Document:

exhibit10_4.htm

    
      

    

    Exhibit
10.4

     

    EXECUTIVE
EMPLOYMENT AGREEMENT

     

    This
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into
October 15, 2008 by and between VAIL HOLDINGS, INC., a Colorado corporation (the
“Company”), a wholly-owned subsidiary of VAIL RESORTS, INC., a Delaware
corporation (“VRI”), and John McD. Garnsey (“Executive”).

     

    The
parties hereto agree as follows:

     

    
      	
               
      

            	
              1.

            	
              Employment.

            

    

     

    (a)    The Company
hereby employs Executive to serve as President - Vail Resorts Hospitality on the
terms and conditions set forth herein. In such capacity, Executive shall have
the responsibilities normally associated with such position, subject to the
direction and supervision of the Chief Executive Officer (the
“CEO”).

     

    (b)    Executive
accepts employment hereunder and agrees that, during the term of Executive’s
employment, Executive will observe and comply with the policies and rules of the
Company and devote substantially all Executive’s time during normal business
hours and best efforts to the performance of Executive’s duties hereunder, which
duties shall be performed in an efficient and competent manner and to the best
of Executive’s ability.  Executive further agrees that, during the
term of this Agreement, Executive will not, without the prior written consent of
the CEO and the Board, directly or indirectly engage in any manner in any
business or other endeavor, either as an owner, employee, officer, director,
independent contractor, agent, partner, advisor, or in any other capacity
calling for the rendition of Executive’s personal services.  This
restriction shall not preclude Executive from having passive investments, and
devoting reasonable time to the supervision thereof (so long as such does not
create a conflict of interest or interfere with Executive’s obligations
hereunder), in any business or enterprise that is not in competition with any
business or enterprise of the Company or any of its parents, subsidiaries or
affiliates (collectively, the “Companies”).  This Agreement shall not
limit Executive’s community or charitable activities so long as such activities
do not impair or interfere with Executive’s performance of the services
contemplated by this Agreement.

     

    
      	
               
      

            	
              2.

            	
              Compensation.

            

    

     

    For all
services rendered by Executive to or on behalf of the Companies, the Company
shall provide or cause to be provided to Executive, subject to making any and
all withholdings and deductions required of the Company or its affiliates by law
with all other income tax consequences being borne by Executive, the
following:

     

    (a)    Base
Salary.  Executive shall receive a base salary of Three Hundred
Thirty Five Thousand Dollars ($335,000) per year increasing, effective August 1,
2009, to Three Hundred Sixty-Five Thousand Dollars ($365,000) per year (the
“Base Salary”), payable in accordance with the normal payroll practices of the
Company, and net of mandatory time off deductions and other applicable
withholding and deductions.  Executive’s Base Salary shall be reviewed
annually by the CEO and the Compensation Committee of the Board (the
“Compensation Committee”).  Any increases in such Base Salary shall be
at the discretion of the Compensation Committee, after consultation with and
upon recommendation of the CEO, and Executive acknowledges that the Compensation
Committee is not obligated to grant any increases.  The Base Salary
shall not be lowered during the term of this Agreement without Executive’s
written consent.

     

     (b)    Vail Resorts Management
Incentive Plan for Corporate Executives.  Executive shall be
entitled to participate in the Management Incentive Plan for Corporate
Executives (the “MIP”) on the same terms as may be applicable to other senior
executives of the Company and subject to the terms of the MIP.  Under
the MIP, Executive’s target annual bonus will be Fifty Percent (50%) of
Executive’s Base Salary based upon Executive’s performance in light of
objectives established by the CEO, and the Companies’ performance in light of
objectives established by the Compensation Committee.  Any awards
under the MIP are at the discretion of the Compensation Committee.

     

     (c)    Benefits; Paid Time Off.
Executive shall be eligible to participate in the benefit plans and perks and on
the same terms as may be extended generally to other senior executives of the
Companies and to the extent Executive is eligible under the terms of the
applicable plan.  Executive shall also receive Two Hundred Sixteen
(216) hours of paid time off, which amount shall include hours for paid
holidays, as well as be required to take such hours of mandatory-time-off in
accordance with the Company’s policies and procedures.

     

    (d)    Clubs and Other
Privileges.  Executive shall, subject to applicable rules in
effect from time to time, be entitled during the term of employment to the
benefits of membership in such of the private clubs owned and operated by the
Company as designated by the CEO from time to time  (collectively
“Clubs”) as part of the Company’s quality evaluation program and subject to
completion of bi-annual feedback surveys; provided that Executive shall not
actually be a member of such Clubs and in no event shall Executive be entitled
to any claim of reimbursement for any initiation or similar
fees.  Executive shall be solely responsible for the payment of any
and all charges incurred at such Clubs, but may utilize Executive’s annual
allowance provided pursuant to Executive Perquisite Fund (as may be in effect
from time to time) to pay such charges, excepting only the payment of regular
dues, which Executive shall not be obligated to pay.  In addition,
Executive shall receive all other benefits and perquisites on the same terms
afforded from time to time to senior executives generally (e.g., season ski passes,
executive perquisite fund).

     

    (e)    Expense
Reimbursement.  Executive shall have a travel and entertainment
budget that is reasonable in light of Executive’s position and responsibilities
and shall be reimbursed for all reasonable business-related travel and
entertainment expenses incurred by Executive thereunder upon submission of
appropriate documentation thereof in compliance with applicable Company
policies.

     

     (f)    Legal Expenses. The
Company shall reimburse Executive’s reasonable documented legal fees and
expenses (not to exceed $10,000) incurred in the review and negotiation of this
Agreement.

     

    
      	
               
      

            	
              3.

            	
              Term and
      Termination.

            

    

     

    (a)           Term.  The
effective date of this Agreement shall be October 15, 2008 (“Employment
Commencement Date”).  Unless terminated earlier, the term of this
Agreement shall be for the period commencing with the Employment Commencement
Date and continuing through October 15, 2011 and shall thereafter be
automatically renewed for successive one-year periods unless, no later than 60
days before the expiration of the then-current term, either Executive or the
Company gives the other written notice of non-renewal, in which case this
Agreement shall expire upon the conclusion of the then-current initial or
renewal term.

     

    (b)    Termination for
Cause.  The Company may terminate this Agreement at any time
for “Cause”.  For purposes of this Agreement, “Cause” shall mean (i)
any conduct involving gross negligence, gross mismanagement, or the unauthorized
disclosure of confidential information or trade secrets; (ii) dishonesty or a
violation of the Company’s Code of Ethics and Business Conduct that has or
reasonably could be expected to result in a detrimental impact on the
reputation, goodwill or business position of any of the Companies; (iii) gross
obstruction of business operations or illegal or disreputable conduct by
Executive that impairs or reasonably could be expected to impair the reputation,
goodwill or business position of any of the Companies, and any acts that violate
any policy of the Company relating to discrimination or harassment; (iv)
commission of a felony or a crime involving moral turpitude or the entrance of a
plea of guilty or nolo contedere to a felony or a crime involving moral
turpitude; or (v) any action involving a material breach of the terms of the
Agreement including material inattention to or material neglect of
duties.  In the event of a termination for Cause, Executive shall be
entitled to receive only Executive’s then-current Base Salary through the date
of such termination.  Further, Executive acknowledges that in the
event of such a termination for Cause, Executive shall not be entitled to
receive any bonus payment for the year of termination or subsequent years under
the MIP or any other incentive compensation plan in which Executive is then
participating.

     

    (c)    Termination Without
Cause.  The Company may terminate this Agreement at any time
without Cause, by giving Executive written notice specifying the effective date
of such termination.  In the event of a termination without Cause and
provided that Executive and the Company execute (and, if applicable, thereafter
not revoke) a written release in connection with such termination substantially
in the form attached hereto as Annex I (the “Mutual Release”), Executive shall
be entitled to receive (i) Executive’s then-current Base Salary through the
effective date of such termination, (ii) a pro-rated bonus for the portion of
the Company’s fiscal year through the effective date of such termination, which
pro-rated bonus shall be based on applying the level of achievement of the
performance targets (with respect to both Executive and the Companies) to
Executive’s target bonus for the year of such termination payable in a lump sum
at the same time as bonuses are paid to the Company’s senior executives
generally (the “Pro-Rated Bonus”), and (iii) twelve (12) months of
Executive’s then current Base Salary payable in a lump sum.  For the
purposes of this section, any written notice of non-renewal given by the Company
pursuant to Section 3(a) of this Agreement shall be deemed termination without
Cause.  Any payment to Executive made pursuant hereto shall be paid to
Executive no later than the date that is two and a half months following the
calendar year in which such termination without Cause occurs.

     

    (d)    Termination By Executive For
Good Reason.  Executive shall be entitled to terminate this
Agreement at any time for “Good Reason” by giving the Company written notice of
such termination.  For purposes of this Agreement, “Good Reason” shall
mean (i) the Company has breached its obligations hereunder in any material
respect, (ii) the Company has decreased Executive’s then current Base Salary,
(iii) Executive is directed to relocate Executive’s principal office more than
50 miles from Interlocken Business Park without Executive’s consent, and/or (iv)
the Company has effected a material diminution in Executive’s reporting
responsibilities, authority, or duties as in effect immediately prior to such
change; provided, however, that
Executive shall not have the right to terminate this Agreement for Good Reason
unless: (a) Executive has provided notice to the Company of any of the foregoing
conditions within 90 days of the initial existence of the condition; (B) the
Company has been given at least 30 days after receiving such notice to cure such
condition; and (C) Executive actually terminates employment within six months
following the initial existence of the condition.  In such event,
provided that Executive and the Company have executed (and, if applicable,
thereafter not revoked) the Mutual Release, Executive shall be entitled to
receive (w) Executive’s then current Base Salary through the effective date of
such termination, (x) a Pro-Rated Bonus, (y) twelve (12) months of
Executive’s then current Base Salary payable in a lump sum.  Any
payment to Executive made pursuant hereto shall be paid to Executive no later
than the date that is two and a half months following the calendar year in which
such termination for Good Reason occurs.

     

    (e)           Termination By Executive
Without Good Reason.  Executive may also terminate this
Agreement at any time without Good Reason by giving the Company at least thirty
(30) days’ prior written notice.  In such event, Executive shall be
entitled to receive only Executive’s then-current Base Salary through the date
of termination.  Further, Executive acknowledges that in the event of
such a termination without Good Reason, Executive shall not be entitled to
receive any bonus payment for the year of termination or subsequent years under
the MIP or any other incentive compensation plan in which Executive is then
participating.

     

     (f)    Termination Due To
Disability.  In the event that Executive becomes “Totally and
Permanently Disabled” (as reasonably determined by the Board acting in good
faith), the Company shall have the right to terminate this Agreement upon
written notice to Executive; provided, however, that in the event that Executive
and the Company execute (and, if applicable, thereafter not
revoke)  the Mutual Release, Executive shall be entitled to receive
(i) Executive’s then-current Base Salary through the date of such termination,
(ii) a Pro-Rated Bonus, and (iii) Executive’s then-current Base Salary, net of
short term disability payments remitted to Executive by the Company pursuant to
the Company’s Short-Term Disability Plan, through the earlier of (y) the
scheduled expiration date of this Agreement (but in no event less than twelve
(12) months from the date of disability) or (z) the date on which Executive’s
long-term disability insurance payments commence.

     

    (g)    Termination Due To
Death.  This Agreement shall be deemed automatically terminated
upon the death of Executive.  In such event, provided Executive’s
personal representative and the Company execute a release substantially in the
form of the Mutual Release, Executive’s personal representative shall be
entitled to receive (i) Executive’s then-current Base Salary through such date
of termination, and (ii) a Pro-Rated Bonus.

     

    (h)    Other
Benefits.  Upon Executive’s termination pursuant to Sections
3(c) or (d), and, in the event that Executive and the Company execute (and, if
applicable, thereafter not revoke) the Mutual Release, the Company agrees to pay
Executive, in lump sum, one year’s COBRA premiums for continuation of health and
dental coverage in existence at the time of such termination, as determined as
of Executive’s date of termination. This payment will be
remitted to Executive at the same time that Executive is paid pursuant to
Sections 3(c) and (d).  Except as expressly set forth in this Section
3, Executive shall not be entitled to receive any compensation or other benefits
in connection with the termination of Executive’s employment.

     

    (i)           Termination in Connection
with a Change in Control.  In the event of a termination of
Executive’s employment by the Company without Cause or by Executive for Good
Reason or notice by the Company of non-renewal of this Agreement, all within 365
days of a consummation of a Change in Control of VRI and provided that Executive
and the Company execute (and, if applicable, thereafter not revoke) the Mutual
Release, Executive shall be entitled to receive (i) Executive’s then-current
Base Salary through the effective date of such termination or non-renewal, (ii)
a Pro-Rated Bonus, (iii) a lump sum payment equal to twelve (12) months of
Executive’s then current Base Salary plus an amount equal to the cash bonus paid
to Executive in the prior calendar year, payable no later than the date that is
two and a half months following the calendar year in which such termination or
non-renewal occurs, and (iv) to the extent not already vested, full vesting of
any RSUs, SARs or other equity awards (including, but not limited to performance
share options) held by Executive whether granted to Executive pursuant to this
Agreement or otherwise.  For purposes of this Agreement, “Change in
Control” shall mean an event or series of events by
which:  (A)  any “person” or “group” (as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), but excluding any employee benefit plan of such person or
its subsidiaries, and any person or entity acting in its capacity as trustee,
agent, or other fiduciary or administrator of any such plan) becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of 35% or more of the equity securities of VRI entitled
to vote for members of the Board or equivalent governing body of VRI on a
fully-diluted basis; or (B) during any period of twenty four (24) consecutive
months, a majority of the members of the Board or other equivalent governing
body of VRI cease to be composed of individuals (1) who were members of that
Board or equivalent governing body on the first day of such period, (2) whose
election or nomination to that Board or equivalent governing body was approved
by individuals referred to in clause (1) above constituting at the time of such
election or nomination at least a majority of that Board or equivalent governing
body, or (3) whose election or nomination to that Board or other equivalent
governing body was approved by individuals referred to in clauses (1) and (2)
above constituting at the time of such election or nomination at least a
majority of that Board or equivalent governing body (excluding, in the case of
both clause (2) and clause (3), any individual whose initial nomination for, or
assumption of office as, a member of that Board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the Board); or (C) any person or two or more persons acting in
concert shall have acquired, by contract or otherwise, control over the equity
securities of VRI entitled to vote for members of the Board or equivalent
governing body of VRI on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant to any
option right) representing 51% or more of the combined voting power of such
securities; or (D)VRI sells or transfers (other than by mortgage or pledge) all
or substantially all of its properties and assets to, another “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act).

     

    (k)    Provisions of Agreement that
Survive Termination.  No termination of this Agreement shall
affect any of the rights and obligations of the parties hereto under Sections 4,
5, 6 and 7, and such rights and obligations shall survive such termination in
accordance with the terms of such sections.

     

    
      	
               
      

            	
              4.

            	
              Restrictive
      Covenants.

            

    

     

    (a)    The
provisions of this Section 4 shall apply for a period of one (1) year beginning
with the date of termination of Executive’s employment hereunder for any
reason.  During such period, Executive will not, without the prior
written consent of the CEO, directly or indirectly, become associated, either as
owner, employee, officer, director, independent contractor, agent, partner,
advisor or in any other capacity calling for the rendition of personal services
(“New Capacity”), with any individual, partnership, corporation, or other
organization doing business in the State of Colorado (“New Enterprise”) whose
business or enterprise is lodging or hospitality (“Competing Business”);
provided, however, that the foregoing shall not preclude Executive from (i)
engaging in such New Capacity where (A) such Competing Business account for less
than 10% of the New Enterprise’s annual revenues and annual net income on both a
historical or pro forma basis for its most recently completed fiscal year, or
(B) Executive’s duties for the New Enterprise are not primarily related to the
conduct of such Competing Business, or (ii) having passive investments in less
than five percent (5%) of the outstanding capital stock of a competitive
corporation that is listed on a national securities exchange or regularly traded
in the over-the-counter market or that have been approved in writing by the
CEO.  Executive acknowledges that this Agreement is a contract for the
protection of trade secrets within the meaning of Colorado Revised Statutes §
8-2-113(2)(b) and that Executive is an executive or manager, or professional
staff to an executive or manager, within the meaning of Colorado Revised
Statutes § 8-2-113(2)(d).  Executive acknowledges that Executive has
had a full and fair opportunity to consult with counsel of Executive’s own
choosing concerning the meaning and legal effect of this Section
4(a).

     

    (b)    Further,
Executive covenants and agrees that, during Executive’s employment hereunder and
for the period of one year thereafter, Executive will not, directly or
indirectly, solicit for another business or enterprise, or otherwise interfere
with the Company’s relationship with, any person who is a Grade 27 managerial or
higher level employee of any of the Companies at the time of Executive’s
termination.

     

    (c)           Executive
acknowledges that the restrictions, prohibitions and other provisions hereof,
are reasonable, fair and equitable in terms of duration, scope and geographic
area; are necessary to protect the legitimate business interests of the Company;
and are a material inducement to the Company to enter into this
Agreement.

     

    (d)    In the event
Executive breaches any provision of Section 4, in addition to any other remedies
that the Company may have at law or in equity, Executive shall promptly
reimburse the Company for any severance payments received from, or payable by,
the Company.  In addition, the Company shall be entitled in its sole
discretion to offset all or any portion of the amount of any unpaid
reimbursements against any amount owed by the Company to Executive.

     

    
      	
               
      

            	
              5.

            	
              Document Return;
      Resignations.

            

    

     

    (a)    Upon
termination of Executive’s employment hereunder for any reason, or upon the
Company’s earlier request, Executive agrees that Executive shall promptly
surrender to the Company all letters, papers, documents, instruments, records,
books, products, data and work product stored on electronic storage media, and
any other materials owned by any of the Companies or used by Executive in the
performance of Executive’s duties under this Agreement.

     

    (b)    Upon
termination of Executive hereunder for any reason, Executive agrees that
Executive shall be deemed to have resigned from all officer, director,
management or board positions to which Executive may have been elected or
appointed by reason of Executive’s employment or involvement with the Company,
specifically including but not limited to the Board, the boards of any of the
Companies and any other boards, districts, homeowner and/or industry
associations in which Executive serves at the direction of the CEO
(collectively, the “Associations”).  Executive agrees to promptly
execute and deliver to the Company or its designee any other document, including
without limitation a letter of resignation, reasonably requested by the Company
to effectuate the purposes of this Section 5(b).  If the Company is
unable, after reasonable effort, to secure Executive’s signature on any document
that the Company deems to be necessary to effectuate the purposes of this
Section 5(b), Executive hereby designates and appoints the Company and its duly
authorized officers and agents as Executive’s agent and attorney-in-fact, to act
for and on Executive’s behalf to execute, verify and submit to any appropriate
third party any such document, which shall thereafter have the same legal force
and effect as if executed by Executive.

     

    
      	
               
      

            	
              6.

            	
              Confidentiality and
      Assignment of Intellectual
Property.

            

    

     

    (a)    During
Executive’s employment with the Company, and at all times following the
termination of Executive’s employment hereunder for any reason, Executive shall
not use for Executive’s own benefit or for the benefit of any subsequent
employer, or disclose, directly or indirectly, to any person, firm or entity, or
any officer, director, stockholder, partner, associate, employee, agent or
representative thereof, any confidential information or trade secrets of any of
the Companies or the Associations, other than as reasonably necessary to perform
Executive’s duties under this Agreement.  As used herein, the term
“confidential information” includes budgets, business plans, strategies,
analyses of potential transactions, costs, personnel data, and other proprietary
information of the Company that is not in the public domain.

     

    (b)    For purposes
of this Section 6(b), “Company Inventions” means all ideas, processes,
trademarks and service marks, inventions, discoveries, and improvements to any
of the foregoing, that Executive learns of, conceives, develops or creates alone
or with others during Executive’s employment with the Company (whether or not
conceived, developed or created during regular working hours) that directly or
indirectly arise from or relate to: (i) the Company’s business, products or
services; or (ii) work performed for the Company by Executive or any other
Company employee, agent or contractor; or (iii) the use of the Company’s
property or time; or (iv) access to the Company’s confidential
information.  Executive hereby assigns to the Company Executive’s
entire right, title and interest in all Company Inventions, which shall be the
sole and exclusive property of the Company whether or not subject to patent,
copyright, trademark or trade secret protection.  Executive also
acknowledges that all original works of authorship that are made by Executive
(solely or jointly with others), within the scope of Executive’s employment with
the Company, and that are protectable by copyright, are “works made for hire,”
as that term is defined in the United States Copyright Act (17
U.S.C.  §§ 101, et seq.).  To the extent that any such
works, by operation of law, cannot be “works made for hire,” Executive hereby
assigns to Company all right, title, and interest in and to such works and to
any related copyrights.  Executive shall promptly execute, acknowledge
and deliver to the Company all additional instruments or documents deemed at any
time by the Company in its sole discretion to be necessary to carry out the
intentions of this paragraph.

     

    
      	
               
      

            	
              7.

            	
              Non-Disparagement.

            

    

     

    Following
the termination of Executive’s employment hereunder for any reason, Executive
agrees that Executive shall not make any statements disparaging of any of the
Companies, their respective boards, their businesses, and the officers,
directors, stockholders, or employees of any of the Companies or the
Associations.  In response to inquiries from prospective employers,
which shall be referred by Executive only to the Senior Vice President of Human
Resources, the Company shall confirm only dates of employment, job title, and
job responsibilities.  Subject to the terms of this Section 7,
Executive, as appropriate, may respond truthfully to inquiries from prospective
employers of Executive, and the Company and Executive may respond truthfully as
may be required by any governmental or judicial body acting in its official
capacity.

     

    
      	
               
      

            	
              8.

            	
              Non-Assignability.

            

    

     

    It is
understood that this Agreement has been entered into personally by the
parties.  Neither party shall have the right to assign, transfer,
encumber or dispose of any duties, rights or payments due hereunder, which
duties, rights and payments with respect hereto are expressly declared to be
non-assignable and non-transferable, being based upon the personal services of
Executive, and any attempted assignment or transfer shall be null and void and
without binding effect on either party; provided, however, that the Company may
assign this Agreement to any parent, subsidiary, affiliate or successor
corporation.

     

    
      	
               
      

            	
              9.

            	
              Injunctive
      Relief.

            

    

     

    The
parties acknowledge that the remedy at law for any violation or threatened
violation of Sections 4, 5, 6, 7 and/or 8 of this Agreement may be inadequate
and that, accordingly, either party shall be entitled to injunctive relief in
the event of such a violation or threatened violation without being required to
post bond or other surety.  The above stated remedies shall be in
addition to, and not in limitation of, any other rights or remedies to which
either party is or may be entitled at law, in equity, or under this
Agreement.

     

    
      
        	 	
                10.

              	
                Indemnification.

              

      

    

     

    The
Company agrees that it shall indemnify and hold harmless Executive in connection
with legal proceedings seeking to impose liability on Executive in such
Executive’s capacity as a director, officer or employee of the Companies to the
fullest extent permitted under the Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws of VRI.  In furtherance
thereof, the Company and Executive each agree to execute and deliver an
Indemnification Agreement by and between the Company and Executive, attached
hereto as Exhibit
A and incorporated herein by reference, concurrently with the execution
and delivery of this Agreement.  To the extent any provision set forth
in the Indemnification Agreement is in conflict with any provision set forth in
this Agreement, the provision set forth in the Indemnification Agreement shall
govern.  Further, Executive shall be entitled to coverage under the
Directors and Officers Liability Insurance program to the same extent as other
senior executives of the Companies.

     

    
      
        	 	
                11.

              	
                Complete
      Agreement.

              

      

    

     

    This
Agreement constitutes the full understanding and entire employment agreement of
the parties, and supersedes and is in lieu of any and all other understandings
or agreements between the Company and Executive.  Nothing herein is
intended to limit any rights or duties Executive has under the terms of any
applicable incentive compensation, benefit plan or other similar
agreements.

     

    
      	 	
              12.

            	
              Disputes

            

    

                         .

        All disputes
relating to or arising from this Agreement and/or Executive’s employment with
the Company shall be resolved, upon written request by either party, by final
and binding arbitration by the Judicial Arbiter Group (“JAG”) in Denver,
Colorado in accordance with the JAMS Streamlined Arbitration Rules and
Procedures as in effect at the time of the arbitration.  The JAG
arbitration fees shall be paid equally by the parties
hereto.  Arbitration hereunder shall take place before one JAG
arbitrator mutually agreed upon by the parties within 30 days of the written
request for arbitration.  If the parties are unable or fail to agree upon
the arbitrator within such time, the parties shall submit a request at the end
of such period to JAG to select the arbitrator within 15 days
thereafter.  The arbitration and determination rendered by the JAG
arbitrator shall be final and binding on the parties and judgment may be entered
upon such determination in any court having jurisdiction thereof (and such
judgment enforced, if necessary, through judicial proceedings).  It is
understood and agreed that the arbitrator shall be specifically empowered to
designate and award any remedy available at law or in equity, including specific
performance.  The arbitrator may award costs and expenses of the
arbitration proceeding (including, without limitation, reasonable attorneys'
fees) to the prevailing party.

     

    
      
        	 	
                13.

              	
                Amendments.

              

      

    

     

    Any
amendment to this Agreement shall be made only in writing and signed by each of
the parties hereto.

     

    
      
        	 	
                14.

              	
                Governing
      Law.

              

      

    

     

    The
internal laws of the State of Colorado law shall govern the construction and
enforcement of this Agreement.

     

    
      
        	 	
                15.

              	
                Notices.

              

      

    

     

    Any
notice required or authorized hereunder shall be deemed delivered when
deposited, postage prepaid, in the United States mail, certified, with return
receipt requested, addressed to the parties as follows:

     

        John McD.
Garnsey

        21500 Highway
Six

        Eagle, CO
81631

    

        Vail
Holdings, Inc.

        390
Interlocken Crescent

        Broomfield,
Colorado  80021

        Attn:  General
Counsel

     

    
      	 	
              16.

            	
              Code Section
      409A.

            

    

     

    Anything
in this Agreement to the contrary notwithstanding, if on the date of termination
of Executive’s employment with the Company, as a result of such termination,
Executive would receive any payment that, absent the application of this Section
16 would be subject to interest and additional tax imposed pursuant to Section
409A(a) of the Internal Revenue Code of 1986, as amended (the “Code”) as a
result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such
payment shall be made prior to the date that is the earliest of (1) 6 months
after the date of termination of Executive’s employment, (2) Executive’s death,
or (3) such other date as will cause such payment not to be subject to such
interest and additional tax.

     

    
      	 	
              17. 

            	
              No Duty to
      Mitigate

            

    

        .

        Executive
shall not be required to mitigate damages or the amount of any payment provided
for under this Agreement by seeking other employment or otherwise, nor will any
payments hereunder be subject to offset in the event Executive does
mitigate.

     

    
      	 	
              18.

            	
              Binding
      Effect.

            

    

       

        This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors, permitted assigns, heirs, executors and legal
representatives.

     

    
      	 	
              19. 

            	
              Counterparts.

            

    

        

        This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original but all such
counterparts together shall constitute one and the same
instrument.  Each counterpart may consist of two copies hereof each
signed by one of the parties hereto.

     

    
      	 	
              20. 

            	
              Construction.
      

            

    

                         

        Headings in
this Agreement are for convenience only and shall not control the meaning of
this Agreement.  Whenever applicable, masculine and neutral pronouns
shall equally apply to the feminine genders; the singular shall include the
plural and the plural shall include the singular.  The parties have
reviewed and understand this Agreement, and each has had a full opportunity to
negotiate this Agreement’s terms and to consult with counsel of their own
choosing.  Therefore, the parties expressly waive all applicable
common law and statutory rules of construction that any provision of this
Agreement should be construed against this Agreement’s drafter, and agree that
this Agreement and all amendments thereto shall be construed as a whole,
according to the fair meaning of the language used.

     

    
      	 	
              21. 

            	
              Severability and
      Modification by Court.

            

    

                     

        If any court
of competent jurisdiction declares any provision of this Agreement invalid or
unenforceable, the remainder of this Agreement shall remain fully
enforceable.  To the extent that any such court concludes that any
provision of this Agreement is void or voidable, the court shall reform such
provision(s) to render the provision(s) enforceable, but only to the extent
absolutely necessary to render the provision(s) enforceable and only in view of
the parties’ express desire that the Company be protected to the greatest extent
allowed by law from unfair competition, unfair solicitation and/or the misuse or
disclosure of its confidential information and records containing such
information.

     

    

     

    [Signature
Page to follow.]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

    VAIL
HOLDINGS, INC.

     

    

     

    By: /s/ Robert A. Katz
_____________________

     

    Name:
Robert A. Katz

     

    Title:
Chief Executive Officer

     

    

     

    EXECUTIVE:

     

    

     

    /s/ John McD.
Garnsey____________________

     

    John McD.
Garnsey

     

    

     

    

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex
I

     

    MUTUAL
RELEASE

     

    This
mutual release (this “Release”) is entered into as of this _____________ day of
_____________, 20___ (the “Release Date”) by John McD. Garnsey (“Employee”), on
the one hand and Vail Holdings, Inc., (“VHI”) on the other hand.

     

    1.           Reference
is hereby made to Executive Employment Agreement, dated __________, 20__ (the
“Executive Employment Agreement”) by the parties hereto setting forth the
agreements among the parties regarding the termination of the employment
relationship between Employee and VHI.  Capitalized terms used but not
defined herein have the meanings ascribed to them in Executive Employment
Agreement.

     

    2.           Employee,
for him/herself, his/her spouse, heirs, executors, administrators, successors,
and assigns, hereby releases and discharges VHI 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, that Employee or his/her spouse, heirs,
executors, administrators, successors, or assigns ever had or may have at any
time through the Release Date.  Employee 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 rescission periods observed; (ii) any claim,
whether statutory, common law, or otherwise, arising out of the terms or
conditions of Employee’s employment and/or Employee’s separation from VHI
including, but not limited to, any claims in the nature of tort or contract
claims, wrongful discharge, promissory estoppel, intentional or negligent
infliction of emotional distress, and/or breach of covenant of good faith and
fair dealing.  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,
Employee 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.  Employee 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.           VHI
hereby releases and discharges Employee, his/her spouse, heirs, executors,
administrators, successors, and assigns, from any and all actions, causes of
actions, claims, demands, grievances and complaints, known and unknown, that VHI
ever had or may have at any time through the Release Date.  VHI
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 Employee’s employment and/or
Employee’s separation from VHI, 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, VHI 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.  VHI 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.

     

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

     

    5.           Enforceability of
Release:

     

    
      	
               
      

            	
              (a)

            	
              You
      acknowledge that you have been advised to consult with an attorney before
      signing this Release.

            

    

     

    
      
        	 	
                (b)

              	
                You
      acknowledge the adequacy and sufficiency of the consideration outlined in
      Executive Employment Agreement for your promises set forth in this Release
      and that the Company is not otherwise obligated to pay such
      sums.

              

      

    

     

    
      	
               
      

            	
              (c)

            	
              You
      acknowledge that you have been offered at least twenty-one (21) days to
      consider this Release, that you have read Executive Employment Agreement
      and this Release, and understand its terms and significance, and that you
      have executed this Release and with full knowledge of its effect, after
      having carefully read and considered all terms of this Release and, if you
      have chosen to consult with an attorney, your attorney has fully explained
      all terms and their significance to
you.

            

    

     

    
      
        	 	
                (d)

              	
                You
      hereby certify your understanding that you may revoke this Release, as it
      applies to you, within seven (7) days following execution of this Release
      and that this Release shall not become effective or enforceable until that
      revocation period has expired.  Any revocation should be sent,
      in writing, to Vail Resorts Management Company, 390 Interlocken Crescent,
      Suite 1000, Broomfield, Colorado  80021, Attn: Office of the
      General Counsel.  You also understand that, should you revoke
      this Release within the seven-day period, this Release, as it applies to
      you, would be voided in its entirety and the sums set forth in Executive
      Employment Agreement would not be paid or owed to
  you.

              

      

    

     

    6.           This
Mutual Release shall be effective as of the eighth day following 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.

     

    JOHN MCD.
GARNSEY                                                                                                                     VAIL
HOLDINGS, INC.

     

    

     

    _________________________________                                                                                           By:_________________________________

     

    Date:______________________________                                                                                        Date:_______________________________exhibit10_5.htm

    
      

    

    Exhibit
10.5

     

    EXECUTIVE
EMPLOYMENT AGREEMENT

     

    This
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into
October 15, 2008 by and between VAIL HOLDINGS, INC., a Colorado corporation (the
“Company”), a wholly-owned subsidiary of VAIL RESORTS, INC., a Delaware
corporation (“VRI”), and Blaise Carrig (“Executive”).

     

    Whereas
the parties had previously entered into that certain Employment Agreement, dated
July 23, 2002 (the “Original Agreement”), as supplemented by that certain
Addendum, dated as of September 1, 2002 (the “Addendum”), but now desire to make
certain updates to the terms contained in that Original Agreement as required to
comply with law and as otherwise agreed herein and in order to accomplish the
foregoing enter into this replacement Agreement.

     

    The
parties hereto agree as follows:

     

    
      	
               
      

            	
              1.

            	
              Employment.

            

    

     

    (a)    The Company
hereby employs Executive to serve as Co- President, Mountain Division, and Chief
Operating Officer, Heavenly on the terms and conditions set forth herein. In
such capacity, Executive shall have the responsibilities normally associated
with such position, subject to the direction and supervision of the Chief
Executive Officer (the “CEO”).

     

    (b)    Executive
accepts employment hereunder and agrees that, during the term of Executive’s
employment, Executive will observe and comply with the policies and rules of the
Company and devote substantially all Executive’s time during normal business
hours and best efforts to the performance of Executive’s duties hereunder, which
duties shall be performed in an efficient and competent manner and to the best
of Executive’s ability.  Executive further agrees that, during the
term of this Agreement, Executive will not, without the prior written consent of
the CEO and the Board, directly or indirectly engage in any manner in any
business or other endeavor, either as an owner, employee, officer, director,
independent contractor, agent, partner, advisor, or in any other capacity
calling for the rendition of Executive’s personal services.  This
restriction shall not preclude Executive from having passive investments, and
devoting reasonable time to the supervision thereof (so long as such does not
create a conflict of interest or interfere with Executive’s obligations
hereunder), in any business or enterprise that is not in competition with any
business or enterprise of the Company or any of its parents, subsidiaries or
affiliates (collectively, the “Companies”).  This Agreement shall not
limit Executive’s community or charitable activities so long as such activities
do not impair or interfere with Executive’s performance of the services
contemplated by this Agreement.

     

    
      	
               
      

            	
              2.

            	
              Compensation.

            

    

     

    For all
services rendered by Executive to or on behalf of the Companies, the Company
shall provide or cause to be provided to Executive, subject to making any and
all withholdings and deductions required of the Company or its affiliates by law
with all other income tax consequences being borne by Executive, the
following:

     

    (a)    Base
Salary.  Executive shall receive a base salary of Three Hundred
Sixty-Five Thousand Dollars ($365,000) per year increasing, effective August 1,
2009, to Three Hundred Eighty-Five Thousand Dollars ($385,000) per year (the
“Base Salary”), payable in accordance with the normal payroll practices of the
Company, and net of mandatory time off deductions and other applicable
withholding and deductions.  Executive’s Base Salary shall be reviewed
annually by the CEO and the Compensation Committee of the Board (the
“Compensation Committee”).  Any increases in such Base Salary shall be
at the discretion of the Compensation Committee, after consultation with and
upon recommendation of the CEO, and Executive acknowledges that the Compensation
Committee is not obligated to grant any increases.  The Base Salary
shall not be lowered during the term of this Agreement without Executive’s
written consent.

     

     (b)    Vail Resorts Management
Incentive Plan for Corporate Executives.  Executive shall be
entitled to participate in the Management Incentive Plan for Corporate
Executives (the “MIP”) on the same terms as may be applicable to other senior
executives of the Company and subject to the terms of the MIP.  Under
the MIP, Executive’s target annual bonus will be Fifty Percent (50%) of
Executive’s Base Salary based upon Executive’s performance in light of
objectives established by the CEO, and the Companies’ performance in light of
objectives established by the Compensation Committee.  Any awards
under the MIP are at the discretion of the Compensation Committee.

     

    (c)    Benefits; Paid Time Off.
Executive shall be eligible to participate in the benefit plans and perks and on
the same terms as may be extended generally to other senior executives of the
Companies and to the extent Executive is eligible under the terms of the
applicable plan.  Executive shall also receive One Hundred Eighty Four
(184) hours of paid time off, which amount shall include hours for paid
holidays, as well as be required to take such hours of mandatory-time-off in
accordance with the Company’s policies and procedures.

     

    (d)    Clubs and Other
Privileges.  Executive shall, subject to applicable rules in
effect from time to time, be entitled during the term of employment to the
benefits of membership in such of the private clubs owned and operated by the
Company as designated by the CEO from time to time  (collectively
“Clubs”) as part of the Company’s quality evaluation program and subject to
completion of bi-annual feedback surveys; provided that Executive shall not
actually be a member of such Clubs and in no event shall Executive be entitled
to any claim of reimbursement for any initiation or similar
fees.  Executive shall be solely responsible for the payment of any
and all charges incurred at such Clubs, but may utilize Executive’s annual
allowance provided pursuant to Executive Perquisite Fund (as may be in effect
from time to time) to pay such charges, excepting only the payment of regular
dues, which Executive shall not be obligated to pay.  In addition,
Executive shall receive all other benefits and perquisites on the same terms
afforded from time to time to senior executives generally (e.g., season ski passes,
executive perquisite fund).

     

    (e)    Expense
Reimbursement.  Executive shall have a travel and entertainment
budget that is reasonable in light of Executive’s position and responsibilities
and shall be reimbursed for all reasonable business-related travel and
entertainment expenses incurred by Executive thereunder upon submission of
appropriate documentation thereof in compliance with applicable Company
policies.

     

    (f)    Legal
Expenses. The Company shall reimburse Executive’s reasonable
documented legal fees and expenses (not to exceed $10,000) incurred in the
review and negotiation of this Agreement.

     

    (g)    Residence. The
Company and Executive previously reached certain agreements regarding
Executive’s primary residence as set forth in the Addendum, which shall remain
in full force and effect without modification hereunder.

     

    
      	
               
      

            	
              3.

            	
              Term and
      Termination.

            

    

     

    (a)    Term.  The
effective date of this Agreement shall be October 15, 2008 (“Employment
Commencement Date”).  Unless terminated earlier, the term of this
Agreement shall be for the period commencing with the Employment Commencement
Date and continuing through October 15, 2011 and shall thereafter be
automatically renewed for successive one-year periods unless, no later than 60
days before the expiration of the then-current term, either Executive or the
Company gives the other written notice of non-renewal, in which case this
Agreement shall expire upon the conclusion of the then-current initial or
renewal term.

     

    (b)    Termination for
Cause.  The Company may terminate this Agreement at any time
for “Cause”.  For purposes of this Agreement, “Cause” shall mean (i)
any conduct involving gross negligence, gross mismanagement, or the unauthorized
disclosure of confidential information or trade secrets; (ii) dishonesty or a
violation of the Company’s Code of Ethics and Business Conduct that has or
reasonably could be expected to result in a detrimental impact on the
reputation, goodwill or business position of any of the Companies; (iii) gross
obstruction of business operations or illegal or disreputable conduct by
Executive that impairs or reasonably could be expected to impair the reputation,
goodwill or business position of any of the Companies, and any acts that violate
any policy of the Company relating to discrimination or harassment; (iv)
commission of a felony or a crime involving moral turpitude or the entrance of a
plea of guilty or nolo contedere to a felony or a crime involving moral
turpitude; or (v) any action involving a material breach of the terms of the
Agreement including material inattention to or material neglect of
duties.  In the event of a termination for Cause, Executive shall be
entitled to receive only Executive’s then-current Base Salary through the date
of such termination.  Further, Executive acknowledges that in the
event of such a termination for Cause, Executive shall not be entitled to
receive any bonus payment for the year of termination or subsequent years under
the MIP or any other incentive compensation plan in which Executive is then
participating.

     

    (c)    Termination Without
Cause.  The Company may terminate this Agreement at any time
without Cause, by giving Executive written notice specifying the effective date
of such termination.  In the event of a termination without Cause and
provided that Executive and the Company execute (and, if applicable, thereafter
not revoke) a written release in connection with such termination substantially
in the form attached hereto as Annex I (the “Mutual Release”), Executive shall
be entitled to receive (i) Executive’s then-current Base Salary through the
effective date of such termination, (ii) a pro-rated bonus for the portion of
the Company’s fiscal year through the effective date of such termination, which
pro-rated bonus shall be based on applying the level of achievement of the
performance targets (with respect to both Executive and the Companies) to
Executive’s target bonus for the year of such termination payable in a lump sum
at the same time as bonuses are paid to the Company’s senior executives
generally (the “Pro-Rated Bonus”), and (iii) twelve (12) months of
Executive’s then current Base Salary payable in a lump sum.  For the
purposes of this section, any written notice of non-renewal given by the Company
pursuant to Section 3(a) of this Agreement shall be deemed termination without
Cause. Any payment to Executive made pursuant hereto shall be paid to Executive
no later than the date that is two and a half months following the calendar year
in which such termination without Cause occurs.

     

    (d)    Termination By Executive For
Good Reason.  Executive shall be entitled to terminate this
Agreement at any time for “Good Reason” by giving the Company written notice of
such termination.  For purposes of this Agreement, “Good Reason” shall
mean (i) the Company has breached its obligations hereunder in any material
respect, (ii) the Company has decreased Executive’s then current Base Salary,
(iii) Executive is directed to relocate Executive’s principal office more than
50 miles from Heavenly’s executive offices in Stateline,
Nevada  without Executive’s consent, and/or (iv) the Company has
effected a material diminution in Executive’s reporting responsibilities,
authority, or duties as in effect immediately prior to such change; provided, however, that
Executive shall not have the right to terminate this Agreement for Good Reason
unless: (a) Executive has provided notice to the Company of any of the foregoing
conditions within 90 days of the initial existence of the condition; (B) the
Company has been given at least 30 days after receiving such notice to cure such
condition; and (C) Executive actually terminates employment within six months
following the initial existence of the condition.  In such event,
provided that Executive and the Company have executed (and, if applicable,
thereafter not revoked) the Mutual Release, Executive shall be entitled to
receive (w) Executive’s then current Base Salary through the effective date of
such termination, (x) a Pro-Rated Bonus, (y) twelve (12) months of
Executive’s then current Base Salary payable in a lump sum.  Any
payment to Executive made pursuant hereto shall be paid to Executive no later
than the date that is two and a half months following the calendar year in which
such termination for Good Reason occurs.

     

    (e)    Termination By Executive
Without Good Reason.  Executive may also terminate this
Agreement at any time without Good Reason by giving the Company at least thirty
(30) days’ prior written notice.  In such event, Executive shall be
entitled to receive only Executive’s then-current Base Salary through the date
of termination.  Further, Executive acknowledges that in the event of
such a termination without Good Reason, Executive shall not be entitled to
receive any bonus payment for the year of termination or subsequent years under
the MIP or any other incentive compensation plan in which Executive is then
participating.

     

    (f)    Termination Due To
Disability.  In the event that Executive becomes “Totally and
Permanently Disabled” (as reasonably determined by the Board acting in good
faith), the Company shall have the right to terminate this Agreement upon
written notice to Executive; provided, however, that in the event that Executive
and the Company execute (and, if applicable, thereafter not
revoke)  the Mutual Release, Executive shall be entitled to receive
(i) Executive’s then-current Base Salary through the date of such termination,
(ii) a Pro-Rated Bonus, and (iii) Executive’s then-current Base Salary, net of
short term disability payments remitted to Executive by the Company pursuant to
the Company’s Short-Term Disability Plan, through the earlier of (y) the
scheduled expiration date of this Agreement (but in no event less than twelve
(12) months from the date of disability) or (z) the date on which Executive’s
long-term disability insurance payments commence.

     

    (g)    Termination Due To
Death.  This Agreement shall be deemed automatically terminated
upon the death of Executive.  In such event, provided Executive’s
personal representative and the Company execute a release substantially in the
form of the Mutual Release, Executive’s personal representative shall be
entitled to receive (i) Executive’s then-current Base Salary through such date
of termination, and (ii) a Pro-Rated Bonus.

     

    (h)    Other
Benefits.  Upon Executive’s termination pursuant to Sections
3(c) or (d), and, in the event that Executive and the Company execute (and, if
applicable, thereafter not revoke) the Mutual Release, the Company agrees to pay
Executive, in lump sum, one year’s COBRA premiums for continuation of health and
dental coverage in existence at the time of such termination, as determined as
of Executive’s date of termination. This payment will be
remitted to Executive at the same time that Executive is paid pursuant to
Sections 3(c) and (d).  Except as expressly set forth in this Section
3, Executive shall not be entitled to receive any compensation or other benefits
in connection with the termination of Executive’s employment.

     

    (i)    Termination in Connection
with a Change in Control.  In the event of a termination of
Executive’s employment by the Company without Cause or by Executive for Good
Reason or notice by the Company of non-renewal of this Agreement, all within 365
days of a consummation of a Change in Control of VRI and provided that Executive
and the Company execute (and, if applicable, thereafter not revoke) the Mutual
Release, Executive shall be entitled to receive (i) Executive’s then-current
Base Salary through the effective date of such termination or non-renewal, (ii)
a Pro-Rated Bonus, (iii) a lump sum payment equal to twelve (12) months of
Executive’s then current Base Salary plus an amount equal to the cash bonus paid
to Executive in the prior calendar year], payable no later than the date that is
two and a half months following the calendar year in which such termination or
non-renewal occurs, and (iv) to the extent not already vested, full vesting of
any RSUs, SARs or other equity awards (including, but not limited to performance
share options) held by Executive whether granted to Executive pursuant to this
Agreement or otherwise.  For purposes of this Agreement, “Change in
Control” shall mean an event or series of events by
which:  (A)  any “person” or “group” (as such terms are used
in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), but excluding any employee benefit plan of such person or
its subsidiaries, and any person or entity acting in its capacity as trustee,
agent, or other fiduciary or administrator of any such plan) becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of 35% or more of the equity securities of VRI entitled
to vote for members of the Board or equivalent governing body of VRI on a
fully-diluted basis; or (B) during any period of twenty four (24) consecutive
months, a majority of the members of the Board or other equivalent governing
body of VRI cease to be composed of individuals (1) who were members of that
Board or equivalent governing body on the first day of such period, (2) whose
election or nomination to that Board or equivalent governing body was approved
by individuals referred to in clause (1) above constituting at the time of such
election or nomination at least a majority of that Board or equivalent governing
body, or (3) whose election or nomination to that Board or other equivalent
governing body was approved by individuals referred to in clauses (1) and (2)
above constituting at the time of such election or nomination at least a
majority of that Board or equivalent governing body (excluding, in the case of
both clause (2) and clause (3), any individual whose initial nomination for, or
assumption of office as, a member of that Board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the Board); or (C) any person or two or more persons acting in
concert shall have acquired, by contract or otherwise, control over the equity
securities of VRI entitled to vote for members of the Board or equivalent
governing body of VRI on a fully-diluted basis (and taking into account all such
securities that such person or group has the right to acquire pursuant to any
option right) representing 51% or more of the combined voting power of such
securities; or (D)VRI sells or transfers (other than by mortgage or pledge) all
or substantially all of its properties and assets to, another “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange
Act).

     

    (j)    Provisions of Agreement that
Survive Termination.  No termination of this Agreement shall
affect any of the rights and obligations of the parties hereto under Sections 4,
5, 6 and 7, and such rights and obligations shall survive such termination in
accordance with the terms of such sections.

     

    
      	
               
      

            	
              4.

            	
              Restrictive
      Covenants.

            

    

     

    (a)    The
provisions of this Section 4 shall apply for a period of one (1) year beginning
with the date of termination of Executive’s employment hereunder for any
reason.  During such period, Executive will not, without the prior
written consent of the CEO, directly or indirectly, become associated, either as
owner, employee, officer, director, independent contractor, agent, partner,
advisor or in any other capacity calling for the rendition of personal services
(“New Capacity”), with any individual, partnership, corporation, or other
organization (“New Enterprise”) doing business in North America whose business
or enterprise is ski resort ownership or operation (“Competing Business”); provided, however, that the
foregoing shall not preclude Executive from (i) engaging in such New Capacity
where (A) such Competing Business accounts for less than 10% of the New
Enterprise’s annual revenues and annual net income on both a historical or pro
forma basis for its most recently completed fiscal year, or (B) Executive’s
duties for the New Enterprise are not primarily related to the conduct of such
Competing Business, or (ii) having passive investments in less than five percent
(5%) of the outstanding capital stock of a competitive corporation that is
listed on a national securities exchange or regularly traded in the
over-the-counter market or that have been approved in writing by the
CEO.  Executive acknowledges that this Agreement is a contract for the
protection of trade secrets within the meaning of Colorado Revised Statutes §
8-2-113(2)(b) and that Executive is an executive or manager, or professional
staff to an executive or manager, within the meaning of Colorado Revised
Statutes § 8-2-113(2)(d).  Executive acknowledges that Executive has
had a full and fair opportunity to consult with counsel of Executive’s own
choosing concerning the meaning and legal effect of this Section
4(a).

     

    (b)    Further,
Executive covenants and agrees that, during Executive’s employment hereunder and
for the period of one year thereafter, Executive will not, directly or
indirectly, solicit for another business or enterprise, or otherwise interfere
with the Company’s relationship with, any person who is a Grade 27 managerial or
higher level employee of any of the Companies at the time of Executive’s
termination.

     

    (c)    Executive
acknowledges that the restrictions, prohibitions and other provisions hereof,
are reasonable, fair and equitable in terms of duration, scope and geographic
area; are necessary to protect the legitimate business interests of the Company;
and are a material inducement to the Company to enter into this
Agreement.

     

    (d)    In the event
Executive breaches any provision of Section 4, in addition to any other remedies
that the Company may have at law or in equity, Executive shall promptly
reimburse the Company for any severance payments received from, or payable by,
the Company.  In addition, the Company shall be entitled in its sole
discretion to offset all or any portion of the amount of any unpaid
reimbursements against any amount owed by the Company to Executive.

     

    
      	
               
      

            	
              5.

            	
              Document Return;
      Resignations.

            

    

     

    (a)    Upon
termination of Executive’s employment hereunder for any reason, or upon the
Company’s earlier request, Executive agrees that Executive shall promptly
surrender to the Company all letters, papers, documents, instruments, records,
books, products, data and work product stored on electronic storage media, and
any other materials owned by any of the Companies or used by Executive in the
performance of Executive’s duties under this Agreement.

     

    (b)    Upon
termination of Executive hereunder for any reason, Executive agrees that
Executive shall be deemed to have resigned from all officer, director,
management or board positions to which Executive may have been elected or
appointed by reason of Executive’s employment or involvement with the Company,
specifically including but not limited to the Board, the boards of any of the
Companies and any other boards, districts, homeowner and/or industry
associations in which Executive serves at the direction of the CEO
(collectively, the “Associations”).  Executive agrees to promptly
execute and deliver to the Company or its designee any other document, including
without limitation a letter of resignation, reasonably requested by the Company
to effectuate the purposes of this Section 5(b).  If the Company is
unable, after reasonable effort, to secure Executive’s signature on any document
that the Company deems to be necessary to effectuate the purposes of this
Section 5(b), Executive hereby designates and appoints the Company and its duly
authorized officers and agents as Executive’s agent and attorney-in-fact, to act
for and on Executive’s behalf to execute, verify and submit to any appropriate
third party any such document, which shall thereafter have the same legal force
and effect as if executed by Executive.

     

    
      	
               
      

            	
              6.

            	
              Confidentiality and
      Assignment of Intellectual
Property.

            

    

     

    (a)    During
Executive’s employment with the Company, and at all times following the
termination of Executive’s employment hereunder for any reason, Executive shall
not use for Executive’s own benefit or for the benefit of any subsequent
employer, or disclose, directly or indirectly, to any person, firm or entity, or
any officer, director, stockholder, partner, associate, employee, agent or
representative thereof, any confidential information or trade secrets of any of
the Companies or the Associations, other than as reasonably necessary to perform
Executive’s duties under this Agreement.  As used herein, the term
“confidential information” includes budgets, business plans, strategies,
analyses of potential transactions, costs, personnel data, and other proprietary
information of the Company that is not in the public domain.

     

    (b)    For purposes
of this Section 6(b), “Company Inventions” means all ideas, processes,
trademarks and service marks, inventions, discoveries, and improvements to any
of the foregoing, that Executive learns of, conceives, develops or creates alone
or with others during Executive’s employment with the Company (whether or not
conceived, developed or created during regular working hours) that directly or
indirectly arise from or relate to: (i) the Company’s business, products or
services; or (ii) work performed for the Company by Executive or any other
Company employee, agent or contractor; or (iii) the use of the Company’s
property or time; or (iv) access to the Company’s confidential
information.  Executive hereby assigns to the Company Executive’s
entire right, title and interest in all Company Inventions, which shall be the
sole and exclusive property of the Company whether or not subject to patent,
copyright, trademark or trade secret protection.  Executive also
acknowledges that all original works of authorship that are made by Executive
(solely or jointly with others), within the scope of Executive’s employment with
the Company, and that are protectable by copyright, are “works made for hire,”
as that term is defined in the United States Copyright Act (17
U.S.C.  §§ 101, et seq.).  To the extent that any such
works, by operation of law, cannot be “works made for hire,” Executive hereby
assigns to Company all right, title, and interest in and to such works and to
any related copyrights.  Executive shall promptly execute, acknowledge
and deliver to the Company all additional instruments or documents deemed at any
time by the Company in its sole discretion to be necessary to carry out the
intentions of this paragraph.

     

    
      	
               
      

            	
              7.

            	
              Non-Disparagement.

            

    

     

    Following
the termination of Executive’s employment hereunder for any reason, Executive
agrees that Executive shall not make any statements disparaging of any of the
Companies, their respective boards, their businesses, and the officers,
directors, stockholders, or employees of any of the Companies or the
Associations.  In response to inquiries from prospective employers,
which shall be referred by Executive only to the Senior Vice President of Human
Resources, the Company shall confirm only dates of employment, job title, and
job responsibilities.  Subject to the terms of this Section 7,
Executive, as appropriate, may respond truthfully to inquiries from prospective
employers of Executive, and the Company and Executive may respond truthfully as
may be required by any governmental or judicial body acting in its official
capacity.

     

    
      	
               
      

            	
              8.

            	
              Non-Assignability.

            

    

     

    It is
understood that this Agreement has been entered into personally by the
parties.  Neither party shall have the right to assign, transfer,
encumber or dispose of any duties, rights or payments due hereunder, which
duties, rights and payments with respect hereto are expressly declared to be
non-assignable and non-transferable, being based upon the personal services of
Executive, and any attempted assignment or transfer shall be null and void and
without binding effect on either party; provided, however, that the Company may
assign this Agreement to any parent, subsidiary, affiliate or successor
corporation.

     

    
      	
               
      

            	
              9.

            	
              Injunctive
      Relief.

            

    

     

    The
parties acknowledge that the remedy at law for any violation or threatened
violation of Sections 4, 5, 6, 7 and/or 8 of this Agreement may be inadequate
and that, accordingly, either party shall be entitled to injunctive relief in
the event of such a violation or threatened violation without being required to
post bond or other surety.  The above stated remedies shall be in
addition to, and not in limitation of, any other rights or remedies to which
either party is or may be entitled at law, in equity, or under this
Agreement.

     

    
      
        	 	
                10.

              	
                Indemnification.

              

      

    

     

    The
Company agrees that it shall indemnify and hold harmless Executive in connection
with legal proceedings seeking to impose liability on Executive in such
Executive’s capacity as a director, officer or employee of the Companies to the
fullest extent permitted under the Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws of VRI.  In furtherance
thereof, the Company and Executive each agree to execute and deliver an
Indemnification Agreement by and between the Company and Executive, attached
hereto as Exhibit
A and incorporated herein by reference, concurrently with the execution
and delivery of this Agreement.  To the extent any provision set forth
in the Indemnification Agreement is in conflict with any provision set forth in
this Agreement, the provision set forth in the Indemnification Agreement shall
govern.  Further, Executive shall be entitled to coverage under the
Directors and Officers Liability Insurance program to the same extent as other
senior executives of the Companies.

     

    
      
        	 	
                11.

              	
                Complete
      Agreement.

              

      

    

     

    This
Agreement constitutes the full understanding and entire employment agreement of
the parties, and supersedes and is in lieu of any and all other understandings
or agreements between the Company and Executive, including the Original
Agreement which is replaced in its entirety; provided, however, that the
terms of the Addendum shall remain in full force and effect.  Nothing
herein is intended to limit any rights or duties Executive has under the terms
of any applicable incentive compensation, benefit plan or other similar
agreements.

     

    
      	 	
              12. 

            	
              Disputes.

            

    

                         

        All disputes
relating to or arising from this Agreement and/or Executive’s employment with
the Company shall be resolved, upon written request by either party, by final
and binding arbitration by JAMS in San Francisco, California in accordance with
the JAMS Streamlined Arbitration Rules and Procedures as in effect at the time
of the arbitration.  The JAMS arbitration fees shall be paid equally
by the parties hereto.  Arbitration hereunder shall take place before
one JAMS arbitrator mutually agreed upon by the parties within 30 days of the
written request for arbitration.  If the parties are unable or fail to
agree upon the arbitrator within such time, the parties shall submit a request
at the end of such period to JAMS to select the arbitrator within 15 days
thereafter.  The arbitration and determination rendered by the JAMS
arbitrator shall be final and binding on the parties and judgment may be entered
upon such determination in any court having jurisdiction thereof (and such
judgment enforced, if necessary, through judicial proceedings).  It is
understood and agreed that the arbitrator shall be specifically empowered to
designate and award any remedy available at law or in equity, including specific
performance.  The arbitrator may award costs and expenses of the
arbitration proceeding (including, without limitation, reasonable attorneys'
fees) to the prevailing party.

     

    
      
        	 	
                13.

              	
                Amendments.

              

      

    

     

    Any
amendment to this Agreement shall be made only in writing and signed by each of
the parties hereto.

     

    
      
        	 	
                14.

              	
                Governing
      Law.

              

      

    

     

    The
internal laws of the State of Nevada shall govern the construction and
enforcement of this Agreement.

     

    
      
        	 	
                15.

              	
                Notices.

              

      

    

     

    Any
notice required or authorized hereunder shall be deemed delivered when
deposited, postage prepaid, in the United States mail, certified, with return
receipt requested, addressed to the parties as follows:

     

        Blaise
Carrig

        558 Green
Acres Drive

        Gardnerville,
NV 89460

        

        Vail
Holdings, Inc.    

        390
Interlocken Crescent

        Broomfield,
Colorado  80021

        Attn:  General
Counsel

     

    
      	 	
              16.

            	
              Code Section
      409A.

            

    

                          

    Anything
in this Agreement to the contrary notwithstanding, if on the date of termination
of Executive’s employment with the Company, as a result of such termination,
Executive would receive any payment that, absent the application of this Section
16 would be subject to interest and additional tax imposed pursuant to Section
409A(a) of the Internal Revenue Code of 1986, as amended (the “Code”) as a
result of the application of Section 409A(a)(2)(B)(i) of the Code, then no such
payment shall be made prior to the date that is the earliest of (1) 6 months
after the date of termination of Executive’s employment, (2) Executive’s death,
or (3) such other date as will cause such payment not to be subject to such
interest and additional tax.

     

    
      	 	
              17.

            	
              No Duty to
  Mitigate.

            

    

                        

        Executive
shall not be required to mitigate damages or the amount of any payment provided
for under this Agreement by seeking other employment or otherwise, nor will any
payments hereunder be subject to offset in the event Executive does
mitigate.

     

    
      	 	
              18.

            	
              Binding
  Effect.

            

    

                          

        This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors, permitted assigns, heirs, executors and legal
representatives.

     

    
      	 	
              19 . 

            	
              Counterparts.

            

    

             

        This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original but all such
counterparts together shall constitute one and the same
instrument.  Each counterpart may consist of two copies hereof each
signed by one of the parties hereto.

     

    
      	 	
              20.  

            	
              
                Construction

              

            

    

                        

        Headings
in this Agreement are for convenience only and shall not control the meaning of
this Agreement.  Whenever applicable, masculine and neutral pronouns
shall equally apply to the feminine genders; the singular shall include the
plural and the plural shall include the singular.  The parties have
reviewed and understand this Agreement, and each has had a full opportunity to
negotiate this Agreement’s terms and to consult with counsel of their own
choosing.  Therefore, the parties expressly waive all applicable
common law and statutory rules of construction that any provision of this
Agreement should be construed against this Agreement’s drafter, and agree that
this Agreement and all amendments thereto shall be construed as a whole,
according to the fair meaning of the language used.

     

    
      	 	
              21.

            	
              
                Severability
      and Modification by
  Court.

              

            

    

                          

    If any
court of competent jurisdiction declares any provision of this Agreement invalid
or unenforceable, the remainder of this Agreement shall remain fully
enforceable.  To the extent that any such court concludes that any
provision of this Agreement is void or voidable, the court shall reform such
provision(s) to render the provision(s) enforceable, but only to the extent
absolutely necessary to render the provision(s) enforceable and only in view of
the parties’ express desire that the Company be protected to the greatest extent
allowed by law from unfair competition, unfair solicitation and/or the misuse or
disclosure of its confidential information and records containing such
information.

     

    

     

    [Signature
Page to follow.]

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

    VAIL
HOLDINGS, INC.

     

    By: /s/ Robert A. Katz

     

    Name:
Robert A. Katz

     

    Title:
Chief Executive Officer

     

    

     

    EXECUTIVE:

     

    /s/ Blaise
Carrig                                                                

     

    Blaise
Carrig

     

    

     

    

     

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Annex
I

     

    MUTUAL
RELEASE

     

    This
mutual release (this “Release”) is entered into as of this _____________ day of
_____________, 20___ (the “Release Date”) by Blaise Carrig (“Employee”), on the
one hand and Vail Holdings, Inc., (“VHI”) on the other hand.

     

    1.           Reference
is hereby made to Executive Employment Agreement, dated __________, 20__ (the
“Executive Employment Agreement”) by the parties hereto setting forth the
agreements among the parties regarding the termination of the employment
relationship between Employee and VHI.  Capitalized terms used but not
defined herein have the meanings ascribed to them in Executive Employment
Agreement.

     

    2.           Employee,
for him/herself, his/her spouse, heirs, executors, administrators, successors,
and assigns, hereby releases and discharges VHI 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, that Employee or his/her spouse, heirs,
executors, administrators, successors, or assigns ever had or may have at any
time through the Release Date.  Employee 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 rescission periods observed; (ii) any claim,
whether statutory, common law, or otherwise, arising out of the terms or
conditions of Employee’s employment and/or Employee’s separation from VHI
including, but not limited to, any claims in the nature of tort or contract
claims, wrongful discharge, promissory estoppel, intentional or negligent
infliction of emotional distress, and/or breach of covenant of good faith and
fair dealing.  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,
Employee 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.  Employee 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.           VHI
hereby releases and discharges Employee, his/her spouse, heirs, executors,
administrators, successors, and assigns, from any and all actions, causes of
actions, claims, demands, grievances and complaints, known and unknown, that VHI
ever had or may have at any time through the Release Date.  VHI
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 Employee’s employment and/or
Employee’s separation from VHI, 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, VHI 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.  VHI 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.

     

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

     

    5.           Enforceability of
Release:

     

    
      	
               
      

            	
              (a)

            	
              You
      acknowledge that you have been advised to consult with an attorney before
      signing this Release.

            

    

     

    
      
        	 	
                (b)

              	
                You
      acknowledge the adequacy and sufficiency of the consideration outlined in
      Executive Employment Agreement for your promises set forth in this Release
      and that the Company is not otherwise obligated to pay such
      sums.

              

      

    

     

    
      	
               
      

            	
              (c)

            	
              You
      acknowledge that you have been offered at least twenty-one (21) days to
      consider this Release, that you have read Executive Employment Agreement
      and this Release, and understand its terms and significance, and that you
      have executed this Release and with full knowledge of its effect, after
      having carefully read and considered all terms of this Release and, if you
      have chosen to consult with an attorney, your attorney has fully explained
      all terms and their significance to
you.

            

    

     

    
      
        	 	
                (d)

              	
                You
      hereby certify your understanding that you may revoke this Release, as it
      applies to you, within seven (7) days following execution of this Release
      and that this Release shall not become effective or enforceable until that
      revocation period has expired.  Any revocation should be sent,
      in writing, to Vail Resorts Management Company, 390 Interlocken Crescent,
      Suite 1000, Broomfield, Colorado  80021, Attn: Office of the
      General Counsel.  You also understand that, should you revoke
      this Release within the seven-day period, this Release, as it applies to
      you, would be voided in its entirety and the sums set forth in Executive
      Employment Agreement would not be paid or owed to
  you.

              

      

    

     

    6.           This
Mutual Release shall be effective as of the eighth day following 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.

     

    BLAISE
CARRIG                                                                                                           VAIL
HOLDINGS, INC.

     

    

     

    

     

    _________________________________                                                                       By:_________________________________

     

    Date:______________________________                                                                    Date:_______________________________

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