**Exhibit10.42**

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**PWRW&GDRAFT**

**12/21/01**

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**AMERICANSKIING COMPANY**

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**PHANTOMEQUITY AWARD AGREEMENT**

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

 

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

 

WHEREAS, the Company had agreed to provide Employee anincentive to commence employment with the Company by granting to Employee aphantom award entitling Employee to receive, under the terms and conditionsdescribed herein,      % of the phantom equity poolestablished by the Company and determined in accordance with Section 1 hereof(the “Pool”), subject to the restrictions hereinafter set forth, and hasauthorized the officer whose signature appears below to execute this Agreementon behalf of the Company.

 

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

 

1.                                       Grantof Award.

 

(a)                                  Subjectto the terms and conditions set forth herein this Agreement, the Company herebygrants to the Employee an award (the “Award”) equal to          %(the “Award Percentage”) of the Total Equity Pool Value (as defined in Section1 (b) below).  This grant of the Awardis irrevocable and unconditional, except that (i) the Award can be forfeited inaccordance with Section 2 of this Agreement, (ii) the Company’s obligationto make payment in respect of the Award is subject to the terms of Section 4hereof and is conditioned on the compliance by Employee with the withholdingobligations set forth in Section 5 hereof .

 

(b)                                 Thetotal value of the phantom equity pool (the “Total Equity Pool Value”) at anygiven 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 Committeein good faith and (B) the Total Pool Percentage determined in accordance withthe following chart:

 

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| **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 theCompany less the value of the outstanding debt of the Company.  The Total Enterprise Value shall equal thetotal purchase price paid for the Company (or, in the absence of an acquisitionof the Company, the total value of the Company determined by a qualifiedindependent third party) at the time of a Valuation Event as defined in Section3 below.  By way of example, if theTotal Enterprise Value of the Company is determined to be $500 million and theoutstanding amount of the debt of the Company is $350 million, the Total EquityValue would be $150 million.

 

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

 

2.                                       Vestingof Award.

 

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

 

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

 

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

 

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

 

(e)                                  Forpurposes of this Agreement and except as otherwise provided in an EmploymentAgreement, “Cause” shall have such meaning as is set forth in anyexisting employment agreement between the employee and the Company or in theabsence of such a definition shall mean (i) the Employee’s failure or refusalto satisfactorily perform or observe any of his duties, responsibilities orobligations to the Company, (ii) the Employee’s gross negligence in performinghis duties or any willful and intentional act of the Employee involvingmalfeasance, fraud, theft, misappropriation of funds, embezzlement ordishonesty affecting the Company; or (iii) the Employee’s conviction of, or aplea of guilty or nolo contendere to, an offense which is a felony in thejurisdiction involved or any lesser crime involving Company property.

 

(f)                                    Forpurposes of this Agreement and except as otherwise provided in an EmploymentAgreement, “Change in Control” shall mean the occurrence of any of thefollowing: (i)  The acquisition (other than from the Company) by any“Person” of fifty (50%) percent or more of the combined voting power of theCompany’s then outstanding voting securities, other than any Person holding fiftypercent or more of such combined voting power on the date hereof provided;however, that for purposes of this Plan, the parties hereby agree andacknowledge that Oak Hill Capital Partners L.P. and/or its affiliates as of theEffective Date of the Plan owns at least 50% of the combined voting power ofthe Company’s outstanding voting securities; (ii)  the individualswho were members of the Board (the “Incumbent Board”) during the previoustwelve (12) month period, cease for any reason to constitute at least a majorityof the Board; or (iii)  approval by stockholders of the Company of(a) a merger or consolidation involving the Company in which the stockholdersof the Company, immediately before such merger or consolidation do not, as aresult of such merger or consolidation, own, directly or indirectly, more thansixty percent (60%) of the combined voting power of the then outstanding votingsecurities of the corporation resulting from such merger or consolidation insubstantially the same proportion as their ownership of the combined votingpower of the securities of the Company outstanding immediately before suchmerger or consolidation or (b) a complete liquidation or dissolution of theCompany or an agreement for the sale or other disposition of all or substantiallyall of the assets of the Company.

 

(g)                                 Forpurposes of this Agreement, “Disability” shall have such meaning as isset forth in any existing employment agreement between the employee and theCompany or in the absence of such a definition shall have the meaning ascribedto such term under the Social Security Act.

 

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

 

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amount of any payments previously made to Employee in respect of theAward (the result being, the “Payment Amount”).  For purposes of this Agreement, Valuation Event shall mean any ofthe following: (i) a sale or disposition a significant Company operationor property as determined by the Board; (ii)  a merger, consolidationor similar event of the Company other than one (A) in which the Company is thesurviving entity or (B) where no Change in Control has occurred; (iii)  apublic offering of equity securities by the Company that yields net proceeds tothe Company in excess of $50 million; or (iv) a Change in Control.  Notwithstanding the foregoing, in the eventthat the Committee determines in good faith that payment of such amounts incash would have a material detrimental effect on the Company as determined by aunanimous vote of the Board or is prohibited under the terms of any legal orcontractual restriction to which the Company is subject, then the Company shallbe entitled to make all or any portion of such payments in the form ofnotes.   In the event the Board makesany of the payment in the form of notes, the Board will use all reasonableefforts to redeem the notes as soon as the redemption would not have a materialdetrimental effect on the Company.  Inthe event of a termination of the Employee’s employment, the Company shall havethe right, exercisable within 60 days thereafter, to cancel the Award inexchange for a payment equal to the Payment Amount as if a Valuation Event hadoccurred at the time of such termination.

 

4.                                       Reductionin Payment. Except as otherwise provided in an Employment Agreement, ifpayments made to Employee by the Company, including payments pursuant to theAward, are considered “excess parachute payments” within the meaning ofSection 280G of the Internal Revenue Code of 1986, as amended (the“Code”), then such Award payment due under this agreement will be reduced, butnot below zero, such that the sum of the payments to the Employee under theAward plus any other payments to the Employee by the Company shall be limitedto the greatest amount which may be paid to the Employee without causing a lossof deduction to the Company under Section 280G of the Code or an excise taxliability to the Employee under Section 4999 of the Code.

 

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

 

6.                                       Determinationsby Committee.  All determinationsand interpretations with respect to this Agreement shall be made by theCommittee in good faith and shall be binding on the parties hereto unless it isdetermined by a court of competent jurisdiction that such determination isarbitrary and capricious.

 

7.                                       EntireAgreement.  This constitutes theentire agreement between the parties with respect to the subject matterhereof.  It may not be modified orchanged except by written instrument executed by all parties.

 

8.                                       GoverningLaw.  This Agreement shall begoverned 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 dulyexecuted this Agreement as of the day and year first above written.

 
|   | AMERICAN SKIING COMPANY |
|--------|-------------------------|
|   |                    |
|   |                    |
|   | By:                     |   |   |
|   |                    | Name: |   |
|   |                    | Title: |   |
|   |                    |   |   |
|   |                    |   |   |
|   |                    | Employee |   |

 

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