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EXHIBIT 10.1
VANS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement" herein) is entered into as of August
16, 1999, by and between VANS, INC., a Delaware corporation (the "Company"), and
XXXX X. XXXXXXXXXX ("Employee").
1. Employment and Duties. The Company hereby employs Employee as President
and Chief Executive Officer of the Company on the terms and subject to the
conditions contained in this Agreement. Employee shall be responsible for the
management and direction of all aspects of the Company's business. 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 Board of Directors of the Company. Employee shall
be based at the Company's corporate offices. Employee understands, however, that
Employee may be required to travel up to 20% of his time 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 August 15, 2002. Notwithstanding the
foregoing, the term of this Agreement automatically shall extend for one
additional year on each anniversary date hereof, unless sooner terminated as
provided HEREIN. 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 ROLLING 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 /s/ CEG Initial /s/ GHS
------- ----------
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 $350,000.00 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 shall terminate upon the date of death or disability and the
Company shall thereafter be required to make payments and provide benefits 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 substantially all of his full time and energy 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
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
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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. Notwithstanding anything to the
contrary contained herein, Employee shall be permitted to serve on the Board of
Directors of Fitness Holdings, Inc. during the term of this Agreement.
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 material and confidential 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 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, use any Trade Secret in any way except in
connection with 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 shallpromptly 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 material Trade Secret which could
have a material adverse effect on the Company.
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, 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 the 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 available to the other officers of the Company
during the term hereof and for which Employee shall qualify, including
specifically the Company's annual bonus plan for executive officers pursuant to
which Employee shall have the opportunity to earn an annual bonus equal to one
hundred percent (100%) of his salary compensation, subject to the terms and
conditions of the plan. The Company also shall maintain during the term of this
Agreement, a $5.0 million split dollar life insurance policy for the benefit of
Employee, and shall be responsible for the payment of all premiums thereunder.
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.
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
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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
willful misconduct by Employee; (iv) Employee's knowing 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. Notwithstanding the foregoing, in the event the Cause for termination
of this Agreement is the death or disability of Employee, the Company shall pay
Employee's salary and other benefits hereunder for a period of two (2) years
from the date of death or disability. Employee or Employee's estate shall have
the option, in his or its sole discretion, to receive such payments in one lump
sum.
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 President and Chief Executive
Officer without Cause during the term of this Agreement; (ii) without Employee's
consent, a majority of the duties defined in Section 1 hereof are removed from
Employee's responsibilities; (iii) without Employee's consent, Employee is
ordered by the Board of Directors to relocate his residence; or (iv) a "Change
in Management or Control" has occurred (as defined in Section 11.5). 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 one hundred
and eighty (180) 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.
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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 one year 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 the remaining term of the Agreement. Employee shall
have the option, in his sole discretion, to receive such severance compensation
in one lump sum. Additionally, Employee shall be entitled to exercise the vested
portion of any of his Company stock options for a period of eighteen (18) months
after the date of termination. 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, (ii) has been a member of that Board of Directors for the two years
immediately preceding such date of determination, or (iii) 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
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Employee of his duties under this Agreement or assign Employee other duties and
responsibilities to be performed until the termination becomes effective.
12. 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. The insurance obtained hereunder
shall be in addition to, and not in lieu of, any insurance the Company is
obligated to provide Employee pursuant to Section 10.
13. 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.
14. 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: Xxxx X. Xxxxxxxxxx
(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.
15. Applicable Law and Severability. This Agreement shall, in all respects,
be governed by the laws of the State of California applicable to agreements
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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.
16. 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.
17. 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.
18. 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.
19. 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 but not limited to that certain Employment Agreement, dated
as of September 1, 1995, as amended.
20. Counterparts. This Agreement may be executed in counterparts.
21. Arbitration of Employment Disputes. Any dispute, claim 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 and
Mediation Service ("JAMS")/Endispute, and
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judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The cost of arbitration (except for the fees and
costs of Employee's attorneys) shall be borne by the Company. The arbitration
shall occur in Los Angeles, California and the parties hereby consent to the
jurisdiction of the arbitrator and to service of process. The Arbitrator shall
issue a written opinion of his or her decision. 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. NOTWITHSTANDING
THE FOREGOING, NOTHING IN THIS PROVISION IS INTENDED TO AFFECT OR RESTRICT ANY
RIGHTS OR REMEDIES EMPLOYEE MIGHT HAVE IF HIS CLAIMS WERE BROUGHT IN COURT.
22. Survival of Certain Provisions. Sections 7,8,9, and 21 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/ Xxxx X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxxxx Xxxxx X. Xxxxxxxx
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Address Title
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