EXHIBIT 10.3
VANS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement" herein) is entered into as
of June 16, 2003, by and between VANS, INC., a Delaware corporation (the
"Company"), and XXXXXX X. XXX XXXXX ("Employee").
1. Employment and Duties. Subject to appointment by the Board of
Directors, the Company hereby employs Employee as Vice President - Asia and
Americas and Promotions and Events of the Company on the terms and subject to
the conditions contained in this Agreement. Employee shall be responsible for
managing the Company's promotions and events departments; managing the Company's
Xxxx Xxxxxxx Snowboard Camp; and managing the Company's sales efforts in Asia
and Central and South America. 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
Chief Marketing Officer 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 June 15, 2006, 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 CEG Initial SJV
----- -----
Representative Employee
of the Company
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 not less than $185,000
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. 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
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) 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
2
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 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 doing business on specific customers, suppliers, prospective
customers and prospective suppliers of the Company;
3
(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 duties to the Company.
4
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 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.
5
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
her 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 -
Asia and Americas and Promotions and Events 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.
6
11.4 Severance Compensation. In the event (i) Employee
terminates this Agreement for Good Reason in accordance with Paragraph 11.3
hereof; or (ii) 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 one year. In the event Employee is terminated without Cause, or
terminates this Agreement for Good Reason, within three (3) years of a "Change
in Management or Control" (as such term is defined in Paragraph 11.5 hereof),
the Company shall be obligated to pay severance compensation to Employee in an
amount equal to 2.99 times the sum of (a) Employee's then current salary
compensation, plus (b) the highest amount of bonus earned by Employee in any
fiscal year during the three fiscal years prior to the Change in Management or
Control, or in any fiscal year in the three-year period immediately prior to the
date of this Agreement, and such severance compensation shall be "grossed up"
for all federal and state taxes payable thereon. Employee shall have the option,
in his sole discretion, to receive such severance compensation in one lump sum.
In addition to the foregoing severance compensation, the Company shall also 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.
11.5 Definition of "Change in Management or Control."
The term `Change in Management or Control' means the occurrence, in a single
transaction or in a series of related transactions, of (i) a merger,
consolidation or similar transaction involving (directly or indirectly) the
Company and, immediately after the consummation of such merger, consolidation or
similar transaction, the stockholders of the Company immediately prior thereto
do not own, directly or indirectly, outstanding voting securities representing
more than fifty percent (50%) of the combined outstanding voting power of the
surviving entity in such merger, consolidation or similar transaction or more
than fifty percent (50%) of the combined outstanding voting power of the parent
of the surviving entity in such merger, consolidation or similar transaction;
(ii) a sale, lease, license or other disposition of all or substantially all of
the consolidated assets of the Company and its subsidiaries, other than a sale,
lease, license or other disposition of all or substantially all of the
consolidated assets of the Company and its subsidiaries to an entity, of more
than fifty percent (50%) of the combined voting power of the voting securities
of which are owned by stockholders of the Company in substantially the same
proportions as their ownership of the Company immediately prior to such sale,
lease, license or other disposition; or (iii) the acquisition by any Person
(other than any employee benefit plan, or related trust, sponsored or maintained
by the Company) as Beneficial Owner (as `Person' and `Beneficial Owner' are
defined in the Securities Exchange Act of 1934, as amended, or the rules and
regulations thereunder), directly or indirectly, of securities of the Company
representing twenty percent (20%) or more of the total voting power represented
by the Company's then outstanding voting securities.
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
7
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 four 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.
00000 Xxxxxxxxx Xxxxxx
Xxxxx Xx Xxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
562/565-8413 - facsimile
8
To Employee: Xxxxxx X. Xxx Xxxxx
(At the address listed 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.
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, including without limitation, that certain Vans,
Inc. Employment Agreement dated as of June 15, 2000, between the parties.
21. Counterparts. This Agreement may be executed in counterparts.
22. Arbitration of Employment Disputes. All disputes or
controversies arising out of the employment relationship between Employee and
the Company,
9
including claims by the Company against Employee, and claims by Employee against
the Company, including but not limited to claims for wrongful termination;
violations of Title VII of the Civil Rights Act of 1964, as amended; violations
of the Americans with Disabilities Act of 1990; or claims for violations of any
State law, rule or regulation regarding discrimination, harassment or other
wrongful conduct, shall be decided by an arbitrator in a final and binding
arbitration administered by the American Arbitration Association ("AAA") to be
conducted in Los Angeles, California, in accordance with its rules, guidelines
and standards for employment arbitration. Notwithstanding anything in the rules
of the body administering the arbitration, or applicable law to the contrary,
each party to the arbitration shall be entitled to conduct sufficient discovery
to adequately prepare its claims or defenses for arbitration, including access
to essential documents and witnesses, to be determined by the arbitrator,
subject to judicial review as allowed by law. The arbitrator shall have
jurisdiction to decide any questions as to the arbitrability of such claims,
whether an agreement to arbitrate exists, or whether an agreement to arbitrate
covers the claims in question. The arbitrator shall have the authority to grant
any and all rights, remedies and relief that would otherwise be available to the
parties if the claims were brought in a court of law, including punitive
damages, and shall have the authority to award the prevailing party reasonable
attorneys' fees. The arbitrator shall issue a written award and arbitration
decision that sets forth the arbitrator's findings of fact and conclusions of
law upon which the award is based. Judgment upon the award rendered by the
arbitrator may be entered in any court of competent jurisdiction. The cost of
arbitration (other than Employee's attorneys' fees and costs) shall be borne by
the Company. Each of us shall have the right, within 20 days after the issuance
of an award by the arbitrator, to seek a review thereof by a second arbitrator
who shall be appointed in accordance with the rules of the AAA, and such
arbitrator shall have the authority to affirm or reverse and remand the award in
accordance with the law and procedures applicable to appellate review by the
California Court of Appeal of a civil judgment following a trial.
23. 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/ Xxxxxx X. Xxx Xxxxx By: Xxxxx X. Xxxxxxxx
-------------------------------- ---------------------------------
Xxxxxx X. Xxx Xxxxx
Senior Vice President and
General Counsel
-------------------------------- ------------------------------------
(Address) Title
10
