Exhibit 10.28
Amended and Restated Employment Agreement by and between Booth Creek Ski
Group, Inc., Booth Creek Ski Holdings, Inc. and Xxxxxxxxx X. Xxxx
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
Xxxxxxxxx X. Xxxx ("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 Executive Vice
President and Chief Financial Officer. Executive shall be responsible for
Company's strategic planning, financial, and accounting operations and
perform such particular or additional duties, consistent with her office,
as may be assigned by Company's president ("president"), to whom the
Executive shall directly report, or board of directors ("board"). Executive
shall render her services faithfully and to the best of her ability and,
subject to Section 5.h, devote her full business time and attention to the
services to be rendered by her 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 her 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 president or Company policy, not cured, within a
reasonable time of notice from the board or president; 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 Xxxx Xxxxxxx Life Insurance Company,
Xxxxxxx 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 her estate of an amount
equal to any unpaid expense reimbursement and unpaid salary for
the month in which her 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 Two Hundred Fifty Thousand Dollars ($250,000) 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
her 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 her employment or in connection with either
Company, or pursuant to clause (x) of such Section, but only for events
occurring in the course of her employment or in connection with the Company, or
pursuant to clause (z) of such Section or (y) Executive both terminates her
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, Xxxxxxxxxxx X. Xxxxx, Xxxxxxx X.
Xxxx, Xxxxx X. Xxxx, Xxxx Xxxxxxx Life Insurance Company, Xxxxxxx
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 her 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 her 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 her 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
Xxxxxxxxxxx X. Xxxxx or Deferred Compensation Agreement with Xxxxxxx
X. Xxxx or Xxxxx X. Xxxx, 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:
Xxxxxxxxxxx X. Xxxxx
0000 X. Xxxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with copies to:
Xxxxxxx X. Xxxx
Loeb & Loeb LLP
000 Xxxx Xxxxxx
Xxx Xxxx XX 00000-0000
Telephone: 000-000-0000
Telecopier: 000-000-0000
and
Xxxx Xxxxxxx Life Insurance Company
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Bond and Corporate Finance
Department T-57
Telecopy No.: (000) 000-0000
and
CIBC World Markets Corp.
000 Xxxxxxxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx Xxxxx
Telecopy No.: (000) 000-0000
and
Xxxxxx Flyer
c/o CIBC World Markets Corp.
000 Xxxxxxxxx Xxxxxx, 0xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
If to Executive:
Xxxxxxxxx X. Xxxx
0000 Xxxxxxxx Xxxx, Xxxx Xxxx
Xxxx, XX 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxx X. Xxxx, Esq.
Xxxxxxx & Xxxxxx L.L.C.
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx XX 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
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 / Xxxxxxxxxxx X. Xxxxx / s / Xxxxxxxxx X. Xxxx
-------------------------- -----------------------
Xxxxxxxxxxx X. Xxxxx, President XXXXXXXXX X. XXXX
BOOTH CREEK SKI GROUP, INC.
By:/ s / Xxxxxxxxxxx X. Xxxxx
--------------------------------
Xxxxxxxxxxx X. Xxxxx, President
