1
EXHIBIT 10.3
SECOND AMENDMENT TO VANS, INC.
DEFERRED COMPENSATION AGREEMENT
FOR XXXXXX XXXXXXXXXX
This Second Amendment to Vans, Inc. Deferred Compensation Agreement is made
and entered into, and is effective, as of this 15th day of December, 2000, by
and between VANS, INC., a Delaware corporation (the "Company"), and XXXXXX
XXXXXXXXXX (the "Executive"), with reference to the following facts:
A. As of June 1, 1996, the Company and the Executive entered into that
certain "Vans, Inc. Deferred Compensation Agreement for Xxxxxx Xxxxxxxxxx" (the
"Agreement");
B. As of June 1, 1996, the Company with Executive entered into the First
Amendment to the Agreement; and
C. The Executive and the Company hereby desire to amend the Agreement as
amended by the First Amendment, in the following particulars only:
NOW, THEREFORE, in consideration of the foregoing recitals, and the
agreements hereinafter set forth, the parties hereto agree as follows:
1. Section 2(a) of the Agreement shall be amended to read as follows:
(a) Subject to Section 2(b) hereof, the Company shall pay to the
Executive, and following the Executive's death, to XXXXXX XXXXXXXXXX (the
"Spouse"), if she shall survive the Executive, and is married to the
Executive on the date of his death, the remaining balance in the Trust on
January 31, 2004, in quarterly amounts on February 15, 2004, May 15, 2004,
August 15, 2004 and November 15, 2004.
Each quarterly payment shall be grossed up for Federal
withholding taxes and California withholding taxes, if any, including
Social Security, Medicare, and any employment taxes. For the purpose of
determining the amount of the gross up for each quarterly payment from the
Trust, the quarterly payment shall be considered to be the lower of
one-quarter of the balance in the Trust on January 31, 2001, or January 31,
2004. On April 1, 2005, an additional amount shall be paid to Executive on
a grossed up basis in an amount that will permit him to have funds
available to pay any remaining tax due on the 2004 quarterly payments. For
the purpose of this April 1, 2005 payment, the quarterly payments shall be
considered to be equal to one-quarter of the lower of the then balance in
the Trust on January 31, 2001 or January 31, 2004.
2
For payments made in 2004, gross up will be determined on the
basis of supplemental wage withholding if that method is available in 2004,
plus Medicare, any applicable California withholding tax, and employment
taxes. For the purpose of determining the amount of any remaining tax due
on the 2004 quarterly payments, Executive's income tax (Federal and
California, if any) shall be determined with and without the grossed up
quarterly payments as determined above with the difference the amount to be
grossed up for payment due April 15, 2005 on the remaining tax attributable
to the 2004 grossed up payments.
The payments required pursuant to this Section 2(a) shall be made
solely to the Executive and, upon his death, such payments shall thereafter
be made to the Spouse, if she is then living, or her estate if she dies
before the payments are complete provided that she is married to the
Executive on the date of his death. If the spouse shall survive the
Executive, but not be married to the Executive on the date of his death, or
does not survive Executive, the amount in the Trust on January 31, 2004,
less payments, if any, made from the Trust plus gross up as determined
above on the remaining payments shall be paid to the estate of Executive.
2. Section 13 of the Agreement shall be amended to read as follows:
13. FUTURE EMPLOYMENT.
Nothing contained herein shall be construed as conferring upon
the Executive the right to continue in the employ of the Company as an
executive or in any other capacity, or to interfere with the Company's
right to discharge the Executive pursuant to his Employment Agreement with
the Company.
Executive is a party to an employment agreement with the Company
dated December 1, 1995 as amended and it is his current intent to provide
services thereunder until December 31, 2003. Executive agrees to retire on
December 31, 2003. Notwithstanding the foregoing, in the event Executive
retires prior to December 31, 2003, the payments provided in Section 2(a)
of this Agreement from the Trust, including gross up as determined above,
shall be based upon the remaining balance in the Trust on the 15th of the
month following the month of retirement and shall be payable in a lump sum
prior to the end of such month with a gross up payment, as determined
above, to cover the tax due on such payment. Gross up shall be determined
based upon the lower of the balance in the Trust on January 31, 2001 or the
15th of the month following the month of retirement.
3. Except as expressly amended hereby, the Agreement as amended by the
First Amendment is hereby ratified, affirmed and approved in all respects.
2
3
4. An example of a gross up determination is attached.
"Company"
VANS, Inc., a Delaware corporation
By: /s/ XXXXX XXXXXXXX
-----------------------------------
"Executive"
By: /s/ XXXXXX XXXXXXXXXX
-----------------------------------
Xxxxxx Xxxxxxxxxx
3
