EXHIBIT 10.4
THIRD AMENDMENT TO VANS, INC.
DEFERRED COMPENSATION AGREEMENT
FOR XXXXXX XXXXXXXXXX
This Third Amendment to Vans, Inc. Deferred Compensation Agreement is
made and entered into, and is effective, as of this ___th day of December, 2003,
by and between VANS, INC., a Delaware corporation (the "Company"), and XXXXXX
XXXXXXXXXX (the "Executive"), with reference to the following facts:
A. As of June 1, 1996, the Company and the Executive entered into that
certain "Vans, Inc. Deferred Compensation Agreement for Xxxxxx Xxxxxxxxxx" (the
"Agreement");
B. As of June 1, 1996, the Company with Executive entered into the First
Amendment to the Agreement;
C. As of December 15, 2000, the Company with Executive entered into the
Second Amendment to the Agreement; and
D. The Executive and the Company hereby desire to amend the Agreement as
amended by the First and Second Amendment, in the following particulars only:
NOW, THEREFORE, in consideration of the foregoing recitals, and the
agreements hereinafter set forth, the parties hereto agree as follows:
1. Section 2(a) of the Agreement shall be amended to read as
follows:
(a) Subject to Section 2(b) hereof, the Company shall
pay to the Executive, and following the Executive's death, to XXXXXX
XXXXXXXXXX (the "Spouse"), if she shall survive the Executive, and is
married to the Executive on the date of his death, the remaining balance
in the Trust on November 1, 2004, on November 30, 2004.
Such lump sum payment shall be grossed up for Federal
withholding taxes and California withholding taxes, if any, including
Social Security, Medicare, and any employment taxes. For the purpose of
determining the amount of the gross up for the payment from the Trust,
the payment shall be considered to be the balance in the Trust on
November 1, 2004. On April 1, 2005, an additional amount, if any, shall
be paid to Executive on a grossed up basis in an amount that will permit
him to have funds available
to pay any remaining tax due on the November 2004 payment.
For the payment made in November 2004, gross up will be
determined on the basis of supplemental wage withholding if that method
is available in 2004, plus Medicare, any applicable California
withholding tax, and employment taxes. For the purpose of determining
the amount of any remaining tax due on the 2004 payment, Executive's
income tax (Federal and California, if any) shall be determined with and
without the grossed up payment as determined above with the difference
the amount to be grossed up for payment due April 15, 2005 on the
remaining tax attributable to the 2004 grossed up payment.
The payment required pursuant to this Section 2(a) shall
be made solely to the Executive and, upon his death, such payments shall
thereafter be made to the Spouse, if she is then living, or her estate
if she dies before the payments are complete provided that she is
married to the Executive on the date of his death. If the spouse shall
survive the Executive, but not be married to the Executive on the date
of his death, or does not survive Executive, the amount in the Trust on
November 1, 2004, less payments, if any, made from the Trust plus gross
up as determined above on the remaining payments shall be paid to the
estate of Executive.
2. Section 13 of the Agreement shall be amended to read as
follows:
13. Future Employment.
Nothing contained herein shall be construed as
conferring upon the Executive the right to continue in the
employ of the Company as an executive or in any other capacity,
or to interfere with the Company's right to discharge the
Executive pursuant to his Employment Agreement with the Company.
Executive is a party to an employment agreement with the
Company dated December 1, 1995 as amended and it continues to be
his intent to provide services thereunder until October 26,
2004. Executive agrees to retire on October 26, 2004.
Notwithstanding the foregoing, in the event Executive retires
prior to October 26, 2004, the payments provided in Section 2(a)
of this Agreement from the Trust, including gross up as
determined in such section, shall be based upon the remaining
balance in the Trust on the 1st of the month as determined by
the 15th of the month following the month of retirement and
shall be payable in a lump sum on the last day of such month
with a gross up payment, as determined above, to cover the tax
due on such payment. Gross up shall be determined based upon the
lower of the balance in the Trust on January 31, 2001 or the 1st
of the month following the month of retirement. (By way of
illustration, if retirement is in July, the trust balance is as
of August 1, determined by August 15 and paid by August 31.)
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3. For purposes of this Agreement "retirement" shall mean
retirement by Executive as Executive Chairman of the Board of Directors
of the Company. Retirement under this agreement does not preclude
Executive from serving thereafter as a member of the Board of Directors
or as a non-executive chairman of the Board.
4. Except as expressly amended hereby, the Agreement as amended
by the First Amendment is hereby ratified, affirmed and approved in all
respects.
5. An example of a gross up determination is attached.
"Company"
VANS, Inc., a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxx
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"Executive"
By: /s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx
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