Exhibit 10.27
Amended and Restated Employment Agreement by and between
Booth Creek Ski Group, Inc., Booth Creek Ski Holdings,
Inc. and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of May 1, 2000,
between Booth Creek Ski Group, Inc., a Delaware corporation ("Parent"), Booth
Creek Ski Holdings, Inc., a Delaware corporation ("Holdings"; the term "Company"
shall mean "each of Parent and Holdings" unless the context of the term contains
the word "either" or "neither" or language of like import, in which case the
term shall mean either or neither of Parent or Holdings, as the case may be) and
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Executive").
The parties agree as follows:
1. Employment. Company agrees to employ Executive during the Employment
Term, as defined in Section 3, upon the terms and conditions hereinafter set
forth, and Executive agrees to be so employed.
2. Titles and Duties. Company shall employ Executive as President and
Chief Operating Officer. Executive shall be responsible for Company's strategic
planning and daily operations and perform such particular or additional duties,
consistent with his office, as may be assigned by Company's board of directors
("board"), to whom the Executive shall directly report. Executive shall render
his services faithfully and to the best of his ability and, subject to Section
5.h, devote his full business time and attention to the services to be rendered
by him hereunder.
3. Term of Employment; Termination.
a. The period during which Executive shall be employed under this
Agreement (the "Employment Term") commenced as of May 1, 2000 and shall
continue through October 31, 2003, unless the Employment Term shall be
sooner terminated as provided herein.
b. The Employment Term shall terminate prior to any date otherwise
specified in Section 3.a upon
i. Executive's death or disability ("disability" shall mean any
physical or mental incapacity that prevents Executive in a material
respect from performing Executive's duties as herein provided for a
continuous period of 90 days or an aggregate period of 150 days during
any consecutive twelve-month period, and disability shall be deemed to
have occurred as of the end of the applicable period);
ii. notice from either Company of termination for cause ("cause"
shall mean that Executive shall have (w) committed a felony,
regardless whether in the course of his employment, excluding offenses
under laws regulating motor vehicle traffic or skiing, but not
excluding such offenses, if they arise from Executive's failure to
cause Company to conduct its business in accordance with law (provided
that, if Company shall terminate Executive's employment pursuant to
this subclause (w), and Executive ultimately shall be acquitted, such
termination shall be deemed a termination pursuant to clause iii, as
of the date of termination pursuant to this subclause (w)); (x)
engaged in fraud, embezzlement involving property of either Company or
otherwise, or other intentional wrongful act that materially impairs
the goodwill or business of either Company; (y) any willful failure to
carry out any material responsibilities hereunder or to comply with
any reasonable instruction of the board or Company policy, not cured,
within a reasonable time of notice from the board; or (z) otherwise
materially breached any provision of this Agreement);
iii. notice from either Company of termination other than for
cause;
iv. 60 days' notice from Executive given within six months from
the date that that ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company, ▇▇▇▇▇▇▇
Mezzanine Partners L.P., CIBC WG Argosy Merchant Fund 2, L.L.C.,
Co-Investment Merchant Fund, LLC, and their affiliates (the
"Investors") together own beneficially Parent capital stock (assuming
any currently exercisable rights to acquire Parent capital stock have
been exercised), entitling them to cast less than a majority of the
votes entitled to be cast on any matter upon which a holder of a share
of stock of a Delaware corporation of which only one class of stock is
outstanding would be entitled to vote, treating any Parent outstanding
nonvoting stock that is convertible into Parent voting stock as if it
had been so converted ("A Change in Control"); or
v. 30 days notice from Executive given within two months after
Executive's duties and authority have been materially reduced from
those existing on the date hereof, unless such duties and authority
are restored within such 30-day period.
c. If the Employment Term shall terminate pursuant to any of clauses i
through v of Section 3.b, Company's obligations hereunder shall be fully
satisfied,
i. upon payment to Executive or his estate of an amount equal to
any unpaid expense reimbursement and unpaid salary for the month in
which his death or disability shall occur and compliance with Section
4.g and payment of any bonus under Section 5.h, in case of termination
pursuant to clause i;
ii. upon payment to Executive of any unpaid expense reimbursement
and unpaid salary through the date of termination, in the event of
termination pursuant to clause ii, provided, however, that such
payment shall not prevent Company from seeking relief respecting any
claim it might have against the Executive hereunder or otherwise; or
iii. upon payment to Executive, within 10 days after termination
pursuant to any of clause iii, iv, or v, of (x) any unpaid expense
reimbursement, (y) an amount equal to the sum of (A) the amount of any
unpaid salary through the date of termination and payment of any bonus
under Section 5.h plus (B) the product obtained by multiplying
Executive's Base Salary by 1.5., and (z) and compliance with Section
4.g, except that Company shall, until the sooner of 18 months from
date of termination or Executive's becoming eligible for comparable
health, disability, and life insurance benefits from new employment,
continue to provide Executive the Company insurance benefits in effect
respecting Executive immediately prior to occurrence of the event
resulting in the termination.
4. Compensation and Benefits.
a. Holdings shall pay Executive, in accordance with Holdings' payroll
practices applicable to its salaried executives, a Base Salary at the rate
of Three Hundred Fifteen Thousand Dollars ($315,000) per year, subject to
increase, but not decrease, after the first fiscal year end occurring
during the Employment Term, as the parties may agree.
b. The parties contemplate that prior to each fiscal year, Holdings'
board of directors will establish reasonable performance incentive goals
for Executive for the ensuing fiscal year, with a bonus target of 50% of
Executive's Base Salary for such fiscal year, if the goals are obtained.
c. During the Employment Term, Executive shall be eligible to
participate in the health, disability, and retirement plans offered to
executives of Company or any of its related entities engaged in operating a
ski resort in accordance with the terms of those plans, at participation
levels and with benefits not less favorable than those provided to the
plans' respective highest ranking participants. Promptly after this
Agreement shall have been executed, Company will obtain and, thereafter
during the Employment Term, maintain disability insurance coverage for
Executive in amounts, for such periods, and under such conditions, as are
customary. During the Employment Term, Company shall not materially reduce
the benefits required to be provided under this Section from their levels
in effect at the commencement of the Employment Term.
d. Promptly following adoption of, and in accordance with, a stock
bonus/option plan (the "Plan"; shares of Parent Class B Common Stock issued
or issuable there under to be referred to as "Plan Shares"), Parent shall
issue to Executive a number of Plan Shares that will equal 5% of the sum of
the number of shares of Parent common stock outstanding and issuable on
exercise or conversion of outstanding rights to buy or securities
convertible into common stock (including the Plan Shares to be granted
pursuant to this clause or otherwise to be reserved for issuance under the
Plan) outstanding as of the date hereof. If Parent does not adopt the Plan
having substantially the terms set forth in Exhibit A, Parent shall in good
faith establish a cash bonus plan for Executive that shall substantially
match the economic benefits of the Plan. Should any Investor make any
equity investment directly in any business controlled by Parent, as to
which Executive has, at Company's request, provided material assistance in
negotiating or overseeing, Parent and Holdings shall make such arrangement
as they shall reasonably deem appropriate to put Executive in the same
position hereunder with respect to such business as Executive would have
been if such business were wholly owned by Holdings, and such equity
investment had been made in Holdings to fund such business. Should Company
agree with any Investor to provide management or consulting services to any
business not controlled by Parent, Company shall pay Executive a percentage
of any fees received in respect thereof appropriate to reflect Executive's
ownership of Parent common stock.
i. If either Company shall terminate the Employment Term pursuant
to clause ii of Section 3.b, or Employee shall terminate his
employment in breach hereof, Executive shall forfeit to Parent the
percentage of Executive's Plan Shares set forth below, if such
termination shall occur prior to November 1 of the year set forth
opposite such percentage, and Company shall have the right,
exercisable by notice to Executive given within one year after the
date of such termination, to buy from Executive Executive's Plan
Shares not forfeited at their Fair Market Value (as hereinafter
defined), determined as set forth below (the "Forfeiture Table"):
Executive shall forfeit if the Employment Term
the following percentage terminates prior to
of Executive's Plan Shares, November 1 of, __________
--------------------------- -------------------------
80% 2000
60% 2001
40% 2002
20% 2003
Notwithstanding the preceding, Executive shall forfeit all of Executive's Plan
Shares to Parent, if, during the term of the Stockholders Agreement, as
hereinafter defined, (x) either Company shall terminate the Employment Term
pursuant to clause (w) of Section 3.b.ii, respecting a felony that Executive
shall commit in the course of his employment or in connection with either
Company, or pursuant to clause (x) of such Section, but only for events
occurring in the course of his employment or in connection with the Company, or
pursuant to clause (z) of such Section or (y) Executive both terminates his
employment in breach hereof and breaches Section 5 prior to November 1, 2003.
The preceding sentence shall not apply to any Plan Share sold pursuant to
Section 2 or 3 of the Stockholders Agreement.
ii. Except pursuant to Section 2 or 3 of a Stockholders Agreement
(the "Stockholders Agreement") executed or to be executed between
Executive, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇ Life Insurance Company, ▇▇▇▇▇▇▇ Mezzanine Partners L.P., CIBC
WG Argosy Merchant Fund 2, L.L.C., Co-Investment Merchant Fund, LLC,
and Parent, Executive shall not sell or otherwise transfer any Plan
Share or interest (including any security interest) in any Plan Share
so long as such Plan Share shall remain subject to forfeiture.
iii. If, during the term of the Stockholders Agreement, Executive
(or any legal representative or successor by will or inheritance)
shall receive from a financially responsible unaffiliated person that
is not a competitor of the Company (the "Offeror") a written bona fide
offer (the "Bona Fide Offer") to purchase for cash any Parent capital
stock held by Executive ("Offered Shares"), which Bona Fide Offer
otherwise shall be in accordance with this agreement and which
Executive shall desire to accept, Executive shall give written notice
(the "Notice") to such effect to Parent and the Investors. The Notice
shall also set forth the name and address of the Offeror, the price
and other terms of the Bona Fide Offer, and shall contain an offer
(the "Notice Offer"), irrevocable during the Company Option Period (as
defined in Section 4.d., clause iii.a), to sell the Offered Shares to
Parent or its designees, and, irrevocable during the Investor Option
Period (as defined in Section 4.d, clause iii.b), to sell the Offered
Shares to the Investors, at the price and on the other terms contained
in the Bona Fide Offer and pursuant to the other provisions of this
Agreement. The Notice shall be accompanied by a copy of the Bona Fide
Offer. For purposes of this clause (iii), a "competitor" of the
Company shall mean a business that owns or operates ski-resorts or is
in the ski-resort real estate development business.
a) Parent shall have the right to accept the Notice Offer
with respect to any or all of the Offered Shares, exercisable by
delivery of a written notice of acceptance given to Executive and
Investors within 30 days after delivery of the Notice ("Company
Option Period"). Parent's acceptance shall also state the amount
of capital stock, if any, that each Investor would be entitled to
purchase pursuant to Section 4.d, clause iii.b), if each Investor
accepted the Notice Offer with respect to the full proportionate
amount referred to in the first sentence of such clause.
b) Each Investor shall have the right to accept the Notice
Offer with respect to that proportion of the Offered Shares as to
which Parent shall have failed to accept the Notice Offer equal
to such Investor's proportion of Parent capital stock owned by
all Investors, exercisable by delivery of a written notice of
acceptance given to Executive and Investors within 40 days after
delivery of the Notice ("Investor Option Period"). Any Investor
that shall accept the Notice Offer respecting the full
proportionate amount referred to in the preceding sentence may
also state in its acceptance the maximum number of additional
Offered Shares that the Investor shall wish to buy, if any other
Investor shall not accept the Notice Offer with respect to its
full proportionate amount. If the total number of Offered Shares
that Investors state they shall wish to buy pursuant to the
preceding sentence shall exceed the amount available pursuant
thereto, each such Investor shall purchase that proportion of the
additional Offered Shares equal to such Investor's proportion of
Parent capital stock owned by all such Investors. The closing of
any sale of Offered Shares to Investors shall occur concurrently
with the closing of any sale of such Offered Shares to Parent, or
if none are to be sold to Parent, within 70 days after delivery
of the Notice.
c) Should Parent and Investors fail to accept the Notice
Offer with respect to all of the Offered Shares, then Executive
shall be entitled, for a period of 30 days following the
expiration of the Investor Option Period, to close the sale of
all, but not less than all, of the Offered Shares to the Offeror
on the terms and conditions set forth in the Bona Fide Offer,
provided that the Bona Fide Offeror shall agree to be bound by
this Section 4.d.iii with respect to the Offered Shares. If
Executive shall fail to so sell the Offered Shares, Executive
shall not thereafter sell the Offered Shares, except after again
complying with this Section 4.d, clause iii.
iv. The closing of any Parent purchase of Plan Shares or other
Parent capital stock held by Executive shall occur within 30 days of
Parent's notice of exercise of right to buy, but not before the
expiration of the Investor Option Period. At the closing of any
purchase, Executive shall deliver certificates representing the
capital stock to be sold, endorsed in blank or accompanied by stock
powers executed in blank, with signatures guaranteed and any required
stock transfer stamp attached, against payment of the amount due at
closing in immediately payable funds. In the case of a purchase
pursuant to Section 4.d.i, 20% of the purchase price will be due at
the closing and the balance in four equal annual installments; Parent
will deliver a promissory note, in customary form as Parent and
Executive shall reasonably agree, to evidence Parent's obligation to
pay the balance; and, to secure payment of the note, Parent will
pledge the purchased Plan Shares pursuant to a Pledge Agreement in
customary form as Parent and Executive shall reasonably agree. Upon
any sale of any Plan Share pursuant to this Agreement or not in
violation of this Agreement or other agreement to which Executive and
Parent shall be a party relating to any Plan Share, Parent shall pay
Executive an amount of deferred compensation per share sold equal to
the amount of one Deferred Compensation Unit, determined as set forth
below.
v. The Fair Market Value of a Plan Share shall mean the quotient
obtained by dividing (x) the excess of (I) the sum of Enterprise
Value, as hereinafter defined, for the fiscal year ended immediately
before the date as of which Fair Market Value is to be determined,
plus the CE Proceeds, as hereinafter defined, as of such date over
(II) the total of the face amounts of Parent's 12% notes made to the
Investors and Booth Creek Partners Limited II, L.L.L.P. ("Investor
Notes") outstanding on the last day of such fiscal year by (y) the
Adjusted Shares Outstanding, as hereinafter defined. For purposes of
this clause (v), "CE Proceeds" as of any date shall mean the sum of
the products obtained by multiplying the exercise or conversion price
of each CE Security outstanding on such date by the number of shares
of common stock issuable upon exercise, exchange, or conversion of
such CE Security; "CE Security" shall mean each warrant, stock option,
convertible security, or other right or security exercisable or
exchangeable for or convertible into Parent common stock, insofar as
its exercise or conversion price is less than the quotient obtained by
dividing Enterprise Value as of such date by the number of shares of
Parent common stock outstanding on such date, except that none of the
Investor Notes shall constitute a CE Security; and "Adjusted Shares
Outstanding" shall mean as of any date the number of shares of common
stock outstanding as of such date plus the number of shares of common
stock issuable upon exercise, exchange, or conversion of all CE
Securities outstanding on such date.
vi. The amount of a Deferred Compensation Unit as of any date
(the "Determination Date") shall equal the excess of (X) an amount
determined by dividing (I) any excess of (A) the sum of (1) the lesser
of (i) the total of the face amounts of the Investor Notes outstanding
on the Determination Date or (ii) the sum of Enterprise Value for the
fiscal year ended immediately before the Determination Date and the CE
Proceeds plus (2) the amounts of all cash repayments of principal and
cash payments of interest on the Investor Notes from the beginning of
the Employment Term through the Determination Date over (B)
$60,000,000 by (II) the Adjusted Shares Outstanding over (Y) the sums
of the respective quotients obtained by dividing the amount of each
Accelerated DCA Payment made or, but for the operation of clauses
vii.a or vii.b, would have been made by the number of Plan Shares
constituting the numerator of the fraction referred to in clause
(vii)(Y) that shall or would have been used to compute any such
Accelerated DCA Payment. For purposes of this clause (vi), "CE
Proceeds" shall mean the sum of the products obtained by multiplying
the exercise price of each CE Security outstanding on the
Determination Date by the number of shares of common stock issuable
upon exercise of such CE Security; "CE Security" shall mean each
warrant or stock option exercisable to purchase Parent common stock
first outstanding on or before the date that any Plan Shares are
issued, insofar as its exercise price is less than the quotient
obtained by dividing Enterprise Value as of the Determination Date by
Adjusted Shares Outstanding; and "Adjusted Shares Outstanding" shall
mean 16,485, as appropriately adjusted for stock dividends, stock
splits, reverse stock splits, etc. occurring subsequent to the date of
issue of the Plan Shares.
vii. Subject to clauses vii.a) and vii.b), at any time a cash
payment of principal or interest on the Investor Notes ("Cash Note
Payment") shall be made that, together with all other Cash Note
Payments made after the date of execution hereof, exceeds $60,000,000
(such Cash Note Payment, to the extent of such excess, the "Note
Excess Payment"),Company shall pay to Executive an amount
("Accelerated DCA Payment") equal to the product obtained by
multiplying (X) the excess of (I) the quotient obtained by dividing
such Note Excess Payment by .85 over (II) such Note Excess Payment by
(Y) a fraction, the numerator of which shall be the number of Plan
Shares then held by Executive and the denominator of which shall be
2,473, as appropriately adjusted for stock dividends, stock splits,
reverse stock splits, etc. occurring subsequent to the date of issue
of the Plan Shares.
a) No Accelerated DCA Payment shall be made to Executive
pursuant to clause vii. at the time any Note Excess Payment shall
be made from proceeds of an initial public offering of Parent
equity securities registered under the Securities Act ("IPO") or
during the Lockup Period, as hereinafter defined, but, subject to
clause vii.b), within five days following the end of the Lockup
Period, Company shall pay Executive an amount ("Deferred
Accelerated DCA Payment") equal to one quarter of the total of
all Accelerated DCA Payments that Company would have made
pursuant to clause vii., but for the operation of this clause
vii.a), computed without regard to clause vii.b), and Company
shall pay to Executive three additional Deferred Accelerated DCA
Payments, each in an amount equal to the first one, at the end of
each of the sixth, 12th, and 18th month after the end of the
Lockup Period.
b) There shall be deducted from any Accelerated DCA Payment
or Deferred Accelerated DCA Payment an amount (a "DCA Vesting
Deduction") equal to the percentage of Executive's Plan Shares
remaining subject to forfeiture, as stated in the Forfeiture
Table, at the time such Accelerated DCA Payment or Deferred
Accelerated DCA Payment shall be payable. At each time that
Executive's Plan Shares shall cease to be forfeitable under the
Forfeiture Table, Company shall pay to Executive an amount ("DCA
Vesting Payment") bearing the same proportion to the amount of
each DCA Vesting Deduction theretofore made as the number of Plan
Shares so ceasing to be forfeitable shall bear to the number of
Executive's Plan Shares that remained subject to forfeiture at
the time such DCA Vesting Deduction was made. Upon the occurrence
of a Change in Control, Company shall pay to Executive an amount
equal to the excess of the sum of all DCA Vesting Deductions
theretofore made over the sum of all DCA Vesting Payments
theretofore made, and, thereafter, this clause vii.b shall have
no further effect.
viii. Should any of the Investors sell any of their Parent common
stock pursuant to the IPO, Company shall pay to Executive within 60
days following the end of the Lockup Period an amount equal to the
product obtained by multiplying (X) any excess of the IPO Price over
the Ending Lockup Price by (Y) the Investors Sale Percentage and (Z)
the number of Plan Shares held by Executive not subject to forfeiture
under the Forfeiture Table on the date of consummation of the IPO.
Such payment shall be made in cash or equivalent amount of Parent
common stock valued at the Ending Lockup Price, as Parent shall elect.
"Lockup Period" shall mean the period not less than six nor more than
12 months following the IPO during which Executive shall, pursuant to
the Stockholders Agreement, refrain from selling any Parent common
stock. "IPO Price" shall mean the price at which Parent common stock
shall first be offered to the public pursuant to the IPO. "Ending
Lockup Price" shall mean the mean of the closing prices of the Parent
common stock on each of the last 20 trading days of the Lockup Period,
as reported in The Wall Street Journal. "Investors Sale Percentage"
shall mean the quotient obtained by dividing (X) the excess of (I) the
sum of the number of shares of Parent common stock held, or issuable
upon exercise of securities convertible into or exercisable for Parent
common stock held, by the Investors immediately before the
effectiveness of the registration statement filed in connection with
the IPO (such sum, the "Investor Pre-IPO Number") over (II) the sum of
the number of shares of Parent common stock held, or issuable upon
exercise of securities convertible into or exercisable for Parent
common stock held by the Investors, immediately following consummation
of the IPO (an underwritten IPO shall be deemed consummated for this
purpose on delivery for sale of offered securities to the
underwriters, and, if the underwriters have an overallotment option,
the IPO shall be deemed consummated only upon its expiration or
delivery of securities for sale to the underwriters upon exercise
thereof) by (Y) the Investor Pre-IPO Number.
e. Holdings will pay premiums on Executive's life insurance
policy in effect as of the date of this Agreement, which policy
Executive shall continue to own.
f. Executive and an individual specified by Executive shall
be given a full lifetime membership in each club that is now, or
at any time during the Employment Term shall be, 100%-owned by
Holdings or any person controlling, controlled by or under common
control with Holdings (an "affiliate"), and Holdings shall pay,
waive, or cause to be paid or waived any initiation fee or dues
payable during the Employment Term associated with such
membership. Insofar as contractually permitted, Executive and an
individual specified by Executive shall be given a full lifetime
membership in each club in which Holdings or any affiliate shall
have an ownership interest, and Holdings shall waive or cause to
be waived any initiation fee or dues payable during the
Employment Term associated with such membership.
g. Holdings shall cause to be conveyed to Executive one
single-family lot (approximately 1/2 acre) that Executive shall
select from the Northstar Resort in development parcel O or an
approximately two-acre lot identified on Exhibit B, as Executive
shall elect, subject to the next sentence. If only one, but not
both, of such development parcels shall have been subdivided
before October 31, 2002, then Holdings shall cause to be conveyed
to Executive the lot identified in the preceding sentence
included in the development parcel that so shall have been
subdivided. If neither development parcel shall have been
subdivided by such date, or, before such date, either Company
shall terminate the Employment Term pursuant to Section 3.b,
clause iii, iv, or v, Holdings shall instead pay to Executive,
within 30 days thereafter, an amount equal to the fair market
value of the lot that would have had the greater fair market
value, if both development parcels had been subdivided on the
date triggering operation of this sentence. If the Employment
Term shall terminate pursuant to Section 3.b.i., the term
"Executive" shall refer to Executive's estate for purposes of
this Section 4.g.
h. Company shall reimburse Executive for reasonable and
necessary business expenses in accordance with such Company's
policies and upon presentation of appropriate documentation.
Holdings shall reimburse Executive for the cost of reasonable
accommodations at non-company owned facilities during Executive's
business trips to the Northstar Resort. If Company shall require
Executive to relocate, Company and Executive shall agree upon a
reasonable relocation package to be provided to Executive. It is
expected that Executive will relocate to Northstar within 30
months from the date of execution hereof.
5. Confidentiality; Noncompetition.
a. Executive shall regard and preserve as confidential all proprietary
or confidential information of Company or any business concern controlling,
controlled by, or under common control with Company or of any East West
Entity (as such term is defined in Section 5(h) hereof) (collectively,
"Companies") that has been or may be developed or obtained by or disclosed
to Executive by reason of Executive's employment ("Confidential
Information") with any of the Companies. Executive shall not use for
Executive's own benefit or purpose, or the benefit or purpose of any person
other than the Companies, or disclose to others, either during the
Employment Term or at any time thereafter, except as required in the course
of Executive's employment with any of the Companies, any Confidential
Information. Confidential Information shall include, but not be limited to,
all nonpublic information of any of the Companies relating to its business,
including all vendor or customer lists, financial information, methods of
operation, business plans, marketing plans, strategies, or forecasts,
proprietary software or other technology, and terms of contracts. This
subsection a. shall not prevent Executive from performing his duties under
the Consulting Agreement referred to in Section 5.h, so long as both the
Employment Term and such Consulting Agreement shall remain in effect and
Executive's use or disclosure of Confidential Information in performing his
duties under the Consulting Agreement shall be limited to that reasonably
required for such purpose. This Section 5.a shall not apply to information
that becomes public other than through a breach of this Agreement by
Executive; to information that Executive obtained non-confidentially before
commencement of the Employment Term; or to any disclosure that Executive
shall be required by law to make.
b. Executive covenants and agrees that (i) for so long as Executive
shall be employed by any of the Companies (the "Period of Employment") and
(ii) if the Executive's employment shall have been terminated during the
Employment Term (x) by either Company for cause, (y) by Executive in breach
of this Agreement, or (z) pursuant to clause iii., iv., or v. of Section
3.b, and, in the case of this subclause (z), Company shall be in compliance
with clause iii of Section 3.c, then for one year after termination of such
employment, Executive shall not, directly or indirectly, as principal,
partner, agent, employee, independent contractor, stockholder, or
otherwise, anywhere in the United States or Canada, engage or attempt to
engage in any ski resort business or ski resort real estate development
business or within 50 miles of Lake Tahoe any business activity of the kind
being conducted or planned to be conducted by any of the Companies. (To
avoid any doubt, during such one-year period, Executive shall not in any
such capacity engage or attempt to engage in any such business or business
activity within any such geographic area, notwithstanding that such
business or business activity is owned or operated or otherwise involves
any East West Entity.) The foregoing shall not prohibit Executive, together
with Executive's spouse and children, from owning beneficially any publicly
traded security, so long as the beneficial ownership by all of them, when
combined with the beneficial ownership of such publicly traded security of
any person (as the term is used in Section 13(d) of the Securities Exchange
Act of 1934) of which any of them is a member, shall constitute less than
5% of the class of such publicly traded security. Notwithstanding this
Section 5.b, Executive may commence seeking other employment if Company, at
least 90 days before the end of the Employment Term, shall not have offered
to Executive in writing to continue to employ Executive for at least two
years, on terms no less favorable to Executive than those existing at such
time.
c. Executive covenants and agrees that, during the Period of
Employment, and for two years thereafter, Executive shall not, directly or
indirectly, solicit any officer or management level employee of any of the
Companies to leave such employment or to engage in any activity that
Executive would be prevented from engaging in under this Section 5.
d. Executive covenants and agrees that, during the Period of
Employment and, for any subsequent period during which Section 5.b shall be
in effect, Executive shall not, directly or indirectly, seek to persuade
any vendor, customer, or other person doing business with any of the
Companies to cease, reduce, or not increase such business.
e. Executive covenants and agrees that, during the Period of
Employment, and for one year thereafter, Executive shall not disparage any
of the Companies or any of the personnel of any of the Companies or reveal
any information that might impair the reputation or goodwill of any of
them, except that this Section 5.e shall not prohibit Executive from
enforcing his rights hereunder.
f. Executive recognizes that the foregoing limitations are reasonable
and properly required for the adequate protection of the business of the
Companies and that in the event that any territorial or time limitation is
deemed in arbitration or by a court with proper jurisdiction to be
unreasonable, Executive agrees to request, and to submit to, the reduction
of said territorial or time limitation to such an area or period as shall
be deemed reasonable by such court. If Executive shall breach any of the
foregoing covenants, then the time limitation thereof shall be extended for
a period of time during which such breach shall occur. The existence of any
claim or cause of action by Executive against any of the Companies, if any,
whether predicated upon this Agreement or otherwise, shall not constitute a
defense to the enforcement of the foregoing covenants. Executive agrees
that a remedy at law for any breach or proposed or attempted breach of any
of the provisions of this Section 5 shall be inadequate and that the
Companies shall be entitled to injunctive relief with respect to such
breach or proposed or attempted breach, in addition to any other remedy it
might have.
g. Executive agrees that the provisions of this Section 5 shall inure
to the benefit of and be enforceable by any person with whom or into which
either Company shall merge or consolidate, regardless whether such Company
shall be the survivor of such transaction, or to any person acquiring all
or substantially all of either Company's assets or business.
h. Notwithstanding the foregoing provisions of Section 5, Executive
shall continue to perform consulting services, as an employee on loan from
Parent, to Morita Investments International B.V. ("MINT"), pursuant to the
Consulting Agreement dated December 15, 1999 between MINT and CRBC, LLC,
which, except for Article 6, has been assigned to Parent (the "MINT
Agreement"). If Executive shall be employed by either Company as of the end
of fiscal year in which Parent shall receive monetary compensation pursuant
to section 7 of such Consulting Agreement, Executive shall receive a bonus
for such fiscal year equal to the percentage, of the amount that Parent
shall have so received, that is set forth below opposite the compounded
annual growth rate of Company's Enterprise Value since October 31, 1999
through the end of such fiscal year ("CAGR").
Bonus percentage
If CAGR is shall be_________
---------- ----------------
<5% 5%
>5%, <10% 10%
-
>10%,<15% 17.5%
-
>15% 25%
Enterprise Value as of the end of a fiscal year shall mean any excess of Asset
Value over Consolidated Debt. Asset Value as of the end of a fiscal year shall
mean the sum of (i) the product obtained by multiplying EBITDA for such fiscal
year (including revenue from timber sales, but excluding any amounts received
under the MINT Agreement and sales of real estate or other one-time revenue
items) as determined from Parent's audited income statement for such year by
7.5, plus, as of the end of such fiscal year, (ii) the fair market value of real
property available for development, owned by Parent or any subsidiary, plus
(iii) the fair market value of Parent's interest in, and of the interest of any
Parent affiliate in, the East West joint ventures (which, for this purpose
includes any transaction between Parent or any Parent affiliate and East West
Partners, Inc. or any affiliate thereof), including East West Resort Development
V, L.P., L.L.P. (collectively, an "East West Entity"), and any other joint
venture or transaction as to which Executive has, at either Company's request,
provided material assistance in negotiating or overseeing. Consolidated Debt
shall mean the mean of the monthly balances, as recorded on the books of Parent
or its subsidiaries in accordance with GAAP, during such fiscal year of debt for
borrowed money, including short-term debt for money borrowed, capitalized
leases, and redeemable preferred stock, but excluding the Investor Notes or
accruals thereon.
i. Notwithstanding Section 6, any dispute over any accounting
determination shall be resolved conclusively by Parent's regularly engaged
independent auditors, applying GAAP consistently with Parent's past
practices, and, if either Company and Executive shall disagree regarding
fair market value of real property or any interest referred to in Section
5.h, clause (iii), a conclusive determination shall be made by an appraisal
firm selected by an accounting firm selected by lot from among those of the
five largest United States accounting firms that shall have had no material
relationship with Parent, any affiliate, Executive, or any member of
Executive's family. Any determination of the fair market value of any
interest referred to in Section 5.h, clause (iii) shall be made without any
minority discount. The fees and expenses of such independent auditors or
appraisal firm shall be borne by Parent. If the disputed item shall have
been previously determined under Company's employment agreement with
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ or Deferred Compensation Agreement with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
or ▇▇▇▇▇ ▇. ▇▇▇▇, and Company shall have offered Executive the opportunity
fully to participate in the resolution thereof, such determination shall
bind Company and Executive hereunder.
6. Disputes. The parties shall promptly submit any dispute or claim arising
out of or in respect to this Agreement to binding arbitration before one
arbitrator ("Arbitrator"). The parties agree that, except as otherwise provided
in Section 5.i and Section 6.e, respecting temporary or preliminary injunctive
relief, binding arbitration shall be the sole means of resolving any such
dispute or claim. The laws of the State of Colorado shall apply to any
arbitration hereunder and shall govern this Agreement.
a. The Arbitrator shall be an active member of the bar in the state in
which the arbitration shall occur, specializing for at least fifteen years
in corporate and business law. The American Arbitration Association shall
select the Arbitrator, upon the request of either side, within 30 days of
request. The arbitration shall be held in the state in which employee shall
be or shall have been most recently employed by Company, in accordance with
the then-current provisions of the rules of the American Arbitration
Association, except as otherwise provided herein.
b. In the Arbitrator's discretion, any party shall have rights to
discovery to the same extent as would be provided under the Federal Rules
of Civil Procedure, and the Federal Rules of Evidence. The Arbitrator shall
disallow any claim of fraud, unless alleged with particularity, and shall
make no award respecting any fraud claim, unless proved by clear and
convincing evidence. No party shall seek, and neither the Arbitrator nor
any court shall award, punitive or other exemplary damages respecting any
dispute under this Agreement.
c. The Arbitrator may, at his discretion and at the expense of the
parties who will bear the cost of the Arbitration, employ experts to assist
him in his determinations. The costs of the Arbitration proceeding and any
proceeding in court to confirm or to vacate any arbitration award or to
obtain temporary or preliminary injunctive relief as provided in Section
6.e, as applicable, shall be borne by the unsuccessful party and shall be
awarded as part of the Arbitrator's decision, unless the Arbitrator shall
otherwise allocate such costs, for the reasons set forth, in such decision.
d. Any judgment upon any award rendered by the Arbitrator may be
entered in and enforced by any court of competent jurisdiction. The parties
expressly consent to the jurisdiction of the courts (Federal and state) in
Colorado to enforce any award of the Arbitrator or to render any
provisional or injunctive relief in connection with or in aid of the
Arbitration. The parties expressly consent to the personal and subject
matter jurisdiction of the Arbitrator to arbitrate any and all matters to
be submitted to arbitration hereunder. None of the parties hereto shall
challenge any arbitration hereunder on the grounds that any party necessary
to such arbitration (including, without limitation, the parties hereto)
shall have been absent from such arbitration for any reason, including,
without limitation, that such party shall have been the subject of any
bankruptcy, reorganization, or insolvency proceeding.
e. This Section 6 shall not prevent either Company from seeking or
obtaining temporary or preliminary injunctive relief in a court for any
breach or threatened breach of any provision of this Agreement or any
agreement contemplated hereby; provided that the determination whether such
breach or threatened breach shall have occurred and the remedy therefor
(other than with respect to such preliminary or temporary relief) shall be
made by arbitration pursuant to this Section 6.
f. The parties shall indemnify the Arbitrator and any experts employed
by the Arbitrator and hold them harmless from and against any claim or
demand arising out of any arbitration under this Agreement or any agreement
contemplated hereby, unless resulting from the willful misconduct of the
person indemnified.
g. This arbitration clause shall survive the termination of this
Agreement. ALL PARTIES WAIVE TRIAL BY JURY WITH RESPECT TO ANY DISPUTE
ARISING UNDER THIS AGREEMENT.
7. Miscellaneous Provisions.
a. This Agreement sets forth Company's and Executive's entire
agreement with respect to the subject matter hereof, superseding all prior
or contemporaneous agreements, understandings, or discussions. This
Agreement may be amended, and any provision hereof may be waived or
otherwise modified, only by a writing signed by Company and Executive. This
agreement shall be governed by the laws of Colorado, applicable to a
contract wholly negotiated, signed, and performed in Colorado.
b. All notices given in connection with this Agreement, shall be in
writing and delivered personally or be sent by registered mail or certified
mail, postage prepaid, return receipt requested, addressed as follows:
If to either Company to:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Loeb & Loeb LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Bond and Corporate Finance
Department T-57
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
CIBC World Markets Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ Flyer
c/o CIBC World Markets Corp.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Executive:
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (970) 926--2874
Telecopier: (970) 926--5567
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
Either party may change the address for notice to such party by notice in
writing to the other party as provided above.
c. Company will indemnify Executive to the maximum extent permitted by
ss.145 of the Delaware Corporation Laws. The foregoing obligation will
survive termination of this Agreement. Company shall at all times carry
Directors and Officers liability insurance in at least the amounts carried
as of the date of execution of this Agreement.
d. Company shall pay the reasonable attorneys' fees and expenses
incurred by Executive respecting the negotiation and preparation of this
Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement on January 22, 2002, as of the date first above written.
BOOTH CREEK SKI HOLDINGS, INC.
By: / s / ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ / s / ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Executive Vice President ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
BOOTH CREEK SKI GROUP, INC.
By:/ s / ▇▇▇▇▇▇▇▇ ▇. Cole_____________________
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Executive Vice President