**Exhibit10.1**

 

**EMPLOYMENT AGREEMENT**

 

ThisEmployment Agreement (this “Agreement”) is entered into onMay 18, 2009, by and between Crocs, Inc. a Delaware corporation(the “Company”), and Daniel Hart****(the “Executive”).

 

**BACKGROUND**

 

A.            The Company is in the businessof designing, manufacturing, marketing, distributing, and selling unique andinnovative footwear for men, women and children.

 

B.            The Company desires toemploy Executive as the Company’s Executive Vice President of Administrationand Corporate Development, and Executive desires to be so employed by theCompany, on the terms and conditions set forth in this Agreement.

 

C.            In Executive’s position,Executive will have access to confidential, proprietary and trade secretinformation of the Company.  It isdesirable and in the best interests of the Company and its stockholders toprotect confidential, proprietary and trade secret information of the Company,to prevent unfair competition by former executives of the Company followingseparation of their employment with the Company and to secure cooperation fromformer executives with respect to matters related to their employment with theCompany.

 

**AGREEMENT**

 

Inconsideration of the foregoing premises and the respective agreements of theCompany and Executive set forth below, the Company and Executive, intending tobe legally bound, agree as follows:

 

1.             EMPLOYMENT.

 

(a)           Employment.  Subject to the terms and conditions hereof,the Company shall employ Executive and Executive agrees to be so employed asExecutive Vice President of Administration and Corporate Development. Executive’semployment hereunder shall not be for any specific term and shall be subject totermination at will by either Executive or the Company for any reason uponwritten notice to the other party.

 

2.             DUTIES.  Beginning no later than June 15, 2009,and at all times thereafter during his employment, Executive shall serve as theCompany’s Executive Vice President of Administration and CorporateDevelopment.  As the Company’s ExecutiveVice President of Administration and Corporate Development, Executive shallreport to the Chief Executive Officer and shall direct and manage the affairsof the Company with such duties, functions and responsibilities (including theright to hire and dismiss employees (subject to approval of the Board in thecase of certain executives)) as are customarily associated with and incident tothe position of Executive Vice President of Administration and CorporateDevelopment and as the Company may, from time to time, require of him, subjectto the direction of the CEO.  The duties,functions and responsibilities include, but are not limited to, directing theCompany’s 

 

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legal,human resources, investor relations, corporate communications, and corporatedevelopment functions.

 

The Executive shall serve the Company faithfully,conscientiously and to the best of the Executive’s ability and shall promotethe interests and reputation of the Company. Unless prevented by sickness or disability, the Executive shall devotehis time, attention, knowledge, energy and skills, during normal working hours,and at such other times as the Executive’s duties may reasonably require, tothe duties of the Executive’s employment; provided, however, that it shall notbe a breach of this Agreement for the Executive to manage his own privatefinancial investments; or with the consent of the Board (which consent shallnot be unreasonably withheld) to be a member of the board of directors of othercompanies that do not compete with the Company, so long as, in either case,such activities do not require the Executive to spend a material amount of timeaway from his performance of his duties hereunder, or otherwise violate thisAgreement or the Company’s other policies. The principal place of employment of the Executive shall be theprincipal executive offices of the Company. The Executive acknowledges that, in the course of his employment, he maybe regularly required to travel on behalf of the Company.  Executive will follow and comply with thepolicies and procedures of the Company, including without limitation, policiesrelating to business ethics, code of conduct, conflict of interest,non-discrimination, confidentiality and protection of trade secrets, andinsider trading. Executive hereby represents and confirms that neither (i) Executive’sentering into this Agreement nor (ii) Executive’s performance of Executive’sduties and obligations hereunder will violate or conflict with any other agreement(oral or written) to which Executive is a party or by which Executive isbound.  Without commenting on whether abreach of any other section of this Agreement is material, the parties agreethat a breach of this Section 2 shall be a material breach of thisAgreement.

 

3.             COMPENSATION.  During Executive’s employment under thisAgreement, Executive will be provided with the below compensation and benefits.

 

(a)           Base Salary.  The Company will pay to Executive forservices provided hereunder an annualized base salary (“Base Salary”) at a rateof $475,000.00, which Base Salary will be paid on a bi-weekly basis inaccordance with the Company’s normal payroll policies and procedures.  The Board will review Executive’s performanceon an annual basis and determine any increases to Executive’s Base Salary inits sole discretion.  The Board mayreduce Executive’s Base Salary if such reduction is part of an across the boarduniformly applied reduction affecting all senior executives and does not exceedthe average percentage reduction for all such senior executives, but in noevent may the Board or Company, without Executive’s consent, reduce Executive’sBase Salary by greater than 10% in any one year, and, provided further, in noevent may the Board or Company reduce Executive’s Base Salary by greater than$47,500 in total during Executive’s employment with the Company.

 

(b)           Incentive Compensation. Executivewill be eligible to participate in the Company’s 2008 Cash Incentive Plan bonusplan (the “Bonus Plan”),****in accordancewith its terms, as may be amended and in effect from time to time.  Executive’s annual target incentivecompensation under the Bonus Plan and for each successor annual cash bonus planshall be not less than 80% of Executive’s Base Salary pursuant to the currentterms and 

 

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conditionsof the relevant Bonus Plan. For the year 2009 only, Executive shall have aminimum guaranteed bonus under the Bonus Plan of not less than 50% of his 80%Bonus target for the remainder of 2009, which equals $190,000, which also shallfurther be pro rated based on the proportion of the year Executive was employedby the Company.  All payments under theBonus Plan (and any successor thereto) shall be made to the Executive within 21⁄2 months after the end of the calendar year in which the Executive’s right tosuch payments is no longer subject to a substantial risk of forfeiture.

 

(c)           Stock Options.  Effective upon commencement of Executive’semployment with the Company and upon approval by the Board, the Company willgrant to Executive an option to purchase 200,000 shares of common stock of theCompany at the fair market value as of the date of the grant, subject to theCompany’s 2007 Equity Incentive Plan and the Company’s standard written stockoption agreement there under to be entered into by and between Executive andthe Company, provided, however, that any stock option agreements with respectto the foregoing grants and any future grants shall be conformed so as to be consistentwith the provisions and covenants regarding such grants (such as vesting,exercisability etc.) set forth in this Agreement. Executive shall also beentitled to additional annual grants pari passu with other similarly situatedsenior executives.  Any and all stockoptions granted to Executive during his employment shall remain exercisable for10 years after grant, including if Executive ceases to be employed with theCompany for any reason other than termination for ‘cause’. In the event of a ‘Changeof Control’ (as hereinafter defined), all unvested stock options and unvestedrestricted stock then held by Executive, and which are scheduled to vest overthe 24 months following such event, shall immediately vest upon the effectivedate of such Change of Control.

 

(d)           Restricted Stock.  Effective upon commencement of Executive’semployment with the Company and upon approval by the Board, the Company willgrant to Executive 150,000 shares of restricted stock pursuant to the Company’s2007 Equity Incentive Plan and the Company’s standard written restricted stockaward agreement to be entered into by and between Executive and the Company,provided, however, that any restricted stock award agreements with respect tothe foregoing grants and any future grants shall be conformed so as to beconsistent with the provisions and covenants regarding such grants (such asvesting, etc.)  set forth in thisAgreement. Executive shall also be entitled to additional annual grants paripassu with other similarly situated senior executives.

 

(e)           Signing Bonus.  Executive will receive a $100,000 signingbonus payable within 5 business days of his commencing employment with theCompany.  Executive agrees that (exceptin the event of his death or termination without ‘cause’) he shall re-pay apro-rata share of this signing bonus should his employment with the Companycease prior to the first anniversary of the first date that Executive reportsfor work with the Company.  The pro-ratashare to be repaid shall be equivalent to the number of months fewer thantwelve that, divided by twelve, remain until the first anniversary of the firstdate that Executive reported to work.

 

(f)            Deferred Compensation.  Executive will be eligible to participate inthe Company’s 2007 Senior Executive Deferred Compensation Plan in accordancewith its terms, as may be amended and in effect from time to time.

 

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(g)           Employee Benefits andExecutive Incentives and Perquisites.  Executive will be entitled to participate inall employee benefit plans and programs and executive perquisites andincentives generally available to and on terms no less favorable than similarlysituated senior executive employees of the Company, to the extent thatExecutive meets the eligibility requirements for each individual plan orprogram.  Executive’s participation inany such plan or program will be subject to the provisions, rules, andregulations of, or applicable to, the plan or program.  The Company provides no assurance as to theadoption or continuation of any particular employee benefit plan or program.

 

(h)           Business Expenses.  The Company will reimburse Executive for allreasonable and necessary out-of-pocket business, travel, and entertainmentexpenses incurred by Executive in the performance of Executive’s duties andresponsibilities to the Company during Executive’s employment under thisAgreement.  Such reimbursement shall besubject to the Company’s normal policies and procedures for expenseverification, documentation, and reimbursement; provided, however, thatExecutive shall submit verification of expenses within 45 days after the datethe expense was incurred, and the Company shall reimburse Executive for suchexpenses eligible for reimbursement within 30 days thereafter but no later than2 1⁄2 months after the end of the calendar year in which such expenses areincurred.  The right to reimbursementhereunder is not subject to liquidation or exchange for any other benefit, andthe amount of expenses eligible for reimbursement in a calendar year shall notaffect the expenses eligible for reimbursement in any other calendar year.

 

(i)            Vacation Time.  In addition to Company holidays offered toemployees in the U.S.A., Executive shall be entitled to 20 days of paid timeoff per year, which shall be pro-rated for 2009.

 

(j)             Relocation.  Executive shall perform his duties at theCompany’s headquarters, and in other such places as agreed between Executiveand the Chief Executive Officer, and the Board has delegated to the ChiefExecutive Officer the authority to reach an agreement with Executive regardingany relocation and reasonable temporary housing, commuting, or relocationexpenses.

 

4.             CONFIDENTIAL INFORMATION.  Except as authorized in writing by the Boardor as necessary in carrying out Executive’s responsibilities for the Company,Executive will not at any time divulge, furnish, or make accessible to anyoneor use in any way, any confidential, proprietary, or secret knowledge orinformation of the Company that Executive has acquired or will acquire aboutthe Company, whether developed by himself or by others, concerning (a) anytrade secrets, (b) any confidential, proprietary, or secret designs,inventions, discoveries, programs, processes, formulae, plans, devices, or material(whether or not patented or patentable) directly or indirectly useful in anyaspect of the business of the Company, (c) any confidential, proprietary,or secret customer or supplier lists, (d) any confidential, proprietary,or secret development or research work, (e) any strategic or otherconfidential business, marketing, or sales plans, systems or techniques,(f) any confidential, proprietary, or secret financial data or plans, or(g) any other confidential or proprietary information or secret aspects ofthe business of the Company.  Executiveacknowledges that the above-described knowledge and information 

 

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constitutea unique and valuable asset of the Company and represent a substantialinvestment of time and expense by the Company, and that any disclosure or otheruse of such knowledge or information other than for the sole benefit of theCompany would be wrongful and would cause irreparable harm to the Company.  Executive will refrain from intentionallycommitting any acts that would materially reduce, and shall take reasonablesteps to protect, the value of such knowledge or information to theCompany.  The foregoing obligations ofconfidentiality shall not apply to any knowledge or information that (i) isnow or subsequently becomes generally publicly known, other than as a direct orindirect result of the breach by Executive of this Agreement, (ii) isindependently made available to Executive in good faith by a third party whohas not violated a confidential relationship with the Company, or (iii) isrequired to be disclosed by law or legal process.  Executive understands and agrees thatExecutive’s obligations under this Agreement to maintain the confidentiality ofthe Company’s confidential information are in addition to any obligations ofExecutive under applicable statutory or common law.

 

5.             VENTURES.  If, during Executive’s employment with theCompany, Executive participates in the planning or implementing of any project,program, or venture involving the Company, all rights in such project, program,or venture belong to the Company.  Exceptas approved in writing by the Board, Executive will not be entitled to anyinterest in any such project, program, or venture or to any commission, finder’sfee, or other compensation in connection therewith.  Executive will have no interest, direct orindirect, in any customer or supplier that conducts business with the Company.

 

6.             INTELLECTUALPROPERTY.

 

(a)           Disclosure and Assignment.  Executive hereby transfers and assigns to theCompany (or its designee) all right, title, and interest of Executive in and toevery idea, concept, invention, and improvement (whether patented, patentableor not) conceived or reduced to practice by Executive whether solely or incollaboration with others while Executive is employed by the Company, and allcopyrighted or copyrightable matter created by Executive whether solely or incollaboration with others while Executive is employed by the Company, in eachcase, that relates to the Company’s****business(collectively, “Creations”).  Executiveshall communicate promptly and disclose to the Company, in such form as theCompany may request, all information, details, and data pertaining to eachCreation.  Every copyrightable Creation,regardless of whether copyright protection is sought or preserved by theCompany, shall be a “work made for hire” as defined in 17 U.S.C.§ 101, and the Company shall own all rights in and to such matterthroughout the world, without the payment of any royalty or other considerationto Executive or anyone claiming through Executive.

 

(b)           Trademarks.  All right, title, and interest in and to anyand all trademarks, trade names, service marks, and logos adopted, used, orconsidered for use by the Company during Executive’s employment (whether or notdeveloped by Executive) to identify the Company’s business or other goods orservices (collectively, the “Marks”), together with the goodwill appurtenantthereto, and all other materials, ideas, or other property conceived, created,developed, adopted, or improved by Executive solely or jointly during Executive’semployment by the Company and relating to its business shall be ownedexclusively by the Company.  

 

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Executiveshall not have, and will not claim to have, any right, title, or interest ofany kind in or to the Marks or such other property.

 

7.             NONCOMPETITION AND NONSOLICITATION COVENANTS.

 

(a)           Agreement Not to Compete.  During Executive’s employment with theCompany and for a period of 12 consecutive months from and after thetermination of Executive’s employment, whether such termination is with orwithout Cause, or is at the instance of Executive or the Company, Executivewill not, directly or indirectly, in any manner or capacity, including withoutlimitation as a proprietor, principal, agent, partner, officer, director,investor, stockholder, employee, member of any association, consultant orotherwise engage or participate in any Competitive Business.  “Competitive Business” means any person,entity or business operation (other than the Company) that designs,manufactures, markets, distributes, or sells footwear or other products thatare the same or similar to the footwear or other products designed, manufactured,marketed, distributed or sold by the Company in any geographic location inwhich the Company is then doing business, or is then actively preparing to dobusiness, or that engages in any other business that is competitive with thethen-current businesses of the Company or with any business or market theCompany is actively preparing to enter as of the date of termination ofExecutive’s employment.  Ownership (aseither a proprietor, principal, investor, or stockholder in this Section 7(a))by Executive, as a passive investment, of less than 5%****ofthe outstanding shares of capital stock of any corporation shall not constitutea breach of this Section 7(a). Nothing in this Section 7(a), however, shall be construed toprevent Executive from providing legal advice where he has been engaged as anattorney and such advice is being given pursuant to a valid license to practicelaw.  The parties intend and agree thatthis exception shall be narrowly construed.

 

(b)           Agreement Not to Hire.  During Executive’s employment with theCompany and for a period of 12 consecutive months from and after thetermination of Executive’s employment, whether such termination is with orwithout Cause, or is at the instance of Executive or the Company, Executivewill not, directly or indirectly, in any manner or capacity, including withoutlimitation as a proprietor,  principal,agent, partner, officer, director, investor, stockholder, employee, member ofany association, consultant, or otherwise, hire, engage, or solicit any personwho is then an employee of the Company or who was an employee of the Company atany time during the 12 month period immediately preceding Executive’sTermination Date.

 

(c)           Agreement Not to Solicit.  During Executive’s employment with theCompany and for a period of 12 consecutive months from and after thetermination of Executive’s employment, whether such termination is with orwithout Cause, or is at the instance of Executive or the Company, Executivewill not, directly or indirectly, in any manner or capacity including withoutlimitation as a principal, agent, partner, officer, director, employee, orconsultant, solicit, request, advise, or induce any current or potentialcustomer (potential customer in this Section 7(c) is defined as anypotential customer with whom the Company has been actively engaging indiscussions during the 12 month period immediately preceding Executive’stermination of employment), supplier, vendor or other business contact of theCompany to cancel, curtail, or otherwise change its relationship adversely tothe Company, or 

 

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interferein any manner with the relationship between the Company and any of itscustomers, suppliers, vendors or other business contacts.

 

(d)           Modification.  If the duration of, the scope of, or anybusiness activity covered by, any provision of this Section 7 exceeds thatwhich is valid and enforceable under applicable law, such provision will beconstrued to cover only that duration, scope, or activity that is determined tobe valid and enforceable.  Executivehereby acknowledges that this Section 7 will be construed so that itsprovisions are valid and enforceable to the maximum extent, not exceeding itsexpress terms, possible under applicable law.

 

(e)           No Adequate Remedy at Law.  Executive hereby acknowledges that theprovisions of this Section 7 are reasonable and necessary to protect thelegitimate interests of the Company and that any violation of this Section 7by Executive will cause substantial and irreparable harm to the Company to suchan extent that monetary damages alone would be an inadequate remedytherefor.  Accordingly, in the event ofany actual or threatened breach of any such provisions, the Company will, inaddition to any other remedies it may have, be entitled to injunctive and otherequitable relief to enforce such provisions, and such relief may be grantedwithout the necessity of proving actual monetary damages.

 

8.             TERMINATION OF EMPLOYMENT.

 

(a)           Executive’s employment withthe Company under this Agreement will terminate upon the occurrence of any oneof the following events:

 

(i)            The Executive’sreceipt of the Company’s written notice to Executive of the termination ofExecutive’s employment, effective as of the date stated in such notice;

 

(ii)           The Company’sreceipt of Executive’s written resignation from the Company, effective notearlier than 30 days after delivery of such written notice of resignation,provided that the Board may waive such notice or relieve Executive of Executive’sduties during such notice period;

 

(iii)          Executive’sDisability; or

 

(iv)          Executive’sdeath.

 

(b)           The date upon whichExecutive’s termination of employment with the Company is effective is the “TerminationDate.”  For purposes of Sections 9 and 10of this Agreement only, the Termination Date shall mean the date on which a “separationfrom service” from the Company has occurred for purposes of Section 409Aof the Internal Revenue Code of 1986, as amended (the “Code”) and theregulations and guidance thereunder.

 

9.             PAYMENT UPONINVOLUNTARY TERMINATION WITHOUT CAUSE.  If Executive’s employment with the Company isterminated involuntarily at the initiative of the Company without Cause (asdefined in Section 13 below), then, in addition to such Base Salary 

 

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andany other compensation that has been earned but not paid to Executive as of theTermination Date, the Company shall, subject to the conditions in Section 11,provide Executive the following severance pay and benefits:

 

(a)           pay to Executive a lump sumamount equal to one year of Executive’s Base Salary in effect as of theTermination Date;

 

(b)           pay to Executive a lump sumamount equal to 80% of Executive’s Base Salary in effect as of the TerminationDate, pro-rated to equal the proportion of the year that Executive was employedwith the Company;

 

(c)           pay to Executive a lump sumamount of Executive’s annual incentive (bonus) compensation equal to 80% ofExecutive’s Base Salary at the time of Executive’s Termination Date; and

 

(d)           immediate vesting of anyunvested stock options or unvested restricted stock then held by Executive thatwould have vested had Executive remained employed for 24 months after theTermination Date.

 

Anysuch amounts that become due and owing pursuant to Sections 9(a) or (c) shallbe paid to Executive in full on the 45th day followingthe Termination Date, provided Executive is in satisfaction of the conditionsin Section 11. Any such amounts that become due and owing pursuant to Section 9(b) shallbe paid to Executive in full no later then when such annual bonuses are paid toother senior executive officers of the Company, provided Executive is insatisfaction of the conditions in Section 11.  For purposes of this Section 9, BaseSalary shall be determined prior to any reduction that would entitle theExecutive to terminate his employment with the Company for Good Reason.

 

10.           PAYMENT UPON RESIGNATION BYEXECUTIVE FOR GOOD REASON.  Uponresignation by Executive for Good Reason (as defined in Section 13 below),then, in addition to such Base Salary and any other compensation that has beenearned but not paid to Executive as of the Termination Date, Executive shall beentitled to severance pay and benefits as provided in Section 9(a)-(d) fora termination by the Company without Cause. Any such amounts that become due and owing pursuant to this Section 10shall be paid to Executive in accordance with the provisions of Section 9.

 

11.           CONDITIONS.Notwithstanding anything above to the contrary, the Company will not beobligated to make any payments to Executive under Sections 9 or 10 unless thefollowing two conditions are met:

 

(a) The Company and Executive hereby agree and covenant that, within 30 businessdays of the date of Executive’s Termination Date, they will enter into amutually agreeable form of release, in which Executive releases any claims hemay have against the Company relating to his employment with the Company,provided that Executive shall not be required to release any claims he may haveagainst the company relating to his rights to indemnification, insurancecoverage (including without limitation directors’ and officers’ 

 

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liabilityinsurance coverage), and the ability to enforce the terms of this Agreement;and all applicable rescission periods provided by law for releases of claimsshall have expired and Executive shall have signed and not rescinded therelease of claims.

 

(b)           Executive is in compliancewith the terms of this Agreement as of the dates of such payments.

 

12.           OTHER TERMINATION.  If Executive’s employment with the Company isterminated:

 

(a)           by reason of Executive’sabandonment of Executive’s employment or resignation for any reason other thanGood Reason;

 

(b)           by reason of termination ofExecutive’s employment by the Company for Cause; or

 

(c)           upon Executive’s death orDisability,

 

thenthe Company will pay to Executive, or Executive’s beneficiary or Executive’sestate, as the case may be, such Base Salary and any other compensation thathas been earned but not paid to Executive as of the Termination Date, payablepursuant to the Company’s normal payroll practices and procedures and asprovided under any applicable plans or programs.

 

13.           DEFINITIONS.

 

(a)           Cause.  “Cause” hereunder means:

 

(i)            Executive’sconviction, or guilty or no contest plea, to any felony;

 

(ii)           any act offraud by Executive related to or connected with Executive’s employment by theCompany;

 

(iii)          Executive’s material breachof his fiduciary duty to the Company;

 

(iv)          Executive’s gross negligenceor gross misconduct in the performance of duties reasonably assigned toExecutive which causes material harm to the Company;

 

(v)           any willful and materialviolation by Executive of the Company’s codes of conduct or other rules orpolicies of the Company;

 

(vi)          any entry of any court orderor other ruling that prevents Executive from performing his material duties andresponsibilities hereunder; or

 

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(vii)         any willful and material breach of this Agreement byExecutive.

 

(b)           Disability.  “Disability” hereunder means either (i) anysevere medically determinable physical impairment that renders Executive unableto function, such as Executive being in a coma, from which a physician withrelevant and appropriate expertise has given his medical opinion that Executivewill not recover within six months; or (ii) Executive’s inability becauseof mental or physical illness or incapacity, whether total or partial, toperform his duties under this Agreement for a continuous period of 120 days, orfor shorter periods aggregating 120 days out of any 180 day period.

 

(c)           Good Reason.  “Good Reason” hereunder means any of thefollowing conditions arising during Executive’s term of employment without theconsent of Executive:

 

(i)            a material diminution in Executive’sresponsibilities, authority, position, or duties;

 

(ii)           a reduction in Executive’sBase Salary (except as provided for in Section 3(a) hereof);

 

(iii)          a reduction in Executive’sincentive or equity compensation opportunity such that it is materially lessfavorable than those provided generally to other senior executive officers;

 

(iv)          the Company’s materialfailure to honor its incentive compensation plans, as then in effect;

 

(v)           assignment of duties orresponsibilities materially inconsistent with those described in Section 2hereto;

 

(vi)          removal from the position ofExecutive Vice President of Administration and Corporate Development of theCompany or its successor;

 

(vii)         any change in Executive’sreporting responsibility being solely to the Chief Executive Officer;

 

(viii)        any Change in Control, asdefined in Section 13(d) below, provided that Executive tenders hisResignation for Good Reason within 180 days of the Change of Control;

 

(ix)           relocation of Executive’soffice or the Company 50 miles or more from the place of relocation agreedbetween Executive and Chief Executive Officer pursuant to Section 3(j) hereof;or

 

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(x)            any other action or inaction that constitutes amaterial breach by the Company of this Agreement.

 

Provided,however, that “Good Reason” will not exist unless Executive has first providedwritten notice to the Company of the occurrence of one or more of theconditions under clauses (i) through (x) above within 180 days of thecondition’s occurrence and such condition(s) is (are) not fully remediedby the Company within 30 days after the Company’s receipt of written noticefrom Executive.

 

(d)           Change ofControl.  “Change ofControl” hereunder shall mean and is defined as such term is defined in Section 2(f) ofthe Company’s 2007 Equity Incentive Plan as in effect as of the date hereof.

 

14.           OTHER POST-TERMINATIONOBLIGATIONS.

 

(a)           In the event of terminationof Executive’s employment, the sole obligation of the Company under thisAgreement will be its obligation to make the payments called for by Sections 9,10 or 12 hereof, as the case may be, and the Company will have no otherobligation to Executive or to Executive’s beneficiary or Executive’s estate,except as otherwise provided by law or by the terms of any employee benefitplans or programs, or of any incentive compensation or stock ownership plans,then maintained by the Company in which Executive participates.

 

(b)           Immediately upon termination of Executive’semployment with the Company for any reason, Executive will resign all positionsthen held as a director or officer of the Company and of any subsidiary, parentor affiliated entity of the Company.

 

(c)           Upon termination ofExecutive’s employment with the Company, Executive shall promptly deliver tothe Company any and all Company records and any and all Company property inExecutive’s possession or under Executive’s control, including without limitationmanuals, books, blank forms, documents, letters, memoranda, notes, notebooks,reports, printouts, computer disks, flash drives or other digital storagemedia, source codes, data, tables or calculations and all copies thereof,documents that in whole or in part contain any trade secrets or confidential,proprietary or other secret information of the Company and all copies thereof,and keys, access cards, access codes, passwords, credit cards, personalcomputers, handheld personal computers or other digital devices, telephones andother electronic equipment belonging to the Company.

 

(d)           Following termination ofExecutive’s employment with the Company for any reason, Executive will, uponreasonable request of the Company or its designee, cooperate with the Companyin connection with the transition of Executive’s duties and responsibilitiesfor the Company; consult with the Company regarding business matters thatExecutive was directly and substantially involved with while employed by theCompany, provided that such consulting shall not exceed 20 percent of theaverage level of bona fide services performed by Executive for the Company andits affiliates over the immediately 

 

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preceding36-month period (or, if less, the full period during which Executive hasprovided services to the Company); and be reasonably available, with or withoutsubpoena, to be interviewed, review documents or things, give depositions,testify, or engage in other reasonable activities in connection with anylitigation or investigation, with respect to matters that Executive then has ormay have knowledge of by virtue of Executive’s employment by or service to theCompany or any related entity.  TheCompany shall compensate Executive at a rate of $250 per hour for such work,and shall reimburse Executive’s reasonable legal fees incurred in connectiontherewith. Such reimbursement shall be subject to the Company’s normal policiesand procedures for expense verification, documentation, and reimbursement;provided, however, that Executive shall submit verification of expenses andhours worked within 45 days after the date the expense was incurred or theservice were performed, respectively, and the Company shall pay all suchcompensation and reimbursement within 30 days thereafter but no later than 2 1⁄2months after the end of the calendar year in which such services wereperformed.

 

(e)           Executive will not malign,defame or disparage the reputation, character, image, products or services ofthe Company, or the reputation or character of the Company’s directors,officers, employees or agents, provided that nothing in this Section 14(e) shallbe construed to limit or restrict Executive from taking any action thatExecutive in good faith reasonably believes is necessary to fulfill Executive’sfiduciary obligations to the Company, or from providing truthful information inconnection with any legal proceeding, government investigation or other legalmatter.

 

15.           LIABILITY INSURANCE ANDINDEMNIFICATION.  The Companyshall maintain directors’ and officers’ liability insurance for Executive whileExecutive is employed under this Agreement and thereafter at a level equivalentto or exceeding the level currently provided for other current and former officersof the Company.  The Company furtheragrees to indemnify and hold harmless Executive to the fullest extent permittedunder the Company’s charter and bylaws and Delaware law.

 

16.           MISCELLANEOUS.

 

(a)           Tax Withholding.  The Company may withhold from any amountspayable under this Agreement such federal, state and local income andemployment taxes as the Company shall determine are required to be withheldpursuant to any applicable law or regulation.

 

(b)           Section 409A.  This Agreement is intended to satisfy, or beexempt from, the requirements of Section 409A(a)(2), (3) and (4) ofthe Code, including current and future guidance and regulations interpretingsuch provisions, and should be interpreted accordingly. The Company makes nowarranty to Executive with respect to tax treatment of any compensation to bepaid to him in connection with his employment, and Executive shall be solelyresponsible for the payment of all taxes due and owing with respect to wages,benefits, and other compensation provided to him.  Any provision of this Agreement to thecontrary notwithstanding, in the event the Executive is a “specified employee”upon his “separation from service” as those terms are defined in and pursuantto Code Section 409A and the regulations and Treasury guidance thereunder,and is entitled to receive a payment pursuant 

 

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tothis Agreement upon separation from service that is subject to Code Section 409A,the payment may not be made earlier than six months following the date of theExecutive’s separation from service if required by Code Section 409A andthe regulations and Treasury guidance thereunder, in which case, theaccumulated postponed amount shall be paid in a lump sum payment within ten (10) daysafter the end of the six-month period, provided, that if the Executive diesduring the postponement period prior to the payment of the postponed amount,the amounts so postponed shall be paid to the personal representative of theExecutive’s estate within 60 days after the date of the Executive’s death.

 

(c)             ParachutePayment Adjustments.

 

(i)            Any other provision of this Agreement to thecontrary notwithstanding, if the total sum of (i) the payments andbenefits to be paid or provided to (or with respect to) the Executive underthis Agreement which are considered to be “parachute payments” within themeaning of Section 280G of the Code and (ii) any other payments andbenefits which are considered to be “parachute payments,” as so defined, to bepaid or provided to (or with respect to) the Executive by the Company, by aperson acquiring ownership or effective control of the Company or a substantialportion of the Company’s assets, or by a member of the Company’s affiliatedgroup (within the meaning of Section 280G(d)(5) of the Code) (the “TotalAmount”) exceeds the amount the Executive can receive without having to payexcise tax with respect to all or any portion of such payments or benefitsunder Section 4999 of the Code, then the payments and benefits to be paidor provided to the Executive pursuant to this Agreement that are included inthe Total Amount shall be reduced to the greater of zero or the highest amountwhich will not result in the Executive having to pay excise tax with respect toany such payments and benefits under Section 4999 of the Code (the “ReducedAmount”); provided, however, that (x) if the Reduced Amount,minus any and all applicable federal, state and local taxes thereon (includingbut not limited to income and employment taxes imposed by the Code), is lessthan the Total Amount, minus any and all applicable federal, state and localtaxes (including but not limited to income and employment taxes imposed by theCode and excise taxes applicable to such payments and benefits under Section 4999of the Code), or (y) in the event that the elimination of all payments andbenefits described in paragraph (ii) below would not be sufficient toresult in the Executive not having to pay excise tax with respect to anyremaining portion of the Total Amount under Section 4999 of the Code, thenthe reduction of the payments and benefits to be paid or provided to theExecutive provided for in the preceding provisions of this Section 16(c) shallnot apply.

 

(ii)           In the event that a reduction in the Executive’s “parachutepayments” is required to be made under Section 16(c)(i), the reductionshall be made first to the extent needed from amounts due under Section 9(a) ofthis Agreement, then to the extent needed from amounts described in Section 9(c) ofthis Agreement, then to the extent needed from amounts described in Section 9(b) ofthis Agreement, and then from such other “parachute payments” due under Section 9(d) of

 

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this Agreement that are not subject to Section 409A of the Code asshall be determined by the Company.

 

(d)           Governing Law.  All matters relating to the interpretation,construction, application, validity, and enforcement of this Agreement will begoverned by the laws of the State of Colorado without giving effect to anychoice or conflict of law provision or rule, whether of the State of Coloradoor any other jurisdiction, that would cause the application of laws of anyjurisdiction other than the State of Colorado.

 

(e)           Jurisdiction and Venue.  Except for disputes to be resolved byarbitration as provided in Section 16(f), Executive and the Companyconsent to jurisdiction of the courts of the State of Colorado and/or theUnited States District Court, District of Colorado for the purpose of resolvingall issues of law, equity, or fact arising out of or in connection with thisAgreement.  Except for disputes to beresolved by arbitration as provided in Section 16(e), any action involvingclaims of a breach of this Agreement must be brought in such courts.  Each party consents to personal jurisdictionover such party in the state and/or federal courts of Colorado and herebywaives any defense of lack of personal jurisdiction.  Venue, for the purpose of all such suits,will be in Denver County, State of Colorado.

 

(f)            Waiver of Jury Trial;Arbitration.  To theextent permitted by law, Executive and the Company waive any and all rights toa jury trial with respect to any dispute arising out of or relating to thisAgreement.  Except for disputes arisingunder Sections 4, 5, 6, 7 or 14 hereof, all disputes involving theinterpretation, construction, application or alleged breach of this Agreementand all disputes relating to the termination of Executive’s employment with theCompany shall be submitted to final and binding arbitration in Denver,Colorado.  The arbitrator shall beselected and the arbitration shall be conducted pursuant to the then mostrecent Employment Dispute Resolution Rules of the American ArbitrationAssociation, and the arbitration shall be administered by the AmericanArbitration Association, unless the parties thereto agree otherwise.  The decision of the arbitrator shall be finaland binding, and any court of competent jurisdiction may enter judgment uponthe award.  All fees and expenses of thearbitrator shall be paid by the Company. The arbitrator shall have jurisdiction and authority to interpret andapply the provisions of this Agreement and relevant federal, state and locallaws, rules and regulations insofar as necessary to the determination ofthe dispute and to remedy any breaches of the Agreement and/or violations ofapplicable laws, but shall not have jurisdiction or authority to alter in anyway the provisions of this Agreement.  Thearbitrator shall have the authority to award attorneys’ fees and costs to theExecutive if he is the prevailing party but shall not have the authority toaward the fees and expenses of the arbitrator to the prevailing party.  In the event of an arbitration, Executive shallbe entitled to obtain documents from the Company and its officers and directorsreasonably in advance of the arbitration hearing so as to be able to preparehis case.  The parties hereby agree thatthis arbitration provision shall be in lieu of any requirement that either partyexhausts such party’s administrative remedies under federal, state or locallaw.

 

(g)           Entire Agreement.  This Agreement contains the entire agreementof the parties relating to Executive’s employment with the Company andsupersedes all prior agreements and understandings with respect to such subjectmatter, and the parties hereto have 

 

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made no agreements, representations, or warranties relating to thesubject matter of this Agreement that are not set forth in this Agreement.

 

(h)           No Violation of Other Agreements.  Executive hereby represents and agrees thatneither (i) Executive’s entering into this Agreement nor (ii) Executive’scarrying out the provisions of this Agreement, will violate any other agreement(oral, written, or other) to which Executive is a party or by which Executiveis bound.

 

(i)            Assignment.  This Agreement shall not be assignable, inwhole or in part, by either party without the written consent of the otherparty, except that the Company may, without the consent of Executive (butsubject to the assumption obligation set forth below), assign or delegate allor any portion of its rights and obligations under this Agreement to anycorporation or other business entity (i) with which the Company may mergeor consolidate, (ii) to which the Company may sell or transfer all orsubstantially all of its assets or capital stock, or (iii) of which 50% ormore of the capital stock or the voting control is owned, directly orindirectly, by the Company or which is under common ownership or control withthe Company.  Any such current or futuresuccessor, parent, affiliate or other joint venture partner to which any rightor obligation has been assigned or delegated shall be deemed to be the “Company”for purposes of such rights or obligations of this Agreement.  The Company shall cause any successor orassignee described above to assume in writing the Company’s obligations underthis Agreement.

 

(j)            Amendments.  No amendment or modification of this Agreementwill be effective unless made in writing and signed by the parties hereto.

 

(k)           Counterparts.  This Agreement may be executed by facsimilesignature and in any number of counterparts, and such counterparts executed anddelivered, each as an original, will constitute but one and the sameinstrument.

 

(l)            Severability.  Subject to Section 7(d) hereof, tothe extent that any portion of any provision of this Agreement is held invalidor unenforceable, it will be considered deleted herefrom and the remainder ofsuch provision and of this Agreement will be unaffected and will continue infull force and effect.

 

(m)          Survival.  The provisions of this Agreement that bytheir terms or implication extend beyond the Termination Date, includingwithout limitation Sections 4, 6, 7, 14, 15, and 16 of this Agreement, shallsurvive the termination of Executive’s employment with the Company for anyreason.

 

(n)           Captions and Headings.  The captions and paragraph headings used inthis Agreement are for convenience of reference only and will not affect theconstruction or interpretation of this Agreement or any of the provisionshereof.

 

(o)           Notices.  Any notice required or permitted to be givenunder this Agreement shall be in writing and shall be deemed to have been dulygiven when (i) delivered personally; (ii) sent by facsimile or othersimilar electronic device with confirmation;

 

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(iii) deliveredby reliable overnight courier; or (iv) three business days after being sentby registered or certified mail, postage prepaid, and in the case of (iii) and(iv) addressed as follows:

 
| If  to the Company: | Crocs, Inc.                           |   |
|---------------------|--------------------------------------------|--------|
|                | 6328  Monarch Park Place                   |   |
|                | Niwot,  CO 80503                           |   |
|                | Attention:  Chief Executive Officer        |   |
|                |                                       |   |
| If  to Executive:   |                                       |   |
|                | [latest  address on file with the Company] |   |

 

Executiveand the Company have executed this Agreement effective as of the date set forthin the first paragraph.

 

 
|   | **COMPANY:**     |
|--------|------------------|
|   |             |
|   | CROCS, INC. |
|   |             |
|   |             |
|   | By:              | /s/  John Duerden |
|   |             |   |
|   |             | Its: | President  and CEO |
|   |             |   |   |
|   |             |
|   | /s/  Daniel Hart |
|   | Daniel Hart      |

 

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