Employment Agreement between Booth Creek Ski Group, Inc., Booth Creek Ski Holdings, Inc., and Christopher P. Ryman

Summary

This agreement, effective May 1, 2000, is between Booth Creek Ski Group, Inc., Booth Creek Ski Holdings, Inc., and Christopher P. Ryman. It outlines Mr. Ryman's employment as President and Chief Operating Officer, his duties, compensation, and benefits. The agreement specifies a term through October 31, 2003, with provisions for early termination under certain conditions, including death, disability, or for cause. It also details salary, bonus eligibility, participation in benefit plans, and stock or cash bonus arrangements. The agreement ensures Mr. Ryman receives specified payments and benefits if his employment ends early under defined circumstances.

EX-10.32 3 0003.txt EMPLOYMENT AGREEMENT - CHRISTOPHER P. RYMAN EMPLOYMENT AGREEMENT 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 Christopher P. Ryman ("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 for either company 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 either 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 CIBC WG Argosy Merchant Fund 2, L.L.C., John Hancock Life Insurance Company, and their affiliates (the "Investors") together own beneficially Parent capital stock 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; 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, 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 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 any unpaid expense reimbursement and of an amount equal to the sum of (x) the amount of any unpaid salary through the date of termination plus (y) the product obtained by multiplying Executive's Base Salary by 1.5., 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"), Parent shall issue to Executive a number of shares of Parent Class B Common Stock (the "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 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 or under common control with Parent, as to which Executive has, at Company's request, provided material assistance in negotiating or overseeing, Company 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 Parent, and such equity investment had been made in Parent to fund such business. i. If either Company shall terminate the Employment Term pursuant to clause ii of Section 3.b, or Employee shall terminate the Employment Term in breach hereof, Executive shall forfeit to Parent the percentage of the 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 the Plan Shares not forfeited at their fair market value, determined as set forth below: Executive Shall forfeit if the Employment Term the following percentage terminates prior to of Plan Shares, November 1 of, ------------------------ ------------------------ 80% 2000 60% 2001 40% 2002 20% 2003 Notwithstanding the preceding, Executive shall forfeit all of the Plan Shares to Parent, if either Company shall terminate Executive's employment 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 either Company or pursuant to clause (z) of such Section. ii. Except pursuant to Section 3 of a Stockholders Agreement (the "Stockholders Agreement") executed or to be executed between Executive, Elizabeth J. Cole, John Hancock Life Insurance Company, Hancock 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 shall receive from a financially responsible unaffiliated person (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. 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 or 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. If Executive shall fail to 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, 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 (x) to Parent pursuant to this Agreement or (y) to a third party, not in violation of this Agreement or other agreement relating to any Plan Share to which Executive and Parent shall be a party, Parent shall pay Executive a bonus per share sold equal to the Negative Equity Makeup Amount, 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 ("Investor Notes") outstanding on the last day of such fiscal year by (y) the Adjusted Shares Outstanding, as hereinafter defined. "Negative Equity Makeup Amount" as of any date shall be determined by dividing (I) any excess of (A) the lesser of (i) the sum of the total of the face amounts of the Investor Notes outstanding on such date plus the amounts of all cash repayments of principal and cash payments of interest thereon during the Employment Term through such date or (ii) the sum of Enterprise Value for the fiscal year ended immediately before such date and the CE Proceeds over (B) $60,000,000 by (II) the Adjusted Shares Outstanding. 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. Adjusted Shares Outstanding shall mean as of any date the number of shares of Parent common stock outstanding as of such date plus the number of shares of Parent common stock issuable upon exercise, exchange, or conversion of all CE Securities outstanding on such date. 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 Company or any person controlling, controlled by or under common control with Company (an "affiliate"), and Company 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 Company or any affiliate shall have an ownership interest, and Company 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, 2001, 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. h. Company shall reimburse Executive for reasonable and necessary business expenses in accordance with such Company's policies and upon presentation of appropriate documentation. Company 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 18 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. 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 neither 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 than those existing as of the time of such offer. 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, Executive, and Elizabeth J. Cole, monetary compensation under which has been assigned to Parent. If Executive shall be employed by Parent 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 Parent'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 sales of real estate or other one-time revenue items) as determined from Parent's annual audited income statement 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 Company or any subsidiary, plus (iii) the fair market value of Company's interest in, and of the interest of any Company affiliate in, the East West joint ventures (which, for this purpose includes any transaction between Holdings or any Holdings 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. Notwithstanding anything else contained herein, Parent's Enterprise Value, as of October 31, 1999, was $60,000,000. i. Notwithstanding Section 6, any dispute over any accounting determination shall be resolved conclusively by Company's regularly engaged independent accountants, applying GAAP consistently with Company'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 accountants or appraisal firm shall be borne by Parent. If the disputed item shall have been previously determined under Company's employment agreement with Elizabeth J. Cole, 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.h, 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 capital of 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. On application to the Arbitrator, 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 shall apply to any Arbitration under this Agreement; provided, however, that the Arbitrator shall limit any discovery or evidence such that her decision shall be rendered within the period referred to in Section 6.b. 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 her discretion and at the expense of the parties who will bear the cost of the Arbitration, employ experts to assist her in her 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.h, 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: Elizabeth J. Cole 1000 S. Frontage Road West, Suite 100 Vail, CO 81657 Telephone: (970) 476-4030 Telecopier: (970) 479-0291 with copies to: Michael D. Beck Loeb & Loeb LLP 345 Park Avenue New York NY 10154-0037 Telephone: 212 ###-###-#### Telecopier: 212 ###-###-#### and John Hancock Life Insurance Company 200 Clarendon Street Boston, Massachusetts 02117 Attention: Bond and Corporate Finance Department T-57 Telecopy No.: (617) 572-5068 and CIBC World Markets Corp. 425 Lexington Avenue, 3rd floor New York, New York 10017 Attention: Jay Bloom Telecopy No.: (212) 885-4934 and Steven Flyer c/o CIBC World Markets Corp. 425 Lexington Avenue, 3rd floor New York, New York 10017 Telecopy No.: (212) 885-4946 If to Executive: Christopher P. Ryman PO Box 2413 Vail, CO 81657 Telephone: (970) 926-2874 Telecopier: (970) 926-5567 with a copy to: James F. Wood, Esq. Sherman & Howard L.L.C. 633 Seventeenth Street Denver CO 80202 Telephone: 303 ###-###-#### Telecopier: 303 ###-###-#### 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 section 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 , 2000, as of the date first above written. ----------- BOOTH CREEK SKI HOLDINGS, INC. By: /s/ Elizabeth J.Cole /s/ Christopher P. Ryman ---------------------------------- --------------------------------------- Elizabeth J. Cole, Executive Vice Christopher P. Ryman President BOOTH CREEK SKI GROUP, INC. By: /s/ Elizabeth J. Cole ---------------------------------- Elizabeth J. Cole, Executive Vice President LOEB&LOEB LLP A Limited Liability Partnership Including Professional Corporations Exhibit A Interoffice Memorandum - ------------------------------------------------------------------------------- Date: August 10, 2000 File: 20063810007 To: Christopher P. Ryman Elizabeth J. Cole From: Michael D. Beck Jay Fenster David C. Fischer Re: Booth Creek Ski Group Inc. Stock Incentive Plan The purpose of this memorandum is to outline our understanding of the equity grant program which Booth Creek Ski Group Inc. (the "Company") seeks to establish (the "Plan") and to identify relevant issues, so that the program can be structured to maximally achieve its goals and is properly documented. Because any equity compensation program has significant financial and tax implications, it would be prudent and, therefore, is highly recommended that the proposal be reviewed by the Company's CPAs to assure that it achieves maximum results from a financial and tax accounting perspective. 1. Background and Introduction: The Company already has a stock option plan in place and a limited number of options (100) have been issued thereunder. Consideration will be given to amending or otherwise rolling in existing option obligations into the new equity program. The number of shares to be reserved for issuance under the Plan will represent 15% of the total shares of the Company's outstanding common stock, on a fully diluted basis, including shares of common stock to be reserved for issuance under the Plan. Under the Plan, officers and employees of the Company and its subsidiaries will be eligible to receive awards. Moreover, while it is not anticipated that grants will initially be made to consultants and independent contractors, it is recommend that the Plan be flexible and allow for grants to consultants and independent contractors. The Plan will allow for awards of stock options, restricted stock and other types of equity grants. The initial grants under the Plan will fall into two groups, namely, normal option grants and special management grants. 2. Normal Option Grants: We propose that normal option grants have the following features: a. While both ISOs and NSOs will be authorized by the Plan, the normal option grant will be an ISO. b. Option term is 10 years. c. Per share exercise price is fair market value ("FMV") of share of common stock on date of grant. (Note that even if the Plan document allows the Company's board of directors (the "Board"), in its sole discretion, to make a reasonable determination of FMV, the Board should have a particular methodology in mind for making these determinations so that it can properly administer the Plan. While Loeb & Loeb can assist in providing guidelines for making FMV determinations, ultimately, the Company will have to make such determinations in consultation with their accountants. Making appropriate FMV determinations is important because grants at less than FMV (i) cannot qualify for ISO treatment for federal income tax purposes, and (ii) will result in a charge to earnings for financial accounting purposes.) d. Graded vesting over 5 years (20% annually); first vest date is 10/31/00. No accelerated vesting upon a change of control. e. Exercise price to be paid in cash; permit net exercises [payment of withholding?]. f. Unexercised, vested options to terminate (i) immediately, upon a termination of employment for cause; (ii) one year following death or disability retirement; and (iii) three months following any other termination of employment. g. Restrictions/Rights Applicable to Shares Issued Upon Option Exercise: i) Subject to Right of First Refusal by Company [Shares transferable only with Company's consent?]. ii) Subject to Call by the Company at FMV after termination of employment. iii) Pro rata tag-along upon sale of control. iv) Drag-along upon sale of Company. v) All of these restrictions/rights lapse upon an IPO or other event resulting in the shares of common stock becoming publicly traded. Note:In the event of any inconsistency between this memo and the employment contracts dated as of May 1, 2000 between the Company and Christopher Ryman and Elizabeth Cole, respectively, the terms and provisions of said employment contracts shall govern and control. Exhibit B to Employment Agreement between Booth Creek Ski Group, Inc., Booth Creek Ski Holdings, Inc. and Christopher P. Ryman. Map depicting the Northstar resort and two alternative sites for the selection of a single family lot to be conveyed to Executive.