EXHIBIT 10.64
EMPLOYMENT AGREEMENT
AGREEMENT made as of March 11, 1996, by and between L.A. GEAR, INC., a
California corporation (the "Company"), and ▇▇▇▇▇ ▇▇▇▇▇▇ (the "Employee").
WHEREAS, the Company desires to retain the exclusive services of
Employee and Employee desires to be employed by the Company for the term of
this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
1. DUTIES.
(a) The Employee shall serve as Senior Vice President Design,
Development, Marketing of the Company or such other position as may be agreed
between the Employee and the Company, and shall perform such duties, services
and responsibilities as are consistent with such positions. The Employee's
duties, services and responsibilities will be performed under the overall
supervision of the Executive Vice President of the Company (or such other
executive officer as may be designed by the President of the Company) and
consistent with the policies of the Board of Directors of the Company (the
"Board of Directors").
(b) During the Employment Term (as defined in Section 2(a) below),
the Employee shall devote his full business time, attention and skill to the
performance of such duties, services and responsibilities, and will use his
best efforts to promote the interests of the Company. The Employee will not,
without the prior written approval of the Board of Directors, engage in any
other business activity which would interfere with the performance of his
duties, services and responsibilities hereunder or which is in violation of
policies established from time to time by the Company.
2. TERM.
(a) The term of employment of the Employee hereunder shall
commence as of the date hereof shall continue in full force and effect until
March 10, 1997, unless earlier terminated or renewed as provided herein (the
"Employment Term"). The terms of this Agreement shall be coincident with the
Employment Term.
(b) On the six-month anniversary of the date hereof, and on each
six-month anniversary thereafter, the Employment Term shall be extended by
six months, on the same terms and conditions contained herein, unless the
Company delivers written notice to the Employee on or prior to such six month
anniversary date of its intention not to extend the then-current Employment
Term, in which case the Employment Term and this Agreement shall expire on
the then-current date of expiration of the Employment Term.
3. COMPENSATION. In consideration of the performance by the Employee
of the Employee's obligations during the Employment Term (including any
services as an officer, director, employee, member of any committee of the
Company or any of its subsidiaries, or otherwise), the Company will during
the Employment Term pay the Employee a salary (the "Salary") at an annual
rate of not less that $275,000.
During the Employment Term, the Employee will be eligible to participate
in any management bonus plan then in effect for similarly situated employees
pursuant to the terms and conditions of such management bonus plan.
The Salary shall be payable in accordance with the normal payroll
practices of the Company then in effect. The Salary, and all bonuses or other
forms of compensation paid to the Employee hereunder, shall be subject to all
applicable taxes required to be withheld by the Company pursuant to federal,
state or local law. The Employee shall be solely responsible for income taxes
imposed on the Employee by reasons of any cash or non-cash compensation and
benefits provided hereunder.
In addition to the payment of Salary, the Employee shall be entitled to
participate in any employee benefit plans then in effect for similarly
situated employees to the extent the Employee meets the eligibility
requirements for any such plan; PROVIDED, HOWEVER, that nothing in this
paragraph shall require the Company to provide health or medial insurance
benefits to the Employee or any dependent of the Employee with respect to any
condition existing prior to the commencement of the Employee's employment by
the Company pursuant to the Prior Employment Agreement (as defined below),
except as covered by the Company's health and medical insurance plans
sponsored for employees in general.
The Employee shall be entitled to three weeks vacation (in addition to
the usual national holidays) per year, which vacation shall be accrued
ratably during each year during which the Employee serves hereunder, subject
to the limitations set forth in this paragraph. Any accrued but unused
vacation may be carried forward into subsequent years; PROVIDED, HOWEVER that
accrued but unused vacation available to the Employee may not, at any time,
exceed a total of six weeks. Vacation shall not be earned at any time that
accrued but unused vacation totals six weeks and shall not resume to be
earned until accrued but unused vacation again declines below six weeks. Such
vacation shall be taken at such time or times as may be agreed between the
Employee and the Company.
If (i) the Employee is absent from work for 180 calendar days in any
twelve-month period by reason of illness or incapacity (whether physical or
otherwise) or (ii) the Company reasonably determines that the Employee is
unable to perform his duties, services and responsibilities hereunder by
reason of illness or incapacity (whether physical or otherwise) for a total
of 180 calendar days in any twelve-month period during the Employment Term
("Disability"), the Company shall not be obligated to pay the Employee
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any compensation (Salary or bonus) for any period in excess of such 180 days;
furthermore, any such payments shall be reduced by any amount the Employee is
entitled to receive as a result of such disability under any plan provided
through the Company or under state or federal law.
4. TERMINATION.
(a) Except as otherwise provided in this Agreement, the employment of
Employee hereunder and the Employment Term shall terminate upon the earliest
to occur of the dates specified below:
(i) the close of business on the date of expiration of the
Employment Term;
(ii) the close of business on the date of the Employee's death;
(iii) the close of business on the day on which the Company shall
have delivered to the Employee a written notice of the Company's election to
terminate his employment for "Cause" (as defined in Section 4(c) hereof);
(iv) the close of business on the day on which the Company shall
have delivered to the Employee a written notice of the Company's election to
terminate his employment because of Disability;
(v) the close of business on the day following the date on which
the Board of Directors shall have adopted a resolution terminating the
employment of the Employee hereunder and such termination is not for death,
Cause or Disability; or
(vi) the close of business on an early termination date mutually
agreed to in writing by the Company and the Employee.
(b) Any purported termination by the Company or by the Employee
pursuant to Section 4(a) hereof shall be communicated by written "Notice of
Termination" to the other. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which indicates the specified
termination provision in this Agreement relied upon and which sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provision so indicated.
For purposes of this Agreement, no such purported termination shall be
effective without delivery of such Notice of Termination.
(c) For purposes of this Agreement, termination of employment for
"Cause" shall mean termination based on (i) the Employee's breach of this
Agreement,
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(ii) conviction of the Employee for (x) any crime constituting a felony in
the jurisdiction in which committed, (y) any crime involving moral turpitude
(whether or not a felony), or (z) any other criminal act against the Company
involving dishonesty or willful misconduct intended to injure the Company
(whether or not a felony), (iii) substance abuse by the Employee, (iv) the
failure or refusal of the Employee to follow the lawful and proper directives
of the Board of Directors (or of any superior officer of the Company having
direct supervisory authority over the Employee), or (v) willful malfeasance
or gross misconduct by the Employee which discredits or damages the Company.
(d) In the event of termination of this Agreement, for whatever
reason, the Employee agrees to cooperate with the Company and to be
reasonably available to the Company with respect to continuing and/or future
matters arising out of the Employee's employment or any other relationship
with the Company, whether such matters are business-related, legal or
otherwise. The Company agrees to reimburse the Employee for the Employee's
reasonable travel expenses incurred in complying with the terms of this
paragraph upon delivery by the Employee of the Company of valid receipts for
such expenses. The provisions of this paragraph shall survive termination of
this Agreement.
5. TERMINATION PAYMENTS. If the Employee's employment with the
Company terminates for whatever reason, the Company will pay the Employee any
portion of the Salary accrued hereunder on or prior to the date of
termination but not paid. Subject to the last sentence of the following
paragraph, if the Employee's employment with the Company terminates pursuant
to Section 4(a)(v), the Company will continue to pay the Employee an amount
equal to the Employee's Salary (at the salary rate in effect on the date of
termination of the Employee's employment hereunder) for the remainder of the
term of this Agreement.
Except as otherwise provided in any stock option agreement between the
Company and the Employee in effect at the time of the termination of the
Employee's employment, the foregoing payments upon termination shall
constitute the exclusive payments due the Employee upon termination under
this Agreement, but shall have no effect on any benefits which may be due the
Employee under any plan of the Company which provides benefits after
termination of employment. The Employee shall not be required to mitigate the
foregoing amounts payable upon termination of this Agreement by seeking other
employment or otherwise; PROVIDED, HOWEVER, that the foregoing payments shall
be reduced or mitigated by virtue of any cash compensation (including any
deferred portion thereof) received or earned by the Employee from any other
employer, or from personal services rendered by the Employee to a third party
as an independent contractor, during the period commencing on the date of
termination of this Agreement and ending on the date on which the Employment
Term had been scheduled to expire.
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6. EMPLOYEE COVENANTS.
(a) UNAUTHORIZED DISCLOSURE. The Employee agrees and understands
that in the Employee's position with the Company, the Employee will be
exposed to and receive information relating to the confidential affairs of
the Company, including but not limited to technical information, business and
marketing plans, strategies, customer information, other information
concerning the Company's products, promotions, development, financing,
expansion plans, business policies and practices, and other forms of
information considered by the Company to be confidential and in the nature of
trade secrets. Except to the extent that the proper performance of the
Employee's duties, services and responsibilities hereunder may require
disclosure, and except as such information (i) was known to the Employee
prior to his employment by the Company or (ii) was or becomes generally
available to the public other than as a result of a disclosure by the
Employee in violation of the provisions of this Section 6(a), the Employee
agrees that during the Employment Term and thereafter the Employee will keep
such information confidential and not disclose such information, either
directly or indirectly, to any third person or entity without the prior
written consent of the Company. This confidentiality covenant has no
temporal, geographical or territorial restriction. Upon termination of this
Agreement, the Employee will promptly supply to the Company all property,
keys, notes, memoranda, writings, lists, files, reports, customer lists,
correspondence, tapes, disks, cards, surveys, maps, logs, machines, technical
data or any other tangible product or document which has been produced by,
received by or otherwise submitted to the Employee during or prior to the
Employment Term. Any material breach of the terms of this paragraph shall be
considered Cause.
(b) INVENTIONS. (i) the Employee agrees that any and all
inventions, discoveries, improvements, processes, business application
software, patents, copyrights and trademarks made, developed, discovered or
acquired by him during the Employment Term, solely or jointly with others or
otherwise and which relate to the business of the Company and all knowledge
possessed by the Employee relating thereto (collectively, the "Inventions"),
shall be fully and promptly disclosed to the Board of Directors and to such
person or persons as the Board of Directors shall direct and shall be the
sole and absolute property of the Company and the Company shall be the sole
and absolute owner thereof. The Employee agrees that he will at all times
keep all of the same secret from everyone except the Company and such persons
as the Board of Directors may from time to time direct. The Employee shall,
as requested by the Company at any time and from time to time, whether prior
to or after the expiration of the Employment Term, execute and deliver to the
Company any instruments deemed necessary by the Company to effect disclosure
and assignment of the Inventions to the Company or its designees and any
patent applications (United States or foreign) and renewals with respect
thereto, including any other instruments deemed necessary by the Company for
the prosecution of patent applications or the acquisition of letters patent.
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(ii) Reference is hereby made to Appendix A to this Agreement
reprinting the text of Section 2870 through 2872 of the California Labor
Code. Execution of this Agreement by the Employee shall confirm that the
Employee has received and read such Appendix A. The provisions of this
Section 6(b) shall not apply to any invention which qualifies fully under the
provisions of Section 2870 of the California Labor Code.
(c) NON-COMPETITION. By and in consideration of the Company's
entering into this Agreement and the Salary and benefits to be provided by
the Company hereunder, and further in consideration of the Employee's
exposure to the proprietary information of the Company, the Employee agrees
that the Employee will not, during the Employment Term, directly or
indirectly own, manage, operate, join, control, be employed by, or
participate in the ownership, management, operation or control of or be
connected in any manner, including but not limited to holding the positions
of shareholder, director, officer, consultant, independent contractor,
employee, partner, or investor, with any Competing Enterprise. For purposes
of this paragraph, the term "Competing Enterprise" shall mean any person,
corporation, partnership or other entity engaged in the design and marketing
of athletic and casual footwear and/or related apparel products and
accessories. The prohibition of this clause (c) shall not be deemed to
prevent Employee from owning 2% or less of any class of equity securities of
an entity that has a class of equity securities registered under Section 12
of the Securities Exchange Act of 1934, as amended.
(d) NON-SOLICITATION. During the Employment Term and for a period
of one year thereafter, the Employee shall not interfere with the Company's
relationship with, or endeavor to entice away from the Company, any person
who at any time during the Employment Term was an employee or customer of the
Company or otherwise had a material business relationship with the Company.
(e) REMEDIES. The Employee agrees that any breach of the terms of
this Section 6 would result in irreparable injury and damage to the Company
for which the Company would have adequate remedy at law; the Employee
therefore also agrees that in the event of such breach or any threat of
breach, the Company shall be entitled to an immediate injunction and
restraining order to prevent such breach and/or threatened breach and/or
continued breach by the Employee and/or any and all persons and/or entities
acting for and/or with the Employee, without having to prove damages, in
addition to any other remedies to which the Company may be entitled at law or
in equity. The terms of this paragraph shall not prevent the Company from
pursuing any other available remedies for any breach or threatened breach
hereof, including but not limited to the recovery of damages from the
Employee.
The provisions of subsections (a), (b), (d) and (e) of this Section 6
shall survive any termination of this Agreement and the Employment Term. The
existence of any claim or cause of action by the Employee against the
Company, whether predicated on this Agreement or
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otherwise, shall not constitute a defense to the enforcement by the Company
of the covenants and agreements of this Section 6.
(f) "COMPANY". For the purposes of this Section 6 only, the term
"Company" shall mean, collectively, L.A. Gear, Inc., a California
corporation,and its successors, assigns and nominees, and all individuals,
corporations and other entities that directly, or indirectly through one or
more intermediaries, control or are controlled by or are under common control
with any of the foregoing.
7. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been
given (i) if personally delivered, when so delivered, or (ii) if mailed,
three (3) business days after having been placed in the United States mail,
registered or certified, postage prepaid, addressed to the party to whom it
is directed at the address set forth below:
If to the Company:
L.A. Gear, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
With a copy to:
L.A. Gear, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Dept. - Office of General Counsel
If to the Employee:
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
by registered or certified mail, postage prepaid, return receipt requested.
8. BINDING EFFECT/ASSIGNMENT. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, personal representatives, estate, successors (including, without
limitation, by way of merger) and assigns. Notwithstanding the provisions of
the immediately preceding sentence, the Employee
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shall not assign all or any portion of this Agreement without the prior
written consent of the Company.
9. PRIOR EMPLOYMENT AGREEMENT. Upon the execution of this Agreement
by each of the Employee and the Company, except as provided below, the
Employment Agreement, dated as of September 11, 1995 (the "Prior Employment
Agreement"), by and between the Company and the Employee, are hereby
terminated, effective as of the date hereof, and of no further force and
effect. Notwithstanding anything to the contrary in the foregoing, Section 6
of the Prior Employment Agreement shall remain in full force and effect and
shall survive the termination of the other provisions of the Prior Employment
Agreement pursuant to this Section 9.
10. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parites hereto with respect to the subject matter hereof
and supersedes all prior agreements, written or oral, between them as to such
subject matter. This Agreement may not be amended, nor may any provision
hereof be modified or waived, except by an instrument in writing duly signed
by the party to be charged.
11. SEVERABILITY. If any provision of this Agreement, or any
applicaton thereof to any circumstances, is invalid, in whole or in part,
such provision or application shall to that extent be severable and shall not
affect other provisions or applications of this Agreement.
12. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California,
without reference to the principles of conflict of laws.
13. MODIFICATIONS AND WAIVERS. No provisions of this Agreement may
be modified, altered or amended except by an instrument in writing executed
by the parties hereto. No waiver by either party hereto of any breach by the
other party hereto of any provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions at
the time or at any prior or subsequent time.
14. HEADINGS. The headings contained herein are solely for the
purposes of reference, are not part of this Agreement and shall not in any
way affect the meaning or interpretation of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by authority of its Board of Directors, and the Employee has hereunto set his
hand, as of the day and year first above written.
L.A. GEAR, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Title: President
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------
▇▇▇▇▇ ▇▇▇▇▇▇
(Employee)
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Appendix A
NOTIFICATION TO EMPLOYEE
Set forth below is the text of Sections 2870, 2871 and 2872 of the
California Labor Code, as published in ▇▇▇▇'▇ ▇▇▇. Cal.Labor Code (1989) and
▇▇▇▇'▇ ▇▇▇. Cal.Labor Code (1994 Supp.):
SECTION 2870. EMPLOYMENT AGREEMENTS; ASSIGNMENT OF RIGHTS
(a) Any provision in an employment agreement which provides
that an employee shall assign, or offer to assign, any of his or her rights
in an invention to his or her employer shall not apply to an invention that
the employee developed entirely on his or her own time without using the
employer's equipment, supplies, facilities, or trade secret information
except for those inventions that either:
(1) Relate at the time of conception or reduction to
practice of the invention to the employer's business, or actual or
demonstrably anticipated research or development of the employer; or
(2) Result from any work performed by the employee
for the employer.
(b) To the extent a provision in an employment agreement
purports to require an employee to assign an invention otherwise excluded
from being required to be assigned under subdivision (a), the provision is
against the public policy of this state and is unenforceable.
SECTION 2871. CONDITIONS OF EMPLOYMENT OR CONTINUED EMPLOYMENT; DISCLOSURE IF
INVENTIONS
No employer shall require a provision made void and
unenforceable by Section 2870 as a condition of employment or continued
employment. Nothing in this article shall be construed to forbid or restrict
the right of an employer to provide in contracts of employment for
disclosure, provided that any such disclosures be received in confidence, of
all of the employee's inventions made solely or jointly with others during
the term of his or her employment, a review process by the employer to
determine such issues as may arise, and for full title to certain patents and
inventions to be in the United States, as required by contracts between the
employer and the United States or any of its agencies.
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SECTION 2872. NOTICE TO EMPLOYEE; BURDEN OF PROOF
If an employee agreement entered into after January 1, 1980,
contains a provision requiring the employee to assign or offer to assign any
of his or her rights to any invention to his or her employer, the employer
must also, at the time the agreement is made, provide a written notification
to the employee that the agreement does not apply to an invention which
qualifies fully under the provisions of Section 2870. In any suit or action
arising thereunder, the burden of proof shall be on the employee claiming the
benefits of its provisions.
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