FORM OF STOCK OPTION AGREEMENT

EX-10.20 2 exhibit10_20.htm EXHIBIT 10.20 exhibit10_20.htm

Exhibit 10.20
 
FORM OF STOCK OPTION AGREEMENT
 

 
[Employee Name]
 
[Address]
 
[City, State, Zip]
 
RE: Grant of Stock Option
 
Dear [Name of Employee]:
 
Vail Resorts, Inc. (the “Company”) is pleased to confirm that you were granted an award of an Option on [date] (the “Grant Date”) on the terms set forth herein.  Your Option is granted pursuant to the Company’s Amended and Restated 2002 Long Term Incentive and Share Award 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.           Option Terms.
 
(a)           Grant.  On the Grant Date, you were granted an Option to purchase up to [Number] shares of the Company’s Common Stock, having $.01 par value (the “Option Shares”), at an exercise price per Option Share equal to [Amount] (the “Exercise Price”), payable upon exercise as set forth in paragraph 2 below.  Your Option 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.  Your Option is not intended to be an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.
 
(b)           Exercisability/Vesting.  Your Option will be exercisable only to the extent it has vested.  Your Option will be vested with respect to 33-1/3% of the Option Shares (rounded to the nearest whole share) on each of the first through third 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, the unvested portion of your Option shall expire and be of no further force or effect.  Any such termination shall not affect the vested portion of your Option, which shall remain exercisable pursuant to paragraph 1(c) 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 Option, 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 Option which has 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 Option 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 Option.  In no event shall any part of your Option 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 Option that is not vested and exercisable on the date of termination of your employment shall expire and be forfeited.  The portion of your Option 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.
 
2.           Procedure for Option 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 Option by delivering, to the attention of the Company’s General Counsel at the address set forth in paragraph 8 below, written notice to the Company accompanied by payment in full, in a manner acceptable to the Company, of an amount equal to the product of the Exercise Price and the number of Option Shares to be acquired.  The Company may delay effectiveness of any exercise of your Option 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.           Option Not Transferable.
 
Your Option is personal to you and is 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 Option.  In the event of your death, your Option may be exercised only by the executor or administrator of your estate or the person or persons to whom your rights under the Option shall pass by will or by the laws of intestate succession.
 
4.           Conformity with Plan.
 
Your Option is intended to conform in all respects with, and is 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.
 
5.           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.
 
6.           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 Option, and the Company may defer such issuance or exercise unless indemnified by you to its satisfaction against the payment of any such amount.
 
7.           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 Option, 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 kind of Shares, other securities or other consideration issued or issuable with respect to this Option; and (ii) the Exercise Price of this Option. 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 Option Shares represented by the vested portion of your Option multiplied by the per share amount of such extraordinary cash dividend and to the extent this Option is not then fully vested make similar additional payments in the future when and as the remaining portion of this Option vests; or (ii) reduce the Exercise Price of your Option 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.
 
8.           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.
 
390 Interlocken Crescent
 
Suite 1000
 
Broomfield, Colorado 80021
 
Attention: General Counsel
 
9.           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.
 
10.         Code Section 409A.
 
It is intended that this Option comply with Code Section 409A and the guidance promulgated thereunder regarding the permissible deferral of compensation under the grant of Options.
 
[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 8 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 of the provisions set forth in this Agreement and in the Plan.
 

 
[Name of Employee]
 
 
Date: