Saturday, November 11, 2006
Steamboat Ski and Resort Corp. President Chris Diamond will be paid a $400,000 to $725,000 bonus, depending on the sale price of the Steamboat Ski Area.
Diamond will receive the "change-in-control" bonus in exchange for giving up his participation in a company equity plan, according to a Form 8-K that American Skiing Co. filed Wednesday with the U.S. Securities and Exchange Commission.
Public companies use Form 8-K to report "material corporate events" of importance to investors or security holders in the company, according to the SEC. Compensation packages for directors and top executives are considered to be material events.
American Skiing Co., based in Maine, owns the Steamboat Ski and Resort Corp. ASC has listed the ski area for sale and talked with potential buyers, but no deal has been announced.
Diamond has been in the ski industry for more than 30 years and has been president at Steamboat since 1999. According to the agreement filed with the SEC, Diamond's new contract runs from Oct. 1 through July 31, 2007. It will pay him $284,313 with an annual bonus of up to 20 percent of his salary.
The sale price of the ski area will determine the actual amount of Diamond's change-in-control bonus. Estimates are that ASC is seeking $275 million or more for Steamboat, according to financial statements reported to the SEC and leaked to the media.
Diamond's agreement calls for him to be paid a year's salary if his employment ends for any of several reasons, including a change in ownership of the ski area. Diamond said Friday that is a standard protection included in executive employment contracts. It does not mean he will not continue as president if there is an ownership change, he said.
According to a year-end report filed last month, ASC lost $65.7 million during the 2006 fiscal year. But Steamboat performed well, with earnings of $27.5 million from $76.7 million in gross revenues, according to a confidential document prepared for potential buyers of the ski area and leaked to The Denver Post in September.
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