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EXHIBIT 10.1
VANS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement" herein) is entered into
as of October 21, 1998, by and between VANS, INC., a Delaware corporation (the
"Company"), and XXXXXXX X. XXXXXX ("Employee").
1. EMPLOYMENT AND DUTIES. The Company hereby employs Employee
as Senior Vice President International Sales and Apparel 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 international sales and
apparel sales operations. 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 and Chief
Executive Officer 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 October 20, 2001, 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 _________ 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
$225,000.00 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
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,
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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;
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(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 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 40,000 shares
of the Company's Common Stock. Such option shall contain a five-year vesting
schedule. Employee shall be entitled to
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participate in the Company's Fiscal 1999 Bonus Plan at a rate equal to 50% of
his salary, with one-third of his Fiscal 1999 bonus guaranteed.
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 Senior Vice
President International Sales and Apparel 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
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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 actual and reasonable expenses incurred by Employee
in relocating his residence from Massachusetts to Southern California, including
the closing costs incurred by him in the sale of his Massachusetts residence.
The Company shall have no obligation to purchase a new residence in Southern
California for Employee or contribute to, or reimburse him for, the purchase
price thereof, but in the event such
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purchase price exceeds $500,000, the Company shall contribute up to two percent
(2%) of such purchase price to be applied toward the down payment of such
purchase, and shall increase the principal amount of the "Loan" (defined in
paragraph 15.2) by ten percent (10%).
15.2 LOAN. The Company shall, upon the request of
Employee, provide Employee with a loan of $50,000 which shall not bear interest
and which shall be repaid by Employee in five equal annual installments.
15.3 ANNUAL TRIP TO THE U.K.. The Company shall
pay for one (1) round-trip coach-class airfare to the United Kingdom for
Employee and each member of his immediate family each year during the term of
this Agreement.
15.4 CAR ALLOWANCE. The Company shall provide
Employee with a monthly car allowance of $500.00.
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.
00000 Xxxxxxxxx Xxxxxx
Xxxxx Xx Xxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
562/565-8413 - facsimile
To Employee: Xxxxxxx 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.
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,
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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. 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.
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, 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
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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.
24. SURVIVAL OF CERTAIN PROVISIONS. Sections 7,8,9, and 23 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
___________________________ By:________________________
Xxxxxxx X. Xxxxxx
___________________________ ________________________
Address Title
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