FORM OF SHARE APPRECIATION RIGHTS AGREEMENT
Exhibit
10.18
[Employee
Name]
[Address]
[City,
State, Zip]
RE: Grant
of Share Appreciation Rights
Dear
[Name of Employee]:
Vail
Resorts, Inc. (the “Company”) is pleased to confirm that you were granted an
award of Share Appreciation Rights on [date] (the “Grant Date”) on the terms set
forth herein and pursuant to the Company’s Amended and Restated 2002 Long Term
Incentive and Share Award Plan (the “Plan”), the terms of which are incorporated
herein by reference. Capitalized terms used and not defined herein have the
meanings set forth in the Plan.
1.
Share Appreciation Rights Terms.
(a) Grant. On
the Grant Date you were granted Share Appreciation Rights with respect to
[Number] shares of the Company’s common stock, $0.01 par value per share (the
“SAR Shares”), at an exercise price per Share Appreciation Right equal to
[Amount] (the “Exercise Price”). Your Share Appreciation Rights will
expire at the close of business on the tenth anniversary of the Grant Date (the
“Expiration Date”), subject to earlier expiration in connection with the
termination of your employment as provided below.
(b) Exercisability/Vesting. Your
Share Appreciation Rights will be exercisable only to the extent they have
vested. Your Share Appreciation Rights will be vested with respect to
[Percentage Amount]% of the SAR Shares (rounded to the nearest whole share) on
each of the [____, through ______] anniversaries of the Grant Date, if and only
if you have been continuously employed by the Company and/or its Subsidiaries
from the date of this Agreement through such dates. Upon the
termination of your employment for any reason, by you or by the Company and/or
its Subsidiaries, with or without cause, all of your unvested Share Appreciation
Rights shall expire and be of no further force or effect. Any such termination
shall not affect your vested Share Appreciation Rights, which shall remain
exercisable pursuant to paragraph 1(d) below.
(c) Change in
Control.
(i) As
used in this Agreement, “Change in Control” shall mean an event or series of
events by which:
(A) any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent,
or other fiduciary or administrator of any such plan) becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of 35% or more of the equity securities of the Company entitled to
vote for members of the Board or equivalent governing body of the Company on a
fully-diluted basis; or
(B) during
any period of twenty four (24) consecutive months, a majority of the members of
the Board or other equivalent governing body of the Company cease to be composed
of individuals (1) who were members of that Board or equivalent governing body
on the first day of such period, (2) whose election or nomination to that Board
or equivalent governing body was approved by individuals referred to in clause
(1) above constituting at the time of such election or nomination at least a
majority of that Board or equivalent governing body, or (3) whose election or
nomination to that Board or other equivalent governing body was approved by
individuals referred to in clauses (1) and (2) above constituting at the time of
such election or nomination at least a majority of that Board or equivalent
governing body (excluding, in the case of both clause (2) and clause (3), any
individual whose initial nomination for, or assumption of office as, a member of
that Board or equivalent governing body occurs as a result of an actual or
threatened solicitation of proxies or consents for the election or removal of
one or more directors by any person or group other than a solicitation for the
election of one or more directors by or on behalf of the Board); or
(C) any
person or two or more persons acting in concert shall have acquired, by contract
or otherwise, control over the equity securities of the Company entitled to vote
for members of the Board or equivalent governing body of the Company on a
fully-diluted basis (and taking into account all such securities that such
person or group has the right to acquire pursuant to any option right)
representing 51% or more of the combined voting power of such securities;
or
(D) the
Company sells or transfers (other than by mortgage or pledge) all or
substantially all of its properties and assets to, another “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act).
(ii) Notwithstanding
any provision of this Agreement to the contrary, in the event of a Change in
Control, your Share Appreciation Rights, if not already vested under Section
1(b) above, will vest in full at the time of the Change in Control.
(iii) In
connection with the Change in Control, the Company may, on not less than 20
days’ notice to you, provide that any portion of your Share Appreciation Rights
which have not been exercised prior to or in connection with the Change in
Control will be forfeited. In lieu of requiring such exercise, the
Company may provide for the cancellation of your Share Appreciation Rights in
exchange for a payment equal to the excess (if any) of the consideration per
share of common stock receivable in connection with such Change in Control over
the Exercise Price, which amount, plus accrued interest thereon, shall be paid
to you in accordance with the terms of the Change in Control.
(d) Termination of Share
Appreciation Rights. In no event shall any part of your Share
Appreciation Rights be exercisable after the Expiration Date set forth in
paragraph 1(a). If your employment with the Company and/or its Subsidiaries
terminates for any reason, that portion of your Share Appreciation Rights that
is not vested and exercisable on the date of termination of your employment
shall expire and be forfeited. The portion of your Share Appreciation Rights
that is vested and exercisable on the date of such termination shall, to the
extent not theretofore exercised, expire on the 90th day after such date of
termination.
(e) Exercisability/Vesting
in Event of Death. Notwithstanding any provision of this Agreement to
the contrary, if your employment with the Company and/or its Subsidiaries
terminates as a result of your death, then your Share Appreciation Rights, if
not already vested under Section 1(b) above, will vest in full as of the date of
death and may be exercised by the persons described in Section 4 below, but only
within the period ending on the earlier of (1) the date [twelve (12)] months following
the date of death or (2) the Expiration Date set forth in paragraph
1(a). If, after death, the Share Appreciation Rights are not
exercised within the time specified herein, the Share Appreciation Rights shall
expire and be forfeited.
2.
Procedure for Share Appreciation Rights Exercise.
You may,
at any time or from time to time, to the extent permitted hereby, exercise all
or any portion of your vested portion of your Share Appreciation Rights by
delivering, to the attention of the Company’s General Counsel at the address set
forth in paragraph 9 below, written notice to the Company of the number of Share
Appreciation Rights to be exercised. The Company may delay
effectiveness of any exercise of your Share Appreciation Rights for such period
of time as may be necessary to comply with any legal or contractual provisions
to which it may be subject relating to the issuance of its securities, it being
understood that such exercise shall be effective immediately upon completion of
such compliance notwithstanding the occurrence of the Expiration
Date.
3.
Payment for Share Appreciation Rights.
Upon your
exercise of the Share Appreciation Rights, the Company shall pay you in SAR
Shares an amount equal to the quotient of (i) the product of (x) the positive
difference (if any) between the Fair Market Value of a SAR Share on the exercise
date and the Exercise Price, multiplied by (y) the number of Share Appreciation
Rights being exercised, divided by (ii) the Fair Market Value of a SAR Share on
the exercise date, rounded down to the nearest whole share. Any fractional SAR
Shares shall be forfeited.
4.
Share Appreciation Rights Not Transferable.
Your
Share Appreciation Rights are personal to you and are not transferable by you,
other than by will or by the laws of descent and distribution. During your
lifetime, only you (or your guardian or legal representative) may exercise your
Share Appreciation Rights. In the event of your death, your Share Appreciation
Rights may be exercised only by the executor or administrator of your estate or
the person or persons to whom your rights under the Share Appreciation Rights
shall pass by will or by the laws of intestate succession.
5.
Conformity with Plan.
Your
Share Appreciation Rights are intended to conform in all respects with, and are
subject to, all applicable provisions of the Plan, the terms and conditions of
which are incorporated herein by reference. Any inconsistencies between this
Agreement and the Plan shall be resolved in accordance with the Plan. By
executing and returning a copy of this Agreement, you acknowledge your receipt
of this Agreement and the Plan and agree to be bound by all the terms of this
Agreement and the Plan.
6.
Rights of Participants.
Nothing
in this Agreement shall interfere with or limit in any way the right of the
Company and/or its Subsidiaries to terminate your employment at any time (with
or without cause), or confer upon you any right to continue in the employ of the
Company and/or its Subsidiaries for any period of time or to continue to receive
your current (or other) rate of compensation, Nothing in this Agreement shall
confer upon you any right to be selected to receive additional awards under the
Plan or otherwise.
7.
Withholding of Taxes.
The
Company may, if necessary or desirable, withhold from any amounts due and
payable to you by the Company or a Subsidiary (or secure payment from you in
lieu of withholding) the amount of any withholding or other tax due from the
Company or Subsidiary with respect to the issuance or exercise of your Share
Appreciation Rights, and the Company may defer such issuance or exercise unless
indemnified by you to its satisfaction against the payment of any such
amount.
8.
Adjustments.
In the
event that the Committee shall determine that any dividend in Shares,
recapitalization, Share split, reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange, or other
similar corporate transaction or event affects the Shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of your
rights under this Share Appreciation Rights Agreement, then the Committee shall
make such equitable changes or adjustments as it deems appropriate and adjust,
in such manner as it deems equitable, any or all of: (i) the number
and kinds of SAR Shares, other securities or other consideration subject to the
Share Appreciation Rights; and (ii) the Exercise Price of the Share Appreciation
Rights. In the event that the Company shall declare an extraordinary
cash dividend, then the Committee shall in its discretion either (i) pay you
cash on the payment date of such dividend in an amount equal to the number of
SAR Shares represented by the vested portion of your Share Appreciation Rights
multiplied by the per share amount of such extraordinary cash dividend and to
the extent these Share Appreciation Rights are not then fully vested make
similar additional payments in the future when and as the remaining portion of
these Share Appreciation Rights vest; or (ii) reduce the Exercise Price of your
Share Appreciation Rights by an amount equal to the per share extraordinary
dividend; or (iii) make such other adjustment as the Committee determines would
provide you a substantially similar benefit.
9.
Notice.
Any
notice required or permitted to be given to the Company under this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or by courier, or sent by certified or registered mail, postage
prepaid, return receipt requested, duly addressed to the Company as
follows:
Vail
Resorts, Inc.
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Attention: General
Counsel
l0.
Governing Law.
This
Agreement shall be governed by and construed in accordance with the laws of the
State of Colorado without reference to the principles of conflict of
laws.
11.
Code Section 409A.
It is
intended that this award of Share Appreciation Rights comply with Code Section
409A and the guidance promulgated thereunder regarding the permissible deferral
of compensation under the grant of Share Appreciation Rights.
(Signature Page
Follows)
To
confirm your understanding and acceptance of the terms and provisions set forth
in this Agreement, please execute the extra copy of this Agreement in the space
below and return it to the attention of the Company’s General Counsel at the
address set forth in paragraph 9 above.
Very
truly yours,
VAIL
RESORTS, INC.
By: __________________________
Name:
________________________
Title:
_________________________
The
undersigned hereby acknowledges that he or she has read this Agreement and has
received a copy of the Plan and hereby agrees to be bound by all the provisions
set forth in this Agreement and in the Plan,
_______________________________
[Name of
Employee]
Date:
__________________________