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 _____ day of October, 2002,
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 and the Executive entered into
the First Amendment to the Agreement;
C. As of December 15, 2000, the Company and the Executive entered
into the Second Amendment to the Agreement;
D. The Executive and the Company hereby desire to amend the
Agreement as amended by the First Amendment and the Second Amendment. It is not
the intention of the parties to alter (i) the status of the Company's obligation
to pay deferred compensation under the Agreement as amended by the First
Amendment and the Second Amendment as an unfunded and unsecured promise to pay
money to the Executive in the future; or (ii) the rights of any general
creditors of the Company to the assets of the Company, including without
limitation, the amounts deposited with the trustee of the Trust Under Vans, Inc.
Deferred Compensation Plan; and
E. The Executive and the Company desire to amend the Agreement as
amended by the First Amendment and the 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 January 31, 2005, in quarterly amounts on
February 15, 2005, May 15, 2005, August 15, 2005 and November 15, 2005.
Each quarterly 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 each quarterly
payment from the Trust, the quarterly payment shall be considered to be
the lower of one-quarter of the balance in the Trust on January 31,
2001, or January 31, 2005. On April 1, 2006, an additional amount 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
2005 quarterly payments. For the purpose of this April 1, 2006 payment,
the quarterly payments shall be considered to be equal to one-quarter
of the lower of the then balance in the Trust on January 31, 2001 or
January 31, 2005.
For payments made in 2005, gross up will be
determined on the basis of supplemental wage withholding if that method
is available in 2005, plus Medicare, any applicable California
withholding tax, and employment taxes. For the purpose of determining
the amount of any remaining tax due on the 2005 quarterly payments, the
Executive's income tax (Federal and California, if any) shall be
determined with and without the grossed up quarterly payments as
determined above with the difference the amount to be grossed up for
payment due April 15, 2006 on the remaining tax attributable to the
2005 grossed up payments.
The payments 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 the Executive, the amount
in the Trust on January 31, 2005, 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 the 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 is his
current intent to provide services thereunder until December
31, [2004]. Executive agrees to retire on December 31, [2004].
Notwithstanding the foregoing, in the event Executive retires
prior to December 31, [2004], the payments provided in Section
2(a) of this Agreement from the Trust, including gross up as
determined above, shall be based upon the remaining balance in
the Trust on the 15th of the month following the month of
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retirement and shall be payable in a lump sum prior to the end
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 15th of the month following the month
of retirement.
3. Except as expressly amended hereby, the Agreement as
amended by the First Amendment and the Second Amendment is hereby
ratified, affirmed and approved in all respects.
4. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall
constitute an original, but such counterparts together shall constitute
one and the same Amendment.
"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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