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EXHIBIT 10.2
VANS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement" herein) is entered into as of August
9, 1999, by and between VANS, INC., a Delaware corporation (the "Company"), and
XXXXX X. XXXXXX ("Employee").
1. Employment and Duties. The Company hereby employs Employee as Vice
President - Marketing of the Company on the terms and subject to the conditions
contained in this Agreement. Employee shall be responsible for managing the
Company's marketing and advertising efforts and exploring new media and
entertainment opportunities. 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 Vice President - World
Marketing of the Company, or such other executive officer as may be designated
by 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 August 8, 2002, 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 /s/ CEG Initial /s/ CS
------------------- ---------------
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 $120,000 during the term of this
Agreement. 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; Relocation to Southern California. 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. The Company also shall reimburse Employee for
the reasonable expenses actually incurred by Employee in connection with the
relocation of his residence from New York to Southern California; provided that,
Employee shall furnish the Company with written receipts for such expenses and
the Company shall not be responsible for the costs associated with selling or
sub-leasing Employee's New York residence or purchasing or leasing a new
residence in Southern California.
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)
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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, 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,
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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 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
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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.
(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, including specifically the Company's annual bonus plan for executive
officers pursuant to which Employee shall have the opportunity to earn an annual
bonus equal to thirty percent (30%) of his salary compensation, subject to the
terms and conditions of the plan. 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
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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.
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 - Marketing 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 such termination,
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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 six (6) months from the date of
termination. Notwithstanding the foregoing, if Employee is employed by a new
employer, or as a consultant after the termination of this Agreement, 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. 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
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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: Xxxxx X. 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.
16. 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.
17. 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.
18. 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.
19. 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.
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20. 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.
21. Counterparts. This Agreement may be executed in counterparts.
22. 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 (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, OR UNDER HIS EMPLOYMENT RELATIONSHIP WITH
THE COMPANY, DECIDED BY NEUTRAL ARBITRATION AND IS GIVING UP THE RIGHT TO A JURY
OR COURT TRIAL.
23. 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/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxx
V.P. and General Counsel
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Address Title
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