EMPLOYMENT AGREEMENT
Exhibit
10.31(a)
EMPLOYMENT
AGREEMENT dated as of July 23, 2002 by and between Heavenly Valley, Limited
Partnership, a Nevada limited partnership ("Heavenly") and Xxxxxx Xxxxxx
(hereinafter referred to as "Executive").
RECITALS
1. Heavenly
desires to employ Executive to render services to it for the period and upon the
terms and conditions provided for in this Agreement; and
2. Executive
wishes to serve in the employ of Heavenly for its benefit for the period and
upon the terms and conditions provided for in this Agreement.
COVENANTS
NOW,
THEREFORE, the parties hereto agree as follows:
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1.
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Employment.
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(a)
Heavenly hereby employs Executive to serve as Senior Vice President & Chief
Operating Officer - Heavenly Ski Resort on the terms and conditions set forth
herein. In such capacity, Executive shall have the responsibilities
normally associated with such position, subject to the supervision and control
of the President (the "President"), the Board of Directors (the "Board") and
chief executive officer (the "CEO") of Vail Resorts, Inc. ("Vail"), a Delaware
corporation, the sole indirect shareholder of Heavenly.
(b)
Executive accepts employment by Heavenly and agrees that, during the term of his
employment, he will devote substantially all his time during normal business
hours and best efforts to the performance of his duties hereunder, which duties
shall be performed in an efficient and competent manner and to the best of his
ability. Executive further agrees that, during the term of this
Agreement, he will not, without the prior written consent of the President,
directly or indirectly engage in any manner in any business or other endeavor,
either as an owner, employee, officer, director, independent contractor, agent,
partner, advisor, or in any other capacity calling for the rendition of his
personal services. This restriction will not preclude Executive from
having passive investments in less than five percent (5%) of the outstanding
capital stock of a competitive corporation which is listed on a national
securities exchange or regularly traded in the over-the-counter market or which
have been approved by the President ("Permitted Investments").
2. Compensation.
For all
services rendered by Executive, Heavenly shall provide to Executive, subject to
any and all withholdings and deductions required by law, the
following:
(a) Base
Salary. Beginning September 1, 2002, Executive shall receive
regular compensation at the initial rate of Two Hundred Seventy-Five Thousand
Dollars ($275,000.00), payable in accordance with the normal payroll practices
of Heavenly. Executive's Base Salary shall be reviewed annually by
the President, the CEO and the Board; Executive's initial review shall occur on
or
(b) Bonuses, Stock Options,
etc. Executive shall also be considered annually for bonuses,
and/or stock options based upon his performance in light of objectives
established by the Board, it being understood that any such awards are at the
discretion of the President, the CEO and the Board. Without limiting the
generality of the foregoing, Executive shall be eligible to participate in (i)
the Management Incentive Plan of Vail ("MIP") and receive a MIP bonus in an
amount equal to up to 50% of Executive's salary, and (ii) any other bonus,
incentive, and fringe benefit plans as Vail shall make generally available to
other employees in senior management positions in accordance with the terms of
the relevant contracts, policies or plans providing such benefits, all on such
terms as the Board may determine. If any such compensation or
benefits are paid or made available, it shall be at such time or times as the
Board shall determine, based upon such factors, if any, as the Board may
establish. Executive shall be granted the option to buy up to 30,000
shares of common stock Tranche A through the Vail Resorts, Inc. 1996 Long Term
Incentive and Share Award Plan ("1996 Plan") upon terms as specifically 'Set
forth in the Vail's standard stock option agreement, which terms shall include
vesting over three years in equal installments (with the first anniversary being
September 1, 2003) and an exercise price equal to the closing market price on
September 1, 2002. Executive shall be eligible to participate in annual option
grant(s) made by the Board under the 1996 Plan for year 2003 and thereafter (a
number of shares of common stock Tranche B, if any, granted by the Board in its
discretion in the Fall of each year, at an exercise price equal to the closing
market price on the day of the grant, if made by the Board, all subject to the
terms of the applicable stock option agreement).
(c) Insurance. Executive
shall also receive, at Heavenly’s expense, health, medical, dental, long-term
disability and life insurance pursuant to such plans as are from time to time
adopted by the Board.
(d) Expense
Reimbursement. Executive shall have a travel and entertainment
budget which is reasonable in light of his position and responsibilities and
shall be reimbursed for all reasonable business-related travel and entertainment
expenses incurred by him thereunder upon submission of appropriate documentation
thereof.
(e) Relocation Reimbursement;
Interim Housing. Heavenly shall reimburse Executive for all
reasonable and customary documented relocation and moving costs, including (i)
the reasonable costs of moving Executive's personal possessions, including up to
three (3) vehicles, and Executive's pets and livestock, and (ii) the reasonable
costs, not to exceed $30,000.00, incurred by Executive in selling his primary
residence in Utah, including brokers' commission (up to 6% of the sales price),
and other customary closing costs (e.g. title insurance). Heavenly shall also
pay for the costs of up to 90 days of interim housing in the Lake Tahoe area for
Executive and his family.
3. Term and
Termination.
(a) Term and
Renewal. Unless terminated earlier, as hereinafter provided,
the term of this Agreement shall be for the period commencing September 1, 2002
and continuing through September 30, 2005; provided, however, that unless either
Heavenly or Executive gives written notice of non-renewal to the other not less
than 120 days prior to the then-current scheduled expiration date, this
Agreement shall thereafter be automatically renewed for successive one-year
periods.
(b) Termination for
Cause. Heavenly, acting through the President, may terminate
this Agreement at any time for cause by giving Executive written notice
specifying the effective date of such termination and the circumstances
constituting such cause. For purposes of this Agreement, "cause" shall mean (i)
any conduct involving dishonesty, gross negligence, gross mismanagement, the
unauthorized disclosure of confidential information or trade secrets or a
violation of Vail's code of conduct which has a material detrimental impact on
the reputation, goodwill or business position ofVail or any of its subsidiaries
(collectively, the "Companies"); (ii) gross obstruction of business operations
or illegal or disreputable conduct by Executive which materially impairs the
reputation, goodwill or business position of any of the Companies, including
acts of unlawful sexual harassment; or (iii) any action involving a material
breach of the terms of the Agreement including, without limitation after 15
days' written notice and opportunity to cure to the Board's satisfaction,
material inattention to or material neglect of duties. In the event of a
termination for cause, Executive shall be entitled to receive only his
then-current Base Salary through the date of such termination and any fully
vested stock options or shares and other applicable benefits generally available
to terminated executives at Vail (not to be deemed to include severance payments
or salary continuation). Further, Executive acknowledges that in the event of
such a termination for cause, he shall not be entitled to receive any MIP or
other bonus for the year of termination.
(c) Termination Without Cause or
Non-Renewal. Heavenly, may terminate this Agreement at any
time without cause, by giving Executive written notice specifying the effective
date of such termination. In the event of a termination without cause, or if
Heavenly gives notice of non-renewal of this Agreement as provided in Section
3(a), and provided that Executive executes a written release in connection with
such termination substantially in the form attached hereto (the "Release"),
Executive shall be entitled to receive (i) his then-current Base Salary through
the date of such termination or non-renewal, (ii) in the event that the
applicable Board-established performance targets for the year are achieved, a
pro-rated bonus for the portion of the year in which such termination or
non-renewal occurs, which pro-rated bonus shall be payable in the same form and
at the same time as bonus payments are made to Vail's senior executives
generally, (iii) continuation of his then-current Base Salary through the first
anniversary of the date of termination or non-renewal, and (iv) any fully vested
stock options or shares. Notwithstanding the foregoing, should Heavenly and
Executive mutually agree to waive, in writing, Executive's compliance with the
provisions of Section 4 hereof within 60 days of such termination or expiration,
then Executive shall be under an obligation to mitigate damages by seeking other
employment and the Base Salary continuation shall be reduced by compensation
received by Executive from other employment or self-employment following such
waiver.
(d) Termination By Executive For
Good Reason. Executive shall be entitled to terminate this
Agreement at any time for good reason by giving Heavenly not less than ninety
(90) days prior written notice. For purposes of this Agreement, "good reason"
shall mean (i) Heavenly shall breach its obligations hereunder in any material
respect and shall fail to cure such breach within 60 days following written
notice thereof from Executive, (ii) Heavenly shall decrease Executive's then
current Base Salary and/or (iii) Heavenly shall effect a material diminution in
Executive's reporting responsibilities, titles, authority, offices or duties as
in effect immediately prior to such change. In such event, provided that
Executive has executed the Release, Executive shall be entitled to receive (w)
his then-current Base Salary through the date of such termination, (x) in the
event that the applicable Board-established performance targets for the year are
achieved, a pro-rated bonus for the portion of the year in which such
termination occurs, which pro-rated bonus shall be payable in the same form and
at the same time as bonus payments are made to Vail's senior executives
generally, (y) continuation of his then-current Base Salary through the first
anniversary of the date of such termination, and (z) any fully vested stock
options or shares.
(e) Termination By Executive
Without Good Reason. Executive may also terminate this
Agreement at any time without good reason by giving Heavenly at least one
hundred twenty (120) days prior written notice. In such event, provided that
Executive has executed the Release, Executive shall be entitled to receive only
his then-current Base Salary through the date of termination and any fully
vested stock options or shares and other applicable benefits generally available
to terminated executives at Vail (not to be deemed to include severance payments
or salary continuation). Further, Executive acknowledges that in the event of
such a termination without good reason, he shall not be entitled to receive any
MIP or other bonus for the year of termination.
(f) Termination Due to
Disability. In the event that Executive becomes Permanently
disabled (as determined by the President and the Board in good faith according
to applicable law), Heavenly shall have the right to terminate this Agreement
upon written notice to Executive; provided, however, that in the event that
Executive executes the Release, Executive shall be entitled to receive (i) his
then-current Base Salary through the date of such termination, (ii) in the event
the applicable Board-established performance targets for the year are achieved,
a pro-rated bonus for the portion of the year in which such termination occurs,
which pro-rated bonus shall be payable in the same form and at the same time as
bonus payments are made to Vail's senior executives generally, and (iii)
continuation of his then-current Base Salary through the earlier of (x) the
scheduled expiration date of this Agreement (but in no event less than 12 months
from the date of disability) or (y) the date on which his long-term disability
insurance payments commence. Further, Executive shall be entitled to
retain all fully vested stock options and shares.
(g) Termination Due To
Death. This Agreement shall be deemed automatically terminated
upon the death of Executive. In such event, provided Executive's personal
representative executes a release substantially in the form or the Release,
Executive's personal representative shall be entitled to receive (i) the
Executive's then-current Base Salary through such date of termination, and (ii)
in the event that the applicable Board-established performance targets for the
year are achieved, a pro-rated bonus for the portion of the year in which such
termination occurs, which pro-rated bonus shall be payable in the same form and
at the same time as bonus payments are made to senior executives generally.
Further, Executive's personal representative shall be entitled to retain any
stock options pursuant to the terms of the applicable stock option
agreement.
(h) Other
Benefits. During any period in which Executive is entitled to
Base Salary continuation following termination or expiration of this Agreement
under the terms of this Section 3, Executive shall also be entitled to
continuation of then-current health, dental and other insurance benefits for
Executive and his dependents at Heavenly's expense. Except as
expressly set forth in this Section 3, Executive shall not be entitled to
receive any compensation or other benefits in connection with termination of his
employment. Notwithstanding the foregoing, all deferred compensation
shall be forfeited by Executive in the event of termination of employment
pursuant to Section 3(b) or Section 3(e) of this Agreement.
(i) Payment of Salary
Continuation. Payment of Base Salary following
termination of this Agreement as required by this Section 3 shall be made in
accordance with Heavenly’s normal payroll practices; provided, however, that in
the event of a breach by Executive of the provisions of Sections 4, 5,6 or 7
hereof, Heavenly shall be entitled to cease all such payments. No termination of
this Agreement shall affect any of the rights and obligations of the parties
hereto under Sections 4, 5, 6 and 7, but such rights and obligations shall
survive such termination in accordance with the terms of such
sections.
4. Non-Competition &
Non-Solicitation.
The
provisions of this Section 4 shall apply for a period of one (1) year beginning
with the date of termination of Executive's employment with Heavenly for any
reason. During such period, Executive will not, without the prior written
consent of the President, directly or indirectly, become associated, either as
owner, employee, officer, director, independent contractor, agent, partner,
advisor or in any other capacity calling for the rendition of personal services,
with any individual, partnership, corporation, or other organization in the
states of Colorado, Nevada, Idaho, California or Utah whose business or
enterprise is alpine or nordic ski area operation; provided, however, that the
foregoing shall not preclude Executive from having Permitted
Investments.
Further,
Executive covenants and agrees that, during his employment by Heavenly and for
the. period of one year thereafter, Executive will not solicit for another
business or enterprise any person who is a managerial or higher level employee
of Vail or any of its subsidiaries at the time of Executive's
termination.
5. Document Return;
Resignations.
Upon
termination of Executive's employment with Heavenly for any reason, Executive
agrees that he shall promptly surrender to Heavenly all letters, papers,
documents, instruments, records, books, products, and any other materials owned
by any of the Companies or used by Executive in the performance of his duties
under this Agreement. Additionally, upon termination of Executive's employment
with Heavenly for any reason, Executive agrees to immediately resign from, and
execute appropriate resignation letters relating to, all officer, director,
management or board positions he may have by reason of his employment or
involvement with Heavenly, specifically including but not limited to the boards
of any of the Companies and any other boards, districts, homeowner and/or
industry associations in which Executive serves at the direction of Vail
(collectively the "Associations").
6. Confidentiality.
During
the term of this Agreement, and at all times following the termination of
Executive’s employment with Heavenly for any reason, Executive shall not
disclose, directly or indirectly, to any person, firm or entity, or any officer,
director, stockholder, partner, associate, employee, agent or representative
thereof, any confidential information nor trade secrets of any of the Companies
or the Associations.
7. Non-Disparagement.
For a
period of five (5) years following the termination of Executive's employment
with Heavenly for any reason, Executive agrees that he shall not make any
statements disparaging of any of the Companies, the Board, and the officers,
directors, stockholders, or employees of any of the Company or the Associations.
Vail shall similarly not disparage Executive following such termination, it
being understood that, subject to the terms of this Section 7, Vail and
Executive, as appropriate, may respond truthfully to inquiries from prospective
employers of Executive, or as may be required by any governmental or judicial
body acting in their official capacity.
8. Injunctive
Relief.
The
parties acknowledge that the remedy at law for Sections 4, 5, 6, 7 and/or 9 of
this Agreement may be inadequate and that, accordingly, either party shall be
entitled to injunctive relief in the event of such a violation or threatened
violation without being required to post bond or other surety. The above stated
remedies shall be in addition to, and not in limitation of, any other rights or
remedies to which either party is or may be entitled at law, in equity, or under
this Agreement.
9. Non-Assignability.
It is
understood that this Agreement has been entered into personally by the parties.
Neither party shall have the right to assign, transfer, encumber or dispose of
any duties, rights or payments due hereunder, which duties, rights and payments
with respect hereto are expressly declared to be non-assignable and
non-transferable, being based upon the personal services of Executive, and any
attempted assignment or transfer shall be null and void and without binding
effect on either party; provided, however, that Heavenly may assign this
Agreement to any affiliate or successor corporation.
10. Complete
Agreement.
This
Agreement constitutes the full understanding and entire employment agreement of
the parties, and supersedes and is in lieu of any and all other understandings
or agreements between Heavenly and Executive. Nothing herein is intended to
limit any rights or duties Executive has under the terms of any applicable stock
option, incentive or other similar agreements.
11. Arbitration.
Other
than the parties right to seek injunctive relief in accordance with Section 8 of
this Agreement, any controversy or claim arising out of or in relation to this
Agreement or any breach thereof shall be resolved by final and binding
arbitration, in accordance with the rules for contractual disputes, by the
JAMESENDISPUTE ("Arbiter"), San Francisco, California, and judgment on the award
rendered may be entered in any court having jurisdiction. In the
event that any controversy or claim is submitted for arbitration hereunder
relating to the failure or refusal by Heavenly or Executive to perform in full
all of its obligations hereunder, Heavenly or Executive, as applicable, shall
have the burden of proof (as to both production of evidence and persuasion) with
respect to the justification for such failure or refusal. The Arbiter shall
award the prevailing party its reasonable attorneys' fees and costs. The Arbiter
shall not have the power to direct equitable relief.
12. Amendments.
Any
Amendment to this Agreement shall be made only in writing and signed by each of
the parties hereto.
13. Enforceability.
If, for
any reason, any provisions of this Agreement shall be held to be unenforceable,
such provision shall be deemed to be reformed so that it is enforceable to the
maximum extent permitted by law.
14. Governing
Law.
The
internal laws of the State of Nevada law shall govern the construction and
enforcement of this Agreement.
15. Notices.
Any
notice required or authorized hereunder shall be deemed delivered with
deposited, postage prepaid, in the United States mail, certified, with return
receipt requested, addressed to the parties as follows:
Xx.
Xxxxxx Xxxxxx
Heavenly
Valley, Limited Partnership
C/O Vail
Resorts, Inc.
X.X. Xxx
0
Xxxx,
Xxxxxxxx 00000
Attn: President
Cc: General
Counsel
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day of first written above.
EMPLOYER:
Heavenly
Valley, Limited Partnership
VR
Heavenly I, Inc., its general partner
By: Xxxxxx X.
Xxxx
Its: President
EXECUTIVE:
/s/ Xxxxxx
Xxxxxx
Xxxxxx
Xxxxxx
