EXHIBIT 10.27
AGREEMENT
Agreement dated as of October 11, 1996 between VAIL RESORTS, INC.
(formerly Xxxxxxx Holdings, Inc.) a Delaware corporation (the "Company") and
XXXXXX X. XXXXXXX ("Xxxxxxx").
Xxxxxxx is a party to an employment agreement with the Company and
certain of its affiliates dated October 8, 1992, as amended as of September 1,
1993 (the "Employment Agreement"), and has served as an officer and director of
the Company. Pursuant to the Employment Agreement, Xxxxxxx received certain
options to purchase shares of the Company's common stock, $.01 par value,
formerly designated as Class 2 common stock (the "Common Stock"), of which
options to purchase 204,082 shares at an exercise price of $13.70 per share (the
"$13.70 Options") and options to purchase 582,404 shares at an exercise price of
$23.67 per share (the "$23.67 Options") remain outstanding. The parties desire
to terminate the Employment Agreement and to provide for the cancellation or
exercise of Xxxxxxx'x outstanding options upon the terms and conditions
contained herein.
NOW, THEREFORE, in consideration of the mutual undertakings contained
herein, the parties agree as follows:
1. Termination of Employment Agreement. The Employment Agreement
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is hereby terminated as of September 30, 1996 and shall thereafter be of no
further force and effect. Such termination shall be deemed a termination
pursuant to Section 6.2.1 of the Employment Agreement, and accordingly Xxxxxxx
shall be entitled to receive his Base Salary (as defined in the Employment
Agreement) through October 7, 1997, payable in the manner set forth in such
Section 6.2.1. Except as expressly set forth in this Agreement, Xxxxxxx shall be
entitled to no other compensation or benefits in connection with termination of
the Employment Agreement. Xxxxxxx hereby resigns from all directorships and
other positions with the Company and its subsidiaries effective immediately.
2. Exercise of Options. As payment in full of the exercise price
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under the $13.70 Options, Xxxxxxx hereby agrees to pay to the Company the sum of
$59,928 and waives the right to participate in the $55 million distribution
described in the Company's pending Form S-2 registration statement
(the "Distribution") with respect to the 204,082 shares of Common Stock issuable
upon exercise of the $13.70 Options as well as the 357,488 shares of Common
Stock held by Xxxxxxx on the date hereof. Notwithstanding the foregoing, in the
event that the sum of such payment and the actual amount of the Distribution
waived by Xxxxxxx pursuant to the preceding sentence is less than the aggregate
exercise price of the $13.70 Options, Xxxxxxx shall promptly pay the amount of
such difference to the Company or the Company may deduct such difference from
the amounts payable to Xxxxxxx pursuant to Section 1 hereof.
3. Cancellation of $23.67 Options. As payment in full for the
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cancellation of the $23.67 Options, the Company will issue 168,159 shares of
Common Stock to Xxxxxxx. Xxxxxxx
hereby cancels and surrenders to the Company the $23.67 Options. Xxxxxxx shall
be entitled to participate in the Distribution with respect to such 168,159
shares when and as such Distribution is made.
4. Continuation of Benefits. From the date hereof though December 31,
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1996, the Company shall continue to provide Xxxxxxx'x existing group life,
disability, medical and dental insurance benefits, and shall thereafter make
such benefits available as required by COBRA. In addition, the Company shall
continue to provide Xxxxxxx with use of his existing office (including telephone
and secretarial service) at no cost through December 31, 1996; provided,
however, that Xxxxxxx may continue to utilize such office subsequent to such
date in the event that Xxxxxxx assumes the lease for such office space and pays
all expenses associated therewith. Xxxxxxx and his immediate family members will
receive season passes to the Company's ski resorts for the 1996-97 season, and
Xxxxxxx will be permitted to use his existing club memberships (as designated by
the Company) including but not limited to Game Creek Club during such period.
Xxxxxxx will resign from all such club memberships as of September 30, 1997.
Xxxxxxx and his immediate family members shall be entitled to utilize the
Company's Beaver Creek golf course at no charge through the 1997 season. Xxxxxxx
shall receive or retain ownership of his existing Company car.
5. Noncompetition. Until July 1, 1997, Xxxxxxx will not, directly or
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indirectly, without the prior written consent of the Company, own, manage,
operate, participate in, be employed by or act as an independent contractor or
agent of, or have any financial interest or responsibility in or with, any firm,
person, corporation, enterprise or other entity which owns, manages or operates,
directly or indirectly, an alpine or nordic skiing operation in Colorado;
provided, however, that this provision shall not prohibit Xxxxxxx from
participating in the ownership or management of any of the Telluride, Purgatory
or Wolf Creek ski resorts.
6. Confidential Information. Xxxxxxx acknowledges that the
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information, observations and data obtained by him while employed by the Company
concerning the business or affairs of the Company or its affiliates that are not
generally available to the public ("Confidential Information") are the property
of the Company. Xxxxxxx agrees that he shall not disclose to any unauthorized
person or use for his own account any Confidential Information without the prior
written consent of the Company, unless and to the extent that such matters
become generally known to and available for use by the public other than as a
result of Xxxxxxx'x acts or omissions to act. Notwithstanding the foregoing, in
the event Xxxxxxx becomes legally compelled to disclose Confidential Information
pursuant to judicial or administrative subpoena or process or other legal
obligation, Xxxxxxx may make such disclosure only to the extent required, in the
opinion of counsel for Xxxxxxx, to comply with such subpoena, process or other
obligation. Xxxxxxx shall, as promptly as possible and in any event prior to
making of such disclosure, notify the Company of any such subpoena, process or
obligation and shall cooperate with the Company in seeking a protective order or
other means of protecting the confidentiality of the Confidential Information.
In addition to the foregoing, Xxxxxxx hereby agrees to make no public statements
whatsoever concerning the Company (including statements to media
representatives) and to refrain from
discussing the Company's affairs with any governmental or regulatory agency or
body unless compelled to do so by applicable law.
7. Foundation Obligations. Xxxxxxx hereby agrees to indemnify the
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Company and its subsidiaries and affiliates against 50% of all costs, damages
and expenses incurred by the Company or Vail Associates, Inc. after the date
hereof in connection with the obligations of Vail Associates pursuant to the
Medical Service Agreement dated March 31, 1989 with J. Xxxxxxx Xxxxxxxx, M.D.
(the "Xxxxxxxx Agreement") up to a maximum of $600,000. The Company shall be
entitled to withhold $600,000 from the final payments to Xxxxxxx pursuant to
Section 1 pending final resolution of the amount (if any) of such liability;
provided, however, that in the event that the Company's contemplated initial
public offering of Common Stock has occurred, Xxxxxxx may in lieu of such
withholding pledge shares of Common Stock with a market value of not less than
$1,000,000 to secure his obligation pursuant to this Section 6. In the event
that the market value of such pledged shares shall at any time be less than
$750,000. Xxxxxxx shall promptly pledge additional shares of Comon Stock to
resore the value of the pledged shares to equal at least $750,000 or shall make
other arrangements to secure such obligation satisfactory to the Company. The
Company shall be entitled to control the defense and resolution of any matters
arising under the Xxxxxxxx Agreement.
8. Sale of Shares. When the Company's current contemplated public
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offering of Common Stock is consummated substantially in accordance with
Amendment No. 1 to the Company's pending Form S-2 registration statement,
Xxxxxxx shall have the right to sell at least 168,159 shares in said offering
(it being understood that a reduction in the size of such offering shall reduce
Xxxxxxx'x ability to sell his shares). The parties agree to use good faith
efforts to allow Xxxxxxx to sell more if he so desires.
9. Delivery of Shares. The Company may hold the shares to be
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issued hereunder or any proceeds from the sale thereof by Xxxxxxx until such
time as Xxxxxxx provides evidence of the payment of any applicable income tax
owing by reason of the issuance of the shares. When said evidence is provided
all remaining shares and/or proceeds shall be released.
10. Severability. In the event any provision of this Agreement or
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the application of any such provision shall be held to be prohibited or
unenforceable in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability. The remaining provisions of this Agreement shall remain in
full force and effect, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. The parties shall use their best efforts to replace the
provision that is contrary to law with a legal one approximating to the maximum
extent possible the original intent of the parties. Xxxxxxx acknowledges that
damages would be an inadequate remedy for any breach of the provisions of this
Agreement and agrees that his obligations hereunder shall be specifically
enforceable.
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11. Entire Agreement. This Agreement embodies the complete agreement
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and understanding among the parties and supersedes and preempts any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.
12. Amendment and Waivers: Termination. Any provision of this
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Agreement may be amended or waived only with the prior written consent of the
Company and Xxxxxxx.
13. Governing Law. This Agreement shall be governed by and construed
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in accordance with the domestic laws of the State of Colorado, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of Colorado or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Colorado.
14. Counterparts and Facsimile. This Agreement may be executed by the
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parties in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. This Agreement may be executed by facsimile signature
with an original signature to be promptly delivered thereafter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date set forth above.
VAIL RESORTS, INC.
F/K/A XXXXXXX HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
VAIL HOLDINGS, INC.
F/K/A VAIL ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
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VAIL ASSOCIATES REAL ESTATE, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
BEAVER CREEK ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Vice President
/s/ Xxxxxx X. Xxxxxxx, Xx.
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XXXXXX X. XXXXXXX
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