EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, effective as of September 01, 2003 by and
between AMERICAN SKIING COMPANY, a Delaware corporation (the "Company"), and
Xxxxxx X. Xxxxxxx, Xx. (the "Executive").
WHEREAS, the Company desires to employ the Executive and the Executive
desires to continue to be so employed, on the terms and subject to the
conditions set forth in this agreement (the "Agreement");
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and for other good and valuable consideration the parties hereto hereby agree as
follows:
1. Employment: Term. The Company hereby agrees to continue to employ the
Executive, and the Executive agrees to continue to be so employed by the
Company, upon the terms and subject to the conditions set forth herein,
commencing as of September 1, 2003 (the "Commencement Date") and ending on
August 31, 2006 (the "Initial Period"); provided, however, that such term shall
automatically be extended for an additional three (3) year period (the "Renewal
Period") unless, not later than thirty (30) days prior to the expiration of the
Initial Period, either party hereto shall provide written notice (a "Non-Renewal
Notice") of its or his desire not to extend the term hereof to the other party
hereto and provided, further, however, that such term shall be further
automatically extended for additional consecutive one year periods beginning on
the day following the last day of the Renewal Period and each subsequent
anniversary thereafter (each such one-year period an "Extended Renewal Period")
unless, not later than thirty (30) days prior to the expiration of each such
Extended Renewal Period, either party hereto shall provide a Non-Renewal Notice
to the other party (the Initial Period together with the Renewal Period and each
Extended Renewal Period shall be hereinafter referred to as the "Term").
Notwithstanding the foregoing, the Term may terminated prior to the expiration
of the applicable Initial Period, Renewal Period or Extended Renewal Period, in
accordance with Section 4 of this Agreement
2. Position: Conduct.
(a) During the Term, the Executive will hold the title and office of,
and serve as a Senior Vice President of the Company and the Company's Secretary
and General Counsel. The Executive shall be responsible for the management of
the legal department of the Company and of American Skiing Company Resort
Properties, Inc. ("ASCRP"). The Executive shall undertake the responsibilities
and exercise the authority customarily performed, undertaken and exercised by
persons situated in a similar executive capacity, and shall perform such other
specific duties and services (including service as an officer, director or
equivalent position of any direct or indirect subsidiary without additional
compensation) as the Board of Directors of the Company (the "Board") or Chief
Executive Officer of the Company (the "CEO") shall reasonably request. The
Executive shall report directly to the CEO of the Company unless otherwise
explicitly directed by the Board. During the Term, the Company shall provide the
Executive with executive office space and administrative and secretarial
assistance and other support services consistent with his position and past
practice. The administrative and secretarial assistance may be provided in
either the Company's offices in Portland, Maine, area or at the Company's
headquarters.
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(b) During the Term, the Executive agrees to devote his full business
time and best efforts and attention to the business and affairs of the Company
and to faithfully and diligently perform, to the best of his ability, all of his
duties and responsibilities hereunder. Nothing in this Agreement shall preclude
the Executive from devoting reasonable time and attention to (i) serving, with
the approval of the Board or CEO, as a director, trustee or member of any
committee of any organization, (ii) engaging in charitable and community
activities and (iii) managing his personal investments and affairs; provided
that such activities do not involve any material conflict of interest with the
interests of the Company or, individually or collectively interfere materially
with the performance by the Executive of his duties and responsibilities under
this Agreement. Notwithstanding the foregoing and except as expressly provided
herein, during the Term, the Executive may not accept employment with any other
individual or entity, or engage in any other venture which is directly in
conflict or competition with the business of the Company.
(c) The Executive's office and primary place of rendering his services
under this Agreement shall be the offices of the Company in Portland, Maine,
area. Under no circumstances shall the Executive be required to relocate or
provide services under this Agreement in any other location other than in
connection with reasonable and customary business travel.
3. Salary: Additional Consideration: Perquisites and Benefits.
(a) Salary. During the Term, the Company shall pay the Executive a
base salary (the "Base Salary") at an annual rate of not less than $265,000.00.
Subject to annual review, such Base Salary may be increased from time to time
but in no event shall be decreased without the prior consent of the Executive.
Base Salary shall be paid in periodic installments in accordance with the
Company's standard practice, but not less frequently than semi-monthly.
(b) Bonus. For each fiscal year (August 1st through July 31st) during
the Term, the Executive shall be eligible to receive a bonus from the Company
(the "Annual Bonus"). The award and amount of the Annual Bonus shall be
contingent upon the Company's achievement of predefined operating or performance
goals and other criteria established by the Compensation Committee of the Board
consistent with the adopted annual incentive plan program of the Company, which
shall give the Executive the opportunity to earn a maximum Annual Bonus equal to
75% of Base Salary, with a target Annual Bonus equal to 50% of Base Salary.
(c) Employee Benefits. During the Term, the Executive shall
participate in all plans now existing or hereafter adopted by the Company for
its management employees or the general benefit of its employees, such as any
pension, profit-sharing, bonuses, stock option or other incentive compensation
plans, life and health insurance plans, or other insurance plans and benefits on
the same basis and subject to the same qualifications as other senior executive
officers.
(d) Incentives. The Executive shall be eligible for participation in
the Company's Phantom Equity Plan, as amended from time to time by the
Compensation Committee of the Board (the "Equity Plan"). Subject to the approval
of the Compensation Committee, the Executive shall receive a grant under the
Equity Plan not later than December 31, 2003 at a participation percentage equal
to six and one half percent (6.5%). Such additional grant shall be in addition
to and not in lieu of any previous grant the Executive may have received under
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the Equity Plan. The terms of such grant shall be governed by the Equity Plan
and an award agreement entered into by and between the Executive and the
Company.
(e) Expenses. The Company shall reimburse the Executive, in accordance
with its standard policies from time to time in effect, for all out-of-pocket
business expenses as may be incurred by the Executive in the performance of his
duties under this Agreement. Such reimbursement shall include, but not be
limited to (i) Maine bar fees and state bar association dues (including dues for
any committee or section memberships), (ii) American Bar Association dues,
including any section or committee memberships, and (iii) continuing legal
education credit courses required to maintain bar admission in Maine, including
travel and lodging to and from the same.
(f) Vacation. The Executive shall be entitled to vacation time to be
credited and taken in accordance with the Company's policy from time to time in
effect for senior executives, which in any event shall not be less than a total
of four (4) weeks per calendar year.
(g) Indemnification. To the fullest extent permitted by applicable
law, the Executive shall be indemnified and held harmless by the Company against
any and all judgments, penalties, fines, amounts paid in settlements, and other
reasonable expenses (including, without limitation, reasonable attorney's fees
and disbursements) actually incurred by the Executive in connection with any
threatened, pending or completed action, suit or proceeding (whether civil,
criminal, administrative, investigative or other) relating to or in connection
with any action or omission in his capacity as a director, officer, attorney or
employee of the Company except any action which would otherwise constitute
"Cause" (as such term is defined in Section 4(b)(ii) or 4(b)(iii) of this
Agreement). The Company shall maintain Directors and Officers Insurance in
accordance with past practices, which policies shall include coverage for any
liability resulting from the Executive's rendering of legal opinions in the
course of his duties under Section 2(a) hereof or as otherwise requested by the
Company. Indemnification under this Section 3(g) shall be in addition to, and
not in lieu of, any other indemnification by the Company of it's officers and
directors.
4. Termination and Severance.
(a) Death or Disability. The Term shall terminate immediately upon the
Executive's death or, upon thirty (30) days prior written notice by the Company,
in the case of a determination of the Executive's Disability. As used herein the
term "Disability" means the Executive's inability to perform his duties and
responsibilities under this Agreement for a period of more than 120 consecutive
days, or for more than 180 days, whether or not continuous, during any 365-day
period, due to physical or mental incapacity or impairment. A determination of
Disability will be made by a physician reasonably satisfactory to both the
Executive and the Company and paid for by the Company whose decision shall be
final and binding on the Executive and the Company; provided that if the parties
cannot agree as to a physician, then each shall select and pay for a physician
and these two together shall select a third physician whose fee shall be borne
equally by the Executive and the Company and whose determination of Disability
shall be binding on the Executive and the Company.
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If the Term is terminated upon the Executive's death or Disability, the
Company shall pay to the Executive's estate or the Executive, as the case may
be, a lump sum payment equal to one times the sum of (i) the Executive's annual
Base Salary as in effect on the date of such termination, (ii) a pro rata
portion of the Executive's Annual Bonus with respect to the fiscal year in which
the termination occurred and (iii) any accrued but unpaid vacation through the
date of such termination. The Company may, at its election, satisfy the payment
requirement referenced in Section 4(a)(i), (ii) and (iii) through the issuance
of life insurance on the Executive.
(b) Termination for Cause. The Term may be terminated by the Company
upon notice (as set forth in this Section 4(b)) to the Executive upon the
occurrence of any event constituting "Cause" as defined below. If the Term is
terminated by the Company for Cause, the Company will pay the Executive an
aggregate amount equal to the Executive's accrued and unpaid Base Salary and
vacation pay through the date of such termination. For purposes of this
Agreement, "Cause" shall mean the Executive's (i) willful and intentional
failure or refusal to perform or observe any of his material duties,
responsibilities or obligations set forth in this Agreement; provided, however,
that the Company shall not be deemed to have Cause pursuant to this clause (i)
unless the Company gives the Executive written notice that the specified conduct
has occurred and making specific reference to this Section 4(b)(i) and the
Executive fails to cure the conduct within thirty (30) days after receipt of
such notice; (ii) any willful and intentional act of the Executive involving
malfeasance, fraud, theft, misappropriation of funds, embezzlement or dishonesty
relating to the Company; or (iii) the Executive's conviction of, or a plea of
guilty or nolo contendere to, an offense which is a felony in the jurisdiction
involved or any felony or misdemeanor involving misappropriation of Company
property.
Termination of the Executive for Cause shall be communicated by a Notice of
Termination. For purposes of this Agreement, a "Notice of Termination" shall
mean delivery to the Executive of a copy of a resolution duly adopted by the
affirmative vote of the majority of the Board that the Executive has engaged in
conduct constituting Cause and with respect to any termination based upon
conduct described in clause (i) above, that the Executive failed to cure such
conduct during the thirty-day period following the date on which the Company
gave written notice of the conduct referred to in such clause (i). For purposes
of this Agreement, no such purported termination of the Executive's employment
shall be effective without such Notice of Termination.
(c) Termination by the Executive without Good Reason. If the Term is
terminated by the Executive other than because of death, Disability or for Good
Reason (as such term is defined in Section 4(e) hereof), the Company shall pay
to the Executive an aggregate amount equal to the Executive's accrued and unpaid
Base Salary and vacation through the date of such termination.
(d) Termination By the Company without Cause other than on account of
death or Disability or by the Executive for Good Reason. If the Term is
terminated by the Company without Cause (other than by reason of death or
Disability), or if the Executive terminates the Term for Good Reason (as defined
below), the Company shall pay the Executive a lump sum equal to one times the
sum of (i) the Executive's annual Base Salary as in effect on the date of such
termination and (ii) the amount of the Executive's Annual Bonus for the fiscal
year preceding such termination. In addition, the Company shall continue in
effect the Executive's health benefits at the Company's expense until the
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earlier of: (x) 180 days following such termination or (y) the date on which the
Executive obtains comparable or superior health coverage from a subsequent
employer.
For purposes of this Agreement, "Good Reason" shall mean the occurrence of
any of the following, without the prior written consent of the Executive: (A)
assignment of the Executive of duties materially inconsistent with the
Executive's position as described in Section 2(a) hereof, (B) any material
diminution in the Executive's duties or responsibilities, other than in
connection with the termination of the Executive's employment for Cause,
Disability or as a result of the Executive's death or by the Executive other
than for Good Reason, (C) a change in the Executive's principal place of
employment to a location outside the Portland, Maine area which increases the
Executive's commute by more than 50 miles, (D) the material breach by the
Company of this Agreement or (E) the provision by the Company of a Non-Renewal
Notice pursuant to Section 1 hereof; provided, however, that Good Reason shall
not exist pursuant to clause D unless the Executive gives the Company written
notice that the specified conduct or breach has occurred and the Company fails
to cure the conduct or breach within thirty (30) days of receipt of such notice.
(e) Mitigation. Under no circumstances shall the Executive, upon
termination of his employment hereunder, be required to seek alternative
employment and, in the event the Executive does secure other employment, no
other compensation or other benefits (other than with respect to the
continuation of health benefits described in Section 4(d)) received in respect
of such employment shall be set-off or in any other way limit or reduce the
obligations of the Company under this Section 4.
(f) Taxes. Notwithstanding the previous provisions, if payments made
pursuant to this Section 4 are considered "parachute payments" under Section
280G of the Internal Revenue Code of 1986, as amended (the "Code") then the sum
of such parachute payments plus any other payments made by the Company to the
Executive which are considered parachute payments shall be limited to the
greatest amount which may be paid to the Executive under Section 280G without
causing any loss of deduction to the Company under such section; but only if, by
reason of such reduction, the net after tax benefit of the Executive shall
exceed the net after tax benefit if such reduction were not made. "Net after tax
benefit" for purposes of this Agreement shall mean the sum of (i) the total
amounts payable to the Executive under Section 4, plus (ii) all other payments
and benefits which the Executive receives or then is entitled to receive from
the Company that would constitute a "parachute payment" within the meaning of
Section 280G of the Code, less (iii) the amount of federal income taxes payable
with respect to the foregoing calculated at the minimum marginal income tax rate
for each year in which the foregoing shall be paid to the Executive (based upon
the rate in effect for such year as set forth in the Code at the time of
termination of the Executive's employment), less (iv) the amount of excise taxes
imposed with respect to the payments and benefits described in (i) and (ii)
above by Section 4999 of the Code.
5. Confidential Information.
The Executive acknowledges that the Company and its subsidiaries or
affiliated ventures ("Company Affiliates") own and have developed and compile,
and will in the future own, develop and compile certain Confidential Information
and that during the course of his rendering services hereunder Confidential
Information will be disclosed to the Executive by the Company Affiliates. The
Executive hereby agrees that, during the Term and thereafter, he will not use or
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disclose, furnish or make accessible to anyone, directly or indirectly, any
Confidential Information of Company Affiliates; provided, however, that the
foregoing restriction shall not limit the Executive's ability to use his
experience as a general counsel in subsequent employment.
As used herein, the Term "Confidential Information" means any trade
secrets, confidential or proprietary information, or other knowledge, know-how,
information, documents or materials, owned developed or possessed by Company
Affiliate pertaining to its businesses the confidentiality of which such company
takes reasonable measures to protect, including, but not limited to, trade
secrets, techniques, know-how (including designs, plans, procedures, processes
and research records), software, computer programs, innovations, discoveries,
improvements, research, developments, test results, reports, specifications,
data, formats, marketing data and business plans and strategies, agreements and
other forms of documents, expansion plans, budgets, projections, and salary,
staffing and employment information. Notwithstanding the foregoing, Confidential
Information shall not in any event include information which (i) was generally
known or generally or generally available to the public prior to disclosure to
the Executive, (ii) becomes generally known or generally available to the public
subsequent to its disclosure to the Executive through no wrongful act of the
Executive, (iii) is or becomes available to the Executive from sources other
than the Company Affiliates which sources are not known to the Executive to be
under any duty of confidentiality with respect thereto, (iv) the Executive is
required to disclose by applicable law or regulation or by order of any court or
federal, state or local regulatory or administrative body (provided that the
Executive provides the Company with prior notice of the contemplated disclosure
and reasonably cooperates with the Company, at the Company's sole expense, in
seeking a protective order or other appropriate protection of such information)
or (v) known to the Executive prior to his employment with the Company.
6. Nonsolicitation.
(a) The Executive recognizes and acknowledges that the services to be
performed by him hereunder are special, unique and extraordinary and the
Executive further acknowledges and recognizes the highly competitive nature of
the business of the Company. The Executive understands that the provisions of
this Section 6 may limit the Executive's ability to earn a livelihood in a
business similar to the business of the Company but nevertheless agrees and
hereby acknowledges that (i) such provisions do not impose a greater restraint
than is necessary to protect the goodwill or other business interests of the
Company, (ii) such provisions contain reasonable limitations as to time and
scope of activity to be restrained, (iii) such provisions are not harmful to the
general public, (iv) such provisions are not unduly burdensome to the Executive,
and (v) the consideration provided hereunder is sufficient to compensate the
Executive for the restrictions contained in such provisions. In consideration
thereof and in light of the Executive's education, skills and liabilities, the
Executive agrees that the Executive will not assert in any forum that such
provisions prevent the Executive from earning a living or otherwise are void or
unenforceable or should be held or unenforceable. Accordingly, the Executive
agrees that during the Employment Term and for a period of twelve (12) months
following termination of employment (the "Restrictive Period"), the Executive
will not (i) directly or indirectly solicit or encourage any employee of the
Company to leave the employment of the Company, and (ii) directly or indirectly,
solicit or encourage to cease to work with the Company any consultant then under
contract with the Company.
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(b) It is expressly understood and agreed that although the Executive
and the Company consider the restrictions contained in this Section 6 to be
reasonable, if a final judicial determination is made by a court of competent
jurisdiction that the time or territory or any other restriction contained in
the Agreement is an unenforceable restriction against The Executive, the
provisions of the Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds that any restriction
contained in the Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
7. Specific Performance.
(a) The Executive acknowledges that the services to be rendered by him
hereunder are of a special, unique, extraordinary and personal character and
that the Company would sustain irreparable harm in the event of a violation by
the Executive of Section 5 or 6 of this Agreement. Therefore, in addition to any
other remedies available, the Company shall be entitled to specific enforcement
and/or injunction from any court of competent jurisdiction restraining the
Executive from committing or continuing any such violation of this Agreement
without proving actual damages or posting a bond or other security. Nothing
herein shall be construed as prohibiting the Company from pursuing any other
remedies available to it for such breach or threatened breach, including the
recovery of damages.
(b) If any of the restrictions on activities of the Executive
contained in Section 6 hereof shall for any reason be held by a court of
competent jurisdiction to be excessively broad, such restrictions shall be
construed so as thereafter to be limited or reduced to be enforceable to the
maximum extent comparable with the applicable law as it shall then appear; it
being understood that by the execution of this Agreement the parties hereto
regard such restrictions as reasonable and compatible with their respective
rights.
8. Withholding. The parties agree that all payments to be made to the
Executive by the Company pursuant to the Agreement shall be subject to all
applicable withholding obligations of the Company.
9. Notices. All notices required or permitted hereunder shall be in writing
and shall be deemed given and received when delivered personally, four (4) days
after being mailed if sent by registered or certified mail, postage pre-paid, or
by one (1) day after delivery if sent by air courier (for next-day delivery)
with evidence or receipt thereof or by facsimile with receipt confirmed by the
addressee. Such notices shall be addressed as follows: (i) if to the Executive,
to the address of the Executive on file with the personnel records of the
Company; (ii) if to the Company, at the principal executive offices of the
Company, to the attention of the Chief Executive Officer; or (iii) to any other
address of which such party may have given notice to the other parties in the
manner specified above.
10. Miscellaneous.
(a) This Agreement is a personal contract calling for the provisions
of unique services by the Executive, and the Executive's rights and obligations
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hereunder may not be sold, transferred, assigned, pledged or hypothecated by the
Executive. The rights and obligations of the Company hereunder will be binding
upon and run in favor of its respective successors and assigns.
(b) This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Maine, without regard to
conflict of laws principles.
(c) Any controversy arising out of or relating to this Agreement or
any breach hereof shall be settled by arbitration in Portland, Maine by a single
neutral arbitrator in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. Judgment upon any award rendered may be
entered in any court having jurisdiction thereof, except in the event of a
controversy relating to any alleged violation by the Executive of Section 6 or 7
hereof, in which case the Company shall be entitled to seek injunction relief
from a court of competent jurisdiction without the requirement to seek
arbitration.
(d) The headings of the various sections of this Agreement are for
convenience of reference only and shall not define or limit any of the terms or
provisions hereof.
(e) The provisions of this Agreement which by their terms call for
performance subsequent to the expiration or termination of the Term shall
survive such expiration or termination.
(f) This Agreement constitutes the entire agreement of the parties
hereto with respect to the subject matter hereof (other than any Stock Option
Agreement entered into by and between the Executive and the Company or the
Phantom Equity Award Agreement entered into by and between the Executive and the
Company on or about December 21, 2001 or any subsequent Phantom Equity Award
Agreement entered into in accordance with and pursuant to the Equity Plan) and
supersedes all other prior agreements and undertakings, both written and oral,
among the parties with respect to the subject matter hereof, all of which shall
be terminated on the Commencement Date. In addition, that parties hereto hereby
waive all rights such party may have under all other prior agreements and hereto
hereby waive all rights such party may have under all other prior agreements and
undertakings, both written and oral, among the parties hereto, or among the
Executive, with respect to the subject matter hereof.
EXECUTIVE
/s/Xxxxxx X. Xxxxxxx, Xx.
--------------------------------
By: Xxxxxx X. Xxxxxxx, Xx.
AMERICAN SKIING COMPANY
/s/Xxxxxxx X. Fair
---------------------------------
By: X.X. Fair, Chief Executive Officer
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