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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ( "Agreement" herein) is entered
into as of December 4, 1996 by and between VANS, INC., a Delaware corporation
(the "Company"), and XXX XXXXXX ("Employee").
1. Employment and Duties. The Company hereby employs
Employee as Vice President - Marketing of the Company on the terms and subject
to the conditions contained in this Agreement. Employee shall be responsible
for managing the Company's marketing division. 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
President of the Company. 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 December 3, 1999, 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 _________ Initial__________
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 $140,000 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 work
day.
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 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
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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;
(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;
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(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.
8.4 Records.
(a) Ownership. All Records are and
shall remain the exclusive property of the Company.
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(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.
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. With respect to the Company's Fiscal
1997 Bonus Plan, Employee shall have an opportunity to earn a bonus up to 30%
of his base compensation, with a guaranteed bonus of $15,000; provided,
Employee complies with the terms of the Fiscal 1997 Bonus Plan.
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 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 -
Marketing 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 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
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period of the lesser of (i) the remaining portion of the term of this
Agreement, or (ii) six (6) months from the date of termination; provided,
however, if Employee is employed by a new employer, or as a consultant during
such period, the severance compensation payable to Employee hereunder shall be
reduced by the amount of compensation that Employee actually receives from the
new employer, or as a consultant. However, Employee shall have a duty to inform
the Company that he has obtained such new employment, and the failure to do so
is a material breach of this Agreement. In such event, the Company shall be
entitled to (i) cease all payments to Employee under this Paragraph 11.4; and
(ii) recover any unauthorized payments to Employee in an action for breach of
contract. 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, 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
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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.
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: General Counsel
(000) 000-0000 - facsimile
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To Employee: Xxx Xxxxxx
(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 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.
22. Arbitration of Employment Disputes. Any dispute or
controversy arising out of this Agreement or the employment relationship
between Employee and the Company shall, at any time following the termination
of Employee's employment, be submitted to final and binding arbitration that
shall comply with the applicable
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arbitration rules of Judicial Arbitration and Mediation Service
("JAMS")/Endispute, and judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. Provided, however, that
this agreement to arbitrate does not effect any action by the Company to
enforce its rights to protect trade secrets or confidential information through
an action for injunctive relief. The cost of arbitration (including reasonable
attorneys' fees) shall be borne by the losing party. The arbitration shall
occur in Orange, California and the parties hereby consent to the jurisdiction
of the arbitrator and to service of process. EMPLOYEE HEREBY UNDERSTANDS THAT,
BY SIGNING THIS AGREEMENT, HE IS AGREEING TO HAVE ANY CLAIM HEREUNDER DECIDED
BY NEUTRAL ARBITRATION AND IS GIVING UP THE RIGHT TO A JURY OR COURT TRIAL.
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/ XXX XXXXXX By: /s/ XXXXX X. XXXXXXXX
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Xxx Xxxxxx
Vice President and
000 XXXXXXX XX. General Counsel
S. PASADENA ------------------------
XX 00000 Title
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Address
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