EXHIBIT 10.17
THE NORTH FACE, INC.
XXXXXXXX X. XXXXX EMPLOYMENT AGREEMENT
This Agreement is made by and between The North Face, Inc. (the "Company"),
and Xxxxxxxx X. Xxxxx ("Executive") as of the date set forth by the parties
below.
1. Duties and Scope of Employment.
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(a) Position; Employment Commencement Date; Duties. Executive's
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employment with the Company pursuant to this Agreement shall commence on
November 4, 1999 (the "Employment Commencement Date") and shall continue, unless
otherwise terminated earlier as provided in Section 4 hereof, until December 31,
2002 (the "Employment Term"). As of the Employment Commencement Date, the
Company shall employ the Executive as the Chief Executive Officer of the Company
reporting to the Board Directors of the Company (the "Board"); provided,
however, that Executive agrees to relinquish his duties as the Chief Executive
Officer of the Company and the Company agrees to offer Executive continued
employment in a capacity to be determined by the Board in the event that the
Board appoints Xxxx Xxxxx Salzburger to such position while Executive is
employed by the Company at any time between December 1, 2000 and January 31,
2001. At the end of the Employment Term, Executive and the Company understand
and acknowledge that Executive's employment with the Company will constitute
"at-will" employment. Executive and the Company acknowledge that after the
Employment Term, this employment relationship may be terminated at any time,
with or without good cause or for any or no cause, and with or without notice,
at the option either of the Company or Executive. While employed by the
Company, Executive shall render such business and professional services in the
performance of his duties, consistent with Executive's position within the
Company, as shall reasonably be assigned to him by the Board.
(b) Obligations. While employed by the Company, Executive shall
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devote his full business efforts and time to the Company at the Company's United
States headquarters, subject to Executive's need to commute between the
Company's headquarters and his home until January 31, 2001. Executive agrees,
during the Employment Term, not to actively engage in any other employment,
occupation or consulting activity for any direct or indirect remuneration
without the prior approval of the Board; provided, however, that Executive may
(i) serve in any capacity with any civic, educational or charitable
organization, or as a member of corporate Boards of Directors or committees
thereof, without the approval of the Board, so long as such activities do not
interfere with his duties and obligations under this Agreement and (ii) remain
in an unpaid advisory role with Xxxxxxx Xxxxx and Company, CPA, PC, provided
such role does not interfere with Executive's performance of his duties.
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2. Board Membership. On the Employment Commencement Date, the Company
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agrees to nominate Executive for Board membership.
3. Compensation and Benefits.
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(a) Base Salary. While employed by the Company, the Company shall pay
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the Executive as compensation for his services a base salary at the annualized
rate of $750,000, subject to annual increases at the discretion of the Board
(the "Base Salary"). Such salary shall be paid semi-monthly in accordance with
normal Company payroll practices and subject to the required withholding.
Executive understands and agrees that neither his job performance nor
promotions, commendations, bonuses or the like from the Company give rise to or
in any way serve as the basis for modification, amendment, or extension, by
implication or otherwise, of this Agreement.
(b) Annual Bonuses. During the Employment Term and for Company fiscal
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years ending after December 31, 1999, Executive shall be eligible to receive an
annual cash bonus as established by the Compensation Committee of the Board (the
"Annual Bonus"). Executive shall receive the Annual Bonus based on the
achievement of the target milestones specified by the Compensation Committee in
its discretion (which shall be consistent with the milestones established for
Xxxx Xxxxx Salzburger) that pertain to the Company's (i) EBITDA, (ii) customer
base, and (iii) infrastructure for the fiscal year ending December 31, 2000; the
Company's (i) earnings per share, (ii) customer base, and (iii) infrastructure
for the fiscal year ending December 31, 2001; and the Company's (i) earnings per
share and (ii) infrastructure for the fiscal year ending December 31, 2002 (the
"Bonus Milestones"). For each such fiscal year, the Annual Bonus shall equal
(i) 0% of the Executive's Base Salary for such year if less than 75% of the
applicable Bonus Milestones are met, (ii) 33.33% of the Executive's Base Salary
for such year if 75% of the applicable Bonus Milestones are met, (iii) a scaled
linear percentage of the Executive's Base Salary (between 33.33% and 100%) for
such year if between 75% and 125% of the applicable Bonus Milestones are met
(e.g., Executive shall be entitled to 66.67% of his Base Salary for such year if
100% of the applicable Bonus Milestones are met), and (iv) 100% of the
Executive's Base Salary for such year if 125% or more of the applicable Bonus
Milestones are met. The payment of any Annual Bonus under this Section 3(b)
shall be subject to Executive's employment with the Company through the end of
the applicable Company fiscal year (which employment requirement does not apply
with the respect to the Annual Bonus component of Severance Benefits made
pursuant to Section 5 or with respect to the pro-rated bonus payment made
pursuant to Section 5). Executive's Annual Bonus shall be reviewed annually by
the Compensation Committee of the Board for possible increases in light of
Executive's performance and competitive data.
(c) Stock Options.
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(i) Initial Option. Upon the Employment Commencement Date,
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Executive shall be granted a stock option covering seven hundred fifty thousand
(750,000) shares of Company Common Stock with a per share exercise price equal
to the closing sale price of a share of
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the Company's Common Stock on the market trading day prior to date of grant (the
"Option"). The Option shall have a term of ten years, provided, however, that
the Option shall terminate eighteen (18) months after Executive's termination of
services as an employee, consultant or director of the Company. Except as
otherwise specified in this Agreement, the Option is in all respects subject to
the terms, definitions and provisions of the Company's 1998 Nonstatutory Stock
Option Plan (the "NSO Plan"), as applicable, and the respective standard form of
option agreement thereunder (the "Option Agreement") (including, but not limited
to, "cashless exercise" rights as specified in the Option Agreement).
(ii) Vesting on Option. One hundred-fifty thousand (150,000)
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shares subject to the Option shall be immediately vested and exercisable on the
Employment Commencement Date. Except with respect to accelerated vesting
provided for elsewhere in this Agreement, two hundred thousand (200,000) shares
subject to the Option shall vest each anniversary of the Employment Commencement
Date, so as to be one hundred percent (100%) vested on the third (3rd)
anniversary of the Employment Commencement Date, subject to Executive remaining
employed by the Company on such vesting dates.
(iii) Additional Option. In the event that Xxxx Xxxxx
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Salzburger is appointed by the Board to serve as the Chief Executive Officer of
the Company while Executive is employed by the Company as otherwise provided
herein, and Executive elects to remain employed by the Company as otherwise
provided herein in a capacity to be determined by the Board, Executive shall be
granted an additional stock option covering two hundred thousand (200,000)
shares of Company Common Stock with a per share exercise price equal to the
closing sale price of a share of the Company's Common Stock on the market
trading day prior to the date of grant (the "Additional Option"). The Additional
Option shall have a term of ten years, provided, however, that the Additional
Option shall terminate eighteen (18) months after Executive's termination of
services as an employee, consultant or director of the Company. The Additional
Option shall vest monthly retroactive to the Employment Commencement Date over
the remaining months of the Employment Term so as to be fully vested at the end
of the Employment Term, subject to Executive remaining employed by the Company
on such vesting dates. Except as otherwise specified in this Agreement, the
Additional Option is in all respects subject to the terms, definitions and
provisions of the Company's NSO Plan, as applicable, and the respective standard
form of Option Agreement thereunder (including, but not limited to, "cashless
exercise" rights as specified in the Option Agreement).
(d) Relocation Reimbursements. During the Employment Term, the
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Company will reimburse the Executive for reasonable business class travel and
living expenses, including airfare, hotel and/or housing accommodations,
incurred by Executive and his spouse traveling between the Company's offices and
New York. In the event that Executive is the Chief Executive Officer of the
Company on or after January 1, 2001, the Company will also reimburse the
Executive at such times thereafter for customary and reasonable relocation costs
and housing accommodations. Executive shall not be required to permanently
relocate to the Company's offices until January 31,
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2001.
(e) Employee Benefits. During the Employment Term, Executive shall
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be eligible to participate in the employee benefit plans maintained by the
Company that are applicable to other senior management of the Company to the
full extent provided for under those plans, including, without limitation, the
Company's life, group health and disability insurance, profit-sharing, deferred
compensation and retirement plans, practices, policies and programs and the
Company's sick, personal, and vacation leave policies. The Company reserves the
right to cancel or change the benefit plans and programs it offers to its
employees at any time. Notwithstanding the foregoing, in the event that
Executive is not immediately eligible to participate in the employee benefit
plans maintained by the Company upon the Employment Commencement Date, the
Company shall reimburse Executive for group health, dental and vision plan
coverage premiums for Executive and his covered dependents for the period from
the Employment Commencement Date until the date that Executive and his
dependents become covered under the Company's group health, dental and vision
insurance plans.
(f) Director and Officer Insurance. During the Employment Term, the
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Company shall procure Director and Officer Insurance coverage as mutually agreed
upon in good faith by the Board and Executive on behalf of Executive in
accordance with the Company's established procedures and policies as then in
effect.
(g) Bankruptcy Protection. If, on or before the end of the first
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(1st) year of Employment Term, a petition for relief is filed with respect to
the Company pursuant to any chapter of Title 11 of the United States Code, 11
U.S.C. (S)(S) 101-1330 (the "Bankruptcy Code"), then Executive shall be entitled
to receive a third-party guaranteed cash payment, by guarantee bond or letter of
credit, in an amount equal to eight hundred thousand dollars ($800,000), such
third-party payment to be made within ten (10) business days of the date of such
filing. To the maximum extent permitted by the Bankruptcy Code, Executive's
claim shall be a priority claim (as that term is used in the Bankruptcy Code) in
any proceeding initiated with respect to the Company under any chapter of the
Bankruptcy Code. Should the Company be unable to procure a guarantee bond or
letter of credit in the amount of $800,000 prior to November 24, 1999 in a form
reasonably satisfactory to Executive, Executive may, at his election, terminate
his employment with the Company and receive, subject to signing and not revoking
a release of claims with the Company in substantially the form attached hereto
as Exhibit B, a lump-sum cash payment in the amount of $800,000; provided,
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however, that Executive shall make reasonable commercial efforts at the
Company's expense after consultation with the Board of Directors to assist the
Company in procuring such bond or letter of credit.
(h) Automobile. The Company shall, in its discretion, either make
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available to Executive an automobile or pay Executive a reasonable monthly auto
allowance sufficient to lease or purchase an automobile and reimburse Executive
for the maintenance, operating and insurance costs of such automobile.
4. Termination of Employment.
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(a) Involuntary Termination Without Cause. Subject to Section 6, if
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the Company terminates Executive's employment other than for "Cause" (as defined
herein) or in the event that the Executive resigns within 30 days following the
appointment by the Board of Xxxx-Xxxxx Salzburger as Chief Executive Officer of
the Company as provided in Section 1(a), and the Executive signs and does not
revoke a release of claims with the Company in substantially the form attached
hereto as Exhibit B, then the Executive shall be entitled to the following
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payments and benefits (the "Severance Benefits"):
(i) Continued payments of Base Salary for a period equal to the
lesser of (i) the period ending December 31, 2002, or (ii) one and one-half
years; provided, however, that in no event shall the period of such payments be
less than one year (the applicable payment period is referred to herein as the
"Severance Period");
(ii) Continued Annual Bonus payments over the Severance Period,
payable bi-monthly and based on Executive's Annual Bonus for the prior year
(e.g., if Executive's prior year Annual Bonus is $500,000, the Severance Period
is one year - Executive receives the aggregate amount of $500,000 in continued
annual bonus payments bi-monthly over the Severance Period), or, if such
payments are triggered prior to December 31, 2000, based on 100% of Executive's
"on-target" bonus, (i.e., Executive's prior year "on-target" Annual Bonus is
deemed to be $500,000, the Severance Period is one and one-half years -
Executive receives the aggregate amount of $750,000 in continued annual bonus
payments bi-monthly over the Severance Period);
(iii) Immediate vesting of Executive's options as to that number
of additional shares that would have vested had Executive remained employed
during the Severance Period;
(iv) Company-paid (to the same extent as for active executives)
group health, dental and vision plan continuation coverage premiums for
Executive and his covered dependents under Title X of the Consolidated Budget
Reconciliation Act of 1985, as amended ("COBRA") through the lesser of (x)
eighteen (18) months from the date of Executive's termination of employment, or
(y) the date upon which the Executive and his dependents become covered under
another employer's group health, dental and vision insurance plans that provide
Executive and his dependents with comparable benefits and levels of coverage;
and
(v) A pro-rated bonus payment equal to 100% of Executive's Annual
Bonus as in effect for the Company's fiscal year prior to the date of
termination, pro-rated by multiplying such bonus amount by a fraction, the
numerator of which shall be the number of days prior to the date of termination
during the year of termination, and the denominator of which shall be three-
hundred and sixty-five; provided, however, that if Executive is terminated prior
to December 31, 2000, the Annual Bonus shall be deemed to be $500,000 for
purposes of the pro-rata calculation.
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Notwithstanding the foregoing, if the Company terminates Executive's
employment other than for Cause prior to December 31, 2000, and the Executive
signs and does not revoke a release of claims with the Company in substantially
the form attached hereto as Exhibit B, then the Executive shall be entitled to
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both (i) the amount of Base Salary, Annual Bonus, and vesting on the options
that would have been earned had Executive remained employed with the Company
until December 31, 2000, and (ii) the Severance Benefits (computed as if the
date of termination was December 31, 2000) (all of the foregoing constitutes the
"Early Termination Severance Benefits").
For the purposes of this Agreement, "Cause" shall mean (i) Executive's
continued violation of Executive's obligation to perform the duties and
responsibilities normally required of a chief executive officer which are
willful or grossly negligent after Executive has been given written notice from
the Board of Directors describing Executive's violation; (ii) Executive's
engagement in willful or grossly negligent misconduct which is materially
injurious to the Company or its affiliates; (iii) Executive's conviction of or
plea of nolo contendere to a felony, (iv) Executive's committing a material act
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of fraud against or material misappropriation of property belonging to the
Company or its affiliates; or (v) Executive's material breach of this Agreement
or any confidentiality or proprietary information agreement between Executive
and the Company. However, Executive may not be terminated for Cause without (i)
notice to Executive setting forth the reasons for the Company's intention to
terminate for Cause, and (ii) an opportunity for Executive, together with his
counsel, if any, to be heard before the Board and, further, such actions shall
not constitute Cause if they are cured by the Executive within thirty (30) days
following delivery to the Executive of a written explanation specifying the
basis for the Board's beliefs with respect to such Cause events.
(b) Constructive Termination Following Change of Control. Subject
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to Section 6, if Executive resigns at any time within forty (40) days following
a "Constructive Termination" (as defined herein) that occurs within one (1)
month after a "Change of Control" (as defined herein), and the Executive signs
and does not revoke a release of claims with the Company in substantially the
form attached hereto as Exhibit B, then the Executive shall be entitled to the
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Severance Benefits.
For the purposes of this Agreement, "Change of Control" of the Company
shall mean the occurrence of any of the following events: (i) the consummation
of a merger or consolidation of the Company with any other corporation if the
merger or consolidation will result in the voting securities of the Company
outstanding immediately prior thereto representing (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) less than sixty percent (60%) of the total voting power represented by
the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or (ii) any "person" (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended) becoming the "beneficial owner" (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company representing more
than 40% of the total voting power represented by the Company's then outstanding
voting securities.
For the purposes of this Agreement, "Constructive Termination" shall mean
(i) the failure of
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the Company to reconfirm Executive's duties following the Change of Control or
any material diminution of the Executive's duties, authority or responsibilities
relative to the Executive's duties, authority, or responsibilities as in effect
immediately prior to such diminution, except if agreed to in writing by the
Executive; provided, however, that a diminution in duties, authority or
responsibilities solely by virtue of the Company being acquired and made part of
a larger entity (as, for example, when the Executive remains Chief Executive
Officer of the Company following a Change of Control and is not made the Chief
Executive Officer of the acquiring corporation) shall not constitute
"Constructive Termination;" or (ii) the relocation of the Executive to a
facility or a location more than fifty (50) miles from the Executive's then
present location, without the Executive's written consent; provided, however,
that such actions shall not constitute Constructive Termination if they are
cured by the Company within thirty (30) days following delivery to the Company
of a written explanation specifying the basis for the Executive's beliefs with
respect to such Constructive Termination events.
(c) Total Disability of Executive. Upon Executive's becoming
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permanently and totally disabled (as defined in accordance with Internal Revenue
Code Section 22(e)(3) or its successor provision) during the Employment Term,
employment hereunder shall automatically terminate, all payments of compensation
by the Company to Executive hereunder shall immediately terminate (except as to
amounts already earned); provided, however, that Executive shall be entitled to
receive the Severance Benefits. Notwithstanding the foregoing, if Executive
becomes permanently and totally disabled prior to December 31, 2000, employment
hereunder shall automatically terminate, and Executive shall be entitled to
receive the Early Termination Severance Benefits.
(d) Death of Executive. If Executive dies while employed by the
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Company pursuant to this Agreement, all payments of compensation by the Company
to Executive hereunder shall immediately terminate (except as to amounts already
earned, which shall be paid to his estate); provided, however, that Executive's
estate shall be entitled to receive the Severance Benefits. Notwithstanding the
foregoing, if Executive dies prior to December 31, 2000, then Executive's estate
shall be entitled to receive the Early Termination Severance Benefits.
(e) Other Termination of Employment. In the event Executive terminates
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employment with the Company for any reason other than (i) by the Company not for
Cause, (ii) by the Executive as a result of a Constructive Termination occurring
within one month following a Change of Control or (iii) for death or total
disability, then the options shall only be vested as to the extent vested as of
the date of termination of Executive's employment and Executive shall not
receive any severance pursuant to the terms of this Agreement.
(f) No Mitigation. Executive shall not be required to mitigate the
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value of any severance payments or benefits contemplated by this Section, nor
shall any such payments or benefits be reduced by any earnings or benefits that
the Executive may receive from any other source.
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6. Conditional Nature of Severance Payments.
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(a) Noncompete. Executive acknowledges that the nature of the
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Company's business is such that if Executive were to become employed by, or
substantially involved in, the business of a competitor of the Company during
the twelve (12) months following the termination of Executive's employment with
the Company, it would be very difficult for the Executive not to rely on or use
the Company's trade secrets and confidential information. Thus, to avoid the
inevitable disclosure of the Company's trade secrets and confidential
information, Executive agrees and acknowledges that Executive's right to receive
the severance payments set forth above (to the extent Executive is otherwise
entitled to such payments) shall be conditioned upon the Executive not directly
or indirectly engaging in (whether as an employee, consultant, agent,
proprietor, principal, partner, stockholder, corporate officer, director or
otherwise), nor having any ownership interested in or participating in the
financing, operation, management or control of, any person, firm, corporation or
business that competes with Company by being engaged in the manufacture and sale
of products materially similar to the Company's line of products or is a
material customer of the Company, including by way of example, Adidas/Salomon,
AcrTeryx, Xxxxxx, Xxxx Alpine, Marmot, Moonstone, Mountain Hardware, Nike and
Patagonia and any other entities similarly specializing in the manufacture and
sale of products materially similar to the Company's line of products; provided,
however, that Executive may enter into a consulting relationship with an entity
that competes with the Company following the termination of Executive's
employment with the Company without breach of this section if such relationship
is mutually agreed to by the Company and Executive. Upon any breach (excluding
de minimis breaches which cause no material harm to the Company) of this
section, all severance payments pursuant to this Agreement shall immediately
cease; provided, however, that Executive's actions will not be deemed to be a
breach of this section unless the Executive is given the opportunity to cure
such actions within thirty (30) days following delivery to the Executive of a
written explanation specifying the basis for the Company's beliefs with respect
to such events and he fails to cure such actions within such time. Ownership of
less than 3% of the outstanding voting stock of a publicly traded corporation
will not constitute a violation of this provision.
(b) Non-Solicitation. During Executive's employment and until one (1)
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year after termination of Executive's employment with the Company for any
reason, Executive agrees and acknowledges that Executive's right to receive the
severance payments set forth above (to the extent Executive is otherwise
entitled to such payments) shall be conditioned upon Executive not either
directly or indirectly soliciting, inducing, attempting to hire, recruiting,
encouraging, taking away, hiring any employee of the Company or causing an
employee of the Company to leave his or her employment either for Executive or
for any other entity or person; provided, however, that Executive's actions will
not be deemed to be a breach of this section unless the Executive is given the
opportunity to cure such actions within thirty (30) days following delivery to
the Executive of a written explanation specifying the basis for the Company's
beliefs with respect to such events and he fails to cure such actions within
such time.
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(c) Understanding of Covenants. The Executive represents that he (i)
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is familiar with the foregoing covenants not to compete and not to solicit, and
(ii) is fully aware of his obligations hereunder, including, without limitation,
the reasonableness of the length of time, scope and geographic coverage of these
covenants.
7. Assignment. Subject to Section 4, this Agreement shall be binding upon
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and inure to the benefit of (a) the heirs, executors and legal representatives
of Executive upon Executive's death and (b) any successor of the Company. Any
such successor of the Company shall be deemed substituted for the Company under
the terms of this Agreement for all purposes. As used herein, "successor" shall
include any person, firm, corporation or other business entity which at any
time, whether by purchase, merger or otherwise, directly or indirectly acquires
all or substantially all of the assets or business of the Company. None of the
rights of Executive to receive any form of compensation payable pursuant to this
Agreement shall be assignable or transferable except through a testamentary
disposition or by the laws of descent and distribution upon the death of
Executive. Any attempted assignment, transfer, conveyance or other disposition
(other than as aforesaid) of any interest in the rights of Executive to receive
any form of compensation hereunder shall be null and void.
8. Notices. All notices, requests, demands and other communications
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called for hereunder shall be in writing and shall be deemed given if (i)
delivered personally, (ii) one (1) day after being sent by Federal Express or a
similar commercial overnight service, or (iii) three (3) days after being mailed
by registered or certified mail, return receipt requested, prepaid and addressed
to the parties or their successors in interest at the following addresses, or at
such other addresses as the parties may designate by written notice in the
manner aforesaid:
If to the Company: The North Face, Inc.
0000 Xxxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
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If to Executive: Xxxxxxxx X. Xxxxx
at the last residential address known by the Company.
cc: Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxxxx Xxxxxxx Syracuse & Hirschtritt LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
9. Severability. In the event that any provision hereof becomes or is
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declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Agreement shall continue in full force and effect without said
provision.
10. Confidential Information and Invention Assignment. Executive agrees to
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enter into
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the Company's Confidentiality Agreement attached hereto as Exhibit A
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(the "Confidentiality Agreement") upon commencing employment hereunder which
shall be deemed incorporated and a part hereof.
11. Entire Agreement. This Agreement, the Stock Option Plan, the NSO Plan,
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the respective stock option agreements and the Confidentiality Agreement
represent the entire agreement and understanding between the Company and
Executive concerning Executive's employment relationship with the Company, and
supersede and replace any and all prior agreements and understandings concerning
Executive's employment relationship with the Company.
12. Arbitration and Equitable Relief.
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(a) Executive and the Company agree that any dispute or controversy
arising out of, relating to, or in connection with this Agreement, or the
interpretation, validity, construction, performance, breach, or termination
thereof shall be settled by arbitration to be held in Alameda County,
California, in accordance with the National Rules for the Resolution of
Employment Disputes then in effect of the American Arbitration Association (the
"Rules"). The arbitrator may grant injunctions or other relief in such dispute
or controversy. The decision of the arbitrator shall be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction.
(b) The arbitrator shall apply California law to the merits of any
dispute or claim, without reference to rules of conflict of law. The
arbitration proceedings shall be governed by federal arbitration law and by the
Rules, without reference to state arbitration law. Executive and the Company
hereby expressly consent to the personal jurisdiction and venue of the state and
federal courts located in California for any action or proceeding arising from
or relating to this Agreement and/or relating to any arbitration in which the
parties are participants.
(c) EXECUTIVE HAS READ AND UNDERSTANDS SECTION 12, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES TO SUBMIT ANY FUTURE CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH, OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THE EMPLOYER/EXECUTIVE
RELATIONSHIP.
13. No Oral Modification, Cancellation or Discharge. This Agreement may
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only be amended, canceled or discharged in writing signed by Executive and a
duly authorized officer (other than Executive) of the Company.
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14. Withholding. The Company shall be entitled to withhold, or cause to
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be withheld, from payment any amount of withholding taxes required by law with
respect to payments made to Executive in connection with his employment
hereunder.
15. Acknowledgment. Executive acknowledges that he has had the
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opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
16. Legal Fee Reimbursement. The Company agrees to directly pay
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Executive's reasonable legal fees associated with entering into this Agreement
up to $2,500 upon receiving invoices for such services.
17. Governing Law. This Agreement shall be governed by the internal
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substantive laws, but not the choice of law rules, of the State of California.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the
respective dates set forth below:
THE NORTH FACE, INC.
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
EXECUTIVE
/s/ Xxxxxxxx X. Xxxxx
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XXXXXXXX X. XXXXX
Date: November 4, 1999
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EXHIBIT A
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The North Face, Inc.
Confidentiality Agreement
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This Agreement is intended to set forth in writing certain aspects of my
responsibility as an Employee or Representative of The North Face, Inc.
In return for my employment by The North Face, Inc. I acknowledge and agree
that:
1. Effective Date:
This agreement ("Agreement") shall be effective as of the date below.
2. Confidentiality:
a. I will maintain in confidence and will not disclose or use
either during or after the term of my employment any proprietary or confidential
information belonging to The North Face, Inc. ("Confidential Information")
whether or not in written form, except to the extent required to perform duties
on behalf of The North Face, Inc. Confidential Information refers to any
information which has commercial value and concerns the business of The North
Face, Inc. or its customers or suppliers, which was disclosed to me by The North
Face, Inc. or its customers and suppliers, or which was learned, discovered,
developed, conceived, originated or prepared by me in the scope of my
employment. Such Confidential Information includes, but is not limited to
information relating to The North Face, Inc.'s product, product mix, designs,
processes, pricing, margins, merchandising plans and strategies, finances,
suppliers or customers, catalog mailing lists, sales and marketing plans, future
business plans, and any other information which is identified as confidential by
The North Face, Inc. I understand that Confidential Information does not include
any of the foregoing items which has become publicly known and made generally
available through no wrongful act of mine or of others who were under
confidentiality obligations as to the item or items involved or any of the
foregoing items that were independently developed, conceived, originated or
prepared by me outside of the scope of my employment. The obligations contained
in this Article 2 shall not apply to any information which becomes generally
known in the trade or industry other than as a result of a breach of this
Agreement.
3. The North Face, Inc.'s Materials:
Upon termination of my employment with The North Face, Inc. or at any time upon
The North Face, Inc.'s request, I will promptly deliver to The North Face, Inc.,
without retaining any copies, all documents and other material furnished to me
by The North Face Inc. or prepared by me in connection with my employment with
The North Face, Inc.
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4. Software:
The North Face, Inc. licenses the use of computer software from a variety of
outside companies. The North Face, Inc. does not own this software or its
related documentation and, unless authorized by the software developer, does not
have the right to reproduce it. With regard to use on local area networks or on
multiple machines, The North Face, Inc. employees shall use the software only in
accordance with the license agreement. The North Face, Inc. employees learning
of any misuse of software or related documentation within the company shall
notify the department manager or the Director of Data Processing. According to
the US. Copyright Law, illegal reproduction of software can result in civil
damages of as much as $100,000, and criminal penalties, including fines and
imprisonment. The North Face, Inc. employees who make, acquire or use
unauthorized copies of computer software shall be disciplined up to and
including immediate termination. The North Face, Inc. does not condone, and
will not tolerate the illegal duplication of software.
5. Competitive Employment:
During my term of employment with The North Face, Inc. I will not engage in any
employment, consulting, or other activity in any business competitive with The
North Face Inc. without The North Face, Inc.'s written consent, except as
permitted in the Employment Agreement that I entered into with the Company as of
November 4, 1999 (the "Employment Agreement").
6. Survival:
Notwithstanding the termination of my employment, Articles 2 ("Confidentiality")
and Article 3 ("Materials") shall survive such termination as set forth therein.
7. Specific Performance:
A breach of any of the provision of this Agreement will cause irreparable damage
to The North Face, Inc. for which there will no adequate remedy at law, and The
North Face, Inc. shall be entitled to injunctive relief and/or decree for
specific performance, and such other relief as may be proper (including monetary
damages if appropriate).
The North Face, Inc. Employee:
______________________ ________________________
Title:________________ ________________________
Date:_________________ Date:___________________
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