Exhibit
10.42


 


PWRW&G
DRAFT


12/21/01


 


AMERICAN
SKIING COMPANY


 


PHANTOM
EQUITY AWARD AGREEMENT


 


Agreement, dated as of
                     
    , 2001, between American Skiing Company (the “Company”)
and
                                        
(“Employee”).


 


WHEREAS, Employee is employed by the Company and has
been selected by the Compensation Committee (the “Committee”) of the Board of
Directors of the Company (the “Board”) to receive an award of phantom equity;
and


 


WHEREAS, the Company had agreed to provide Employee an
incentive to commence employment with the Company by granting to Employee a
phantom award entitling Employee to receive, under the terms and conditions
described herein,      % of the phantom equity pool
established by the Company and determined in accordance with Section 1 hereof
(the “Pool”), subject to the restrictions hereinafter set forth, and has
authorized the officer whose signature appears below to execute this Agreement
on behalf of the Company.


 


NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, the parties hereto agree as follows:


 


1.                                       Grant
of Award.


 


(a)                                  Subject
to the terms and conditions set forth herein this Agreement, the Company hereby
grants to the Employee an award (the “Award”) equal to          %
(the “Award Percentage”) of the Total Equity Pool Value (as defined in Section
1 (b) below).  This grant of the Award
is irrevocable and unconditional, except that (i) the Award can be forfeited in
accordance with Section 2 of this Agreement, (ii) the Company’s obligation
to make payment in respect of the Award is subject to the terms of Section 4
hereof and is conditioned on the compliance by Employee with the withholding
obligations set forth in Section 5 hereof .


 


(b)                                 The
total value of the phantom equity pool (the “Total Equity Pool Value”) at any
given time shall be equal to the sum  of
(i) $2 million and (ii) the product of 
(A) the Total Equity Value of the Company as determined by the Committee
in good faith and (B) the Total Pool Percentage determined in accordance with
the following chart:


 

















 


	
  Total Equity Value

  	
   

  	
  Total Plan
  Pool Percentage

  	
   

  
	
  $1.00

  	
   

  	
  0.00

  	
  %

  
	
  $50 million

  	
   

  	
  1.50

  	
  %

  
	
  $100 million

  	
   

  	
  2.00

  	
  %

  
	
  $150 million

  	
   

  	
  2.25

  	
  %

  
	
  $200 million

  	
   

  	
  2.50

  	
  %

  
	
  $250 million

  	
   

  	
  3.00

  	
  %

  
	
  $300 million

  	
   

  	
  3.50

  	
  %

  
	
  $400 million

  	
   

  	
  5.00

  	
  %

  
	
  $500 million or
  above

  	
   

  	
  6.00

  	
  %

  



 


The Total Equity Value shall equal the Total Enterprise Value of the
Company less the value of the outstanding debt of the Company.  The Total Enterprise Value shall equal the
total purchase price paid for the Company (or, in the absence of an acquisition
of the Company, the total value of the Company determined by a qualified
independent third party) at the time of a Valuation Event as defined in Section
3 below.  By way of example, if the
Total Enterprise Value of the Company is determined to be $500 million and the
outstanding amount of the debt of the Company is $350 million, the Total Equity
Value would be $150 million.


 


(c)                                  Subject
to vesting in accordance with Section 2 hereof, the total value of the Award at
any given time shall be equal to the product of (i) the Total Pool Value and
(ii) the Award Percentage.


 


2.                                       Vesting
of Award.


 


(a)                                  Subject
to the provisions of this Agreement and except as otherwise provided in any
existing employment agreement between the Company and the Employee (an
“Employment Agreement”), the Award shall vest as to one-fourth of the total
percentage on each of the first, second, third and fourth anniversaries of the
date hereof.  The extent to which the
Award is vested at any given time shall hereinafter be referred to as the
“Vested Percentage.”


 


(b)                                 All
rights with respect to the Award shall be forfeited and the Award shall
immediately terminate upon the termination of the Employee’s employment with
the Company by the Company for “Cause.” 
All rights with respect to the Award that are not vested shall be
forfeited and the Award, to the extent not vested, shall immediately terminate
upon the termination of the Employee’s employment with the Company by the
Employee voluntarily.


 


(c)                                  Upon
(i) Employee’s death; or (ii) termination of Employee’s employment by the
Company (1) due to Employee’s Disability or (2) without Cause; or (iii)
termination of Employee’s employment by the Employee for “Good Reason” as
defined in any existing employment agreement between the employee and the
Company, the Employee’s Vested Percentage shall be determined based on the date
which is the first anniversary of the Employee’s date of termination.”


 


2

















 


(d)                                 The
Award shall become fully vested upon a Change in Control.


 


(e)                                  For
purposes of this Agreement and except as otherwise provided in an Employment
Agreement, “Cause” shall have such meaning as is set forth in any
existing employment agreement between the employee and the Company or in the
absence of such a definition shall mean (i) the Employee’s failure or refusal
to satisfactorily perform or observe any of his duties, responsibilities or
obligations to the Company, (ii) the Employee’s gross negligence in performing
his duties or any willful and intentional act of the Employee involving
malfeasance, fraud, theft, misappropriation of funds, embezzlement or
dishonesty affecting the Company; or (iii) the Employee’s conviction of, or a
plea of guilty or nolo contendere to, an offense which is a felony in the
jurisdiction involved or any lesser crime involving Company property.


 


(f)                                    For
purposes of this Agreement and except as otherwise provided in an Employment
Agreement, “Change in Control” shall mean the occurrence of any of the
following: (i)  The acquisition (other than from the Company) by any
“Person” of fifty (50%) percent or more of the combined voting power of the
Company’s then outstanding voting securities, other than any Person holding fifty
percent or more of such combined voting power on the date hereof provided;
however, that for purposes of this Plan, the parties hereby agree and
acknowledge that Oak Hill Capital Partners L.P. and/or its affiliates as of the
Effective Date of the Plan owns at least 50% of the combined voting power of
the Company’s outstanding voting securities; (ii)  the individuals
who were members of the Board (the “Incumbent Board”) during the previous
twelve (12) month period, cease for any reason to constitute at least a majority
of the Board; or (iii)  approval by stockholders of the Company of
(a) a merger or consolidation involving the Company in which the stockholders
of the Company, immediately before such merger or consolidation do not, as a
result of such merger or consolidation, own, directly or indirectly, more than
sixty percent (60%) of the combined voting power of the then outstanding voting
securities of the corporation resulting from such merger or consolidation in
substantially the same proportion as their ownership of the combined voting
power of the securities of the Company outstanding immediately before such
merger or consolidation or (b) a complete liquidation or dissolution of the
Company or an agreement for the sale or other disposition of all or substantially
all of the assets of the Company.


 


(g)                                 For
purposes of this Agreement, “Disability” shall have such meaning as is
set forth in any existing employment agreement between the employee and the
Company or in the absence of such a definition shall have the meaning ascribed
to such term under the Social Security Act.


 


3.                                       Payment
of Awards.   Subject to Section 4
hereof, no payment shall be made in respect of the Award until the occurrence
of a “Valuation Event.”  As soon as
practicable, but in no event more than thirty [30] days, following a Valuation
Event, the Company shall pay to the employee a lump sum in cash equal to the
excess of  (i) the product of (A) the
Vested Percentage and (B) the Award Value, over (ii) the 


 


3

















 


amount of any payments previously made to Employee in respect of the
Award (the result being, the “Payment Amount”).  For purposes of this Agreement, Valuation Event shall mean any of
the following: (i) a sale or disposition a significant Company operation
or property as determined by the Board; (ii)  a merger, consolidation
or similar event of the Company other than one (A) in which the Company is the
surviving entity or (B) where no Change in Control has occurred; (iii)  a
public offering of equity securities by the Company that yields net proceeds to
the Company in excess of $50 million; or (iv) a Change in Control.  Notwithstanding the foregoing, in the event
that the Committee determines in good faith that payment of such amounts in
cash would have a material detrimental effect on the Company as determined by a
unanimous vote of the Board or is prohibited under the terms of any legal or
contractual restriction to which the Company is subject, then the Company shall
be entitled to make all or any portion of such payments in the form of
notes.   In the event the Board makes
any of the payment in the form of notes, the Board will use all reasonable
efforts to redeem the notes as soon as the redemption would not have a material
detrimental effect on the Company.  In
the event of a termination of the Employee’s employment, the Company shall have
the right, exercisable within 60 days thereafter, to cancel the Award in
exchange for a payment equal to the Payment Amount as if a Valuation Event had
occurred at the time of such termination.


 


4.                                       Reduction
in Payment. Except as otherwise provided in an Employment Agreement, if
payments made to Employee by the Company, including payments pursuant to the
Award, are considered “excess parachute payments” within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the
“Code”), then such Award payment due under this agreement will be reduced, but
not below zero, such that the sum of the payments to the Employee under the
Award plus any other payments to the Employee by the Company shall be limited
to the greatest amount which may be paid to the Employee without causing a loss
of deduction to the Company under Section 280G of the Code or an excise tax
liability to the Employee under Section 4999 of the Code.


 


5.                                       Withholding.
The Employee shall be entitled to withhold from any payment due under this
Agreement the amount of any state or federal income taxes and payroll taxes
required to be withheld by the Company with regard to such payment. 


 


6.                                       Determinations
by Committee.  All determinations
and interpretations with respect to this Agreement shall be made by the
Committee in good faith and shall be binding on the parties hereto unless it is
determined by a court of competent jurisdiction that such determination is
arbitrary and capricious.


 


7.                                       Entire
Agreement.  This constitutes the
entire agreement between the parties with respect to the subject matter
hereof.  It may not be modified or
changed except by written instrument executed by all parties.


 


8.                                       Governing
Law.  This Agreement shall be
governed and construed in accordance with the laws of the State of Delaware,
without reference to the principles of conflict of laws thereof.


 


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IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the day and year first above written.


 


	
   

  	
  AMERICAN SKIING COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Employee

  	
   

  



 


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