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EXHIBIT 10.21
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement" herein) is entered into as of July
27, 2000, by and between VANS, INC., a Delaware corporation (the "Company"), and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("Employee").
1. Employment and Duties. The Company hereby employs Employee as Vice
President - Global Sourcing of the Company on the terms and subject to the
conditions contained in this Agreement. Employee shall be responsible for
managing and supervising all aspects of the Company's global sourcing
operations. Employee hereby accepts such employment and agrees to perform in
good faith and to the best of Employee's ability all services which may be
required of Employee hereunder, to do what is asked of him, and to be available
to render services at all times and places in accordance with such directions,
requests, rules and regulations made by the Company in connection with
Employee's employment. Employee hereby acknowledges and understands the duties
and services that are expected of him hereunder, and he hereby represents that
he has the experience and knowledge to perform such duties and services.
Employee shall, during the term hereof, devote Employee's full time and energy
to performing his duties. Employee shall report to the Company's Senior Vice
President - Global Operations. Employee shall be based at the Company's
corporate offices. Employee understands, however, that Employee may be required
to travel within and out of the State of California to discharge his duties
hereunder.
2. Term of Employment. The term of this Agreement shall commence as of the
date hereof and shall terminate on July 26, 2003, unless sooner terminated as
provided herein. This Agreement does not give Employee any enforceable right to
employment beyond this term, and Employee agrees that he shall have no rights
hereunder thereafter. AS PROVIDED FURTHER IN PARAGRAPH 11.1 BELOW, THIS
AGREEMENT CONSTITUTES AN EMPLOYMENT AT-WILL THAT MAY BE TERMINATED AT ANY TIME
BY COMPANY OR EMPLOYEE, WITH OR WITHOUT CAUSE, NOTWITHSTANDING THE THREE - YEAR
TERM OF THIS AGREEMENT. IF EMPLOYEE IS TERMINATED WITHOUT CAUSE DURING THE TERM
HEREOF, OR AFTER A "CHANGE IN MANAGEMENT OR CONTROL," AS DEFINED IN PARAGRAPH
11.5 BELOW, OR TERMINATES THIS AGREEMENT FOR "GOOD REASON," AS DEFINED IN
PARAGRAPH 11.3 BELOW, EMPLOYEE'S SOLE REMEDY SHALL BE THE COMPENSATION SET FORTH
IN PARAGRAPH 11.4 BELOW.
Initial /s/ CEG Initial /s/ SAB
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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 not less than $200,000 per annum.
Employee's salary shall be payable in bi-weekly increments in accordance with
the Company's payroll practices for salaried employees, upon the condition that
Employee fully and faithfully performs Employee's services hereunder in
accordance with the terms and conditions of this Agreement. The Company shall
deduct and withhold from the compensation payable to Employee hereunder any and
all amounts required to be deducted or withheld by the Company under the
provisions of any statute, regulation, ordinance, or order and any and all
amendments hereinafter enacted requiring the withholding or deducting from
compensation payable to employees.
4. Expense Reimbursement. Employee shall be reimbursed by the Company for
all traveling, hotel, entertainment and other expenses that are properly and
necessarily incurred by Employee, pursuant to the Company's policies on the
same.
5. Death or Disability of Employee.
5.1 General. In the event of Employee's death or "disability" (as such
term is defined in Paragraph 5.2 hereof) while in the employ of the Company,
this Agreement, and the compensation due to Employee pursuant to Paragraph 3
hereof, shall terminate upon the date of death or disability and the Company
shall thereafter be required to make payments only to Employee, as provided in
Paragraph 11.2 hereof. If Employee shall recover from such disability prior to
the expiration date of the Agreement, this Agreement and Employee's employment
hereunder shall be reinstated for the balance of the term of this Agreement.
5.2 Definition of Disability. Employee shall be deemed disabled if, in
the sole opinion of the Company, Employee is unable to substantially perform the
services required of Employee hereunder for a period in excess of 60 consecutive
work days or 60 work days during any 90 work day period. In such event, Employee
shall be deemed disabled as of such 60th workday.
6. Restrictive Covenant. During the term of this Agreement, Employee shall
(i) devote his full time and energy solely and exclusively to the performance of
his duties described herein; (ii) not directly or indirectly provide services to
or through any company or firm except the Company unless otherwise instructed by
the Company; (iii) not directly or indirectly own, manage, operate, join,
control, contribute to, or participate in the ownership, management, operation
or control of or be employed by or connected in any manner with any enterprise
which is engaged in any business competitive with or similar to that of the
Company; and (iv) not render any services of
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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 to, and shall not in fact,
devote any managerial efforts, as long as such investments are not in companies
which are in competition in any way with the Company; or (b) charitable or
community activities, or in trade or professional organizations, provided that
such incidental services do not interfere with the performance of Employee's
services hereunder.
7. Non-Solicitation. Employee shall not, during the full term of this
Agreement and for a period of one (1) year thereafter, for himself or on behalf
of any other person, partnership, corporation or entity, directly or indirectly,
or by action in concert with others, solicit, induce, suggest or encourage any
person known to him to be an employee of the Company or any affiliate of the
Company to terminate his or her employment or other contractual relationship
with the Company or any of its affiliates.
8. Trade Secrets and Related Matters
8.1 Definitions. For purpose of this Section 8:
(a) "Records" means files, accounts, records, log books,
documents, drawings, sketches, designs, diagrams, models, plans, blueprints,
specifications, manuals, books, forms, notes, reports, memoranda, studies,
surveys, software, flow charts, data, computer programs, listing of source code,
calculations, recordings, catalogues, compilations of information,
correspondence, confidential data of customers and all copies, abstracts or
summaries of the foregoing in any storage medium, as well as instruments, tools,
storage devices, disks, equipment and all other physical items related to the
business of the Company (other than merely personal items of a general
professional nature), whether of a public nature or not, and whether prepared by
Employee or not.
(b) "Trade Secrets" means confidential business or technical
information or trade secrets of the Company which Employee acquires while
employed by the Company, whether or not conceived of, developed or prepared by
Employee or at his direction and includes:
(i) Any information or compilation of information concerning
the Company's financial position, financing, purchasing, accounting, marketing,
merchandising, sales, salaries, pricing, investments, costs, profits, plans for
future development, employees, prospective employees, research, development,
formulae, patterns, inventions, plans, specifications, devices, products,
procedures, processes, operations, techniques, software, computer programs or
data;
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(ii) Any information or compilation of information concerning
the identity, plans, requirements, preferences, practices and methods of doing
business on specific customers, suppliers, prospective customers and prospective
suppliers of the Company;
(iii) Any other information or "know how" which is related to
any product, process, service, business or research of the Company; and
(iv) Any information which the Company acquires from another
party and treats as its proprietary information or designates as "Confidential,"
whether or not owned or developed by the Company.
Notwithstanding the foregoing, "Trade Secrets" do not include any of the
following:
(i) Information which is publicly known or which is generally
employed by the trade, whether on or after the date that Employee first acquires
the information;
(ii) General information or knowledge which Employee would
have learned in the course of similar work elsewhere in the trade; or
(iii) Information which Employee can prove was known by
Employee before the commencement of Employee's engagement by the Company;
8.2 Acknowledgments. Employee acknowledges that:
(a) Employee's relationship with the Company will be a
confidential relationship in which Employee will have access to and may create
Trade Secrets.
(b) The Company uses the Trade Secrets in its business to obtain a
competitive advantage over its competitors who do not know or use that
information.
(c) The protection of the Trade Secrets against unauthorized
disclosure or use is of critical importance in maintaining the competitive
position of the Company.
8.3 Protection of Trade Secrets. Employee shall not at any time,
without the prior written consent of the Company, which may be withheld by it in
its sole and absolute discretion, disclose any Trade Secret in any way except to
employees of the Company, and shall not use any Trade Secret in any way except
in connection with his or her duties to the Company.
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8.4 Records.
(a) Ownership. All Records are and shall remain the exclusive
property of the Company.
(b) Return of Records. At the termination of this Agreement,
Employee shall promptly return to the Company all records in Employee's
possession or over which Employee has control.
8.5 Prohibited Use of Trade Secrets. During the term of this Agreement
and for 12 months following termination of this Agreement, Employee shall not
undertake any employment or consulting relationship (the "New Activity") if the
loyal and complete fulfillment of his or her duties in the New Activity would
inherently call upon Employee to reveal any Trade Secret.
9. Ownership of Material and Ideas. Employee agrees that all material,
ideas, and inventions pertaining to the business of the Company or of any client
of the Company, including but not limited to, all patents and copyrights thereon
and renewals and extensions thereof, trademarks and trade names, and the names,
addresses and telephone numbers of customers, distributors and sales
representatives of the Company, belong solely to the Company. Employee hereby
assigns any rights he may have to any such property to the Company, and agrees
to execute and deliver any documents which evidence such assignment.
Notwithstanding the foregoing, the Company agrees that Employee owns the patents
and inventions set forth in Exhibit A to that certain Vans, Inc. Employment
Agreement, dated as of November 1, 1997 (the "Prior Agreement").
10. Employee Plans, etc. Employee shall be entitled to participate, to the
same extent as most other officers of the Company, in any bonus compensation
plan, stock purchase or stock option plan, group life insurance plan, group
medical insurance plan and other compensation or employee benefit plans
(collectively, "Plans") which are generally available to a majority of the other
officers of the Company during the term hereof and for which Employee shall
qualify. Employee further understands, however, that the Board of Directors, or
such committee or person or persons designated by the Board of Directors, shall
determine in its sole discretion (i) whether any Plans are made available to a
majority of the officers of the Company; (ii) whether one or more Plans are
adopted solely for the Chief Executive Officer and/or one or more (but not a
majority) of the officers of the Company; (iii) whether one or more Plans are
made available to a majority of the officers; and (iv) the amounts payable or
the benefits provided thereunder to each participant in whole or in part.
Employee agrees and acknowledges that he has no vested interest in the
continuance of any Plan, and that no Plan in existence on the date of the
Agreement has acted as a material inducement to Employee in entering into this
Agreement. Notwithstanding anything to the contrary contained in this Section10,
Employee shall be entitled to receive a yearly bonus under
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the Company's Bonus Plan, up to thirty percent (30%) of his gross salary on the
date each such Plan commences.
11. Termination.
11.1 "At Will" Employment. This Agreement, and Employee's employment,
is at will, and the Company may, with or without notice, terminate this
Agreement and all of the Company's obligations hereunder with or without
"Cause." Employee may also terminate this Agreement at any time, for any reason,
upon the giving of thirty (30) days' written notice to the Company; provided,
however, the Company may waive all or any portion of such notice period in its
sole and absolute discretion. Termination by the Company for "Cause" means
termination due to (i) Employee's conviction of a felony ( which, through the
lapse of time or otherwise is not subject to appeal); (ii) Employee's material
refusal, failure or neglect without proper cause to perform adequately his
obligations under this Agreement or follow the instructions of his
supervisor(s); (iii) any negligence or willful misconduct by Employee; (iv)
Employee's material breach of any of his fiduciary obligations as an executive
officer of the Company; (v) Employee's material failure to adhere to the code of
conduct and rules set forth in the Company's Employee Handbook, as amended or in
existence from time to time; (vi) the death or disability of Employee; or (vii)
the voluntary termination by Employee of his employment, except for "Good
Reason" (as defined in Paragraph 11.3 hereof).
11.2 Termination for Cause. Upon termination for Cause, the Company
shall only be required to pay Employee (i) accrued salary compensation due to
Employee as compensation for services rendered hereunder and not previously
paid; (ii) accrued vacation pay; and (iii) any appropriate business expenses
incurred by Employee in connection with his duties hereunder and approved
pursuant to Section 4 hereof, all through the date of termination. Employee
shall not be entitled to any severance compensation; bonus compensation, whether
"vested" or unvested; or any other compensation, benefits or reimbursement of
any kind.
11.3 Termination for "Good Reason." Employee may terminate this
Agreement for "Good Reason" (as hereinafter defined) upon thirty (30) days
written notice to the Company. The term "Good Reason" means (i) Employee is not
appointed or is removed from the position of Vice President - Global Sourcing
without Cause during the term of this Agreement; or (ii) without Employee's
consent, a majority of the duties defined in Section 1 hereof are removed from
Employee's responsibilities. The term Good Reason does not include a situation
where certain of the duties defined in Section 1 hereof are removed from
Employee's responsibilities and are replaced with duties which have greater
responsibility and/or authority than the duties which are removed. Unless
Employee terminates this Agreement within thirty (30) days of learning from any
source that the Company has acted so as to provide Good Reason for Employee to
terminate this Agreement, and gives thirty (30) days' written notice of
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such termination, Employee's right to receive severance compensation pursuant to
Paragraph 11.4 for such event shall be forever lost.
11.4 Severance Compensation. In the event (i) Employee terminates this
Agreement for Good Reason in accordance with Paragraph 11.3 hereof; (ii)
Employee is terminated for any reason (except death or disability) upon, or
within six months following, a "Change in Management or Control (as such term is
defined in Paragraph 11.5 hereof);" or (iii) Employee is terminated without
Cause, the Company shall be obligated to pay severance compensation to Employee
in an amount equal to his salary compensation (at the rate payable at the time
of such termination) for a period of six (6) months from the date of
termination. Notwithstanding anything else in this Agreement to the contrary,
solely in the event of a termination upon or following a Change in Management or
Control, the amount of severance compensation paid to Employee hereunder shall
not include any amount that the Company is prohibited from deducting for federal
income tax purposes by virtue of Section 280G of the Internal Revenue Code of
1986, as amended, or any successor provision. In addition to the foregoing
severance compensation, the Company shall pay Employee (i) all compensation for
services rendered hereunder and not previously paid; (ii) accrued vacation pay;
and (iii) any appropriate business expenses incurred by Employee in connection
with his duties hereunder and approved pursuant to Section 4 hereof, all through
the date of termination. Employee shall not be entitled to any bonus
compensation, whether vested or unvested; or any other compensation, benefits or
reimbursement of any kind.
11.5 Definition of "Change in Management or Control." The term "Change
in Management or Control" means (i) the time that the Company first determines
that any person and all other persons who constitute a group (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934 ("Exchange Act"))
have acquired direct or indirect beneficial ownership (within the meaning of
Rule 13d-3 under the Exchange Act) of twenty percent (20%) or more of the
Company's outstanding securities, unless a majority of the "Continuing
Directors" (as such term is hereinafter defined) approves the acquisition not
later than ten (10) business days after the Company makes that determination, or
(ii) the first day on which a majority of the members of the Company's Board of
Directors are not "Continuing Directors." The term "Continuing Directors" means,
as of any date of determination, any member of the Board of Directors of the
Company who (i) was a member of that Board of Directors on the date of this
Agreement, (iii) has been a member of that Board of Directors for the two years
immediately preceding such date of determination, or (iv) was nominated for
election or elected to the Board of Directors with the affirmative vote of the
greater of (x) a majority of the Continuing Directors who were members of the
Board at the time of such nomination or election, or (y) at least four
Continuing Directors.
11.6 Exclusive Remedy. The payments referred to in this Section 11
shall be exclusive and shall be the only remedy available to Employee for
termination of his employment with the Company, regardless of the circumstances,
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reasons or motivation for any such termination. If Employee gives notice of
termination of this Agreement, or if it becomes known that this Agreement will
otherwise terminate in accordance with its provisions, the Company may, in its
sole discretion, relieve Employee of his duties under this Agreement or assign
Employee other duties and responsibilities to be performed until the termination
becomes effective.
12. Services Unique. It is agreed that the services to be rendered by
Employee hereunder are of a special, unique, unusual, extraordinary and
intellectual character which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in an action at law
and that a breach by Employee of any of the provisions contained herein will
cause the Company irreparable injury and damage. Employee expressly agrees that
the Company shall be entitled to injunctive or other equitable relief to prevent
a breach hereof. Resort to any such equitable relief shall not be construed as a
waiver of any of the rights or remedies which the Company may have against
Employee for damages or otherwise.
13. Key Man Life Insurance. During the term of this Agreement, the Company
may at any time effect insurance on Employee's life and/or health in such
amounts and in such form as the Company may in its sole discretion decide.
Employee shall not have any interest in such insurance, but shall, if the
Company requests, submit to such medical examinations, supply such information
and execute such documents as may be required in connection with, or so as to
enable the Company to effect, such insurance.
14. Vacation. Employee shall have the right during each one year period of
the term of this Agreement to take an aggregate of three weeks of vacation, with
pay, at such times as are mutually convenient to Employee and to the Company.
15. 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.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
562/565-8413 - facsimile
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To Employee: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(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.
16. Applicable Law and Severability. This Agreement shall, in all respects,
be governed by the laws of the State of California applicable to agreements
executed and to be wholly performed within the State of California. Nothing
contained herein shall be construed so as to require the commission of any act
contrary to law, 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.
17. 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.
18. 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.
19. 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.
20. 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,
including but not limited to the Prior Agreement, are hereby terminated and
canceled in their entirety and are of no further force or effect.
21. Counterparts. This Agreement may be executed in counterparts.
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22. Arbitration of Employment Disputes. Any dispute or controversy arising
out of this Agreement or the employment relationship between Employee and the
Company, including but not limited to, claims by Employee for wrongful
termination, race discrimination, sex discrimination, age discrimination,
discrimination based on nationality or religion, violation of Title VII of the
Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of
1990, the Age Discrimination in Employment Act of 1967, as amended, and the
California Fair Housing and Employment Act, as amended, shall, at any time
following the termination of Employee's employment, be submitted to final and
binding arbitration that shall comply with the applicable arbitration rules of
either the American Arbitration Association or the Judicial Arbitration and
Mediation Service and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The cost of arbitration
(except for Employee's attorneys' fees and costs 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 regarding his/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.
23. Survival of Certain Provisions. Sections 7,8,9, and 22 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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President and
General Counsel
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Address Title
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