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EXHIBIT 10.14
VANS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement" herein) is entered into as of
March 10, 1997 by and between VANS, INC., a Delaware corporation (the
"Company"), and SARI K. RATSULA ("Employee"), with reference to the following
facts:
A. The Company and Employee are parties to an Employment Agreement,
dated June 15, 1994 (the "Original Agreement"); and
B. The parties wish to supersede the terms and conditions of the
Original Agreement and enter into a new Employment Agreement on the terms and
conditions stated herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment and Duties. The Company hereby employs Employee as
Senior Vice President -- Sales and Product Development of the Company on the
terms and subject to the conditions contained in this Agreement. Employee shall
be responsible for managing all aspects of the Company's national sales efforts
and managing the Company's product development department. 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 her, 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 her
hereunder, and she hereby represents that she 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 her duties. Employee shall
report to the President and Chief Executive Officer. 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
her duties hereunder.
2. Term of Employment. The term of this Agreement shall terminate on
June 14, 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 she 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 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____________ Initial__________
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 $200,000
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 her full time and energy solely and exclusively to the
performance of her 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,
however, Employee shall have the right to perform such incidental services as
are
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necessary in connection with Employee's (a) private passive investments where
she 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 herself 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 her 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 her 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, strategy, 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,
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(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 designated employees of the Company, and shall not use any Trade
Secret in any way except in connection with her duties to the Company.
8.4 Records.
(a) Ownership, All Records are and shall remain the
exclusive property of the Company.
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(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.
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 she 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 she 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.
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 her
obligations under this Agreement or follow the instructions of her
supervisor(s); (iii) any negligence or willful misconduct by Employee; (iv)
Employee's material breach of any of her fiduciary obligations as an executive
officer of the Company, (v) Employee's material failure to adhere to the code of
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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 her 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 her 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 Senior Vice President -- Sales and
Product Development 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, 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 her salary compensation (at the rate payable at
the time of such termination) for a period of six months from the date of
termination. 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
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vacation pay; and (iii) any appropriate business expenses incurred by Employee
in connection with her 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, (ii) has been a member of that Board of
Directors for the two years immediately preceding such date of determination, or
(iii) 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 her 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 her 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.
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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 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
Attn: General Counsel
(000) 000-0000 - facsimile
To Employee: SARI K. RATSULA
(at the address set forth below her signature)
Any party hereto may change her 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
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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.
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 (including, without
limitations, the Original Agreement), understandings or representations are
hereby terminated and canceled in their entirety and are of no further force or
effect.
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 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 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 Orange,
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, SHE IS AGREEING TO HAVE ANY CLAIM HEREUNDER 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 22 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
By:
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Sari K. Ratsula
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Address Title
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