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EXHIBIT 10.4
VANS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement" herein) is entered into as of
February 1, 1997 by and between VANS, INC., a Delaware corporation (the
"Company"), and XXXX XXXXXX ("Employee").
1. Employment and Duties. The Company hereby employs Employee as
Vice President - Merchandising of the Company on the terms and subject to the
conditions contained in this Agreement. Employee shall be responsible for
managing all merchandising operations of the Company's United States wholesale
business. 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 shall, during the term hereof, devote Employee's full time and energy
to performing his duties. Employee shall report to the President 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 31, 2000, unless sooner
terminated 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 [INIT] Initial [INIT]
--------- ---------
Representative Employee
of the Company
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3. Salary Compensation. 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
$160,000.00 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.
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 work
day.
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 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,
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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;
(ii) Any information or compilation of
information concerning the identity, plans, requirements, preferences,
practices and methods of
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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.
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8.4 Records.
(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 5,000 shares of the Company's Common Stock on each anniversary
of his first date of employment with the Company, commencing on the
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second anniversary of such date. Such options shall contain three-year vesting
schedules.
11. Termination.
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. Termination by the Company for
"Cause" means termination due to (i) Employee's conviction of a felony (which,
through the lapse of time or otherwise is not subject to appeal); (ii)
Employee's material refusal, failure or neglect without proper cause to perform
adequately his obligations under this Agreement or follow the instructions of
his supervisor(s); (iii) any negligence or willful misconduct by Employee; (iv)
Employee's material breach of any of his fiduciary obligations as an executive
officer of the Company; (v) Employee's material failure to adhere to the code
of conduct and rules set forth in the Company's Employee Handbook, as amended
or in existence from time to time; (vi) the death or disability of Employee; or
(vii) the voluntary termination by Employee of his employment, except for "Good
Reason" (as defined in Paragraph 11.3 hereof).
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-Merchandising without Cause during the term of this Agreement; or
(ii) without Employee's consent, a majority of the duties defined in Section 1
hereof are removed from Employee's responsibilities. The term Good Reason does
not include a situation where certain of the duties defined in Section 1 hereof
are removed from Employee's responsibilities and are replaced with duties which
have greater responsibility and/or authority than the duties which are removed.
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
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such termination, Employee's right to receive severance compensation pursuant
to Paragraph 11.4 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);" or (iii) Employee is
terminated without Cause, 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) six (6) 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, 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 reasonable expenses incurred by Employee in
relocating his residence from Tennessee to Southern California, including but
not limited to reimbursing Employee for realtor fees and other reasonable fees
incurred by him in the sale of his Tennessee residence; provided however, the
Company has no obligation to
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purchase a new residence for Employee or contribute to, or reimburse him for,
the purchase price, fees or other costs associated with purchasing a new
residence.
15.2 Housing Accommodations. The Company shall, for a
reasonable period of time after Employee relocates to Southern California,
provide reasonable housing accommodations for Employee and his family at the
Residence Inn in Fullerton, California while Employee obtains permanent
housing.
15.3 Loan. The Company shall, upon the request of
Employee, provide Employee with a loan of $75,000 which shall not bear interest
and which shall be repaid by Employee in five equal annual installments (the
"Loan"). In the event the aggregate amount of all bonuses paid to Employee for
the Company's fiscal years ending May 31, 1998 and 1999 is less than $75,000
(the "Aggregate Bonuses"), then the Loan shall be reduced, dollar for dollar,
by the difference between $75,000 and the Aggregate Bonuses.
15.4 Country Club Membership. The Company shall pay a
one-time initial membership fee for a Country Club selected by Employee, in an
amount not to exceed $20,000.
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.
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: General Counsel
(000) 000-0000 - facsimile
To Employee: Xxxx Xxxxxx
(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.
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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 (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; No Representations by the Company. 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 on 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 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 the American Arbitration
Association or the Judicial Arbitration and Mediation Service
("JAMS")/Endispute, and judgment upon the award rendered by the
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arbitrator may be entered in any court having jurisdiction thereof. The cost
of arbitration (including reasonable attorneys' fees) shall be borne by the
losing party. The arbitration shall occur in Los Angeles, California and the
parties hereby consent to the jurisdiction of the arbitrator and to service of
process. EMPLOYEE HEREBY UNDERSTANDS THAT, BY SIGNING THIS AGREEMENT, HE IS
AGREEING TO HAVE ANY CLAIM HEREUNDER DECIDED BY NEUTRAL ARBITRATION AND IS
GIVING UP THE RIGHT TO A JURY OR COURT TRIAL.
24. Survival of Certain Provisions. Sections 7,8,9, and 22 of
this Agreement shall survive the termination hereof.
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 X. XXXXXX By: /s/ [SIG]
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Xxxx X. Xxxxxx
2815 APACHE MOON TER.
XXXXXXXXXXXX, XX 00000 Vice Pres. & Gen. Counsel
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Address Title
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