (the "Residence"), VA shall make a contribution toward such
purchase up to fifty percent (50%) of the purchase price (excluding any personal
property associated with the purchase), not to exceed Six Hundred Fifty Thousand
Dollars ($650,000.00). Upon making such contribution, VA shall hold a
proportionate undivided interest (the “Vail Interest”) in the Residence in
co-tenancy with Executive in an amount equal to the amount contributed by VA
divided by the total purchase price for which Executive acquired the Residence.
2. Disposition
During Employment.
Executive may re-sell the Residence at his election at any time during the
term
of the Employment Agreement by providing VA thirty (30) days advance written
notice. Executive agrees to list the Residence for sale through a real estate
broker designated by VA ("Broker") for a price deemed to be fair market value
("Listing Price") as Executive and VA mutually determine in their reasonable
judgment. The Listing Price may be changed from time to time with VA's consent,
which consent shall not be unreasonably withheld or delayed. Upon any sale
or
transfer of the Residence, VA shall be entitled to receive a portion of the
re-sale price based on the Vail Interest, net of normal and customary closing
costs (e.g.,
brokers' commission, title insurance premiums, transfer taxes, etc.) and
material home improvements made in excess of Ten Thousand Dollars ($10,000.00).
For example:
Executive
purchases the Residence in 2006 for $1,435,000.00;
VA
contributes $650,000.00;
Accordingly,
the Vail Interest is 45.296%
Executive
sells the Residence in 2009 for $1,720,000.00;
Closing
costs of $120,000.00;
No
material home improvements made;
Accordingly,
VA’s portion of the re-sale price based on the Vail Interest would be
$724,736.00.
Should
Executive undertake any material home improvements or significant remodeling,
not to include ordinary maintenance and repair (e.g.,
painting, re-carpeting, etc.) to the Residence in excess of $10,000.00 in such
instance (e.g.,
addition of a spa/jacuzzi), Executive shall be entitled to receive from VA’s
portion of the re-sale price as determined herein that portion of the cost
of
each material home improvement which exceeds $10,000.00. Executive shall only
be
entitled to such amounts from VA if, prior to undertaking each improvement,
Executive submits to VA plans or a written description of the work to be
undertaken together with a statement indicating the cost thereof, and VA agrees
in writing that such improvement qualifies as a material home improvement.
Executive and VA acknowledge that while any material home improvements to the
Residence may increase the value of the Residence, the parties acknowledge
that
it would be difficult to attribute any appreciation in the Residence value
directly to any material home improvement(s). Accordingly, due to such
uncertainty, the parties agree that (i) the re-sale price of the Residence
and
any appreciation recognized thereby shall only be net of the normal and
customary closing costs and (ii)
the portion of the re-sale price net of closing costs allocable to VA shall
only
be reduced by expenditures made by Executive for any material home
improvement(s) in excess of $10,000.00 in each instance.
For
example:
As
in the above example, assume the Vail Interest is 45.296%
Executive
sells the Residence in 2009 for $1,720,000.00;
Closing
costs of $120,000.00;
45.296%
of the sale price less closing costs equals $724,736.00
Less
$40,000.00 for material home improvement (addition of swimming pool; total
cost
of improvement was $50,000.00. Note that $40,000.00 would be credited to
Executive in this calculation);
Accordingly,
VA’s portion of the re-sale price based on the Vail Interest would be
$684,736.00.
3. Disposition
Upon Termination of Employment Agreement.
(a) Purchase
by Executive.
If the Residence has not been previously sold or transferred, Executive, or
his
estate in the event of Executive’s death, may elect to purchase the Vail
Interest in the Residence, no later than ninety (90) days after the termination
of the Employment Agreement for any reason (without regard to any time period
of
salary continuation thereunder). If Executive so elects, he shall notify VA
in
writing within the ninety (90) day period of his desire to purchase the Vail
Interest, and such notice shall include a financing commitment or other evidence
acceptable to VA that Executive has arranged for acceptable financing to
purchase the Vail Interest in the Residence, at the price determined in this
Section 3(a).
The
price to be paid by Executive for the Vail Interest shall be determined as
follows. Within thirty (30) days after delivery of the above-referenced purchase
notice by Executive to VA, VA and Executive shall each retain an appraiser
at
their respective expense. The two selected appraisers shall select one
additional appraiser who shall be paid for equally by VA and Executive. Each
of
the appraisers shall prepare an appraisal on the Residence. The average of
the
three appraisals shall determine the value of the Residence and shall be binding
upon the parties. Executive shall pay VA for the Vail Interest its portion
of
the appraised value of the Residence based upon the Vail Interest, in full
and
in good funds, net of customary closing costs and material home improvements
as
described in the examples in Sections 2 and 3(b). Executive shall complete
the
purchase of the Vail Interest within sixty (60) days after the three appraisals
have been prepared.
(b) Sale
of Residence; Executive Purchase.
If Executive does not wish to purchase the Vail Interest in the Residence,
or
fails to comply with the deadlines for providing notice, evidence of financing
or for purchasing the Vail Interest as set forth in Section 3(a), Executive
agrees to list the Residence for sale with the Broker, at a Listing Price as
VA
and Executive mutually determine in their reasonable judgment. The Listing
Price
may be changed from time to time with VA's consent, which consent shall not
be
unreasonably withheld or delayed. If the Residence has not sold (and is not
under contract with a ready, willing and able buyer) within one (1) year after
being listed, VA and Executive shall each retain an appraiser at their
respective expense within thirty (30) days after the one (1) year period. The
two selected appraisers shall select one additional appraiser who shall be
paid
for equally by VA and Executive. Each of the appraisers shall prepare an
appraisal on the Residence. The average of the three appraisals shall determine
the value of the Residence and shall be binding upon the parties. VA shall
have
the right to require that Executive purchase the Vail Interest in the Residence
in full, with good funds, by paying VA its portion of the appraised value of
the
Residence based upon the Vail Interest. In such circumstance, closing costs
shall be estimated in an amount equal to the customary closing costs that would
have been incurred in a sale of the Residence. For example:
As
in the above example, assume the Vail Interest is 45.296%
Closing
costs equal $120,000.00 (customary costs estimated to be incurred in an actual
sale);
The
first appraisal is $1,700,000.00;
The
second appraisal is $1,720,000.00;
The
third appraisal is $1,680,000.00;
Average
value equals $1,700,000.00 less closing costs equals $1,580,000.00
45.296%
of $1,580,000.00 equals $715,676.80
Less
$40,000.00 for material home improvement (addition of swimming pool; total
cost
of improvement was $50,000.00. Note that $40,000.00 would be credited to
Executive in this calculation);
Accordingly,
VA’s portion of appraised value based on the Vail Interest would be
$675,676.80.
If
VA elects to require that Executive purchase the Vail Interest in the Residence,
the closing of such transaction shall occur within thirty (30) days after the
three appraisals have been prepared. If VA elects not to require that Executive
purchase the Vail Interest in the Residence, the Residence shall again be listed
by VA's designated Broker, at a Listing Price as VA and Executive mutually
determine in their reasonable judgment. The Listing Price may be changed from
time to time with VA's consent, which consent shall not be unreasonably withheld
or delayed. If the Residence has not sold within one (1) year thereafter, the
three previously named appraisers shall update their respective appraisals
and
VA and Executive shall equally share in the costs thereof. Based on the average
of the three appraisals, Executive shall buy-out the Vail Interest in the
Residence within thirty (30) days after the updated appraisals have been
prepared. All references in this Section 3 shall be deemed to refer to the
estate of Executive in the event of Executive’s death.
4. Executive’s
Obligations With Respect to the Residence.
Executive covenants and agrees to: (i)
use the Residence as Executive's personal and primary place of abode in
compliance with all ordinances, covenants and restrictions governing the
Residence and not lease or rent the same, (ii) use the Residence for significant
business purposes, including, but not limited to the following:(a) entertainment
of VA customers and employees; (b) frequent business related telephone calls
during evening and weekend hours; (c) frequent work on the VA provided computer
and/or other personal communicating device, including email during evening
and
weekend hours; (d) receipt and review of facsimiles, business correspondence,
and business periodicals during evening and weekend hours; and (e) business
and
staff meetings, as appropriate, (ii)
keep the Residence in good order and repair, (iii)
insure the Residence for full replacement value with VA named as a loss payee;
(iv)
not mortgage the Residence for more than Executive's proportionate interest
in
the Residence based on the total fair market value of the Residence established
by any appraisal obtain at Executive's expense (e.g.,
using examples above, Executive's interest would be 54.704%) and timely and
fully perform all obligations under the mortgage, including without limitation
making all mortgage and escrow payments when due; (v)
timely pay or cause to be paid all real property taxes and other assessments
and/or dues affecting the Residence; (vi)
timely pay or cause to be paid all costs for work done in or to the Residence
and keep the same free and clear of all mechanics' or materialmens' liens,
and
(vii)
not transfer or sell Executive's interest in the Residence except in strict
compliance with this Agreement. Notwithstanding the foregoing, VA shall pay
for
its proportionate share of the annual homeowner's insurance premium attributable
to insuring any portion of the structure of the Residence, excluding personal
property therein and excluding homeowner/personal liability coverage in excess
of $300,000.00, and including its
proportionate share of the annual real property taxes for the Residence. As
used
herein, the phrases "Executive’s interest in the Residence" or "Executive’s
proportionate interest in the Residence" shall include any interest of the
Executive’s spouse.
5. Default;
Remedies.
In the event Executive, Executive’s spouse or Executive’s estate, if applicable,
breaches any of the promises, covenants or obligations contained herein, VA
shall have the right to seek equitable relief, including without limitation
the
right to seek specific performance, in addition to all remedies available to
VA
pursuant to Colorado law. In addition, should Executive, Executive’s spouse or
Executive’s estate, if applicable, transfer or sell or attempt to transfer or
sell the Residence in violation of this Agreement, VA shall have the right
to
immediately cause Executive or Executive’s estate, if applicable, to purchase
the Vail Interest in the Residence based on the average of three appraisals
as
provided in Section 3 above; however, in such event, there shall be no
requirement that the Residence be listed for sale for any period of time as
a
condition precedent to Executive purchasing the Vail Interest. If VA does not
make such election, VA shall still receive a portion of the re-sale price based
upon the Vail Interest from the unauthorized re-sale of the Residence as
otherwise provided for herein.
6. Executive’s
Loan.
Executive agrees to cooperate and to cause his spouse to cooperate should VA
desire to obtain an agreement from Executive's and/or Executive’s spouse’s
lender whereby VA obtains the right to receive notice of a default under
Executive’s and/or Executive’s spouse’s loan documents, if any, with respect to
the Residence ("Loan Documents") and the right to cure such default, including
redemption rights ("Loan Default Cure Agreement"). In the event Executive and/or
Executive’s spouse, as borrower, defaults on any payment or other obligation
under the Loan Documents, Executive shall be deemed to have breached this
Agreement. In the event of such default, in addition to the rights VA may have
pursuant to the Loan Default Cure Agreement, VA shall have the right to
immediately cause Executive to purchase the Vail Interest in the Residence
based
on the average of three appraisals as provided in Section 3 above; however,
in
such event, there shall be no requirement that the Residence be listed for
sale
for any period of time as a condition precedent to Executive purchasing the
Vail
Interest. If VA cures the default pursuant to the Loan Default Cure Agreement,
the amount paid by VA to cure such default and any expenses VA incurs to cure
the default, including without limitation reasonable attorney’s fees and costs,
shall be immediately reimbursed by Executive in addition to the amount paid
to
purchase the Vail Interest in the Residence, if VA elects to cause Executive
to
purchase the Vail Interest in the Residence. Any amount paid by VA to cure
Executive's default shall accrue interest at the rate of 18% per
annum.
7. Notices.
Any notices required or authorized hereunder shall be deemed delivered upon
deposit, postage prepaid, in the United States mail, certified, with return
receipt requested, addressed to the parties as follows:
Executive:
Mr.
Jeffrey W. Jones
137
Benchmark Road
Avon,
CO 81620
VA:
Vail
Associates, Inc.
137
Benchmark Road
Avon,
CO 81620
Attn:
Martha Rehm, Esq.
The
addresses of both Executive and VA shall automatically be deemed changed to
390
Interlocken Crescent, Suite 1000, Broomfield, CO on such date that VA takes
possession of the premises it is leasing at such address, and no amendment
to
this Agreement shall be required, unless otherwise agreed by the parties in
writing. Notwithstanding the foregoing, either party shall have the right to
change its address at any time for purposes of this Section 7 by giving written
notice of such change to the other party.
8. Miscellaneous.
This Agreement shall be binding upon Executive, his spouse as acknowledged
and
agreed below, and the heirs, estate and personal representatives of Executive.
This Agreement shall run with the Residence and shall survive the termination
or
expiration of the Employment Agreement. This Agreement is not assignable or
transferable by Executive. This Agreement may be disclosed to all persons and
entities as necessary to enforce its terms or as may be required by law,
including without limitation proxy statements of VA's affiliates or otherwise,
and VA, in its sole and absolute discretion, may record this Agreement in the
office of the clerk and recorder of the county in which the Residence is
located. This Agreement shall be governed by the laws of the State of Colorado.
This Agreement constitutes the full understanding of the parties, and supersedes
and is in lieu of any and all other understandings or agreements with respect
to
the subject matter hereof. Any amendments to this Agreement shall be made only
in writing and signed by each of the parties hereto.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day first
written above.
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EXECUTIVE:
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/s/
Jeffrey W. Jones
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Jeffrey
W. Jones
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VA:
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THE
VAIL CORPORATION, a Colorado corporation (d/b/a Vail Associates,
Inc.)
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By:
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/s/
Martha D. Rehm
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Name:
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Martha
D. Rehm
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Title:
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Executive
Vice President
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ACKNOWLEDGED
AND AGREED TO BY DONNA M. JONES:
I,
Donna M. Jones, acknowledge that although I am not a party to the Employment
Agreement or this Agreement, I specifically agree that, in connection with
any
ownership interest that I may have or hereafter acquire in the Residence, I
will
be bound by the terms of this Agreement and agree to cooperate with VA and
Executive such that the terms of this Agreement may be fully performed for
the
benefit of VA.
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/s/
Donna M. Jones
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Dated:
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June
21, 2006
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Donna
M. Jones
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