Exhibit 10.2

 

FORM OF EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (the “Agreement”) is entered into effective as of
                     (the “Effective Date”), by and between K2 Inc. (the
“Company”) and                      (the “Executive”). The Company and the
Executive are hereinafter collectively referred to as the “Parties,” and
individually referred to as a “Party.”

 

RECITALS

 

A. The Company desires to retain the Executive’s experience, skills, abilities,
background and knowledge and is willing to engage the Executive’s services on
the terms and conditions set forth in this Agreement.

 

B. The Executive desires to be in the employ of the Company and is willing to
accept such employment on the terms and conditions set forth in this Agreement.

 

AGREEMENT

 

In consideration of the foregoing Recitals and the mutual promises and covenants
herein contained, and for other good and valuable consideration, the Parties,
intending to be legally bound, agree as follows:

 

1. EMPLOYMENT.

 

1.1 Title. The Executive shall serve as the Company’s                      and
shall serve in such other capacities as the Company may from time to time
prescribe. The Executive shall report solely and directly to the Chief Executive
Officer of the Company.

 

1.2 Duties. The Executive shall perform all services and actions necessary or
advisable to conduct the business of the Company and which are normally
associated with the positions the Executive holds in a corporation of the size
and nature of the Company.

 

1.3 [INTENTIONALLY OMITTED]

 

2. LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.

 

2.1 Loyalty. During the Executive’s employment with the Company, the Executive
shall devote the Executive’s full business energies, interest, abilities and
productive time to the proper and efficient performance of the Executive’s
duties under this Agreement; provided, however, that Executive may devote a
reasonable amount of time and energies for personal investment and civic and
charitable duties.

 

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2.2 Agreement Not to Participate in Company’s Competitors. Except with the prior
written consent of the Company’s Board of Directors (the “Board”), the Executive
shall not, during the Executive’s employment with the Company and any Severance
Period (as defined below), assume or participate in, directly or indirectly, any
position, investment or interest known by the Executive to be adverse or
antagonistic to the Company, its business or prospects, financial or otherwise,
or in any company, person or entity that is, directly or indirectly, in
competition with the business of the Company or any of its subsidiaries.
Ownership by the Executive, as a passive investment, of less than five percent
(5%) of the outstanding shares of capital stock of any corporation with one or
more classes of its capital stock listed on a national securities exchange or
publicly traded on the Nasdaq Stock Market or in the over-the-counter market
shall not constitute a breach of this paragraph.

 

3. COMPENSATION OF THE EXECUTIVE.

 

3.1 Base Salary. The Company shall pay the Executive a base salary of
                     Dollars ($            ) per year, payable in regular
periodic payments in accordance with Company policy. Such base salary shall be
prorated for any partial year of employment on the basis of a 365-day fiscal
year.

 

3.2 Bonus. In addition to the Executive’s base salary, the Executive shall be
eligible to receive an annual bonus (the “Bonus”). The Bonus (if any) will
awarded based on the achievement of Company and personal milestones to be
established by the Board or Compensation Committee thereof and communicated to
the Executive. The good faith determinations of the Board (or its Compensation
Committee) with respect to the payment of the Bonus shall be final and binding.

 

3.3 Changes to Compensation. The Executive’s compensation shall be reviewed from
time to time by the Board or the Compensation Committee thereof as it deems
appropriate and may be changed upon mutual written agreement between the
Executive and the Board or the Compensation Committee thereof.

 

3.4 Employment Taxes. All of the Executive’s compensation (in any form) shall be
subject to all required withholding taxes, employment taxes and other deductions
required by law.

 

3.5 Benefits. The Executive shall, in accordance with Company policy and the
terms of the applicable plan documents, be eligible to participate in benefits
under any benefit plan or arrangement which may be in effect from time to time
and made available to the Company’s employees. In addition, the Executive shall
be eligible for paid vacation, in accordance with Company policy as in effect
from time to time.

 

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4. TERMINATION.

 

4.1 Termination By the Company. The Executive’s employment with the Company may
be terminated under the following conditions:

 

4.1.1 Termination for Death or Disability. The Executive’s employment with the
Company shall terminate effective upon the date of the Executive’s death or
Complete Disability (as defined below).

 

4.1.2 Termination by the Company For Cause. The Company may terminate the
Executive’s employment under this Agreement for Cause (as defined below). A
notice of termination given pursuant to this Section 4.1.2 shall effect
termination as of the date specified, or, in the event no such date is
specified, on the date upon which the notice is given.

 

4.1.3 Termination by the Company For Any Reason Other Than Cause. The
Executive’s employment by the Company shall be “at will.” The Company may
terminate the Executive’s employment under this Agreement at any time, for any
or no reason and with or without cause or advance notice. This is the full and
complete agreement between the Executive and the Company on this term. Although
the Executive’s duties, title, compensation and benefits may change, the “at
will” nature of the Executive’s employment relationship with the Company may
only be modified in an express written agreement signed by the Executive and the
Board.

 

4.2 Termination by Mutual Agreement of the Parties. The Executive’s employment
pursuant to this Agreement may be terminated at any time upon the mutual written
agreement of the Parties. Any such termination of employment shall have the
consequences specified in such writing.

 

4.3 Termination by the Executive. The Executive’s employment by the Company
shall be “at will.” The Executive shall have the right to resign or terminate
the Executive’s employment at any time, with or without cause, notice or Good
Reason.

 

4.4 Compensation Upon Termination.

 

4.4.1 Termination Not in Connection With a Change in Control. If the Executive’s
employment is terminated (either by the Company, by the Executive, or due to the
Executive’s death or Complete Disability), then the Company shall pay the
Executive’s base salary and any accrued and unused vacation benefits earned
through the date of termination, and the Company shall thereafter have no
further obligations to the Executive under this Agreement, except as expressly
provided herein.

 

4.4.2 Termination in Connection With a Change in Control. If within four (4)
months before or twelve (12) months following a Change in Control (as defined
below), the Company terminates the Executive’s employment without Cause or the
Executive resigns for Good Reason, then the Company shall pay the Executive’s
base salary and any

 

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accrued and unused vacation benefits earned through the date of termination. In
addition, the Company shall provide the Executive with the following severance
benefits:

 

4.4.2.1 The Company shall continue to pay the Executive’s base salary until the
end of the a period following the termination of the Executive’s employment
equal to 2.99 years (the “Severance Period”). Such severance payments shall be
subject to standard deductions and withholdings and paid in accordance with the
Company’s regular payroll policies and practices. For purposes of calculating
the amount to be paid pursuant this Section 4.4.2.1, the Company shall use the
greater of (x) the Executive’s base compensation in effect on the date of
termination and (y) the Executive’s base compensation immediately prior to the
Change in Control.

 

4.4.2.2 Each month during the Severance Period, the Company shall pay the
Executive an amount equal to one-twelfth (1/12th) of the greatest of (i) the
average of the three (3) annual bonuses paid to the Executive by the Company
prior to the date of termination, (ii) the last annual bonus paid to the
Executive by the Company prior to the date of termination, (iii) the average of
the three (3) annual bonuses paid to the Executive by the Company prior to the
date of the Change in Control, and (iv) the last annual bonus paid to the
Executive by the Company prior to the date of the Change in Control. Such
payment shall be subject to standard deductions and withholdings and paid in
equal monthly installments over the Severance Period in accordance with the
Company’s regular payroll policies and practices.

 

4.4.2.3 All Company equity awards held by Executive shall vest immediately and,
during the Severance Period, Executive shall have continued exercisability of
all Company stock options held by the Executive (if any).

 

4.4.2.4 Assuming the Executive timely and accurately elects to continue his
health insurance benefits under the Consolidated Omnibus Budget Reconciliation
Act of 1985 (“COBRA”), the Company shall reimburse him for the COBRA expenses he
pays on behalf of himself and his family until the earliest of (i) the end of
the Severance Period, (ii) the expiration of the Executive’s continuation
coverage under COBRA and any applicable state COBRA-like statute that provides
mandated continuation coverage or (iii) the date the Executive becomes eligible
for health insurance benefits of a subsequent employer.

 

4.4.2.5 In the event that any of the benefits payable to Executive under this
Section 4.4.2 are determined by the Company to constitute deferred compensation
subject to Section 409A(a)(2)(B)(i) of the Code, then the amount such benefits
so determined shall be payable to Executive in a manner that complies with the
requirements of Section 409A, which may include, without limitation, deferring
the payment of such benefit for six (6) months after Executive’s date of
termination, provided however, that nothing in this paragraph shall require the
payment of benefits to Executive earlier than they would otherwise be payable
under this Agreement.

 

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4.4.3 Release. Notwithstanding the foregoing, the Executive shall not receive
any of the severance payments or benefits set forth under Section 4.4.2 unless
upon Executive’s termination of employment the Executive furnishes the Company
with an effective waiver and release of claims (the “Release”) in a form
acceptable to the Parties and substantially as attached hereto as Exhibit A. If
a majority of the Board determines in good faith that the Executive has breached
any provision of his Proprietary Information and Inventions Agreement or any
provision of this Agreement or the Release, the Company shall be excused from
the obligation to provide any severance payment under Section 4.4.2 and the
Company shall be entitled to full recovery of any severance payment already
provided to the Executive under Section 4.4.2.

 

4.5 Definitions. For purposes of this Agreement, the following terms shall have
the following meanings:

 

4.5.1 Complete Disability. “Complete Disability” shall mean the inability of the
Executive to perform the Executive’s duties under this Agreement because the
Executive has become permanently disabled within the meaning of any policy of
disability income insurance covering employees of the Company then in force. In
the event the Company has no policy of disability income insurance covering
employees of the Company in force when the Executive becomes disabled, the term
“Complete Disability” shall mean the inability of the Executive to perform the
Executive’s duties under this Agreement by reason of any incapacity, physical or
mental, which the Board, based upon medical advice or an opinion provided by a
licensed physician acceptable to the Board, determines to have incapacitated the
Executive from satisfactorily performing all of the Executive’s usual services
for the Company for a period of at least one hundred twenty (120) days during
any twelve (12) month period (whether or not consecutive). Based upon such
medical advice or opinion, the determination of the Board shall be final and
binding and the date such determination is made shall be the date of such
Complete Disability for purposes of this Agreement.

 

4.5.2 Cause. “Cause” for the Company to terminate Executive’s employment
hereunder shall mean the occurrence of one or more of the following events if
such event results in a demonstrably harmful impact on the Company’s business or
reputation, or that of any of its subsidiaries, as reasonably determined by the
Board:

 

(i) Executive’s conviction of, or plea of guilty or no contest to, any felony or
any crime involving fraud, dishonesty or moral turpitude under the laws of the
United States or any state thereof;

 

(ii) Executive’s commission of (or attempted commission of), or participation
in, a fraud or act of dishonesty against the Company;

 

(iii) Executive’s material violation of any statutory duty owed to the Company
or material violation of any policy or rule of the Company;

 

(iv) Executive’s unauthorized use or disclosure of the Company’s confidential
information or trade secrets;

 

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(v) Executive’s gross misconduct; or

 

(vi) Executive’s conduct that constitutes gross insubordination or habitual
neglect of duties that is not cured within the reasonable period provided by the
Board or a committee designated by the Board in its written notice to Executive
of such conduct.

 

The determination that a termination is for Cause shall be made by the Board in
good faith. Any determination that the Executive’s employment was terminated by
reason of dismissal without Cause for the purposes of this Agreement shall have
no effect upon any determination of the rights or obligations of the Company or
the Executive for any other purpose.

 

4.5.3 Good Reason. “Good Reason” means, with respect to the Executive, the
occurrence of one or more of the following, without the Executive’s express
written consent and for which the Executive has given the Company express
written notice within thirty (30) days following such occurrence:

 

(i) a material breach of the employment agreement by the Company;

 

(ii) a significant reduction in the Executive’s duties, position, authority or
responsibilities relative to the duties, position, authority or responsibilities
in effect immediately prior to such reduction (it being expressly understood
that a change in the executive’s reporting responsibility so that he does not
report directly or solely to the Company’s Chief Executive Officer will
constitute “Good Reason”);

 

(iii) a reduction in the Executive’s base salary, bonus or other cash incentive
compensation opportunity as in effect immediately prior to such reduction for
any reason other than in connection with, and proportionate to, a company-wide
pay reduction;

 

(iv) a substantial reduction in Executive’s long-term non-cash incentive
opportunities (the value of which is measured as of the date of grant using a
reasonable valuation methodology consistently applied), provided that the grant
of a stock award covering the same number of shares as a similar stock award
granted in the immediately preceding year shall not be deemed to be a
substantial reduction of the Executive’s long-term incentive opportunities;

 

(v) the failure of the Company to timely pay Executive any portion of
Executive’s compensation then due to Executive or the failure to pay or
reimburse Executive for any business expenses incurred by Executive in
accordance with Company policy in a reasonably timely manner;

 

(vi) a material reduction in Executive’s benefits for any reason other than in
connection with any change to the Company’s benefit programs applicable to all
Company employees generally made; and

 

(vii) a relocation of Executive’s principal workplace by more than fifty (50)
miles.

 

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4.5.4 Change in Control. “Change in Control” shall mean a transaction (excluding
in each case transactions in which securities are purchased from the Company for
the principal purpose of raising capital for the Company) in which one of the
following occurs:

 

(i) any person or related group of persons (other than the Company or an
Affiliate of the Company) directly acquires beneficial ownership (within the
meaning of Rule 13d-3 of the Securities Exchange Act of 1934) of securities
possessing more than thirty-five percent (35%) of the total combined voting
power of the Company’s outstanding securities;

 

(ii) the composition of the Board changes over a period of twenty-four (24)
consecutive months or less in a way that results in a majority of the Board
(rounded up to the next whole number) ceasing, by reason of one or more proxy
contests for the election of Board members, to be comprised of individuals who
either (A) have been Board members continuously since the beginning of the
period or (B) have been elected or nominated for election as Board members
during the period by at least two-thirds of the Board members described in
clause (A) who were still in office at the time the election or nomination was
approved by the Board;

 

(iii) (A) a merger or consolidation occurs in which the Company is not the
surviving entity, or (B) any reverse merger occurs in which the Company is the
surviving entity, or (C) any merger involving a subsidiary of the Company occurs
in which the Company is a surviving entity, but in each case in which holders of
the Company’s outstanding voting securities immediately prior to such
transaction, as such, do not hold, immediately following such transaction,
securities possessing fifty percent (50%) or more of the total combined voting
power of the surviving entity’s outstanding securities (in the case of clause
(A)) or the Company’s outstanding voting securities (in the case of clauses (B)
and (C)); or

 

(iv) all or substantially all of the Company’s assets are sold of transferred
other than in connection with an internal reorganization of the Company or the
Company’s complete liquidation (other than a liquidation of the Company into a
wholly-owned subsidiary).

 

4.6 Parachute Payments. If any payment or benefit the Executive would receive
from the Company pursuant to this Agreement or otherwise (“Payment”) would (i)
constitute a “parachute payment” within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”), and (ii) be subject to
the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the
Executive will receive an additional payment (the “Gross-up”) from the Company
such that after taking into account all applicable federal, state and local
employment taxes, income taxes, the Excise Tax and all applicable taxes on the
Gross-up (all computed at the highest applicable marginal rate), results in the
Executive’s receipt, on an after-tax basis, of the full amount of the Payment.

 

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The Company shall appoint a nationally recognized independent accounting firm to
make the determinations required hereunder, which accounting firm shall not then
be serving as accountant or auditor for the individual, entity or group that
effected the Change in Control. The Company shall bear all expenses with respect
to the determinations by such accounting firm required to be made hereunder.

 

The accounting firm engaged to make the determinations hereunder shall provide
its calculations, together with detailed supporting documentation, to the
Company and the Executive within fifteen (15) calendar days after the date on
which the Executive’s right to a Payment is triggered (if requested at that time
by the Company or the Executive) or such other time as requested by the Company
or the Executive. The accounting firm shall furnish the Company and the
Executive with an opinion reasonably acceptable to the Executive with respect to
the application of the Excise Tax to such Payment. The Company shall be entitled
to rely upon the accounting firm’s determinations, which shall be final and
binding on all persons.

 

4.7 Exclusive Remedy. The rights, remedies and payments set forth in this
Section 4 shall be the exclusive rights, remedies and payments available to the
Executive upon termination of this Agreement and the Executive’s employment
hereunder. Such rights remedies and payments shall supersede and replace any and
all rights and remedies under state or federal law. The Company may deduct any
amounts the Executive owes the Company at the time of the Executive’s
termination of employment from any severance payments.

 

4.8 Survival of Certain Sections. Sections 2.2, 3.4, 4.4, 4.5, 4.6, 4.7, 4.8 and
5 - 16 of this Agreement shall survive the termination of this Agreement.

 

5. CONFIDENTIAL AND PROPRIETARY INFORMATION; NONSOLICITATION.

 

5.1 Proprietary Information and Inventions Agreement. As a condition of
employment, the Executive agrees to execute and abide by the Proprietary
Information and Inventions Agreement attached hereto as Exhibit B.

 

5.2 Non-Solicitation. During the Executive’s employment with the Company and any
Severance Period, and for one (1) year after the termination of such periods,
the Executive agrees that in order to protect the confidential and proprietary
information of the Company and its subsidiaries from unauthorized use, the
Executive shall not, either directly or through others, solicit or attempt to
solicit (i) any employee, consultant or independent contractor of the Company or
its subsidiaries to terminate his or her relationship with the Company (or the
applicable subsidiary) in order to become an employee, consultant or independent
contractor to or for any other person or business entity, or (ii) the business
of any customer, supplier, service provider, vendor or distributor of the
Company or a subsidiary which, at the time of termination or one (1) year
immediately prior thereto, was doing business with the Company or one of its
subsidiaries or listed on the customer, supplier, service provider, vendor or
distributor list of the Company or one or more of its subsidiaries.

 

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6. ASSIGNMENT AND BINDING EFFECT.

 

This Agreement shall be binding upon and inure to the benefit of the Executive
and the Executive’s heirs, executors, personal representatives, assigns,
administrators and legal representatives. Because of the unique and personal
nature of the Executive’s duties under this Agreement, neither this Agreement
nor any rights or obligations under this Agreement shall be assignable by the
Executive. This Agreement shall be binding upon and inure to the benefit of the
Company and its successors, assigns and legal representatives.

 

7. CHOICE OF LAW.

 

This Agreement is made and intended to be performed primarily within the state
of California. This Agreement shall be construed and interpreted in accordance
with the internal laws of the state of California (without giving effect to
principles of conflicts of law).

 

8. INTEGRATION.

 

Except as may otherwise be provided herein, this Agreement, including Exhibit A
and Exhibit B, contains the complete, final and exclusive agreement of the
Parties relating to the terms and conditions of the Executive’s employment and
the termination of Executive’s employment, and supersedes all prior and
contemporaneous oral and written employment agreements or arrangements between
the Parties. To the extent this Agreement conflicts with the Proprietary
Information and Inventions Agreement attached as Exhibit B, the Proprietary
Information and Inventions Agreement controls.

 

9. AMENDMENT.

 

This Agreement cannot be amended or modified except by a written agreement
signed by the Executive and the Board.

 

10. WAIVER.

 

No term, covenant or condition of this Agreement or any breach thereof shall be
deemed waived, except with the written consent of the Party against whom the
waiver is claimed, and any waiver or any such term, covenant, condition or
breach shall not be deemed to be a waiver of any preceding or succeeding breach
of the same or any other term, covenant, condition or breach.

 

11. SEVERABILITY.

 

The finding by a court of competent jurisdiction or other authorized body of the
unenforceability, invalidity or illegality of any provision of this Agreement
shall not render any other provision of this Agreement unenforceable, invalid or
illegal. The invalid or unenforceable term or provision shall be modified or
replaced with a valid and enforceable term or provision which most accurately
represents the Parties’ intention with respect to the invalid or unenforceable
term or provision.

 

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12. INTERPRETATION; CONSTRUCTION.

 

The headings set forth in this Agreement are for convenience of reference only
and shall not be used in interpreting this Agreement. The Executive has been
encouraged to consult with, and has consulted with, Executive’s own independent
counsel and tax advisors with respect to the terms of this Agreement. The
Parties acknowledge that each Party and its counsel has reviewed and revised, or
had an opportunity to review and revise, this Agreement, and any rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

 

13. REPRESENTATIONS AND WARRANTIES.

 

The Executive represents and warrants that the Executive is not restricted or
prohibited, contractually or otherwise, from entering into and performing each
of the terms and covenants contained in this Agreement, and that the Executive’s
execution and performance of this Agreement shall not violate or breach any
other agreements between the Executive and any other person or entity.

 

14. COUNTERPARTS.

 

This Agreement may be executed in two counterparts, each of which shall be
deemed an original, all of which together shall constitute one and the same
instrument.

 

15. ARBITRATION.

 

To ensure the rapid and economical resolution of disputes that may arise in
connection with the Executive’s employment with the Company, the Executive and
the Company agree that any and all disputes, claims, or causes of action, in law
or equity, arising from or relating to Executive’s employment, or the
termination of that employment, will be resolved, to the fullest extent
permitted by law, by final binding arbitration in San Diego, California
conducted by the Judicial Arbitration and Mediation Services (“JAMS”), or its
successors, under the then current rules of JAMS for employment disputes;
provided that the arbitrator shall: (a) have the authority to compel adequate
discovery for the resolution of the dispute and to award such relief as would
otherwise be permitted by law and (b) issue a written arbitration decision
including the arbitrator’s essential findings and conclusions and a statement of
the award. Both the Executive and the Company shall be entitled to all rights
and remedies that either the Executive or the Company would be entitled to
pursue in a court of law. The Company shall pay all fees in excess of those
which would be required if the dispute was decided in a court of law. Nothing in
this Agreement is intended to prevent either the Executive or the Company from
obtaining injunctive relief in court to prevent irreparable harm pending the
conclusion of any such arbitration. Notwithstanding the foregoing, the Executive
and the Company each have the right to resolve any and all issues or disputes
involving confidential information, proprietary information, trade secrets or
related information or intellectual property rights by court action instead of
arbitration.

 

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16. TRADE SECRETS OF OTHERS.

 

It is the understanding of both the Company and the Executive that the Executive
shall not divulge to the Company and/or its subsidiaries any confidential
information or trade secrets belonging to others, including the Executive’s
former employers, nor shall the Company and/or its subsidiaries seek to elicit
from the Executive any such information. Consistent with the foregoing, the
Executive shall not provide to the Company and/or its subsidiaries, and the
Company and/or its subsidiaries shall not request, any documents or copies of
documents containing such information.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first shown above.

 

K2 INC.

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Name:

Title:

EXECUTIVE

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Name:

Title:

 

12.