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EXHIBIT 10.3
VANS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement" herein) is entered into as of
January 20, 2000, by and between VANS, INC., a Delaware corporation (the
"Company"), and XXXX XXXXX ("Employee").
1. Employment and Duties. The Company hereby employs Employee as Vice
President - Design of the Company on the terms and subject to the conditions
contained in this Agreement. Employee shall be responsible for the creative
direction of the Company's footwear design and managing the Company's footwear
designers. Employee hereby accepts such employment and agrees to perform in good
faith and to the best of Employee's ability all services which may be required
of Employee hereunder, to do what is asked of him, and to be available to render
services at all times and places in accordance with such directions, requests,
rules and regulations made by the Company in connection with Employee's
employment. Employee hereby acknowledges and understands the duties and services
that are expected of him hereunder, and he hereby represents that he has the
experience and knowledge to perform such duties and services. Employee's
performance shall be reviewed no less than twice per year. Each performance
review will include a determination as to whether the term of this Agreement
will be extended and as to whether Employee's compensation will be increased
(provided, however, that in no event can Employee's compensation be decreased
during the term of this Agreement). Employee shall, during the term hereof,
devote Employee's full time and energy to performing his duties. Employee shall
report to the Senior Vice President - Apparel and International of the Company.
Employee shall be based at the Company's corporate offices. Employee
understands, however, that Employee may be required to travel within and out of
the State of California to discharge his duties hereunder.
2. Term of Employment. The term of this Agreement shall commence as of the
date hereof and shall terminate on January 19, 2003, unless sooner terminated as
provided herein or unless extended as provided herein. This Agreement does not
give Employee any enforceable right to employment beyond this term, and Employee
agrees that he shall have no rights hereunder thereafter. AS PROVIDED FURTHER IN
PARAGRAPH 11.1 BELOW, THIS AGREEMENT CONSTITUTES AN EMPLOYMENT AT-WILL THAT MAY
BE TERMINATED AT ANY TIME BY COMPANY OR EMPLOYEE, WITH OR WITHOUT CAUSE,
NOTWITHSTANDING THE THREE - YEAR TERM OF THIS AGREEMENT. IF EMPLOYEE IS
TERMINATED WITHOUT CAUSE DURING THE TERM HEREOF, OR AFTER A "CHANGE IN
MANAGEMENT OR CONTROL," AS DEFINED IN PARAGRAPH 11.5 BELOW, OR TERMINATES THIS
AGREEMENT FOR "GOOD REASON," AS DEFINED IN PARAGRAPH 11.3 BELOW, EMPLOYEE'S SOLE
REMEDY SHALL BE THE COMPENSATION SET FORTH IN PARAGRAPH 11.4 BELOW.
Initial /s/ CEG Initial /s/ MS
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Representative Employee
of the Company
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3. Salary Compensation; Signing Bonus.
3.1 As salary compensation for Employee's services hereunder and all
the rights granted hereunder by Employee to the Company, the Company shall pay
Employee a gross salary of no less than $185,000.00 per annum. Employee's salary
shall be payable in bi-weekly increments in accordance with the Company's
payroll practices for salaried employees, upon the condition that Employee fully
and faithfully performs Employee's services hereunder in accordance with the
terms and conditions of this Agreement. The Company shall deduct and withhold
from the compensation payable to Employee hereunder any and all amounts required
to be deducted or withheld by the Company under the provisions of any statute,
regulation, ordinance, or order and any and all amendments hereinafter enacted
requiring the withholding or deducting from compensation payable to employees.
3.2 The Company shall pay Employee a "signing bonus" of $15,000, net
to Employee, on the day Employee begins performance of his employment duties
with the Company.
4. Expense Reimbursement. Employee shall be reimbursed by the Company for
all traveling, hotel, entertainment and other expenses that are properly and
necessarily incurred by Employee, pursuant to the Company's policies on the
same.
5. Death or Disability of Employee.
5.1 General. In the event of Employee's death or "disability" (as such
term is defined in Paragraph 5.2 hereof) while in the employ of the Company,
this Agreement, and the compensation due to Employee pursuant to Paragraph 3
hereof, shall terminate upon the date of death or disability and the Company
shall thereafter be required to make payments only to Employee, as provided in
Paragraph 11.2 hereof. If Employee shall recover from such disability prior to
the expiration date of the Agreement, this Agreement and Employee's employment
hereunder shall be reinstated for the balance of the term of this Agreement.
5.2 Definition of Disability. Employee shall be deemed disabled if, in
the sole opinion of the Company, Employee is unable to substantially perform the
services required of Employee hereunder for a period in excess of 60 consecutive
work days or 60 work days during any 90 work day period. In such event, Employee
shall be deemed disabled as of such 60th workday.
6. Restrictive Covenant. During the term of this Agreement, Employee shall
(i) devote his full time and energy solely and exclusively to the performance of
his duties described herein; (ii) not directly or indirectly provide services to
or through any company or firm except the Company unless otherwise instructed by
the Company; (iii) not directly or indirectly own, manage, operate, join,
control, contribute to, or participate in the ownership, management, operation
or control of or be employed by or connected
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in any manner with any enterprise which is engaged in any business competitive
with or similar to that of the Company; and (iv) not render any services of any
kind or character for Employee's own account of for any other person, firm or
corporation without first obtaining the Company's consent in writing; provided,
however, Employee shall have the right to perform such incidental services as
are necessary in connection with Employee's (a) private passive investments
where he is not obligated or required to, and shall not in fact, devote any
managerial efforts, as long as such investments are not in companies which are
in competition in any way with the Company; or (b) charitable or community
activities, or in trade or professional organizations, provided that such
incidental services do not interfere with the performance of Employee's services
hereunder.
7. Non-Solicitation. Employee shall not, during the full term of this
Agreement and for a period of one (1) year thereafter, for himself or on behalf
of any other person, partnership, corporation or entity, directly or indirectly,
or by action in concert with others, solicit, induce, suggest or encourage any
person known to him to be an employee of the Company or any affiliate of the
Company to terminate his or her employment or other contractual relationship
with the Company or any of its affiliates.
8. Trade Secrets and Related Matters
8.1 Definitions. For purpose of this Section 8:
(a) "Records" means files, accounts, records, log books,
documents, drawings, sketches, designs, diagrams, models, plans, blueprints,
specifications, manuals, books, forms, notes, reports, memoranda, studies,
surveys, software, flow charts, data, computer programs, listing of source code,
calculations, recordings, catalogues, compilations of information,
correspondence, confidential data of customers and all copies, abstracts or
summaries of the foregoing in any storage medium, as well as instruments, tools,
storage devices, disks, equipment and all other physical items related to the
business of the Company (other than merely personal items of a general
professional nature), whether of a public nature or not, and whether prepared by
Employee or not.
(b) "Trade Secrets" means confidential business or technical
information or trade secrets of the Company which Employee acquires while
employed by the Company, whether or not conceived of, developed or prepared by
Employee or at his direction and includes:
(i) Any information or compilation of information concerning
the Company's financial position, financing, purchasing, accounting, marketing,
merchandising, sales, salaries, pricing, investments, costs, profits, plans for
future development, employees, prospective employees, research, development,
formulae, patterns, inventions, plans, specifications, devices, products,
procedures, processes, operations, techniques, software, computer programs or
data;
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(ii) Any information or compilation of information
concerning the identity, plans, requirements, preferences, practices and methods
of doing business on specific customers, suppliers, prospective customers and
prospective suppliers of the Company;
(iii) Any other information or "know how" which is related
to any product, process, service, business or research of the Company; and
(iv) Any information which the Company acquires from another
party and treats as its proprietary information or designates as "Confidential,"
whether or not owned or developed by the Company.
Notwithstanding the foregoing, "Trade Secrets" do not include any of the
following:
(i) Information which is publicly known or which is
generally employed by the trade, whether on or after the date that Employee
first acquires the information;
(ii) General information or knowledge which Employee would
have learned in the course of similar work elsewhere in the trade; or
(iii) Information which Employee can prove was known by
Employee before the commencement of Employee's engagement by the Company;
8.2 Acknowledgments. Employee acknowledges that:
(a) Employee's relationship with the Company will be a confidential
relationship in which Employee will have access to and may create Trade Secrets.
(b) The Company uses the Trade Secrets in its business to obtain a
competitive advantage over its competitors who do not know or use that
information.
(c) The protection of the Trade Secrets against unauthorized
disclosure or use is of critical importance in maintaining the competitive
position of the Company.
8.3 Protection of Trade Secrets. Employee shall not at any time, without
the prior written consent of the Company, which may be withheld by it in its
sole and absolute discretion, disclose any Trade Secret in any way except to
employees of the Company, and shall not use any Trade Secret in any way except
in connection with his or her duties to the Company.
8.4 Records.
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(a) Ownership. All Records are and shall remain the exclusive property
of the Company.
(b) Return of Records. At the termination of this Agreement, Employee
shall promptly return to the Company all records in Employee's possession or
over which Employee has control.
8.5 Prohibited Use of Trade Secrets. During the term of this Agreement and
for 12 months following termination of this Agreement, Employee shall not
undertake any employment or consulting relationship (the "New Activity") if the
loyal and complete fulfillment of his or her duties in the New Activity would
inherently call upon Employee to reveal any Trade Secret.
9. Ownership of Material and Ideas. Employee agrees that all material,
ideas, and inventions pertaining to the business of the Company or of any client
of the Company, including but not limited to, all patents and copyrights thereon
and renewals and extensions thereof, trademarks and trade names, and the names,
addresses and telephone numbers of customers, distributors and sales
representatives of the Company, belong solely to the Company. Employee hereby
assigns any rights he may have to any such property to the Company, and agrees
to execute and deliver any documents which evidence such assignment.
10. Employee Plans, etc. Employee shall be entitled to participate, to the
same extent as most other officers of the Company, in any bonus compensation
plan, stock purchase or stock option plan, group life insurance plan, group
medical insurance plan and other compensation or employee benefit plans
(collectively, "Plans") which are generally available to a majority of the other
officers of the Company during the term hereof and for which Employee shall
qualify. Employee further understands, however, that the Board of Directors, or
such committee or person or persons designated by the Board of Directors, shall
determine in its sole discretion (i) whether any Plans are made available to a
majority of the officers of the Company; (ii) whether one or more Plans are
adopted solely for the Chief Executive Officer and/or one or more (but not a
majority) of the officers of the Company; (iii) whether one or more Plans are
made available to a majority of the officers; and (iv) the amounts payable or
the benefits provided thereunder to each participant in whole or in part.
Employee agrees and acknowledges that he has no vested interest in the
continuance of any Plan, and that no Plan in existence on the date of the
Agreement has acted as a material inducement to Employee in entering into this
Agreement. Notwithstanding anything to the contrary contained herein, the
Company shall use its best efforts to cause the Compensation Committee of the
Board of Directors to grant Employee an incentive stock option for 15,000 shares
of the Company's Common Stock with a three-year vesting schedule. Employee shall
be entitled to participate in the Company's Fiscal 2000 Bonus Plan with an
opportunity to receive a bonus equal to 30% of his salary, subject to terms and
conditions of the Plan.
11. Termination.
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11.1 "At Will" Employment. This Agreement, and Employee's employment,
is at will, and the Company may, with or without notice, terminate this
Agreement and all of the Company's obligations hereunder with or without
"Cause." Employee may also terminate this Agreement at any time, for any reason,
upon the giving of thirty (30) days' written notice to the Company; provided,
however, the Company may waive all or any portion of such notice period in its
sole and absolute discretion. For "Cause," as used in this Agreement, shall
mean: (i) Employee's conviction of a felony (which through the lapse of time or
otherwise is not subject to appeal) which has a material adverse impact on the
Company's' financial condition or reputation; (ii) Employee's willful refusal or
repeated neglect, without "Good Reason," to perform his duties under Section 1
of this Agreement; (iii) Employee's material breach of his fiduciary obligations
as an executive officer of the Company, if such breach has a serious adverse
impact upon the Company's financial condition or reputation; (iv) Employee's
intentional and material failure to adhere to the code of conduct and rules set
forth in the Company's Employee handbook, as amended from time to time; (v) the
death or disability of the Employee; and (vi) the voluntary termination by
Employee of his employment without "Good Reason" as defined in paragraph 11.3,
provided, however that with respect to (ii), (iii) and (iv) the Company must
first provide Employee a written notice (including all written evidence)
specifying the failure or breach on Employee's part and affording Employee
thirty (30) days to cure the violation to the reasonable satisfaction of the
Company.
11.2 Termination for Cause. Upon termination for Cause, the Company
shall only be required to pay Employee (i) accrued salary compensation due to
Employee as compensation for services rendered hereunder and not previously
paid; (ii) accrued vacation pay; and (iii) any appropriate business expenses
incurred by Employee in connection with his duties hereunder and approved
pursuant to Section 4 hereof, all through the date of termination. Employee
shall not be entitled to any severance compensation; bonus compensation, whether
"vested" or unvested; or any other compensation, benefits or reimbursement of
any kind.
11.3 Termination for "Good Reason." Employee may terminate this
Agreement for "Good Reason" (as hereinafter defined) upon thirty (30) days
written notice to the Company. The term "Good Reason" means: (i) Employee is not
appointed or is removed from the position of Vice President - Design without
Cause during the term of this Agreement; (ii) Company proposes, or without
Employee's consent makes, a material change in the duties described in Section
1; (iii) Employee, for any reason within the Company's control, is prevented
from or not permitted to perform the duties described in Section 1; or (iv)
Company in any other way breaches this Agreement. The term "Good Reason" does
not include a situation where certain of the duties described in Section 1 are
removed from Employee's responsibility and replaced with other duties which
constitute greater responsibility and/or authority, provided that Company and
Employee agree to the new duties and compensation therefor. Unless Employee
terminates this Agreement within thirty (30) days of learning from any source
that the Company has acted so as to provide "Good Reason" for Employee to
terminate this Agreement and gives thirty (30) days written notice of such
termination, Employee's
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right to receive severance compensation pursuant to paragraph 1.4 for such event
shall be forever lost.
11.4 Severance Compensation. In the event (i) Employee terminates this
Agreement for Good Reason in accordance with Paragraph 11.3 hereof; (ii)
Employee is terminated for any reason (except death or disability) upon, or
within six months following, a "Change in Management or Control (as such term is
defined in Paragraph 11.5 hereof);" (iii) Employee is terminated without Cause;
or (iv) the Company allows this Agreement to expire without renewal, the Company
shall be obligated to pay severance compensation to Employee in an amount equal
to his salary compensation (at the rate payable at the time of such termination)
for a period of the lesser of (i) the remaining portion of the term of this
Agreement, or (ii) nine (9) months from the date of termination; provided,
however, if Employee is employed by a new employer, or as a consultant during
such period, the severance compensation payable to Employee hereunder shall be
reduced by the amount of compensation that Employee actually receives from the
new employer, or as a consultant. However, Employee shall have a duty to inform
the Company that he has obtained such new employment, and the failure to do so
is a material breach of this Agreement. In such event, the Company shall be
entitled to (i) cease all payments to Employee under this Paragraph 11.4; and
(ii) recover any unauthorized payments to Employee in an action for breach of
contract. Notwithstanding anything else in this Agreement to the contrary,
solely in the event of a termination upon or following a Change in Management or
Control, the amount of severance compensation paid to Employee hereunder shall
not include any amount that the Company is prohibited from deducting for federal
income tax purposes by virtue of Section 280G of the Internal Revenue Code of
1986, as amended, or any successor provision. In addition to the foregoing
severance compensation, the Company shall pay Employee (i) all compensation for
services rendered hereunder and not previously paid; (ii) accrued vacation pay;
and (iii) any appropriate business expenses incurred by Employee in connection
with his duties hereunder and approved pursuant to Section 4 hereof; and (iv)
Employee's prorated share of any bonus due pursuant to any bonus plan then in
effect, all through the date of termination. Employee shall not be entitled to
any bonus compensation, whether vested or unvested; or any other compensation,
benefits or reimbursement of any kind.
11.5 Definition of "Change in Management or Control." The term "Change in
Management or Control" means (i) the time that the Company first determines that
any person and all other persons who constitute a group (within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934 ("Exchange Act")) have
acquired direct or indirect beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act) of twenty percent (20%) or more of the Company's
outstanding securities, unless a majority of the "Continuing Directors" (as such
term is hereinafter defined) approves the acquisition not later than ten (10)
business days after the Company makes that determination, or (ii) the first day
on which a majority of the members of the Company's Board of Directors are not
"Continuing Directors." The term "Continuing Directors" means, as of any date of
determination, any member of the Board of Directors of the Company who (i) was a
member of that Board of Directors on the date of this Agreement, (iii) has been
a member of that Board of Directors for the
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two years immediately preceding such date of determination, or (iv) was
nominated for election or elected to the Board of Directors with the affirmative
vote of the greater of (x) a majority of the Continuing Directors who were
members of the Board at the time of such nomination or election, or (y) at least
four Continuing Directors.
11.6 Exclusive Remedy. The payments referred to in this Section 11 shall be
exclusive and shall be the only remedy available to Employee for termination of
his employment with the Company, regardless of the circumstances, reasons or
motivation for any such termination. If Employee gives notice of termination of
this Agreement, or if it becomes known that this Agreement will otherwise
terminate in accordance with its provisions, the Company may, in its sole
discretion, relieve Employee of his duties under this Agreement or assign
Employee other duties and responsibilities to be performed until the termination
becomes effective.
12. Services Unique. It is agreed that the services to be rendered by
Employee hereunder are of a special, unique, unusual, extraordinary and
intellectual character which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in an action at law
and that a breach by Employee of any of the provisions contained herein will
cause the Company irreparable injury and damage. Employee expressly agrees that
the Company shall be entitled to injunctive or other equitable relief to prevent
a breach hereof. Resort to any such equitable relief shall not be construed as a
waiver of any of the rights or remedies which the Company may have against
Employee for damages or otherwise.
13. Key Man Life Insurance. During the term of this Agreement, the Company
may at any time effect insurance on Employee's life and/or health in such
amounts and in such form as the Company may in its sole discretion decide.
Employee shall not have any interest in such insurance, but shall, if the
Company requests, submit to such medical examinations, supply such information
and execute such documents as may be required in connection with, or so as to
enable the Company to effect, such insurance.
14. Vacation. Employee shall have the right during each one year period of
the term of this Agreement to take an aggregate of three weeks of vacation, with
pay, at such times as are mutually convenient to Employee and to the Company.
15. Other Benefits.
15.1 Expense Reimbursement for Relocation of Residence. The Company
shall, upon receipt of appropriate documentation from Employee, reimburse
Employee for all actual and reasonable expenses, including closing costs,
incurred by Employee in relocating his residence from Oregon to Southern
California, up to an aggregate of $40,000.00. The Company shall have no
obligation to purchase a new
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residence in Southern California for Employee or contribute to, or reimburse him
for, the purchase price thereof or closing costs associated therewith.
16. Notices. Any and all notices, demands or other communications required
or desired to be given hereunder by any party shall be in writing and shall be
validly given or made to another party if given by personal delivery, telex,
facsimile, telegram or if deposited in the United States mail, certified or
registered, postage prepaid, return receipt requested. If such notice, demand or
other communication is given by personal delivery, telex, facsimile or telegram,
service shall be conclusively deemed made at the time of such personal service.
If such notice, demand or other communication is given by mail, such notice
shall be conclusively deemed given forty-eight (48) hours after the deposit
thereof in the United States mail addressed to the party to whom such notice,
demand or other communication is to be given as hereinafter set forth:
To the Company: VANS, INC.
00000 Xxxxxxxxx Xxxxxx
Xxxxx Xx Xxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
562/565-8413 - facsimile
To Employee: XXXX XXXXX
(at the address set forth below his signature)
Any party hereto may change his or its address for the purpose of receiving
notices, demands and other communications as herein provided by a written notice
given in the manner aforesaid to the other party or parties hereto.
17. Applicable Law and Severability. This Agreement shall, in all respects,
be governed by the laws of the State of California applicable to agreements
executed and to be wholly performed within the State of California. Nothing
contained herein shall be construed so as to require the commission of any act
contrary to law, and wherever there is any conflict between any provision
contained herein and any present or future statute, law, ordinance or regulation
contrary to which the parties have no legal right to contract, the latter shall
prevail but the provision of this Agreement which is affected shall be curtailed
and limited only to the extent necessary to bring it within the requirements of
the law.
18. Attorneys' Fees. In the event any action is instituted by a party to
enforce any of the terms and provisions contained herein, the prevailing party
in such action shall be entitled to such reasonable attorneys' fees, costs and
expenses as may be fixed by the Court.
19. Modifications or Amendments. No amendment, change or modification of
this Agreement shall be valid unless in writing and signed by all of the parties
hereto. Further, any amendment, change or modification of this Agreement
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(including but not limited to the at-will nature of this Agreement as set forth
in Section 2 and Paragraph 11.1 hereof) must be approved in advance by the Board
of Directors of Company and reflected in the minutes of such Board's meetings or
in an action by unanimous written consent.
20. Successors and Assigns. All of the terms and provisions contained
herein shall inure to the benefit of and shall be binding upon the parties
hereto and their respective heirs, personal representatives, successors and
assigns.
21. Entire Agreement. This Agreement constitutes the entire understanding
and agreement of the parties with respect to the subject matter of this
Agreement, and any and all prior agreements, understandings or representations
are hereby terminated and canceled in their entirety and are of no further force
or effect. Employee specifically acknowledges and agrees that the Company has
not made any promises, assurances or guarantees regarding his employment or the
Company's business or future prospects, and he has not relied on any such
promises, assurances or guarantees in making his decision to become employed by
the Company and relocate his residence to Southern California.
22. Counterparts. This Agreement may be executed in counterparts.
23. Arbitration of Employment Disputes. Any dispute or controversy arising
out of this Agreement or the employment relationship between Employee and the
Company, including but not limited to, claims by Employee for wrongful
termination, race discrimination, sex discrimination, age discrimination,
discrimination based on nationality or religion, violation of Title VII of the
Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of
1990, the Age Discrimination in Employment Act of 1967, as amended, and the
California Fair Housing and Employment Act, as amended, shall, at any time
following the termination of Employee's employment, be submitted to final and
binding arbitration that shall comply with the applicable arbitration rules of
either the American Arbitration Association or the Judicial Arbitration and
Mediation Service ("JAMS")/Endispute, and judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The cost
of arbitration (except for Employee's attorneys' fees and costs) shall be borne
by the Company. The arbitration shall occur in Los Angeles, California and the
parties hereby consent to the jurisdiction of the arbitrator and to service of
process. The arbitrator shall issue a written opinion regarding his/her
decision. EMPLOYEE HEREBY UNDERSTANDS THAT, BY SIGNING THIS AGREEMENT, HE IS
AGREEING TO HAVE ANY CLAIM HEREUNDER, OR UNDER HIS EMPLOYMENT RELATIONSHIP WITH
THE COMPANY, DECIDED BY NEUTRAL ARBITRATION AND IS GIVING UP THE RIGHT TO A JURY
OR COURT TRIAL. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS PROVISION IS
INTENDED TO AFFECT OR RESTRICT ANY RIGHTS OR REMEDIES EMPLOYEE MIGHT HAVE IF HIS
CLAIMS WERE BROUGHT IN COURT.
24. Survival of Certain Provisions. Sections 7,8,9, and 23 of this
Agreement shall survive the termination hereof.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
EMPLOYEE: THE COMPANY:
VANS, INC.,
a Delaware corporation
/s/ Xxxx Xxxxx By: /s/ Xxxxx X. Xxxxxxxx
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Xxxx Xxxxx Xxxxx X. Xxxxxxxx
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