Employment Agreement


     

    EMPLOYMENT
      AGREEMENT

     

    EMPLOYMENT
      AGREEMENT (the “Agreement”) entered into as of February 28, 2006, by and between
      Vail Resorts, Inc., a Delaware corporation with its principal office in Avon,
      Colorado (the “Company”), and Robert A. Katz (“Executive”).

     

    WHEREAS,
      the Company wishes to employ Executive as its Chief Executive Officer and both
      parties desire to enter into an employment agreement to reflect Executive’s new
      capacity upon the terms and conditions set forth herein:

     

    NOW,
      THEREFORE, the parties hereto, intending to be legally bound, hereby agree
      as
      follows:

     

    1.  Employment.
      The
      Company hereby employs Executive as its Chief Executive Officer. Executive
      shall
      also serve as a member of the Company’s Board of Directors (the “Board”) and its
      Executive Committee. Executive shall also serve as Chairman of each of the
      Company’s principal subsidiaries. Executive hereby accepts such employment and
      agrees to perform his duties and responsibilities in accordance with the terms,
      conditions and provisions hereinafter set forth. The Company may have a
      non-executive Chairman of the Board.

     

    1.1.  Employment
      Term.
      The
      term of Executive’s employment under this Agreement shall commence as of the
      date hereof (the “Effective Date”) and shall continue until February 28, 2009;
provided,
      however, that on and after March 1, 2007, the Agreement shall automatically
      renew with the term of the Agreement always being at least two years.
      Notwithstanding the foregoing, Executive’s employment and this Agreement may be
      terminated in accordance with Section 5 hereof. The period commencing on the
      Effective Date and ending on the date on which the term of Executive’s
      employment under the Agreement shall terminate is hereinafter referred to as
      the
“Employment Term.”

     

    1.2.  Duties
      and Responsibilities.
      Executive shall serve as the Company’s Chief Executive Officer and in such other
      senior positions, if any, to which he may be elected by the Board during the
      Employment Term. During the Employment Term, Executive shall perform all duties
      and accept all responsibilities incident to, and not inconsistent with, such
      positions as may be reasonably assigned to him by the Board.

     

    1.3.  Extent
      of Service.
      During
      the Employment Term, Executive agrees to use his best efforts to carry out
      his
      duties and responsibilities under Section 1.2 hereof and, consistent with the
      other provisions of this Agreement, to devote substantially all his business
      time, attention and energy thereto except to the extent required by Executive’s
      outside board directorships, civic or charitable activities. Executive agrees
      not be become engaged in any other business, civic or charitable activity which,
      in his reasonable judgment, is likely to materially interfere with his ability
      to discharge his duties and responsibilities to the Company. Executive agrees
      to
      resign from or discontinue any other business, civic or charitable activity
      which, in the reasonable judgment of the Board, is likely to materially
      interfere with his ability to discharge his duties and responsibilities to
      the
      Company.

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    


     

    1.4.  Base
      Salary.
      For all
      the services rendered by Executive hereunder, the Company shall pay Executive
      a
      base salary (“Base Salary”), commencing on the Effective Date, at the annual
      rate of $815,000, payable in installments at such times as the Company
      customarily pays its other senior level executives (but in any event no less
      often than monthly). Executive’s Base Salary for each fiscal year of the Company
      commencing after the Effective Date (beginning with the first salary review
      by
      the Board in 2006) shall be reviewed for appropriate adjustment (but shall
      not
      be reduced in any case) by the Board pursuant to its normal performance review
      policies for senior level executives. For services rendered by Executive to
      the
      Company prior to the Effective Date, the Company shall pay Executive the sum
      of
      $67,917, payable on the date the Executive receives the first installment
      payment of Base Salary after the Effective Date.

     

    1.5.  Retirement
      and Benefit Coverages.
      During
      the Employment Term, Executive shall be entitled to participate in all (a)
      employee pension and retirement plans and programs (“Retirement Plans”) and (b)
      welfare benefit plans and programs (“Benefit Coverages”), in each case as made
      available to the Company’s senior level executives as a group or to its
      employees generally and as such Retirement Plans or Benefit Coverages may be
      in
      effect from time to time. In addition, Executive shall be entitled to (i) the
      Company’s regular holiday and vacation policy, (ii) annual membership in any
      clubs owned or managed by the Company (which shall terminate concurrently with
      the date of termination of the Employment Term), and (iii) at no cost to
      Executive (A) an annual ski pass for Executive and his immediate family members
      at each of the Company’s resorts, (B) the use of up to 2 ski instructors when
      Executive or his immediate family members are at a Company ski resort; (C)
      lodging in the Company’s hotels (up to 2 rooms) and condominiums (up to a
      three-bedroom unit) for Executive and his immediate family members; and (D)
      up
      to $10,000 per year of discretionary spending at the Company’s properties for
      Executive’s personal use.

     

    1.6.  [Reserved].
      

     

    1.7.  Annual
      Incentive/Long-Term Incentive Program.
      Executive shall be entitled to participate in a short-term or long-term
      incentive compensation program established by the Company for its senior level
      executives generally. Payments under such programs shall depend upon achievement
      of certain business performance targets specified and approved annually in
      advance by the Board (or a Committee thereof) in its sole discretion;
provided,
      however, that Executive’s “target opportunity” under the annual bonus incentive
      program for each year shall be at least 80% of the Executive’s Base Salary, if
      the Company’s budget is fully achieved for such year. The parties hereto further
      agree to negotiate annually in good faith a sliding scale of varying payouts
      based on varying levels of performance. However, Executive acknowledges that
      the
      annual bonsuses shall depend upon achieving the specific business performance
      targets set in advance of each fiscal year by the Board in its sole discretion,
      or by the Committee acting in its stead. For fiscal year 2006 of the Company,
      Executive will be entitled to a pro rated bonus for five months, and such pro
      rated bonus shall be paid on the same basis as bonuses paid to other senior
      executives of the Company. For the avoidance of doubt, no bonus shall be
      guaranteed to the Executive. Executive’s short-term and long-term incentive
      compensation shall be paid to him in the same form and at the same times that
      such compensation is paid to the Company’s senior level executives generally.
      Executive specifically acknowledges that a portion of such incentive
      compensation may be deferred subject to subsequent year financial performance
      of
      the 

     


    
      
        
        

      

      
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    Company,
      if such a provision is consistent with the Company’s then-existing compensation
      program for other senior level executives.

     

    1.8.  Restricted
      Stock.
      Executive shall be entitled to receive, as of the Effective Date, 30,000
      restricted shares of the Company’s common stock, $.01 par value (the “Restricted
      Stock”). The certificates representing the Restricted Stock shall be retained by
      the Company until such shares have vested. Except as provided in Sections 5
      and
      6 below, Executive’s right to such shares shall vest in 36 equal monthly
      installments over 3 years, beginning on the first monthly anniversary of the
      Effective Date. Prior to vesting, Executive shall be entitled to vote the shares
      of Restricted Stock and to be credited with any dividends attributable to such
      shares; provided,
      however, that no payment of such dividends shall be made unless and until,
      and
      only to the extent that, the related shares are vested. Upon termination of
      the
      Employment Term for any reason, that portion of the Restricted Stock that is
      not
      vested (after giving effect to any acceleration of vesting pursuant to Sections
      5 and 6) shall be forfeited by Executive. Executive will be eligible to receive
      additional grants of restricted stock, as determined by the Board or
      Compensation Committee from time to time.

     

    1.9.  Share
      Appreciation Rights.
      Executive shall receive, as of the Effective Date, share appreciation rights
      with respect to 300,000 shares of the Company’s common stock (“SARs”) pursuant
      to the Company’s 2002 Long Term Incentive and Share Award Plan (the “Plan”). The
      exercise price of the SARs will be equal to the fair market value per share
      of
      the Company common stock on the date of grant, as determined under the Plan.
      Except as provided in Sections 5 and 6 below, the SARs shall vest and become
      exercisable in 36 equal monthly installments over 3 years, beginning on the
      first monthly anniversary of the Effective Date. Upon exercise, the SARs will
      be
      settled with shares of Company common stock. Upon termination of the Employment
      Term for any reason, unvested SARs (after giving effect to any acceleration
      of
      vesting pursuant to Sections 5 and 6) shall expire and be forfeited. The SARs
      shall have a 10 year term; provided,
      however, that in the event of earlier termination of the Employment Term, the
      SARs shall expire 90 days after the date of such termination if such termination
      is pursuant to Sections 5.3 or 5.6, and shall expire nine months after the
      date
      of such termination if such termination is for any other reason. Subject to
      compliance with Section 409A of the Internal Revenue Code of 1986, as amended
      (the “Code”), Executive shall be credited with any dividends attributable to
      shares covered by the SARs other than regular dividends paid out of the
      Company’s current earnings in accordance with a multi-year dividend policy
      adopted and consistently applied by the Board (it being understood that, since
      the Company’s current policy is not to pay regular dividends, the payment of
      dividends under a new dividend policy that is intended in good faith to result
      in periodic dividends over a multi-year period shall be deemed regular
      dividends). Subject to compliance with Section 409A of the Code, payment of
      such
      credited dividends shall be made at the time of, and only if and to the extent
      that, the SARs become vested and are exercised. Executive will be eligible
      to
      receive additional grants of SARs, as determined by the Board or Compensation
      Committee from time to time.

     

    1.10.  Reimbursement
      of Expenses.
      Executive shall be reimbursed for customary travel, entertainment and other
      out-of-pocket expenses reasonably incurred by him on behalf of the Company
      in
      the performance of his duties hereunder, which reimbursement shall be made
      in
      accordance with the Company’s normal reimbursement policies.

     


    
      
        
        

      

      
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    2.  Confidential
      Information.
      Executive recognizes and acknowledges that, by reason of his employment by
      and
      service to the Company before, during and, if applicable, after the Employment
      Term, he has had and will continue to have access to certain confidential and
      proprietary information relating to the Company’s business, which may include,
      but is not limited to, trade secrets, trade “know-how”, customer information,
      supplier information, cost and pricing information, marketing and sales
      techniques, strategies and programs, computer programs and software and
      financial information (collectively referred to as “Confidential Information”).
      Executive acknowledges that such Confidential Information is a valuable and
      unique asset of the Company and Executive covenants that he will not at any
      time
      during the course of his employment use any Confidential Information or divulge
      or disclose any Confidential Information to any person, firm or corporation
      except in connection with Executive’s good faith belief as to the proper
      performance of his duties for the Company. Executive also covenants that, at
      any
      time after the termination of his employment, he will not directly or indirectly
      use any Confidential Information for any purpose or divulge or disclose any
      Confidential Information to any person, firm or corporation, unless such
      information is in the public domain through no fault of Executive or except
      when
      required to do so by a court of law, by any governmental agency having
      supervisory authority over the business of the Company or over Executive or
      by
      any administrative or legislative body (including a committee thereof) with
      apparent jurisdiction to order him to divulge, disclose or make accessible
      such
      information, in which case Executive will inform the Company in writing promptly
      of such required disclosure.

     

    3.  Non-Competition,
      Non-Solicitation and Non-Disparagement.

     

    (a)  In
      consideration for the agreements by the Company set forth in Sections 5.4,
      5.5
      and 6, during his employment by the Company and for a period of two years
      thereafter, Executive will not, except with the prior written consent of the
      Board, directly or indirectly own, manage, operate, join, control, finance
      or
      participate in the ownership, management, operation, control or financing of,
      or
      be connected as an officer, director, employee, partner, principal, agent,
      representative, consultant or otherwise with, or use or permit his name to
      be
      used in connection with, any business or enterprise that is engaged in a
“Competing Enterprise,” which is defined as an entity whose operations are
      conducted within the ski industry in North America or in the real estate
      development, lodging or hospitality industries in the State of Colorado.
      Notwithstanding the foregoing, Executive may participate, own, finance, manage,
      obtain employment or otherwise be connected with a larger regional, national
      or
      international business or enterprise (a “New Employer”) which owns or operates a
      Competing Enterprise as a brand, branch, division, subsidiary or affiliate
      provided that (i) the Competing Enterprise accounts for less than 10% of the
      New
      Employer’s annual revenues and annual net income on both a historical or pro
      forma basis for the New Employer’s most recently completed fiscal year, and (ii)
      Executive’s duties for the New Employer are not primarily related to the conduct
      of such Competing Enterprise.

     

    (b)  The
      foregoing restrictions shall not be construed to prohibit the ownership by
      Executive of less than five percent (5%) of any class of securities of any
      corporation which is engaged in any of the foregoing businesses having a class
      of securities registered pursuant to the Securities Exchange Act of 1934 (the
      “Exchange Act”), provided that such ownership represents a passive investment
      and that neither Executive nor any group of persons including Executive in
      any
      way, either directly or indirectly, manages or exercises control of any such
      corporation, 

     


    
      
        
        

      

      
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    guarantees
      any of its financial obligations, otherwise takes any part in its business
      (other than exercising his rights as a shareholder), or seeks to do any of
      the
      foregoing.

     

    (c)  In
      consideration for the agreements by the Company set forth in Sections 5.4,
      5.5
      and 6, Executive further covenants and agrees that, during his employment by
      the
      Company and for the period of two years thereafter, Executive will not solicit
      for another business or enterprise any person who is a managerial or higher
      level employee of the Company at the time of Executive’s
      termination.

     

    (d)  During
      Executive’s employment and for a period of five years thereafter, Executive
      agrees that he shall not make any public statements disparaging of the Company
      or its subsidiaries, the Board, or the officers, directors, stockholders, or
      employees of the Company or its subsidiaries. The Company shall similarly not
      disparage Executive following such termination. Notwithstanding the foregoing,
      the parties may respond truthfully to inquiries from governmental agencies
      or
      from prospective employers of Executive. Similarly, nothing in this provision
      is
      intended to prevent either party from seeking to enforce the provisions of
      this
      Agreement through appropriate proceedings.

     

    4.  Equitable
      Relief.

     

    (a)  Executive
      acknowledges and agrees that the restrictions contained in Sections 2 and 3
      are
      reasonable and necessary to protect and preserve the legitimate interests,
      properties, goodwill and business of the Company, that the Company would not
      have entered into this Agreement in the absence of such restrictions and that
      irreparable injury will be suffered by the Company should Executive breach
      any
      of the provisions of those Sections. Executive represents and acknowledges
      that
      (i) he has been advised by the Company to consult his own legal counsel in
      respect of this Agreement, and (ii) that he has had full opportunity, prior
      to
      execution of this Agreement, to review thoroughly this Agreement with his
      counsel.

     

    (b)  Executive
      further acknowledges and agrees that a breach of any of the restrictions in
      Sections 2 and 3 cannot be adequately compensated by monetary damages. Executive
      agrees that the Company shall be entitled to preliminary and permanent
      injunctive relief, without the necessity of proving actual damages, as well
      as
      an equitable accounting of all earnings, profits and other benefits arising
      from
      any violation of Sections 2 or 3 hereof, which rights shall be cumulative and
      in
      addition to any other rights or remedies to which the Company may be entitled.
      In the event that any of the provisions of Sections 2 or 3 hereof should ever
      be
      adjudicated to exceed the time, geographic, service, or other limitations
      permitted by applicable law in any jurisdiction, it is the intention of the
      parties that the provision shall be amended to the extent of the maximum time,
      geographic, service, or other limitations permitted by applicable law, that
      such
      amendment shall apply only within the jurisdiction of the court that made such
      adjudication and that the provision otherwise be enforced to the maximum extent
      permitted by law.

     

    5.  Termination.
      The
      Employment Term shall terminate upon the occurrence of any one of the following
      events:

     

    5.1.  Disability.
      The
      Company may terminate the Employment Term if Executive is unable substantially
      to perform his duties and responsibilities hereunder to the full extent


     


    
      
        
        

      

      
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    required
      by the Board by reason of illness, injury or incapacity for six consecutive
      months, or for more than nine months in the aggregate during any period of
      12
      calendar months (a “Disability”); provided,
      however, that the Company shall continue to pay Executive his Base Salary until
      the Company acts to terminate the Employment Term and Executive shall be
      entitled to all Restricted Stock and SARs that are vested as of the date of
      such
      termination. In addition, in the event Executive executes a written release
      in
      connection with such termination (such release to be effective only if the
      Company executes such release) substantially in the form attached hereto as
      Annex I (the “Release”),
      Executive shall be entitled to receive (i) upon the achievement of the Company’s
      performance targets for such year, a pro rata portion of the incentive
      compensation Executive would have received under the plans described in Section
      1.7 for the year in which such termination occurred, which amounts shall be
      payable in accordance with the terms of the applicable plan, (ii) all deferred
      incentive compensation earned by Executive with respect to prior years, which
      amounts shall be payable in accordance with the terms of the applicable plan,
      (iii) all amounts (including accrued vacation pay but excluding severance
      compensation) to which Executive is then entitled upon termination of employment
      under applicable plans and programs of the Company then in effect, and (iv)
      all
      other amounts then due and payable to Executive pursuant to the terms of this
      Agreement with respect to services rendered prior to termination of employment.
      In addition, if Executive executes the Release, all unvested shares of
      Restricted Stock and SARs (including grants of restricted stock, options, SARs
      or other equity incentives made subsequent to the Effective Date) shall
      automatically become 100% vested upon termination of the Employment Term
      pursuant to this Section 5.1. The Company shall have no further liability or
      obligation to Executive for compensation under this Agreement. In the event
      of
      any dispute under this Section 5.1 and to the extent determined by the Board
      to
      be job-related and consistent with business necessity, Executive shall submit
      to
      a physical examination by a licensed physician selected by the Board and
      approved by Executive, such approval not to be unreasonably
      withheld.

     

    5.2.  Death.
      The
      Employment Term shall terminate in the event of Executive’s death. In such
      event, the Company shall pay to Executive’s executors, legal representatives or
      administrators, as applicable, an amount equal to the installment of his Base
      Salary set forth in Section 1.4 hereof for the month in which he dies. In
      addition, Executive’s estate shall be entitled to receive (i) previously vested
      shares of Restricted Stock and SARs, (ii) upon the achievement of the Company’s
      performance targets for such year, a pro rata portion of the incentive
      compensation Executive would have received under the plans described in Section
      1.7 for the year in which such termination occurred, which amounts shall be
      payable in accordance with the terms of the applicable plan, (iii) all deferred
      incentive compensation earned by Executive with respect to prior years, which
      amounts shall be payable in accordance with the terms of the applicable plan,
      (iv) all amounts (including accrued vacation pay but excluding severance
      compensation) to which Executive is then entitled upon termination of employment
      under applicable plans and programs of the Company then in effect, and (v)
      all
      other amounts then due and payable to Executive pursuant to the terms of this
      Agreement with respect to services rendered prior to termination of employment.
      In addition, all unvested shares of Restricted Stock and SARs (including grants
      of restricted stock, options, SARs or other equity incentives made subsequent
      to
      the Effective Date) shall automatically become 100% vested upon termination
      of
      the Employment Term pursuant to this Section 5.2. The Company shall have no
      further liability or obligation under this Agreement to his executors, legal
      representatives, administrators, heirs or assigns or any other person claiming
      under or through him.

     


    
      
        
        

      

      
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    5.3.  Cause.
      The
      Company may terminate the Employment Term at any time for “cause” upon written
      notice to Executive, in which event all payments under this Agreement shall
      cease, except for (i) Base Salary to the extent already earned or accrued,
      (ii)
      previously vested shares of Restricted Stock and SARs, (iii) all amounts
      (including accrued vacation pay but excluding severance compensation) to which
      Executive is then entitled upon termination of employment under applicable
      plans
      and programs of the Company then in effect, and (iv) all other amounts then
      due
      and payable to Executive pursuant to the terms of this Agreement with respect
      to
      services rendered prior to termination of employment. For purposes of this
      Agreement, Executive’s employment may be terminated for “cause” if (i) Executive
      is convicted of a felony, (ii) in the reasonable determination of the Board,
      Executive has (x) committed an act of fraud, embezzlement, or theft in
      connection with Executive’s duties in the course of his employment with the
      Company, or (y) engaged in gross mismanagement or gross negligence in the course
      of his employment with the Company or (iii) Executive has breached his
      obligations under this Agreement, including inattention to or neglect of duties,
      and shall not have remedied such breach within 30 days after receiving written
      notice from the Board specifying the details thereof; provided,
      however, that in any case under clause (ii) or (iii), the act or failure to
      act
      by Executive is materially harmful to the reputation, goodwill or business
      position of the Company or its subsidiaries.

     

    5.4.  Termination
      Without Cause.

     

    (a)  The
      Company may terminate the Employment Term at any time without cause upon written
      notice to Executive; provided, however, that in the event that such notice
      is
      given, Executive shall be under no obligation to render any additional services
      to the Company and shall be allowed to seek other employment, subject to the
      restrictions set forth in Section 3(a). Upon any such termination, except as
      provided in Section 5.4(b) below, Executive shall be entitled to receive, as
      liquidated damages for the failure of the Company to continue to employ
      Executive, only the amount due to Executive under the Company’s then-current
      severance pay plan for employees and (i) Base Salary to the extent already
      earned or accrued, (ii) all deferred incentive compensation earned by Executive
      with respect to prior years, which amounts shall be payable in accordance with
      the terms of the applicable plans, (iii) previously vested shares of Restricted
      Stock and SARs, (iv) all amounts (including accrued vacation pay) to which
      Executive is then entitled upon termination of employment under applicable
      plans
      and programs of the Company then in effect, and (v) all other amounts then
      due
      and payable to Executive pursuant to the terms of this Agreement with respect
      to
      services rendered prior to termination of employment. The Company shall have
      no
      further liability or obligation to Executive for compensation under this
      Agreement.

     

    (b)  Notwithstanding
      the foregoing, upon such termination, in the event that Executive executes
      the
      Release, Executive shall be entitled to receive, in lieu of the payments
      described in subsection (a) hereof, which Executive agrees to waive, as
      liquidated damages for the failure of the Company to continue to employ
      Executive, (i) two years’ of Executive’s Base Salary in accordance with Section
      1.4 or, if greater, for the balance of the current Employment Term (without
      regard to Executive’s removal), payable in accordance with the Company’s normal
      payroll practices over such period, provided that, to the extent required by
      Section 409A of the Code, amounts otherwise payable under this clause (i) within
      six months after the Executive’s termination of employment shall be deferred to
      and paid on the day following the six 

     


    
      
        
        

      

      
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    month
      anniversary of such termination of employment, (ii) previously vested shares
      of
      Restricted Stock and SARs, (iii) upon the achievement of the Company’s
      performance targets for such year, a pro rata portion of the incentive
      compensation Executive would have received under the plans described in Section
      1.7 for the year in which such termination occurred, which amounts shall be
      payable in accordance with the terms of the applicable plan, (iv) all deferred
      incentive compensation earned by Executive with respect to prior years, which
      amounts shall be payable in accordance with the terms of the applicable plan,
      (v) all amounts (including accrued vacation pay but excluding severance
      compensation) to which Executive is then entitled upon termination of employment
      under applicable plans and programs of the Company then in effect, and (vi)
      all
      other amounts then due and payable to Executive pursuant to the terms of this
      Agreement with respect to services rendered prior to termination of employment.
      In addition, if Executive executes the Release, all unvested shares of
      Restricted Stock and SARs (including grants of restricted stock, options, SARs
      or other equity incentives made subsequent to the Effective Date) shall
      automatically become 100% vested upon termination of the Employment Term
      pursuant to this Section 5.4. The Company shall have no further liability or
      obligation to Executive for compensation under this Agreement.

     

    5.5.  Constructive
      Termination Without Cause.

     

    (a)  Resignation
      by Executive for good reason (“Constructive Termination Without Cause”) shall
      mean a termination of Executive’s employment at his initiative following the
      occurrence, without Executive’s written consent, of (i) a material diminution in
      Executive’s duties, responsibilities, authority, or status (including the
      appointment of an executive Chairman of the Board), (ii) a reduction in
      Executive’s Base Salary below $815,000 per year or such higher amount as
      increased by the Board in future years or failure to pay Executive’s bonus or
      incentive compensation in violation of Section 1.7, (iii) a failure to convey,
      within 10 business days after written request of Executive, any vested
      Restricted Shares or any shares owed to Executive upon the exercise of any
      SARs,
      (iv) the assignment to Executive of duties or obligations despite his stated
      written objection to the Board which would require Executive to violate any
      law,
      or interpretation thereof, of any governmental body of the United States or
      the
      state of Colorado, (v) an involuntary relocation of Executive’s office outside
      of the Denver metropolitan area or away from the Company’s principal executive
      offices, (vi) a failure of the Company to comply with any of the material terms
      of this Agreement, or (vii) the occurrence of a Change of Control (as defined
      below).

     

    (b)  In
      the
      event of a Constructive Termination Without Cause, if Executive executes the
      Release, Executive shall be entitled to receive (i) two years’ of Executive’s
      Base Salary in accordance with Section 1.4 or, if greater, for the balance
      of
      the current Employment Term (without regard to Executive’s removal), payable in
      accordance with the Company’s normal payroll practices over such period,
      provided that, to the extent required by Section 409A of the Code, amounts
      otherwise payable under this clause (i) within six months after the Executive’s
      termination of employment shall be deferred to and paid on the day following
      the
      six month anniversary of such termination of employment, (ii) previously vested
      shares of Restricted Stock and SARs, (iii) upon the achievement of the Company’s
      performance targets for such year, a pro rata portion of the incentive
      compensation Executive would have received under the plans described in Section
      1.7 for the year in which such termination occurred, which amounts shall be
      payable in accordance with the terms of the applicable plan, (iv) all deferred
      incentive compen-

     


    
      
        
        

      

      
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    sation
      earned by Executive with respect to prior years, which amounts shall be payable
      in accordance with the terms of the applicable plan, (v) all amounts (including
      accrued vacation pay but excluding severance compensation) to which Executive
      is
      then entitled upon termination of employment under applicable plans and programs
      of the Company then in effect, and (vi) all other amounts then due and payable
      to Executive pursuant to the terms of this Agreement with respect to services
      rendered prior to termination of employment. In addition, if Executive executes
      the Release, all unvested shares of Restricted Stock and SARs (including grants
      of restricted stock, options, SARs or other equity incentives made subsequent
      to
      the Effective Date) shall automatically become 100% vested upon termination
      of
      the Employment Term pursuant to this Section 5.5. In the event Executive refuses
      to execute the Release, he shall receive, as liquidated damages for the failure
      of the Company to continue to employ Executive, only the amount due to Executive
      under the Company’s then current severance pay plan for employees and (i) Base
      Salary to the extent already earned or accrued, (ii) all deferred incentive
      compensation earned by Executive with respect to prior years, which amounts
      shall be payable in accordance with the terms of the applicable plans, (iii)
      previously vested shares of Restricted Stock and SARs, (iv) all amounts
      (including accrued vacation pay) to which Executive is then entitled upon
      termination of employment under applicable plans and programs of the Company
      then in effect, and (v) all other amounts then due and payable to Executive
      pursuant to the terms of this Agreement with respect to services rendered prior
      to termination of employment. The Company shall have no further liability or
      obligation to Executive for compensation under this Agreement.

     

    (c)  Prior
      to
      resigning under this Section, Executive shall give written notice to the Board
      and offer a 30-day period for the Company to cure. If, and only if, the Company
      cures an issue raised by the Executive under this Section, and Executive again
      feels it necessary to resign under this Section, Executive shall again given
      written notice to the Board and offer a new 30-day period for the Company to
      cure. If no cure has been effected by the end of the applicable cure period,
      Executive may resign immediately in accordance with the provisions of
      subsections (a) and (b) above. After two such cure periods, only written notice
      must be given but no cure period will be required.

     

    5.6.  Voluntary
      Termination.
      Executive may voluntarily terminate the Employment Term upon 30 days’ prior
      written notice for any reason. In such event, Executive shall be entitled only
      to (i) Base Salary to the extent already earned or accrued, (ii) previously
      vested shares of Restricted Stock and SARs, (iii) all amounts (including accrued
      vacation pay but excluding severance compensation) to which Executive is then
      entitled upon termination of employment under applicable plans and programs
      of
      the Company then in effect, and (iv) all other amounts then due and payable
      to
      Executive pursuant to the terms of this Agreement with respect to services
      rendered prior to termination of employment. The Company shall have no further
      liability or obligation to Executive for compensation under this Agreement.
      A
      voluntary termination under this Section 5.6 shall not be deemed a breach of
      this Agreement.

     

    6.  Acceleration
      of Vesting Upon a Change of Control.
      In the
      event of a Change of Control of the Company, all of Executive’s rights under the
      SARs and to the Restricted Stock shall immediately vest. For purposes hereof,
      “Change of Control” means
      an
      event or series of events by which:

     


    
      
        
        

      

      
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    (I)
       any
      “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
      Securities Exchange Act of 1934, 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 Securities
      Exchange Act of 1934), 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


     

    (II) during
      any period of 24 consecutive months, 35% of the members of the Board or other
      equivalent governing body of the Company cease to be composed of individuals
      (i)
      who were members of that Board or equivalent governing body on the first day
      of
      such period, (ii) whose election or nomination to that board or equivalent
      governing body was approved by individuals referred to in clause
      (i)
      above
      constituting at the time of such election or nomination at least a majority
      of
      that Board or equivalent governing body, or (iii) whose election or nomination
      to that Board or other equivalent governing body was approved by individuals
      referred to in clauses
      (i)
      and
(ii)
      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
      (ii)
      and
clause
      (iii),
      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).

     

    7.  Survivorship.
      The
      respective rights and obligations of the parties hereunder shall survive any
      termination of Executive’s employment and the Employment Term to the extent
      necessary to the intended preservation of such rights and
      obligations.

     

    8.  No
      Mitigation.
      Executive shall not be required to mitigate the amount of any payment or benefit
      provided for in this Agreement by seeking other employment or otherwise and
      there shall be no offset against amounts due Executive under this Agreement
      on
      account of any remuneration attributable to any subsequent employment that
      he
      may obtain. All payments to be made by the Company to Executive hereunder shall
      be made without any offset or deduction for any amounts owed by Executive to
      the
      Company.

     

    9.  Arbitration;
      Expenses.
      

     

    (a)  In
      the
      event of any dispute under the provisions of this Agreement other than a dispute
      in which the primary relief sought is an equitable remedy such as an injunction,
      the parties shall be required to have the dispute, controversy or claim settled
      by arbitration in the City of New York, New York in accordance with the National
      Rules for the Resolution of Employment Disputes then in effect of the American
      Arbitration Association, before a panel of three arbitrators, two of whom shall
      be selected by the Company and Executive, respectively, and the third of whom
      shall be selected by the other two arbitrators. Any award entered by the
      arbitrators shall be final, binding and nonappealable and judgment may be
      entered thereon by either 

     


    
      
        
        

      

      
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    party
      in
      accordance with applicable law in any court of competent jurisdiction. This
      arbitration provision shall be specifically enforceable. The arbitrators shall
      have no authority to modify any provision of this Agreement or to award a remedy
      for a dispute involving this Agreement other than a benefit specifically
      provided under or by virtue of the Agreement. The Company shall be responsible
      for all of its own legal fees and other expenses relating to such arbitration.
      The fees of the American Arbitration Association and the legal fees and expenses
      of Executive relating to such arbitration shall be borne in the manner
      determined by order of the arbitrators. 

     

    (b)  The
      Company shall, upon receipt of an invoice from Executive, reimburse Executive
      for all reasonable legal fees and expenses incurred by Executive in connection
      with the negotiation and execution of this Agreement.

     

    10.  Notices.
      All
      notices and other communications required or permitted hereunder or necessary
      or
      convenient in connection herewith shall be in writing and shall be deemed to
      have been given when hand delivered or mailed by registered or certified mail,
      as follows (provided that notice of change of address shall be deemed given
      only
      when received):

     

    If
      to the
      Company, to:

     

    Vail
      Resorts, Inc.

    P.O.
      Box
      7

    Vail,
      CO
      81658

    Attention:
      General Counsel

     

    If
      to
      Executive, to:

     

    Robert
      A.
      Katz

    c/o
      Vail
      Resorts, Inc. 

    P.O.
      Box
      7 

    Vail,
      CO
      81658

     

    or
      to
      such other names or addresses as the Company or Executive, as the case may
      be,
      shall designate by notice to each other person entitled to receive notices
      in
      the manner specified in this Section.

     

    11.  Contents
      of Agreement; Amendment and Assignment.

     

    (a)  This
      Agreement supersedes all prior agreements and sets forth the entire
      understanding between the parties hereto with respect to the subject matter
      hereof and cannot be changed, modified, extended or terminated except as
      provided herein or upon written amendment approved by the Company and executed
      on its behalf by a duly authorized officer and by Executive.

     

    (b)  All
      of
      the terms and provisions of this Agreement shall be binding upon and inure
      to
      the benefit of and be enforceable by the respective heirs, executors,
      administrators, legal representatives, successors and assigns of the parties
      hereto, except that the duties and responsibilities of Executive hereunder
      are
      of a personal nature and shall not be assignable or delegatable in whole or
      in
      part by Executive. The Company shall require any successor (whether


     


    
      
        
        

      

      
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    direct
      or
      indirect, by purchase, merger, consolidation, reorganization or otherwise)
      to
      all or substantially all of the business or assets of the Company, by agreement
      in form and substance satisfactory to Executive, expressly to assume and agree
      to perform this Agreement in the same manner and to the extent the Company
      would
      be required to perform if no such succession had taken place, and upon request
      by the Company Executive shall acknowledge, by agreement in form and substance
      reasonably acceptable to such successor, that this Agreement may be enforced
      against Executive by such successor.

     

    12.  Severability.
      If any
      provision of this Agreement or application thereof to anyone or under any
      circumstances is adjudicated to be invalid or unenforceable in any jurisdiction,
      such invalidity or unenforceability shall not affect any other provision or
      application of this Agreement which can be given effect without the invalid
      or
      unenforceable provision or application and shall not invalidate or render
      unenforceable such provision or application in any other jurisdiction. If any
      provision is held void, invalid or unenforceable with respect to particular
      circumstances, it shall nevertheless remain in full force and effect in all
      other circumstances.

     

    13.  Remedies
      Cumulative; No Waiver.
      No
      remedy conferred upon a party by this Agreement is intended to be exclusive
      of
      any other remedy, and each and every such remedy shall be cumulative and shall
      be in addition to any other remedy given hereunder or now or hereafter existing
      at law or in equity. No delay or omission by a party in exercising any right,
      remedy or power hereunder or existing at law or in equity shall be construed
      as
      a waiver thereof, and any such right, remedy or power may be exercised by such
      party from time to time and as often as may be deemed expedient or necessary
      by
      such party in its sole discretion.

     

    14.  Beneficiaries/References.
      Executive shall be entitled, to the extent permitted under any applicable law,
      to select and change a beneficiary or beneficiaries to receive any compensation
      or benefit payable hereunder following Executive’s death by giving the Company
      written notice thereof. In the event of Executive’s death or a judicial
      determination of his incompetence, references in this Agreement to Executive
      shall be deemed, where appropriate, to refer to his beneficiary, estate or
      other
      legal representative.

     

    15.  Miscellaneous.
      All
      section headings used in this Agreement are for convenience only. This Agreement
      may be executed in counterparts, each of which is an original. It shall not
      be
      necessary in making proof of this Agreement or any counterpart hereof to produce
      or account for any of the other counterparts.

     

    16.  Withholding.
      The
      Company may withhold from any payments under this Agreement all federal, state
      and local taxes as the Company is required to withhold pursuant to any law
      or
      governmental rule or regulation. Executive shall bear all expense of, and be
      solely responsible for, all federal, state and local taxes due with respect
      to
      any payment received hereunder.

     

    17.  Indemnification
      and Insurance.
      Executive shall be indemnified with respect to his services hereunder to the
      full extent provided in the Company’s by-laws, and the Company agrees during the
      Employment Term to maintain directors’ and officers’ liability insurance with
      coverage and other terms that are customary for similarly situated
      companies.

     


    
      
        
        

      

      
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    18.  Section
      409A.
      It is
      intended that this Agreement will comply with Section 409A of the Code (and
      any
      regulations and guidelines issued thereunder) to the extent the Agreement is
      subject thereto, and the Agreement shall be interpreted on a basis consistent
      with such intent. If an amendment of the Agreement is necessary in order for
      it
      to comply with Section 409A, the parties hereto will negotiate in good faith
      to
      amend the Agreement in a manner that preserves the original intent of the
      parties to the extent reasonably possible.

     

    19.  Excise
      Tax.

     

    (a)  Anything
      in this Agreement to the contrary notwithstanding, in the event it shall
      be determined
      that any payment, award, benefit or distribution (including, without limitation,
      the acceleration of any payment, award, distribution or benefit), by the Company
      or its subsidiaries to or for the benefit of the Executive (whether pursuant
      to
      the terms of this Agreement or otherwise, but determined without regard to
      any
      additional payments required under this Section 19) (a “Payment”) would be
      subject to the excise tax imposed by Section 4999 of the Code or any
      corresponding provisions of state or local tax law, or any interest or penalties
      are incurred by the Executive with respect to such excise tax (such excise
      tax,
      together with any such interest and penalties, are hereinafter collectively
      referred to as the “Excise Tax”), then the Executive shall be entitled to
      receive an additional payment (a “Gross-Up Payment”) in an amount such that
      after payment by the Executive of all taxes (including any Excise Tax, income
      tax or employment tax) imposed upon the Gross-Up Payment and any interest or
      penalties imposed with respect to such taxes, the Executive retains from the
      Gross-Up Payment an amount equal to the excess, if any, of (i) the Excise Tax
      imposed upon the Payments, and (ii) the Excise Tax, if any, that would have
      been
      imposed on the Payments if the Executive had not served as a nonemployee
      director of the Company prior to the Effective Date (and, therefore, the
      Executive’s nonemployee director compensation had not been taken into account in
      the Excise Tax computation). The payment of a Gross-Up Payment under this
      Section 19(a) shall not be conditioned upon the Executive’s termination of
      employment. Notwithstanding the foregoing provisions of this Section 19, if
      it shall be determined that the Executive is entitled to a Gross-Up Payment,
      but
      that the portion of the Payments that would be treated as “parachute payments”
under Section 280G of the Code does not exceed the Safe Harbor Amount (as
      defined in the following sentence) by more than $100,000, then no Gross-Up
      Payment shall be made to the Executive and the amounts payable under this
      Agreement shall be reduced so that the Payments, in the aggregate, are reduced
      to the Safe Harbor Amount. The “Safe Harbor Amount” is the greatest amount of
      payments in the nature of compensation that are contingent on a Change in
      Control for purposes of Section 280G of the Code that could be paid to the
      Executive without giving rise to any Excise Tax. The reduction of the amounts
      payable hereunder, if applicable, shall be made by reducing the cash payments
      under Section 5. For purposes of reducing the payments to the Safe Harbor
      Amount, only amounts payable under this Agreement (and no other Payments) shall
      be reduced. If the reduction of the amounts payable under this Agreement would
      not result in a reduction of the Payments to the Safe Harbor Amount, no amounts
      payable under this Agreement shall be reduced pursuant to this
      Section 19(a).

     

    (b)  Subject
      to the provisions of Section 19(c), all determinations required to be made
      under
      this Section 19, including the determination of whether a Gross-Up Payment
      is
      required and of the amount of any such Gross-up Payment, shall be made by the
      Company's independent auditors or such other accounting firm agreed by the
      parties hereto (the “Accounting 

     


    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    


    Firm”),
      which shall provide detailed supporting calculations to the Company within
      15
      business days after the receipt of notice from the Company that the Executive
      has received a Payment, or such earlier time as is requested by the Company,
      provided that any determination that an Excise Tax is payable by the Executive
      shall be made on the basis of substantial authority. The Company will promptly
      provide copies of such supporting calculations to the Executive. The initial
      Gross-Up Payment, if any, as determined pursuant to this Section 19(b), shall
      be
      paid to the Executive (or for the benefit of the Executive to the extent of
      the
      Company’s withholding obligation with respect to applicable taxes) no later than
      the later of (i) the due date for the payment of any Excise Tax, and
      (ii) the receipt of the Accounting Firm’s determination. If the Accounting
      Firm determines that no Excise Tax is payable by the Executive, it shall furnish
      the Company with a written opinion that substantial authority exists for the
      Executive not to report any Excise Tax on his Federal income tax return and,
      as
      a result, the Company is not required to withhold Excise Tax from payments
      to
      the Executive. The Company will promptly provide a copy of any such opinion
      to
      the Executive. Any determination by the Accounting Firm meeting the requirements
      of this Section 19(b) shall be binding upon the Company and the Executive.
      As a
      result of the uncertainty in the application of Section 4999 of the Code at
      the time of the initial determination by the Accounting Firm hereunder, it
      is
      possible that Gross-Up Payments which will not have been made by the Company
      should have been made (“Underpayment”), consistent with the calculations
      required to be made hereunder. In the event that the Company exhausts its
      remedies pursuant to Section 19(c) and the Executive thereafter is required
      to
      make a payment of Excise Tax, the Accounting Firm shall determine the amount
      of
      the Underpayment, if any, that has occurred and any such Underpayment shall
      be
      promptly paid by the Company to or for the benefit of the Executive. The fees
      and disbursements of the Accounting Firm shall be paid by the
      Company.

     

    (c)  The
      Executive shall notify
      the Company in writing of any claim by the Internal Revenue Service that, if
      successful, would require the payment by the Company of a Gross-Up Payment.
      Such
      notification shall be given as soon as practicable but not later than ten
      business days after the Executive receives written notice of such claim and
      shall apprise the Company of the nature of such claim and the date on which
      such
      Claim is requested to be paid. The Executive shall not pay such claim prior
      to
      the expiration of the 30-day period following the date on which it gives such
      notice to the Company (or such shorter period ending on the date that any
      payment of taxes with respect to such claim is due). If the Company notifies
      the
      Executive in writing prior to the expiration of such period that it desires
      to
      contest such claim, the Executive shall:

     

    (i)
      give
      the Company any information reasonably requested by the Company relating to
      such
      claim,

     

    (ii)
      take
      such action in connection with contesting such claim as the Company shall
      reasonably request in writing from time to time, including, without limitation,
      accepting legal representation with respect to such claim by an attorney
      reasonably selected by the Company,

     

    (iii)
      cooperate with the Company in good faith in order effectively to contest such
      claim, and

     

    (iv)
      permit the Company to participate in any proceedings relating to such claim;
      

     


    
      
        
        

      

      
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    provided,
      however,
      that
      the Company shall bear and pay directly all costs and expenses (including
      additional interest and penalties) incurred in connection with such contest
      and
      shall indemnify and hold the Executive harmless, on an after-tax basis, for
      any
      Excise Tax, income tax or employment tax, including interest and penalties
      with
      respect thereto, imposed as a result of such representation and payment of
      costs
      and expenses. Without limitation on the foregoing provisions of this
      Section 19(c), the Company shall control all proceedings taken in
      connection with such contest and, at its sole option, may pursue or forgo any
      and all administrative appeals, proceedings, hearings and conferences with
      the
      taxing authority in respect of such claim and may, at its sole option, either
      direct the Executive to pay the tax claimed and sue for a refund or contest
      the
      claim in any permissible manner, and the Executive agrees to prosecute such
      contest to a
      determination before any administrative tribunal, in a court of initial
      jurisdiction and in one or more appellate courts, as the Company shall
      determine; provided,
      however,
      that if
      the Company directs the Executive to pay such claim and sue for a refund, the
      Company shall advance the amount of such payment to the Executive on an
      interest-free basis and shall indemnify and hold the Executive harmless, on
      an
      after-tax basis, from any Excise Tax, income tax or employment tax, including
      interest or penalties with respect thereto, imposed with respect to such advance
      (except that if such a loan would not be permitted under applicable law, the
      Company may not direct the Executive to pay the claim and sue for a refund);
      and
further provided
      that any
      extension of the statute of limitations relating to the payment of taxes for
      the
      taxable year of the Executive with respect to which such contested amount is
      claimed to be due is limited solely to such contested amount. Furthermore,
      the
      Company’s control of the contest shall be limited to issues with respect to
      which a Gross-Up Payment would be payable hereunder and the Executive shall
      be
      entitled to settle or contest, as the case may be, any other issue raised by
      the
      Internal Revenue Service or any other taxing authority.

     

    (d)  If,
      after
      the receipt by the Executive of an amount advanced by the Company pursuant
      to
      Section 19(c), the Executive becomes entitled to receive any refund with respect
      to such claim, the Executive shall (subject to the Company’s complying with the
      requirements of Section 19(c)) promptly pay to the Company the amount of
      such refund (together with any interest paid or credited thereon after taxes
      applicable thereto). If, after the receipt by the Executive of an amount
      advanced by the Company pursuant to Section 19(c), a determination is made
      that the Executive shall not be entitled to any refund with respect to such
      claim and the Company does not notify the Executive in writing of its intent
      to
      contest such denial of refund prior to the expiration of 30 days after such
      determination, then such advance shall be forgiven and shall not be required
      to
      be repaid and the amount of such advance shall offset, to the extent thereof,
      the amount of the Gross-Up Payment required to be paid.

     

    20.  Governing
      Law.
      This
      Agreement shall be governed by and interpreted under the laws of the State
      of
      New York without giving effect to any conflict of laws provisions.

     


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed
      this Agreement as of the date first above written.

     

    


    
      	
              VAIL
                RESORTS, INC.

               

               

               

              By:  
                /s/ Martha D. Rehm            

                      
                Martha
                D. Rehm

                      
                Sr.
                Vice President and

                      
                General
                Counsel

            	
              EXECUTIVE

               

               

               

              /s/
                Robert A. Katz            

              Robert
                A. Katz

            


    

    



    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    


    


    MUTUAL
      RELEASE

     

    This
      mutual release (this “Release”) is entered into as of this ____ day of ______,
      ____ (the “Release Date”) by Robert A. Katz (“Katz”), on the one hand and Vail
      Resorts, Inc. (“VRI”) on the other hand.

     

    1. Reference
      is hereby made to the employment agreement dated February 28, 2006 (the
“Employment Agreement”) by the parties hereto setting forth the agreements among
      the parties regarding the termination of the employment relationship between
      Katz and VRI. Capitalized terms used but not defined herein have the meanings
      ascribed to them in the Employment Agreement.

     

    2. Katz,
      for
      himself, his wife, heirs, executors, administrators, successors, and assigns,
      hereby releases and discharges VRI and its respective direct and indirect
      parents and subsidiaries, and other affiliated companies, and each of their
      respective past and present officers, directors, agents and employees, from
      any
      and all actions, causes of action, claims, demands, grievances, and complaints,
      known and unknown, which Katz or his wife, heirs, executors, administrators,
      successors, or assigns ever had or may have at any time through the Release
      Date. Katz acknowledges and agrees that this Release is intended to and does
      cover, but is not limited to, (i) any claim of employment discrimination of
      any
      kind whether based on a federal, state, or local statute or court decision,
      including the Age Discrimination in Employment Act with appropriate notice
      and
      recision periods observed; (ii) any claim, whether statutory, common law, or
      otherwise, arising out of the terms or conditions of Katz’s employment at VRI
      and/or Katz’s separation from VRI; enumeration of specific rights, claims, and
      causes of action being released shall not be construed to limit the general
      scope of this Release. It is the intent of the parties that by this Release
      Katz
      is giving up all rights, claims and causes of action occurring prior to the
      Release Date, whether or not any damage or injury therefrom has yet occurred.
      Katz accepts the risk of loss with respect to both undiscovered claims and
      with
      respect to claims for any harm hereafter suffered arising out of conduct,
      statements, performance or decisions occurring before the Release
      Date.

     

    3. VRI
      hereby releases and discharges Katz, his wife, heirs, executors, administrators,
      successors, and assigns, from any and all actions, causes of actions, claims,
      demands, grievances and complaints, known and unknown, which VRI ever had or
      may
      have at any time through the Release Date. VRI acknowledges and agrees that
      this
      Release is intended to and does cover, but is not limited to, (i) any claim,
      whether statutory, common law, or otherwise, arising out of the terms or
      conditions of Katz’s employment at VRI and/or Katz’s separation from VRI, and
      (ii) any claim for attorneys’ fees, costs, disbursements, or other like
      expenses. The enumeration of specific rights, claims, and causes of action
      being
      released shall not be construed to limit the general scope of this Release.
      It
      is the intent of the parties that by this Release VRI is giving up all of its
      respective rights, claims, and causes of action occurring prior to the Release
      Date, whether or not any damage or injury therefrom has yet occurred. VRI
      accepts the risk of loss with respect to both undiscovered claims and with
      respect to claims for any harm hereafter suffered arising out of conduct,
      statements, performance or decisions occurring before the Release
      Date.

     


    
      
        
        

      

      
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    4. This
      Release shall in no event (i) apply to any claim by either Katz or VRI arising
      from any breach by the other party of its obligations under the Employment
      Agreement occurring on or after the Release Date, (ii) waive Katz’s claim with
      respect to compensation or benefits earned or accrued prior to the Release
      Date
      to the extent such claim survives termination of Katz’s employment under the
      terms of the Employment Agreement, or (iii) waive Katz’s right to
      indemnification under the by-laws of the Company.

     

    5. This
      Mutual Release shall be effective as of the Release Date and only if executed
      by
      both parties.

     

    IN
      WITNESS WHEREOF, each party hereto, intending to be legally bound, has executed
      this Mutual Release on the date indicated below.

     

    


    
      	
               

               

               

               

              ______________________________________

              Robert
                A. Katz

               

               

              Date: 
                _______________________________________

            	
              VAIL
                RESORTS, INC.

               

               

               

              By: 
                ___________________________________________

               

               

               

              Date: 
                __________________________________________

            


    

    
 

     

     

     

     

    -18-