EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Agreement made this 19th day of September, 1996, by and between WINTER
SPORTS, INC., a Montana corporation, with its principal place of business
located in Whitefish, Montana ("Employer"), and XXXXXXX XXXXXXX, of Whitefish,
Montana ("Employee").
1. Employment. The Employer employs the Employee and the Employee accepts
employment upon the terms and conditions of this Agreement.
2. Term. The term of this Agreement shall begin on August 1, 1996 and
shall terminate on July 31, 2000, unless sooner terminated as provided herein
(see paragraph 12).
3. Compensation. The Employer shall pay the Employee the following annual
salary, payable in equal installments every two weeks:
August 1, 1996 through July 31, 1997 - $101,575.00
Effective August 1, 1997, and again on August 1 of each succeeding year of this
Agreement, the above salary shall be adjusted upward by an amount equal to five
percent (5%) of the preceding year's salary, provided that each annual
adjustment to salary shall be contingent upon the Employer meeting or exceeding
its combined budgeted income before taxes for the preceding fiscal year. If the
budget criteria have not been met, there shall be no increase in salary for the
applicable year. In addition, the Employee shall be entitled to provisions of
the Cash Bonus Program set forth later in this Agreement.
4. Duties. The Employee shall serve the Employer as president and general
manager. These duties shall include, without limitation, the general management
and supervision of all Employer's activities and endeavors, increasing the
Employer's market share and number of skier visits, implementing the Employer's
expansion program(s), increasing non-skier business and revenues, seeking
improved financing arrangements, and such other duties as may from time to time
be assigned by the Employer.
5. Extent of Services. The Employee shall devote his entire time and
attention to the Employer's business, unless otherwise agreed to by the Employer
and Employee.
6. Working Environment, Automobile, etc.. The Employee shall have a
private office, secretarial help, Employer provided automobile and other
facilities and services that are suitable to his position and appropriate for
the performance of his duties.
NOTICE: THIS AGREEMENT IS SUBJECT TO ARBITRATION UNDER THE MONTANA UNIFORM
ARBITRATION ACT.
7. Disclosure of Information. The Employee acknowledges that the
Employer's business dealings are a valuable, special and unique asset of the
Employer's business. The Employee shall not, during and after the term of his
employment, disclose all or any part of the information to which he becomes
privileged regarding the Employer's business.
8. Expenses. The Employee may incur reasonable expenses for promoting the
Employer's business, including expenses for entertainment, travel, and similar
items. The Employer will reimburse the Employee for all such expenses upon the
Employee's periodic presentation of an itemized account of such expenditures.
9. Vacations. The Employee shall be entitled each year to a vacation of
three weeks during which time his compensation shall be paid in full.
10. Bonus. During each year of this Agreement, the Employee shall receive
a cash bonus based on the following formula:
.021 x Winter Sports, Inc. net income before taxes, plus
.009 x Big Mountain Development Corporation net income before
taxes.
The bonus shall be based on the corporations' fiscal year end figures, which
concludes on May 31. The net income before taxes for Winter Sports must exceed
$400,000. each fiscal year for a bonus to be paid that year. The net income
before taxes for Big Mountain Development Corporation must exceed $200,000. each
fiscal year for a bonus to be paid that year. If either corporation has a
negative net income before taxes any fiscal year, the negative income figure
shall be multiplied by the above factor and the resulting figure shall be
deducted from the bonus payable (if any) from the other corporation in order to
determine the net amount of bonus payable to the Employee. A negative net bonus
figure shall mean that no bonus is payable to the Employee for that fiscal year.
Year end income figures are usually known in July of each year, and the parties
anticipate that an earned bonus may be paid in August of each year. The fiscal
year that ends on May 31, 1997 shall be the first year when a bonus is
calculated pursuant to this Agreement. An illustration of the bonus
calculations based on recent years' performance is shown on Exhibit A to this
Agreement.
11. Annual Review. The Employee's performance pursuant to the terms of
this Agreement shall be reviewed each year by duly appointed members of the
Employer's Board of Directors, and the Employer's action plans for the period
under review shall be the basis on which the evaluation is conducted.
12. Termination with Cause. The Employer may terminate this Agreement
with cause at any time by giving thirty (30) days' written notice to the
Employee. In the event of such termination, the Employee shall receive six (6)
month's salary. Just cause shall be defined to include any reason which the
Employer believes will be in its best business interest (e.g. failing to meet
budget projections for two consecutive fiscal years, etc.) or due to any conduct
of the Employee which the Employer believes may bring discredit upon himself or
the Employer. Notwithstanding any other provision of this Agreement, in the
event the Employer fails to meet budgeted goals for two consecutive fiscal years
during the term of this Agreement, the Employer may reopen this Agreement for
the purpose of re-negotiating the terms hereof or terminating it pursuant to
this paragraph.
13. Death During Employment. If the Employee dies during the term of
employment, the Employer shall pay to the Employee's estate the compensation
that otherwise would be payable to the Employee up to the end of the month in
which his death occurs.
14. Arbitration. Any controversy or claim arising out of, or relating to
this Agreement, or its breach, shall, at the option of the Employer, be settled
by arbitration in the City of Whitefish, Montana, in accordance with the then
governing rules of the American Arbitration Association. The prevailing party
shall be entitled to its reasonable costs and attorneys' fees. Judgment upon
the award rendered may be entered and enforced in any court of competent
jurisdiction.
15. Notices. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing sent by certified mail to the
Employee's residence or to the Employer's principal office, as the case may be.
16. Waiver of Breach. The Employer's waiver of a breach of any provision
of this Agreement by the Employee shall not operate or be construed as a waiver
of any subsequent breach by the Employee. No waiver shall be valid unless in
writing and signed by an authorized officer of the Employer.
17. Assignment. The Employee acknowledges that his services are unique
and personal. Accordingly, the Employee may not assign his rights or delegate
his duties or obligations under this Agreement. The Employer's rights and
obligations under this Agreement shall inure to the benefit of and shall be
binding upon the Employer's successors and assigns.
18. Entire Agreement. This Agreement contains the entire understanding of
the parties. It may not be changed orally, but only by an agreement in writing
signed by the party against whom the enforcement of any waiver, change,
modification, extension, or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
WINTER SPORTS, INC.
By/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Chairman
Attest:
/s/Xxxxxx X. Xxxxxx
Secretary
/s/Xxxxxxx Xxxxxxx
