Document:

Exhibit 10.11

 

THE PEP BOYS - MANNY, MOE & JACK
 ACCOUNT PLAN

 

(formerly part of The Pep Boys - Manny, Moe & Jack
 Executive Supplemental Retirement Plan)

 

RECITALS

 

WHEREAS, The Pep Boys - Manny, Moe & Jack, a Pennsylvania corporation (the “Company”), established an Executive Supplemental Pension Plan (hereinafter referred to as the “Supplemental Plan”) effective January 1, 1982;

 

WHEREAS, the Company previously amended and completely restated the Supplemental Plan effective January 1, 1988, and further amended and restated the Supplemental Plan effective on February 13, 1992, March 31, 1995, and March 26, 2002;

 

WHEREAS, pursuant to resolutions adopted March 3, 2004, the Board changed the name of the Supplemental Plan to the “Executive Supplemental Retirement Plan” (the “Executive Plan”) and amended and restated the Executive Plan with respect to certain of those individuals who were Eligible Employees (as defined in the Executive Plan) on such date, altered the method of delivering benefits for certain specified Participants and gave others an election as to the manner in which they were credited with a benefit;

 

WHEREAS, the foregoing changes were incorporated into an amendment and restatement of the Executive Plan, effective as of January 31, 2004;

 

WHEREAS, effective January 1, 2009, the Executive Plan was split to create the Legacy Plan and this Account Plan to, among other things, implement changes required pursuant to and consistent with section 409A of the Internal Revenue Code;

 

WHEREAS, the Board subsequently amended this Plan to provide for discretion in making Retirement Contributions hereunder;

 

WHEREAS, the Board now desires to freeze the Plan so that, effective January 1, 2015, (i) no further Retirement Contributions shall be credited under the Plan for Plan Years that commence on or after January 1, 2015, and (ii) no individual shall be eligible to become a new Participant in the Plan for Plan Years that begin on or after January 1, 2015; and

 

WHEREAS, Section 8.1 of the Plan authorizes the Board to amend the Plan.

 

NOW, THEREFORE, the Plan is hereby amended and restated, effective as of January 1, 2015, as follows:

 

 

ARTICLE I

Definitions

 

1.1                               “Administrator” or “Plan Administrator” shall mean a committee composed of three or more persons designated from time to time by the Board.

 

1.2                               “Board” shall mean the Board of Directors of the Company.

 

1.3                               “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time and includes any regulations issued thereunder.

 

1.4                               “Company” shall mean The Pep Boys - Manny, Moe & Jack, a Pennsylvania corporation.

 

1.5                               “Compensation” shall mean, for each Plan Year, 100% of an Eligible Employee’s annual base salary for such Plan Year and annual bonus paid under the Employer’s Annual Incentive Bonus Plan, or any other bonus plan that replaces such plan or is in addition to such plan for the Plan Year, before taking into account amounts which an Eligible Employee elects to forego to provide benefits under a plan which satisfies the provisions of section 401(k) or 125 of the Code or to provide benefits under the Company’s Deferred Compensation Plan; provided, further, that any bonus that was payable under the Employer’s Annual Incentive Bonus Plan, or any other bonus plan that replaces or is in addition to such plan, prior to the date Compensation hereunder is determined but which is unpaid for any reason as of the calculation date shall be included as Compensation for purposes hereof.

 

1.6                               “Disability” shall mean that a Participant ceases employment with the Employer when he or she is entitled to receive benefits under the Long Term Disability Salary Continuation Plan sponsored by the Employer.

 

1.7                               “Effective Date” shall mean January 1, 2015.

 

1.8                               “Eligible Employee” shall mean an employee of the Employer who is a key employee, including officers and directors who are key employees, and is designated by the Board to participate in this Plan; provided, however, that on and after the Effective Date no employee shall be designated as an Eligible Employee. Any individual who is actively participating in the Legacy Plan shall not qualify as an Eligible Employee for purposes of this Plan.

 

1.9                               “Employer” shall mean the Company or any of its subsidiaries.

 

1.10                        “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time and includes any regulations issued thereunder.

 

1.11                        “Executive Plan” shall mean such term as is defined in the Recitals of this Plan.

 

1.12                        “Investment Election Form” shall mean the form prescribed by the Administrator, filed by a Participant with the Administrator, to designate the investment vehicles

 

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for which the amounts credited to the Participant’s Plan Account shall be deemed to be invested under Section 3.2 of the Plan.

 

1.13                        “Legacy Plan” shall mean The Pep Boys — Manny, Moe & Jack Legacy Plan.

 

1.14                        “Legacy Plan Participant” shall mean such term as is defined in the Legacy Plan.

 

1.15                        “Non-Legacy Plan Participant” shall mean any participant in the Executive Plan who was not a Legacy Plan Participant.

 

1.16                        “Participant” shall mean each Non-Legacy Plan Participant who is entitled to receive a benefit from the Plan immediately prior to the Effective Date and did not commence receipt of his or her benefit under the Plan immediately prior to the Effective Date, and each Eligible Employee who first became eligible to participate in the Plan pursuant to Sections 2.1 and 2.2 on or after January 1, 2009 and is entitled to receive a benefit from the Plan immediately prior to the Effective Date and did not commence receipt of his or her benefit under the Plan immediately prior to the Effective Date.

 

1.17                        “Plan” shall mean The Pep Boys — Manny, Moe & Jack Account Plan as set forth herein as of the Effective Date, and the same as may be further amended from time to time.

 

1.18                        “Plan Account” shall mean for each Participant his or her Retirement Contribution Account and the Prior Executive Plan Account, if applicable.

 

1.19                        “Plan Year” shall mean the calendar year.

 

1.20                        “Prior Executive Plan Account” shall mean the individual account maintained on the books of the Company for each Non-Legacy Plan Participant under the Executive Plan and all sums accounted for therein immediately prior to January 1, 2009.

 

1.21                        “Retirement Contribution” shall mean a credit to a Participant’s Retirement Contribution Account pursuant to Section 4.1 of the Plan.  For periods prior to January 1, 2009, the term “Retirement Contribution” shall have the meaning in the Executive Plan.

 

1.22                        “Retirement Contribution Account” shall mean the individual account maintained on the books of the Company for each Participant to record the crediting of all Retirement Contributions, and all earnings related to such Retirement Contributions, on and after January 1, 2009, and the debiting of all distributions to the Participant or to his or her beneficiary on and after January 1, 2009, with respect to such Retirement Contributions.

 

1.23                        “Separation Date” shall mean the last day on which a Participant is employed by an Employer on account of a Separation From Service.

 

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1.24                        “Separation From Service” shall mean a Participant’s separation from service with the Employer within the meaning of section 409A of the Code and the regulations issued thereunder.

 

1.25                        “Specified Employee” shall mean any Participant who, at any time during the twelve month period ending on the identification date (as determined by the Company or its delegate), is a specified employee under section 409A of the Code, as determined by the Company (or its delegate).  The determination of “specified employees,” including the number and identity of persons considered “specified employees” and identification date, shall be made by the Company (or its delegate) in accordance with the provisions of sections 416(i) and 409A of the Code and the regulations issued thereunder.

 

1.26                        “Year of Service” shall mean a consecutive twelve-month period during which an individual is continuously employed by the Employer as an Eligible Employee.  Each Year of Service earned prior to January 1, 2009 under the Executive Plan shall count as a Year of Service under this Plan.  For purposes of this Plan, any partial Years of Service shall not be included in the calculation of benefits or for any other purpose hereunder and Years of Service for which the individual did not qualify as an Eligible Employee shall not count.  If a terminated employee is rehired and is designated as an Eligible Employee, his or her Years of Service shall not include his or her pre-termination employment.  If a Legacy Plan Participant after ceasing to participate in the Legacy Plan is subsequently designated as an Eligible Employee for purposes of this Plan and such Legacy Plan Participant was continuously employed during such subsequent period, such Legacy Plan Participant shall receive credit for his or her Years of Service prior to being so designated.

 

ARTICLE II
  Participation

 

2.1                               Eligibility to Participate.  Each Non-Legacy Participant who was entitled to receive a benefit under the Plan on December 31, 2014, but did not receive payment of his or her benefit prior to the Effective Date, shall be a Participant in the Plan as of the Effective Date and such Participant’s benefit paid on or after the Effective Date shall be governed by the terms of the Plan as set forth herein.  Each individual who became an Eligible Employee on or after January 1, 2009 and who is entitled to receive a benefit under the Plan on December 31, 2014, but did not receive payment of his or her benefit prior to the Effective Date, shall be a Participant in the Plan as of the Effective Date and such Participant’s benefit paid on or after the Effective Date shall be governed by the terms of the Plan as set forth herein.  Notwithstanding the foregoing or any other provision of the Plan to the contrary, effective on and after Effective Date, no individual shall be permitted to become a new Participant in the Plan.

 

2.2                               Termination.  An individual shall continue as a Participant in the Plan for as long as he or she is entitled to receive a benefit from the Plan; provided, however, that a Participant’s active participation in the Plan for purposes of eligibility to receive Retirement Contributions shall terminate on the earliest of the date (a) his or her designation as an Eligible Employee is terminated by the Board, (b) he or she has a Separation From Service from the Employer for any reason or (c) the Plan is terminated.

 

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2.3                               Reemployment.  If an Eligible Employee ceases being eligible to participate in the Plan on or after the Effective Date, such Eligible Employee shall not be eligible to participate in the Plan.

 

ARTICLE III
  Plan Accounts

 

3.1                               Establishment of Accounts.  The Plan Administrator shall maintain a Plan Account on behalf of each Participant in the Plan.  Such Plan Account shall consist of a Prior Executive Plan Account for each Participant who had such under the Executive Plan and a Retirement Contribution Account to reflect Retirement Contributions credited on behalf of such Participant on and after the January 1, 2009.

 

3.2                               Investment Funds.  Amounts credited to a Participant’s Plan Account shall be credited with earnings, at periodic intervals determined by the Plan Administrator, at a rate equal to the actual rate of return for such period of an investment fund or funds or index or indices selected by that Participant on his or her Investment Election Form from a range of investment vehicles authorized by the Plan Administrator.  The rate of return on investment vehicles shall be tracked solely for the purpose of computing the amount of benefits payable to Participants under the Plan.  Neither the Company nor any other Employer shall be obligated to make any actual investment.  A Participant may change the investment allocations for existing amounts credited to his or her Plan Account or for future amounts credited to his or her Plan Account by completing a new Investment Election Form and submitting such to the Plan Administrator.  Amended Investment Election Forms may be submitted by the Participant to the Plan Administrator at such times as permitted by the Plan Administrator in or her sole discretion.

 

3.3                               Bookkeeping Entries.  The maintenance of an individual Plan Account on behalf of each Participant is for bookkeeping purposes only.  Neither the Company nor any other Employer shall be obligated to acquire or set aside any particular assets for the discharge of their obligations under the Plan, nor shall any Participant to have any property rights in any particular assets that may be held by the Company or any other Employer with respect to the Plan.

 

3.4                               Statements.  Statements shall be sent to each Participant no less frequently than quarterly setting forth the value of the Participant’s Plan Accounts.

 

ARTICLE IV
  Retirement Contributions

 

4.1                               Amount.  The Retirement Contribution Account of each Participant shall be credited with a Retirement Contribution, if any, based on a percentage of his or her Compensation for a Plan Year provided that the Participant is an Eligible Employee on the last day of such Plan Year. The applicable percentage for any Plan Year shall be determined in accordance with the following schedule:

 

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If the Participant is...
    	
 
    	
Retirement
   Contribution
   Percentage
    	
 
    
	
At least 55 years of age 
    	
 
    	
19
    	
%
    
	
At least 45 years of age   but not more than 54 years of age
    	
 
    	
16
    	
%
    
	
At least 40 years of age   but not more than 44 years of age 
    	
 
    	
13
    	
%
    
	
Not more than 39 years of   age 
    	
 
    	
10
    	
%
    

 

For purposes of this Section 4.1, a Participant’s age shall be determined at the end of each Plan Year to which the particular Retirement Contribution relates. Notwithstanding the foregoing, (i) for the first four Plan Years that a Participant is an Eligible Employee, including Plan Years under the Executive Plan, but only with respect to Eligible Employees who were eligible to participate in the Plan on January 1, 2009, the Retirement Contribution shall be limited to 10% of Compensation irrespective of the Participant’s age, and (ii) in the case of a Participant who ceases to be an Eligible Employee during a Plan Year by reason of death or a Disability, a pro rata portion of the Retirement Contribution shall be credited based on the number of months during the Plan Year in which the Eligible Employee was employed by the Employer prior to death or Disability.

 

Notwithstanding the foregoing, for all periods after March 8, 2009, but prior to the Effective Date, the Board, by resolution duly adopted prior to applicable period, may condition the making of the Retirement Contribution for the applicable period upon the Company’s achievement of certain specified objectives; provided, however, that any such resolution and the resulting conditionality shall be of no force and effect hereunder following a change in control of the Company.

 

Notwithstanding the foregoing, or any other provision of the Plan to the contrary, effective for Plan Years commencing on or after the Effective Date, no further Retirement Contributions shall be credited under the Plan with respect to Plan Years that commence on or after the Effective Date.

 

4.2                               Crediting.  Retirement Contributions shall be credited to an Eligible Employee’s Retirement Contribution Account for a Plan Year as soon as administratively practicable following the completion of the Plan Year for which the Retirement Contribution relates or such earlier date as is designated by the Company provided that such credit shall be tentative until the end of the Plan Year in order that the requirements of Section 4.1 be determined to be satisfied.

 

ARTICLE V
  Vesting

 

5.1                               Vesting.  Each Participant will vest in the amounts credited to his or her Plan Account, and the related earnings thereon (if any), upon such individual’s completion of four Years of Service.

 

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ARTICLE VI
  Distributions

 

6.1                               Separation From Service.  Each Participant’s Plan Account shall be distributed to him on account of his Separation from Service.  Such distribution shall be paid in a single lump sum in cash to the Participant within sixty (60) days following the six month anniversary of his Separation Date.  The lump sum payment shall be equal to the value of such Plan Account as of the last business day immediately preceding the date of payment.

 

6.2                               Death.

 

(a)                                 In the event of a Participant’s death prior to his or her Separation From Service, distribution of the Participant’s Plan Account shall be made to the Participant’s beneficiary in a lump sum within sixty (60) days following the date of the Participant’s death.  The amount of any lump sum benefit payable in accordance with this subsection shall equal the value of the Participant’s Plan Account as of the last business day immediately preceding the date on which such benefit is paid.

 

(b)                                 In the event a Participant dies after the Participant’s Separation From Service, and prior to the full distribution of the amounts credited to the Participant’s Plan Account, the Participant’s Plan Account shall be paid to the Participant’s beneficiary at such times and in such amounts as they would have been paid to the Participant had the Participant survived.

 

6.3                               Beneficiary Designation.  Each Participant shall have the right to designate one or more beneficiaries and contingent beneficiaries to receive any vested amount in such individual’s Plan Account at the time of his or her death by filing a written designation with the Plan Administrator on the form prescribed by it for such purpose.  Participants may thereafter designate different beneficiaries at any time by filing a new written designation.  The consent of the beneficiary is not required for any revocation or change of election of beneficiary.  Any written designation shall become effective only upon its receipt by the Plan Administrator.  If all of the designated beneficiaries should die on or before the commencement of distribution of death benefits and the Participant fails to make a new designation, his or her beneficiary shall be determined pursuant to Section 6.4.  If the beneficiary (or last contingent beneficiary) determined pursuant to this Section 6.3 or the initial beneficiary determined pursuant to Section 6.4 dies before all payments are made, then the balance of the payments shall be made to such beneficiary’s estate unless such beneficiary (or last contingent beneficiary) designates a second-level beneficiary by filing a written designation with the Administrator on the form prescribed by it for such purpose, in which case such second-level beneficiary shall be treated as a beneficiary hereunder.

 

6.4                               Beneficiary List.  If a Participant omits or fails to designate a beneficiary or if no designated beneficiary survives such individual, the vested amount in such individual’s Plan Account at the time of his or her death shall be paid to the beneficiary determined from the following priority list: (a) surviving spouse, or if none, then (b) the Participant’s estate.

 

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ARTICLE VII
  Loss of Benefits

 

7.1                               Loss of Benefits.  Notwithstanding any provision of the Plan, a person who has a vested benefit in his or her Plan Account shall cease to have any right to receive any payment hereunder and all obligations of the Company to make payments to or on account of such Participant shall cease and terminate should the Administrator find, after full consideration of the facts presented on behalf of the Company and the Participant, that:

 

(a)                                 such Participant, during his or her employment with the Employer and during the one year thereafter (unless the Participant was terminated by the Employer without Cause (as defined in the Non-Competition Agreement between the Employer and the Participant) AND such Participant’s Non-Competition Agreement was entered into prior to January 1, 2009), directly or indirectly, engaged in (as a principal, partner, director, officer, agent, employee, consultant or otherwise) or was financially interested in any business operating within the United States of America, if (i) such business’ primary business is the retail and/or commercial sale of automotive parts, accessories, tires and/or automotive repair/maintenance services including, without limitation, the entities (including their franchisees and affiliates) listed on Schedule 7.1(a)(i) hereto, or (ii) such business is a general retailer which generates revenues from the retail and/or commercial sale of automotive parts, accessories, tires and/or automotive repair/maintenance services in an aggregate amount in excess of $1 billion, including, without limitation, the entities (including their franchisees and affiliates) listed on Schedule 7.1(a)(ii) hereto.  However, nothing contained in this Section 7.1(a) shall prevent the Participant from holding for investment up to two percent (2%) of any class of equity securities of a company whose securities are traded on a national or foreign securities exchange;

 

(b)                                 such Participant, during his or her employment with the Employer or during the one year thereafter, directly or indirectly, induced or attempted to influence any employee of the Employer to terminate his or her employment with the Employer or hired or solicited for hire on behalf of another employer any person then employed or who had been employed by the Employer during the immediately preceding six months; or

 

(c)                                  such Participant’s employment by the Employer was terminated (other than in connection with or following a Change of Control) in connection with any act of disloyalty to the Employer including, without limitation, fraud, embezzlement, theft, breach of the Company’s Conflict of Interest or, Ethics Policies, commission of a felony or proven dishonesty in the course of his or her employment or service or unauthorized disclosure of trade secrets or confidential information of the Employer.

 

ARTICLE VIII
  Termination and Amendments

 

8.1                               Amendments.  The Company may amend this Plan in whole or in part by appropriate resolution of the Board; provided, however, that, no amendment shall (i) decrease or limit any benefits or rights accrued under the Plan prior to the date of the amendment, or (ii) modify any provision of this Article VIII without the consent of a majority of the Participants affected by such amendment.  Notwithstanding the foregoing, the Board, without the consent of

 

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a Participant, may make all technical, administrative, regulatory and compliance amendments to the Plan that the Board deems necessary and appropriate so that the Plan meets the requirements of section 409A of the Code.

 

8.2                               Termination.  The Company reserves the right to terminate this Plan in its entirety at any time by an appropriate resolution of the Board; provided, however, that any termination of the Plan shall not (i) terminate or diminish any benefits then payable under the Plan, (ii) terminate or diminish any benefits payable in the future under the Plan with respect to benefits accrued as of the date of termination of the Plan, or (iii) decrease or limit any benefits or rights accrued under the Plan prior to the date of termination without the consent of a majority of the Participants affected by such termination.  Any termination of the Plan shall be done in a manner that complies with the requirements of Treas. Reg. §1.409A-3(j)(4)(ix) (or any successor regulation thereto).

 

ARTICLE IX
  Plan Administration

 

9.1                               Named Fiduciary and Plan Administrator.  The committee designated by the Board shall be the Administrator and “named fiduciary” (within the meaning of ERISA) of this Plan.  The Administrator shall have the authority to control and manage the operation and, administration of the Plan.  The Administrator shall act by majority vote of the committee members.  No Participant who is a member of the committee shall participate in committee decisions affecting him.

 

9.2                               Delegation of Duties.  The Administrator may (a) delegate all or a portion of the responsibilities of controlling and managing the operation and administration of the Plan to one or more persons; and (b) appoint such agents, advisors, counsel, or other representatives to render advice with regard to any of its responsibilities under the Plan.  Wherever the term “Administrator” is used herein in connection with the operation or administration of the Plan, such term shall include all delegates appointed by the Administrator.

 

9.3                               Powers and Duties.  The authority and responsibility to control and manage the operation and administration of the Plan shall include, but shall not be limited to, the performance of the following acts:

 

(a)                                 The filing of all reports required of the Plan.

 

(b)                                 The distribution to Participants and beneficiaries of all reports and other information required of the Plan.

 

(c)                                  The keeping of complete records of the administration of the Plan.

 

(d)                                 Developing rules and regulations for administration and interpretation of the Plan consistent with the terms and provisions of the Plan.

 

(e)                                  The interpretation of the Plan including the determination of any questions of fact arising under the Plan and the making of all decisions required by the Plan.  The construction of the Plan and any actions and decision taken thereon in good faith by the

 

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Administrator shall be final and conclusive.  The Administrator may correct any defect, or supply any omission, or reconcile any inconsistency in the Plan in such manner and to such extent as shall be expedient to carry the Plan into effect and shall be the sole judge of such expediency.

 

The Administrator’s determinations (including those made by any person or persons to whom the Administrator’s power has been delegated hereunder) on all matters relating to the Plan shall be final, binding and conclusive for all purposes, upon all persons, including without limitation, the Company and any other Employer and all Participants and their respective beneficiaries, and successors hereunder.  Each Participant, by accepting status as a Participant in the Plan agrees that (i) all benefits shall be paid strictly in accordance with the terms of the Plan, and (ii) that the Administrator shall have the discretion and authority set forth in this Article IX and in the Plan generally.

 

9.4                               Payment of Expenses.  All expenses of the Administrator shall be paid by the Company.

 

9.5                               Indemnity of Plan Administrator.  The Company shall indemnify the Plan Administrator or any individual who is a delegate against any and all claims, loss, damage, expense or liability arising from any action or failure to act, except when due to gross negligence or willful misconduct.

 

9.6                               Agent for Service of Process.  The Company shall be the agent for the Plan for service of legal process.

 

ARTICLE X
  Claims Procedure

 

10.1                        Claim.  A Participant or his or her beneficiary or authorized representative (each one being hereinafter referred to as a “Claimant”) who expects a benefit under the Plan which he has not received may file a formal claim for benefits under the Plan with the Administrator.  The Administrator shall review the claim and render a determination relating to the claim based on this Plan document (including the Administrator’s power and authority to interpret and construe the Plan and to make rules relating to the administration of the Plan) and consistent with prior determinations rendered with respect to similarly situated claims.  The Administrator shall notify the Claimant within ninety (90) days of the receipt of the claim of the Administrator’s determination relating to the claim, unless the Administrator determines that special circumstances require an extension of time for processing a claim, in which case the Administrator shall notify the Claimant of the extension within ninety (90) days of receipt of the claim, specifying the special circumstances requiring an extension and the date by which it expects to render a determination on the claim, which determination must be rendered and notice given to the Claimant no later than the 180th day following the receipt of the claim.  If an extension is required because the Claimant failed to submit the information necessary to decide a claim, the time period for making a benefit determination set forth in the prior sentence shall be tolled from the date on which the notification of the extension is sent to the claimant until the date on which the Claimant responds to the request for additional information.  The determination notice shall be in writing, sent by regular mail to the address specified by the

 

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Claimant or if none is specified to the Claimant’s last known address, and must contain the following information:

 

(a)                                 The specific reasons for a determination adverse to the Claimant, if applicable;

 

(b)                                 The specific reference to the pertinent Plan provision(s) on which the determination is based;

 

(c)                                  If applicable, a description of any additional information or material necessary to perfect the claim, and an explanation of why such information or material is necessary; and

 

(d)                                 An explanation of the claims review procedure and the time limitations of the review procedure applicable thereto, including a statement of the Claimant’s right to bring a civil action under section 502(a) of ERISA following an appeal of any adverse benefit determination.

 

For purposes of this Article X, claims, notifications and determinations shall be deemed to be received when actually received and parties shall be deemed to be notified and a notification shall be deemed to be sent or submitted on the date that such notification is postmarked or actually delivered by courier if not mailed.

 

10.2                        Appeal Procedure.  A Claimant is entitled to request an appeal of any adverse determination of his or her claim by the Administrator.  The request for appeal must be submitted in writing within 60 days of the receipt by the Claimant of the notification of an adverse claim determination.  Absent a request for appeal within the 60-day period, the determination of the Administrator regarding the claim will be deemed to be final and conclusive.  During the appeal process, the Claimant shall have a reasonable opportunity to submit written comments, documents, records and other information relating to the claim and shall be entitled, free of charge, to reasonable access to and copies of all documents, records and other information relevant to the claim.  The Administrator shall review the appeal of the initial claim determination (including all comments, documents, records and other information submitted by the Claimant, regardless of whether such information was submitted with the original claim) and render a final determination.

 

10.3                        Final Determination.  Within sixty (60) days following receipt by the Administrator of the Claimant’s request for appeal, the Administrator shall render a final determination relating to the claim, unless the Administrator determines that special circumstances (such as the need to hold a hearing) require an extension of time for processing the appeal, in which case the Administrator shall notify the Claimant of such extension within sixty (60) days following receipt by the Administrator of the request for appeal, specifying the special circumstances requiring an extension and the date by which it expects to render a final determination on the appeal, which determination must be rendered and notice given to the Claimant no later than the 120th day following the receipt by the Administrator of the request for appeal.  If an extension is required because the Claimant failed to submit the information necessary to decide a claim, the time period for making a benefit determination set forth in the

 

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prior sentence shall be tolled from the date on which the extension notification is sent to the Claimant until the date on which the Claimant responds to the request for additional information.  The final determination shall be made in writing to the Claimant.  The final determination shall (i) recite the specific reasons for a determination adverse to the Claimant, if applicable, with specific reference to the pertinent Plan provision(s) on which the determination is based, (ii) state that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the claim and (iii) state that the Claimant has a right to bring an action under section 502(a) of ERISA.

 

ARTICLE XI
  Source of Benefits and Payments

 

11.1                        Unfunded Plan.  The Plan is intended to constitute an “unfunded” plan of deferred compensation for Participants.  Benefits payable hereunder shall be payable out of the general assets of the Company, and no segregation or any assets whatsoever for such benefits shall be made.  Nothing contained herein shall give any Participant or beneficiary any rights to assets that are greater than those of a general creditor of the Employer.

 

11.2                        Non-Alienation.  None of the payments, benefits or rights of Participant or beneficiary thereof shall be subject to any claim of any creditor of such person and, in particular, to the fullest extent permitted by law, shall be free from attachment, garnishment, trustee’s process, or any other legal or equitable process available to any creditor of such person.  No Participant or beneficiary thereof shall have the right to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or payments which he may expect to receive, contingently or otherwise, under this Plan, except the right to designate a beneficiary or beneficiaries as hereinabove provided.

 

11.3                        Incapacity.  If the Company determines that a person entitled to receive any benefit payment is under a legal disability or is incapacitated in any way so as to be unable to manage his or her financial affairs, the Company may make payments to such person’s legal representative or to a relative or other person for his or her benefit, or apply the payment for the benefit of such person in such manner as the Company considers advisable.  Any payment of a benefit in accordance with the provisions of this Section 11.3 shall be a complete discharge of any liability to make such payment.

 

ARTICLE XII
  Miscellaneous

 

12.1                        Effective Date.  This Plan, as amended and restated herein, is effective as of the Effective Date and shall be applicable to each Non-Legacy Plan Participant who did not receive payment of his or her benefit from the Plan prior to the Effective Date and each individual who became an Eligible Employee on or after January 1, 2009 and is entitled to receive a benefit under the Plan immediately prior to the Effective Date, but did not receive payment of his or her benefit from the Plan prior to the Effective Date.  The rights and benefits of any Non-Legacy Plan Participant who commenced benefit payments prior to January 1, 2009 are governed by the terms of the Executive Plan as it existed prior to January 1, 2009.  The rights and benefits of any Non-Legacy Plan Participant and any individual who became an Eligible

 

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Employee on or after January 1, 2009 who commenced benefit payments on or after January 1, 2009, but before the Effective Date, shall be governed by the terms of the Plan as it existed prior to the Effective Date.  The rights and benefits of a Legacy Plan Participant shall not be governed by the terms of this Plan.

 

12.2                        Employment Obligations.  The establishment of this Plan shall not be construed as creating any contract of employment between the Employer and any Participant.  Nothing in this Plan shall be construed as conferring upon any Participant any right to continue in the employment of the Employer, nor shall it interfere with the rights of the Employer to terminate the employment of any Participant and/or to take any personnel action affecting any Participant without regard to the effect that such action may have upon such Participant as a recipient or prospective recipient of benefits under the Plan.  Any amount payable hereunder shall not be deemed salary or other compensation to a Participant for the purposes of computing benefits to which the Participant may be entitled under any qualified retirement arrangement established by the Employer for the benefit of its employees.  Nothing herein contained shall give any Participant the right to inspect the books of the Company or to interfere with the right of the Employer to discharge any Participant from employment at any time for any reason whatsoever, with or without cause.

 

12.3                        No Limitation of Employer Action.  Nothing contained in the Plan shall be construed to prevent the Employer from taking any action that is deemed by it to be appropriate or in its best interest.  No Participant, beneficiary, or other person shall have any claim against the Employer as a result of such action.

 

12.4                        Conflicts of Law.  All matters respecting the validity, effect, interpretation and administration of this Plan shall be determined in accordance with the laws of the Commonwealth of Pennsylvania, except to the extent superseded by ERISA.

 

12.5                        References.  The masculine pronoun shall include the feminine and the singular form shall include the plural, as necessary for proper interpretation of this Plan.

 

12.6                        Withholding Taxes.  The Employer may make such provisions and take such actions as it may deem necessary or appropriate for the withholding of any taxes that the Employer is required to withhold by any law or regulation of any governmental authority, whether Federal, state or local, to withhold in connection with any amounts credited and benefits distributed under the Plan.  Each Participant (or his or her beneficiary); however, shall be responsible for the payment of all individual tax liabilities resulting from any such benefits.

 

12.7                        Severability.  If any provision of this Plan is held unenforceable, the remainder of the Plan shall continue in full force and effect without regard to such unenforceable provision and shall be applied as though the unenforceable provision were not contained in the Plan.

 

12.8                        Successors.  The provisions of this Plan shall bind and inure to the benefit of the Employer and its successors and assigns.  The term, “successors,” as used herein, shall include any corporate or other business entity which shall, whether by merger, consolidation,

 

13

 

purchase or otherwise acquire all or substantially all of the business and assets of the Employer, and successor of any such corporation or other business entity.

 

12.9                        Headings.  Headings are inserted in this Plan for convenience of reference only and are to be ignored in the construction of the provisions of the Plan.

 

12.10                 Notice.  Any notice required or permitted under the Plan shall be sufficient if in writing and hand delivered or sent by registered or certified mail.  Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.  Mailed notice to the Administrator shall be directed to the Company’s corporate headquarters.  Mailed notice to a Participant or beneficiary shall be directed to the individual’s last known address on the Employer’s records.

 

12.11                 Section 409A of the Code.  The Plan is intended to comply with the applicable requirements of section 409A of the Code and related guidance, and shall be administered in accordance with such.  Notwithstanding anything in the Plan to the contrary, elections as to form and distributions from the Plan may only be made under the Plan upon an event and in a manner permitted by section 409A of the Code.  To the extent that any provision of the Plan would cause a conflict with the requirements of section 409A of the Code, or would cause the administration of the Plan to fail to satisfy the requirements of section 409A, such provision shall be deemed null and void.  In no event shall a Participant, directly or indirectly, designate the calendar year of payment.  Notwithstanding anything in the Plan to the contrary, in no event may a Specified Employee commence receipt of his benefit under the Plan on account of a Separation From Service prior to the date that is six months from his Separation Date.

 

IN WITNESS WHEREOF, this The Pep Boys — Manny, Moe & Jack Account Plan is hereby executed effective as of the 31st day of January, 2014.

 

	
 
    	
 
    
	
 
    	
/s/THE   PEP BOYS — MANNY, MOE & JACK
    

 

14

 

Schedule 7(a)(i)

 

Advance (API), Auto Parts Warehouse, AutoZone, CarQuest (WorldPac), Discount Tire, Driven Brands (Meineke), Firestone (Tires Plus), Goodyear (Just Tires), Jiffy Lube, Les Schwab, Monro (Mr. Tire), NAPA, O’Reilly, Rock Auto, TBC (Big O Tire, Carol Tire, Merchants, Midas, National Tire & Battery, Tire Kingdom), Tire Rack

 

Schedule 7(a)(ii)

 

Amazon, BJ’s Wholesale, Costco, Sam’s Club, Sears/Kmart, Target, Wal-Mart

 

15Exhibit 10.35

 

 

January 9, 2014

 

Jason J. Kelroy

Director, Kohl’s Illinois, Inc.

c/o Kohl’s Department Stores, Inc.

N56 W17000 Ridgewood Drive

Menomonee Falls, Wisconsin 53051

 

Dear Jason,

 

Pursuant to our discussions, this letter will serve as an amendment to the April 28, 2005 Retail License Agreement as previously amended on May 6, 2008, January 30, 2009, and May 26, 2011, renewed on April 1, 2010, and assigned on July 26, 2011 (collectively the “Agreement”) by and between Hawk Designs, Inc., a wholly owned subsidiary of Quiksilver, Inc. (“Licensor”) and Kohl’s Illinois, Inc., as assignee of Kohl’s Department Stores, Inc. (“Licensee”). Capitalized terms used in this letter and not otherwise defined shall have the meanings ascribed to them in the Agreement.

 

Subject to Cherokee Inc. or its designee’s acquisition of the rights to the Trademarks, this Agreement and the Licensed Goods pursuant to an Asset Purchase Agreement by and among Cherokee Inc., Hawk Designs, Inc. and Quiksilver, Inc. (the “APA”), we have agreed that:

 

1.          Cherokee Inc. or its designee shall be known as Licensor from the date of execution of the APA by and among Cherokee Inc. or its designee, Hawk Designs, Inc. and Quiksilver, Inc.

 

2.            Notwithstanding the foregoing Article V, Paragraph 2, this Agreement shall extend through January 27, 2018. If Licensee is not then in material default of the terms of this Agreement, this Agreement may be renewed by Licensee, in Licensee’s sole discretion, for up to three (3) additional terms of four (4) Contract Years each (the “Renewal Terms”), provided that, for each such renewal Licensee has notified Licensor in writing of its election to renew this Agreement no later than 12 months prior to the expiration of the then-current term.

 

3.            Notwithstanding the foregoing Article III, Paragraph 2, commencing with the Contract Year beginning February 2, 2014, the Minimum Guaranteed Royalty shall be $4,800,000 for each Contract Year thereafter.

 

4.             Licensor hereby grants Licensee the non-exclusive right to sell Licensed Goods on the Internet on a worldwide basis excluding Canada through any Web pages owned and/or operated by or for Licensee, including but not limited to kohls.com, provided that (1) Licensee shall alert Licensor to any URLs other than kohls.com on which Licensee will be offering the Licensed Goods for sale to consumers outside the United States; and (2) the rights outside the Territory are granted to Licensee on a non-exclusive basis. Notwithstanding the foregoing, Licensee hereby agrees and acknowledges that Licensor has the right in its sole and absolute discretion to enter in to exclusive licenses for Licensed Goods bearing the Trademark outside of the United States with third parties (“Other Licensees”). In the event that Licensor enters into an exclusive license agreement outside the United States with Other Licensees, Licensor shall give Licensee six (6) months written notice of such and any countries included in the agreement with the Other Licensee shall be automatically excluded from this Agreement.

 

5.            Article VI. 6: The requirement for Licensee to have Contract Manufacturers sign Exhibit C (manufacturers agreement) shall be deleted from this Agreement To that end, Article VI, Section 6 shall be deleted in its entirety and replaced with the following:

 

	
5990 Sepulveda Blvd., Suite 600, Sherman Oaks, CA 91411 ·  P (818) 908-9868   F (818) 908-9191
    
	
www.cherokeegroup.com
    

 

 

6. Contract Manufacturers. Licensee shall be entitled to contract the design and manufacture of Licensed Products without the prior written approval of Licensor. Licensee’s current Terms of Engagement are attached hereto as Exhibit A. Licensee shall use commercially reasonable efforts to ensure that all Contract Manufacturers perform in accordance with these Terms of Engagement, provided that if Licensee revises its Terms of Engagement for all manufacturers and vendors, such revised terms shall be applicable to the Contract Manufacturers, as long as such revised terms are no less restrictive with respect to standards of human rights practices and policies (e.g., child labor and workplace conditions) than Licensee’s current Terms of Engagement and, with respect to all other matters addressed therein, the standards applicable to Licensee’s other licensed and “private label” lines of products. In connection therewith, Licensee shall monitor the performance of its Contract Manufacturers to assure compliance with such Terms of Engagement in a manner consistent with Licensee’s practices for Licensee’s other licensed and “private label” lines of products.

 

6.             Article X. 3: The three (3) year records retention requirement shall be replaced with a rolling twenty-four (24) month requirement. If, at any time during a rolling twenty-four (24) month period, Licensor provides written notice to Licensee that Licensor intends to exercise its audit rights, Licensee shall, upon Licensor’s written request, maintain the records required beyond the rolling twenty-four (24) month period, by archiving, saving to tape or otherwise preserving the information. All other terms and conditions of this Article shall remain in full force and effect.

 

7.             Licensor shall provide the support and services to Licensee defined in Exhibit B.

 

8.             Other than as stated in the Agreement as amended and extended, Licensee hereby acknowledges that there are no other existing contracts or understandings, either written or verbal with regards to the Agreement.

 

Except as otherwise specifically set forth in this letter, the Agreement shall remain in full force and effect as amended and extended. If Kohl’s Illinois, Inc. is in agreement with these terms, please sign the enclosed copies of this letter and return one original to me. The other copy is for your files.

 

	
 
    	
Very truly yours,
    
	
 
    	
Cherokee Inc.
    
	
 
    	
 
    
	
 
    	
/s/ Henry Stupp
    
	
 
    	
 
    
	
 
    	
Henry Stupp
    
	
 
    	
Chief Executive Officer
    

 

cc:                                Peggy Eskenasi

Senior Executive Vice President, Product Development 

Kohl’s Department Stores, Inc.

 

Agreed and accepted to this 9th day of January, 2014

 

	
Kohl’s Illinois, Inc.
    
	
 
    
	
By:
    	
/s/ Jason J. Kelroy
    	
  Rev. HLB
    
	
 
    
	
Jason J. Kelroy
    
	
Director, Kohl’s Illinois, Inc.
    

 

 

EXHIBIT A

 

Kohl’s Terms of Engagement (December 2013)

 

 

 

TERMS OF ENGAGEMENT

FOR KOHL’S BUSINESS PARTNERS

 

These Terms of Engagement apply to all of Kohl’s Business Partners. Kohl’s strongly encourages Business Partners to exceed these Terms of Engagement and promote best practices and compliance by Business Partners with the Terms of Engagement In all factories in which they manufacture merchandise.

 

While Kohl’s recognizes that there are different legal and cultural environments In which Business Partners operate throughout the world, these Terms of Engagement set forth the basic minimum requirements Business Partners must meet in order to do business with Kohl’s. The Terms of Engagement also provide the foundation for Kohl’s ongoing evaluation of compliance by Business Partners with the Terms of Engagement.

 

Business Partners are defined as vendors, manufacturers, contractors, subcontractors and other suppliers, sources and agents who provide Kohl’s with goods or services ordered pursuant to any purchase order, contract or agreement issued directly by Kohl’s or ordered on Kohl’s behalf.

 

	
LAWS &
    	
 
    	
 
    	
 
    	
 
    
	
REGULATIONS
    	
 
    	
All Kohl’s Business Partners must operate in full   compliance with all applicable local and national laws, rules and   regulations pertaining to all aspects of factory operations in the   jurisdiction of which they conduct business.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
EMPLOYMENT
    	
 
    	
 
    	
 
    	
 
    
	
PRACTICES
    	
 
    	
Kohl’s will only do business with Business   Partners whose workers are treated fairly and who in all cases are present voluntarily, not put at risk of physical   harm, fairly compensated, and allowed the right of free association and not   exploited in any way. Business Partners shall ensure procedures are in place   by which workers, alleging violations of these Terms of Engagement, may do so   without fear of negative repercussions.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
In addition, Kohl’s Business Partners must adhere   to the following:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  Wages and 
    
	
 
    	
 
    	
Benefits:
    	
 
    	
Kohl’s Business Partners must pay workers wages   and legally mandated benefits that comply with the higher of (a) any   applicable law, or (b) to match the prevailing local manufacturing or   Industry practices. In addition to their compensation for regular hours of   work, workers shall be compensated for overtime hours at such premium rates   as are legally required, or in those countries where such laws do not exist,   at least equal to their regular hourly wage rate. Kohl’s recognizes that   wages are essential to meet workers’ basic needs. Kohl’s will seek and favor Business   Partners who are committed to the betterment of wages and benefits within   their facilities.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  Working 
    
	
 
    	
 
    	
Hours:
    	
 
    	
Kohl’s expects its Business Partners to operate   based on prevailing local   work hours. Except in extraordinary circumstances, Business Partners shall   limit the number of hours that workers may work on a regularly scheduled   basis to the legal limit on regular and overtime hours established by local   laws and regulations in the jurisdiction in which they manufacture. Subject   to the requirements of local law, a regularly scheduled workweek of no more   than sixty (60) hours and one day off in every seven (7) day period are   encouraged. Partners will comply with applicable laws that entitle workers to   vacation time, leave periods and holidays. Business Partners must regularly   provide reasonable rest periods and one day off within a seven-day period.   Any time worked over the norm for the area should be compensated as prescribed   by the local labor laws.
    
							

 

 

	
TERMS OF ENGAGEMENT
    	
[December 2013]
    

 

	
 
    	
 
    	
 
    	
 
    	
Working hours must be recorded by an automated   timekeeping system. Whenever a worker is present in a facility, the worker’s   time must be recorded and the worker properly compensated. This applies to   both regular and overtime working hours and any time used for work   preparations or repairs.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  Child   Labor:
    	
 
    	
Use of child labor is strictly prohibited.   Business Partners must observe all legal requirements for the work of   authorized minors, particularly those relating to hours of work, wages, minimum   education and working conditions. Kohl’s supports the development of   legitimate, workplace apprenticeship programs and Business Partners will be   expected to comply with all laws and regulations applicable to such   apprenticeship programs.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
“Child” is defined as a person who is younger than   15 (or 14 where the law of that country permits) or younger than the age for   completing compulsory education in the country where such age is higher than   15. Kohl’s will not utilize Business Partners who use or permit the use of   child labor in any of their facilities.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  Prison   Labor/
    	
 
    	
 
    
	
 
    	
 
    	
Forced Labor:
    	
 
    	
Business Partners will not use or permit the use   of bonded labor, Indentured labor, prison labor or Forced Labor in the   manufacture or finishing of products ordered by Kohl’s. Nor will Kohl’s   knowingly purchase materials from a Business Partner utilizing bonded   labor, indentured labor, prison labor or Forced Labor. “Forced Labor” is   defined as any work or service which is extracted from any person under the   threat of penalty for its non-performance and for which the worker does not   offer himself voluntarily and includes, without limitation, prison and slave   labor or human trafficking for the purposes thereof. An employer   involuntarily keeping workers identification documents is prohibited.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  Discrimination:
    	
While Kohl’s recognizes and respects cultural   differences, employment   (hiring, wages, benefits, advancement, termination, and retirement) shall be   based on the worker’s ability and not on personal characteristics. Kohl’s   believes that workers should be employed on the basis of their ability to do   the job, rather than on the basis of gender, age, disability, sexual   orientation, racial characteristics, cultural or religious beliefs or similar   factors. Kohl’s will not utilize Business Partners who discriminate against   workers on the basis of gender, age, disability, sexual orientation, racial   characteristics, cultural or religious beliefs or similar factors.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  Free 
    	
 
    	
 
    
	
 
    	
 
    	
Association:
    	
 
    	
Workers must be free to join organizations of   their own choice. Business Partners shall recognize and respect the rights of   workers to freedom of association and collective bargaining. Workers shall   not be subject to intimidation or harassment in the peaceful exercise of   their legal right to join or to refrain from joining an Organization.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  Disciplinary 
    	
 
    	
 
    
	
 
    	
 
    	
Practices:
    	
 
    	
All Business Partners must treat all workers with   respect and dignity. Kohl’s will not utilize Business Partners who use, or   permit the use of corporal punishment, physical, sexual, psychological or   verbal harassment or other forms of mental or physical coercion, abuse or   intimidation.
    
						

 

2

 

	
 
    	
 
    	
 
    	
 
    	
Business Partners shall not use, or permit the use   of fines as a disciplinary practice.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  Women’s
    	
 
    	
 
    
	
 
    	
 
    	
Rights:
    	
 
    	
All Business Partners will ensure that workers who   are women receive equal treatment in   all aspects of employment. Pregnancy tests will not be a condition of   employment or continuation thereof and pregnancy testing, to the extent it is   provided, will be voluntary and at the option of the worker. Workers will not   be exposed to hazards that may endanger their reproductive health and Business   Partners will not force workers to use contraception.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
·                  Health &  
    	
 
    	
 
    
	
 
    	
 
    	
Safety:
    	
 
    	
Kohl’s will only utilize Business Partners who   provide workers with a clean,   safe and healthful work environment designated to prevent accidents and   injuries arising out of or occurring while in the course of work or as a   result of the operation of a Business Partner’s facility. All Business   Partners must comply with all applicable, legally mandated standards for   workplace health and safety. Where applicable, Business Partners who provide   residential facilities for their workers must provide safe and healthy   facilities, separate from production facilities, that comply with legally   mandated standards for health and safety.
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ETHICAL STANDARDS
    	
 
    	
Kohl’s will seek to identify and work with   Business Partners who aspire as individuals and in the conduct of their   business to a set of ethical standards which are compatible with Kohl’s   standards. Bribes, kickbacks or other similar unlawful or improper payments   are strictly prohibited to be given to any person or entity to obtain or   retain business.
    
	
 
    	
 
    	
 
    
	
ENVIRONMENTAL 
    	
 
    	
 
    
	
REQUIREMENTS
    	
 
    	
Kohl’s will only do business with Business   Partners who comply with all applicable government laws and regulations, International standards,   U.S. regulations prohibiting the use of ozone depleting chemicals   (hydrochlorofluourocarbons) and the International Trade in Endangered Species   of Wild Fauna and Flora, as listed in the United States Endangered Species   Act of 1973.
    
	
 
    	
 
    	
 
    
	
LEGAL 
    	
 
    	
 
    
	
REQUIREMENTS
    	
 
    	
Kohl’s policy is to obey the laws of each country   in which merchandise is manufactured   for Kohl’s. Business Partners will comply with all applicable local and   national laws, rules and regulations pertaining to all aspects of   factory operations. This Includes compliance with these Terms of Engagement   and the terms and conditions of purchase orders Issued by Kohl’s or on Kohl’s   behalf and also requires attention to U.S. country of origin regulations   which govern quota classification and the marking of products. Business   Partners manufacturing facilities will comply with US Customs-Trade   Partnership Against Terrorism (C-TPAT) requirements.
    
	
 
    	
 
    	
 
    
	
COMMUNICATION
    	
 
    	
All Business Partners must post the Terms   of Engagement in places in their factories readily accessible to workers, translated into the language   of the workers and supervisors and communicate these provisions to all   workers. Business Partners shall take appropriate steps to ensure the   provisions of these Terms of Engagement are communicated to all workers. Upon   employment, as part of worker orientation, the Terms of Engagement shall be   presented to workers and explained to them. From time to time Business   Partners shall periodically review these Terms of Engagement with workers.
    
							

 

3

 

	
MONITORING/
    	
 
    	
 
    
	
COMPLIANCE
    	
 
    	
Kohl’s   takes affirmative measures to monitor compliance with Kohl’s Terms of   Engagement and Kohl’s Purchase Order Terms and Conditions. Such measures may   include prescreening Business Partners, scheduled or random, announced and   unannounced on-site inspections of factories by Kohl’s representatives, or   certification by Kohl’s Business Partners that Kohl’s Terms of Engagement   have been compiled with.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Kohl’s   associates and representatives have been asked to be watchful for violations   of Kohl’s Terms of Engagement on visits to factories or manufacturing   facilities and to report questionable conduct to management for follow up and   when appropriate, for corrective action.
    
	
 
    	
 
    	
 
    
	
RECORD   
    	
 
    	
 
    
	
KEEPING
    	
 
    	
All   Business Partners must maintain in the factories producing merchandise for   Kohl’s all documentation necessary to demonstrate compliance with Kohl’s   Terms of Engagement. Business Partners must furnish Kohl’s representatives   reasonable access to production facilities, employment records and workers   for confidential interviews in connection with monitoring factory or inspection   visits. Business Partners must promptly respond to reasonable inquiries by   Kohl’s representatives concerning the operations of factories with respect to   Kohl’s Terms of Engagement. 
    
	
 
    	
 
    	
 
    
	
SUBCONTRACTING
    	
 
    	
Business   Partners shall not utilize subcontractors for the production of Kohl’s   merchandise, or components thereof, without Kohl’s prior written approval and   only after the subcontractor has agreed to comply with Kohl’s Terms of   Engagement. Business Partners shall require each Kohl’s approved   subcontractor to abide by the Terms of Engagement. Business Partners shall be   held accountable for a subcontractor’s failure to abide by Kohl’s Terms of   Engagement.
    
	
 
    	
 
    	
 
    
	
CORRECTIVE
    	
 
    	
 
    
	
ACTION
    	
 
    	
If a Business Partner is in violation of Kohl’s Terms of Engagement,   Kohl’s will work with the Business Partner to remediate the violation if at   all possible. If this effort is unsuccessful or not possible, Kohl’s shall   reevaluate its business relationship with the Business Partner and shall take   appropriate corrective action. Corrective action may include cancellation of   the affected order, prohibition of subsequent use of a factory or termination   of Kohl’s business relationship with any Business Partner found to be in   violation of these Terms of Engagement, or exercising any other rights and   remedies to which Kohl’s may be entitled under Purchase Orders issued by   Kohl’s or on behalf of Kohl’s, at law or otherwise.
    
	
 
    	
 
    	
 
    
	
COUNTRY
    	
 
    	
 
    
	
EXCEPTIONS
    	
 
    	
Business Partners will not produce merchandise for   Kohl’s in countries which are considered by Kohl’s to deny basic human   rights. Kohl’s will not initiate or continue its business relationship with   Business Partners that produce merchandise for Kohl’s where there are gross   and systematic violations of human rights and when there is a recognized   movement from within the country calling for withdrawal.
    

 

Kohl’s will periodically review these Terms of Engagement to determine whether revisions are appropriate. Any such revisions will be promptly published by Kohl’s.

 

For questions or for information pertaining to Kohl’s Terms of Engagement e-mail: factory.compliance@kohls.com

 

4

 

EXHIBIT B

 

Licensor Provided Support and Services

 

·               Licensor is entering into a new agreement establishing additional services with Tony Hawk, the individual, (“Additional Service Agreement”) to increase his direct involvement of the TONY HAWK brand with Licensee and establishing a better framework for Licensee and the TONY HAWK brand. Licensor shall be able to twice annually develop digital assets, which will provide updated photography and b-roll video that can and should be used for advertising, in-store, on kohls.com (or any other Webpages owned and/or operated by or for Licensee) and for social media purposes. In addition, Licensor, in conjunction with Licensee’s marketing department shall be able to develop and execute with proper oversight a significantly more robust editorial and promotional campaign. As part of this campaign, Licensor shall have Tony Hawk use best efforts to be directly involved in leveraging his fan base through social media to drive traffic to Licensee. This Additional Service Agreement is at Licensor’s expense and more directly incentivizes Tony Hawk on the increased performance and sale of TONY HAWK branded products.

 

·               Licensor shall use its best efforts related to marketing and advertising the TONY HAWK brand by collaborating with Licensee to improve the customer experience by focusing on in-store enhancements in an effort to increase adoption and conversion to purchase (“ln-store Marketing”). In order to financially support ln-store Marketing initiatives, Licensee shall allocate an amount equal to fifteen percent (15%) of Royalties over $4,800,000 (the “Annual Threshold”) per Contract Year (the “Marketing Allocation”) for the said ln-store Marketing initiatives. However, the minimum Marketing Allocation shall not be less than $200,000 per year or $800,000 in totality from the Contract Year beginning February 2, 2014 through the Contract Year ending January 27, 2018 (the “Minimum Marketing Allocation”). Licensor shall be responsible for the timely payment of such Marketing Allocations directly to the appropriate vendors and Licensee shall not deduct any such amounts from Royalties earned and due to Licensor. The ultimate use and timing of the said Marketing Allocation shall be determined jointly by Licensor and Licensee.

 

·               Additionally, Licensor is committed to implementing the following additional services, once it has adequately transitioned the business but in any event within a commercially reasonable time; but not less than six (6) months and not more than nine (9) months after the APA has been executed. For the avoidance of doubt, all existing design support currently provided by Quiksilver to Licensee will remain in place until Licensor has implemented the new services below.

 

·                 Licensor shall support and fund the creative direction, design, and product management for the TONY HAWK brand. This support will include local product development talent based in Menomonee Falls, WI with the details to be mutually agreed upon in writing by Licensor and Licensee.

 

·                 Licensor shall assign a Sales Manager committed to the TONY HAWK brand.

 

·                 Licensor shall hire a Creative Manager to establish a tighter working relationship between both the Licensee’s and Licensor’s creative teams to help ensure the consistent delivery of relevant product that provides a strong point-of-view and point-of-difference for Licensee’s customers.

 

·                 Licensor shall facilitate introductions for Licensee to meet with third-party global manufacturers (the “Cherokee Development Group”) in an effort to provide Licensee with additional options for the production of the TONY HAWK branded products.

 

Notwithstanding the foregoing, Licensor and Licensee shall collectively establish a written strategy (the “New Strategy”) outlining a new organizational structure focusing on:

 

 

1.            Product Development (including but not limited to trend, design, graphics, graphic language, and updated branding).

2.            Marketing (including but not limited to in-store, online, social/digital media and promotions). The specifics detailing the deliverables with regards to the New Strategy and accompanying timeline for implementation to be determined by both parties and agreed to in writing no later than February 1, 2014 or as soon thereafter as reasonably practical, in order to effectively re-launch the TONY HAWK brand at Kohl’s for February 2015.

 

 

	

    	

    

 

JASON J. KELROY

TEL: (262) 703-1727 

FAX: (262) 703-7274

 

July 26, 2011

 

VlA UPS OVERNIGHT

 

Mr. Charles Exon 

Hawk Designs, Inc. 

15202 Graham Street 

Huntington Beach, CA 92649

 

Re:                             TONY HAWK License Agreement — Proposed Assignment

 

Dear Mr. Exon:

 

I writing to request that Hawk Designs, Inc. consent to an assignment of the April 28, 2005 TONY HAWK Retail License Agreement between Kohl’s Department Stores, Inc. (“KDSI”) and Hawk Designs, Inc. (the “License Agreement”). Specifically, KDSI is seeking to assign all of its rights and obligations under the License Agreement to Kohl’s Illinois, Inc. (“KIN”), a wholly-owned subsidiary of KDSL KIN currently owns all of Kohl’s own intellectual property assets (i.e., all of Kohl’s private brand trademarks and marketing handles). This proposed assignment is not unique to Hawk Designs, Inc. Kohl’s is in the process of assigning all existing trademark license agreements from KDSI to KIN. At this point, we expect the assignments to be completed and effective as of July 31, 2011.

 

KDSI expressly acknowledges and agrees that, as the original signatory to License Agreement, KDSI shall remain responsible and liable for all liabilities of KDSI under the License Agreement and for full performance of KDSI’s obligations as set forth in the License Agreement. In addition, KDSI hereby guarantees the performance and payment obligations of KIN, including, without limitation the payment of any sums that are or become payable after the date of assignment under the License Agreement.

 

CORPORATE OFFICES · N56 W17000 RIDGEWOOD DRIVE · MENOMONEE FALLS, WISCONSIN 53051 · (262) 703-7000

 

 

Please confirm that Hawk Designs, Inc. will consent to the proposed assignment of the License Agreement by having the acknowledgement below signed and returned to me. As always, we look forward to our continuing partnership with Quiksilver and Hawk Designs, Inc.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
/s/   Jason J. Kelroy 
    
	
 
    	
Jason J. Kelroy 
    
	
 
    	
VP, Associate General Counsel
    

 

cc:                                Sean Pence (via e-mail)

 

 

	
 
    	
ACCEPTED AND AGREED TO:
    
	
 
    	
 
    
	
 
    	
Hawk Designs, Inc.
    
	
 
    	
 
    
	
 
    	
/s/   Charles S. Exon
    
	
 
    	
Name:
    	
Charles S. Exon
    
	
 
    	
Title:
    	
Director and Executive Vice President
    
	
 
    	
 
    	
Chief Administrative Officer
    
	
 
    	
 
    	
General Counsel and Secretary
    
	
 
    	
Date:
    	
7/29/11
    

 

2

 

	

    	

    

 

 

	
Peggy Eskenasi
    
	
TEL: (262) 703-2614
    
	
FAX: (262) 703-6256
    

 

May 26, 2011

 

VIA U.S. MAIL & E-MAIL

 

Sean M. Pence

SVP & General Counsel, Americas

Quiksilver, Inc.

15202 Graham Street

Huntington Beach, California 92649

 

Re:                             TONY HAWK Retail License Agreement

 

Dear Sean:

 

This letter confirms the parties’ understanding with respect to the following issues under the April 28, 2005 Retail License Agreement between Kohl’s Department Stores, Inc. and Hawk Designs, Inc., a wholly owned subsidiary of Quiksilver, Inc.:

 

Style names – Kohl’s shall be responsible for clearing, and any potential liability associated with, any style names used on or in connection with “Hawk” “Licensed Goods,” regardless of whether such style names come from internal documents used or provided by Quiksilver.

 

Quiksilver provided graphics/artwork – If Quiksilver provides graphics/artwork on “Hawk” “Licensed Goods,” Quiksilver shall be responsible for clearing, and any potential liability associated with, all such graphics/artwork.

 

Kohls provided graphics/artwork/subcontracted services – If Kohl’s provides Quiksilver with graphics/artwork for use on or in connection with “Hawk” “Licensed Goods,” Kohl’s shall be responsible for clearing, and any potential liability associated with, all such graphics/artwork. In addition, if Kohl’s subcontracts any design services to third parties in connection with “Hawk” “Licensed Goods,” Kohl’s or its subcontractors shall be responsible for clearing, and, as between Kohl’s and Quiksilver, Kohl’s shall be responsible for any potential liability associated with, all such graphics/artwork/designs.

 

****

 

CORPORATE OFFICES · N56 W17000 RIDGEWOOD DRIVE · MENOMONEE FALLS, WISCONSIN 53051 · (262) 703-7000

 

 

Please have a copy of this letter signed and returned to me to confirm our understanding.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
/s/   Peggy Eskenasi
    
	
 
    	
Peggy   Eskenasi
    
	
 
    	
Senior   EVP – Product Development
    

 

	
PE/hb
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Quiksilver, Inc. / Hawk Designs, Inc.
    	
 
    
	
 
    	
 
    
	
/s/   Sean Pence
    	
 
    
	
Name:   Sean Pence
    	
 
    
	
Title:   SVP
    	
 
    

 

2

 

 

Peggy Eskenasi

TEL: (262) 703-2614

FAX: (262) 703-6256

 

April 1, 2010

 

VIA FACSIMILE [(714) 889-4250]
 AND U.S. MAIL

 

Mr. Charles Exon

Hawk Designs, Inc.

15202 Graham Street

Huntington Beach, CA 92649

 

Re:          TONY HAWK License Agreement

 

Dear Mr. Exon:

 

This letter confirms Kohl’s election of its renewal rights under the April 28, 2005 TONY HAWK Retail License Agreement between Kohl’s and Hawk Designs, Inc. for the first renewal term of five (5) Contract Years as provided for in Article V, Paragraph 2 of that agreement. We look forward to our continuing partnership with Quiksilver and Hawk Designs, Inc.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
/s/   Peggy Eskenasi
    
	
 
    	
Peggy   Eskenasi
    
	
 
    	
EVP   – Product Development
    

 

PE/jjk

 

	
cc:
    	
Steve   Tully (via e-mail)
    	
 
    	
 
    
	
 
    	
Sean   Pence (via e-mail)
    	
 
    	
 
    

 

CORPORATE OFFICES · N56 W17000 RIDGEWOOD DRIVE · MENOMONEE FALLS, WISCONSIN 53051 · (262) 703-7000

 

 

PEGGY ESKENASI

Writer’s Direct Dial: (262) 703-2614

Facsimile: (262) 703-6256

E-mail: peggy.eskenasi@kohls.com

 

May 6, 2008

 

VIA DHL OVERNIGHT

 

Mr. Marty Samuels

President

Quiksilver Americas

15202 Graham Street

Huntington Beach, CA 92649

 

Re:          Amendment to Retail License Agreement

 

Dear Marty:

 

This letter will serve as an amendment to the April 28, 2005 Retail License Agreement (“Agreement”) by and between Hawk Designs, Inc., a wholly owned subsidiary of Quiksilver, Inc. (“Licensor”) and Kohl’s Department Stores, Inc. (“Licensee”). Capitalized terms used in this letter and not otherwise defined shall have the meanings ascribed to them in the Agreement. We have agreed that:

 

A.                 During the Initial Term only, Paragraph 7 of Article I of the Agreement shall be amended to read in full as follows:

 

7.                                   “Territory” is the United States and Canada, wherein Licensee may sell the Licensed Goods only at retail and only through Licensee’s Kohl’s branded stores, or over the Internet via Licensee’s Kohl’s branded ecommerce website.

 

B.                 It is expressly agreed that Licensee shall have the right, but no obligation, to market or sell any Licensed Goods in all areas of the Territory.

 

C.                 In consideration of the amendment set forth in the paragraph A above, Licensee shall pay Licensor the following royalty (“Additional Royalty”) in addition to the royalty set forth in Article III of the Agreement:

 

i.                                          A quarterly Additional Royalty of $50,000, payable within sixty (60) days after the end of each Contract Quarter of Contract Year 3;

ii.                                       A quarterly Additional Royalty of $75,000, payable within sixty (60) days after the end of each Contract Quarter of Contract Year 4; and

iii.                                    A quarterly Additional Royalty of $100,000, payable within sixty (60) days after the end of each Contract Quarter of Contract Year 5.

 

 

D.                 The Additional Royalty payable in any Contract Year shall be offset by royalties otherwise payable pursuant to Article III of the Agreement to the extent such royalties are attributable to Licensee’s sales of Licensed Goods in Canada.

 

Except as otherwise specifically set forth in this letter, the Agreement shall remain in full force and effect as originally written. Please call me if you have any questions or if this letter does not accurately reflect our agreement. If you arc in agreement with these terms, please sign the enclosed copies of this letter and return one original to me. The other copy is for your files.

 

 

	
 
    	
Very   truly yours,
    
	
 
    	
Kohl’s   Department Stores, Inc.
    
	
 
    	
 
    
	
 
    	
/s/   Peggy Eskenasi
    
	
 
    	
Peggy   Eskenasi
    
	
 
    	
Executive   Vice President, Product Development
    

 

 

Accepted and agreed to this 21 day of May, 2008. 

 

	
Hawk Designs, Inc.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Martin Samuels
    	
 
    
	
Name:
    	
Martin   Samuels
    	
 
    
	
Title:
    	
President
    	
 
    

 

cc:                              Charles Exon

Hawk Designs, Inc.

15202 Graham Street

Huntington Beach, CA 92649

 

 

ORIGINAL

 

Retail License Agreement

 

This Retail License Agreement (“Agreement”) is effective on this 28th day of April 2005, by and between Hawk Designs, Inc. (“Licensor”), a California corporation (a wholly owned subsidiary of Quiksilver, Inc.), and Kohl’s Department Stores, Inc. (“Licensee”), a Delaware corporation.

 

Recitals

 

Licensor is a manufacturer and distributor of apparel and accessories under various brand names, and owns certain Trademarks (as defined below); and

 

Licensee is a retailer of various consumer products, with expertise and ability in distributing and selling goods at retail; and

 

Licensee desires to license from Licensor the Trademarks and Licensor desires to enter into such a license; and

 

As part of the obligations of this license, Licensee undertakes to pay Licensor a minimum annual royalty;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth below, the parties hereto covenant and agree as follows:

 

Article I.                      Definitions

 

For the purpose of this Agreement, the following terms shall have the meanings set forth:

 

1.                                “Affiliate” means any entity having any relationship, contract, or arrangement with Licensee with respect to any matter winch affects or is affected by this Agreement wherein this entity has or exercises or has the power to exercise, directly or indirectly, in any manner, control, direction, or restraint of Licensee or wherein such entity and Licensee are subject to common or mutual control, direction, or restraint or wherein Licensee has the power to exercise, directly or indirectly, in any manner, control, direction, or restraint of such entity.

 

2.                                “Contract Year” means a period of time coinciding precisely with Licensee’s fiscal year. Licensee has adopted what is known as the ‘4-5-4 retail calendar’, with each fiscal year beginning on the Saturday closest to the end of January. Each Contract Year shall consist of four (4) quarters, coinciding precisely with Licensee’s fiscal quarters (each, a “Contract Quarter”). For example, the first Contract Year shall begin on January 30, 2006 and end on February 3, 2007. The Contract Quarters during the first Contract Year will end on April 29, 2006, July 29, 2006, October 28, 2006 and February 3, 2007.

 

3.                                “Licensed Goods” means the following categories of goods, in connection with which the Trademarks will be used: belts, coats, jackets, jerseys, pants, rainwear, shirts, shorts, sweat pants, sweat shirts, sweaters, t-shirts, tank tops, swim wear, wind-resistant jackets, headwear, backpacks, duffel bags and wallets.

 

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4.                                      “Net Sales” is the total actual retail sales of all Licensed Goods, less:

 

(a)                         Amounts credited for returns, exchanges, and discounts and allowances of all types to Licensee’s customers (including without limitation employee discounts); and

 

(b)                         Any sales and use taxes or similar fees or assessments collected.

 

No deductions shall be made for any other costs incurred, such as, but not limited to, costs of manufacture, sales, distribution, or exploitation of the Licensed Goods.

 

5.                                      “Subsidiary” means any entity with respect to which Licensee owns or controls, directly or indirectly, the majority of the stock entitled to vote for the election of directors or persons performing similar functions.

 

6.                                      “Term” and “Renewal Term” are the periods expressly set forth in this Agreement.

 

7.                                      “Territory” is the United States, wherein Licensee may sell the Licensed Goods only at retail and only through Licensee’s Kohl’s branded retail stores, or over the Internet via Licensee’s Kohl’s branded ecommerce website.

 

8.                                      “Trademarks” means (i) the trademarks embodied in United States Trademark Registration Nos. 2299696, 2849404, 2855 111,2931627, copies of which are attached hereto on EXHIBIT A, as amended and supplemented from time to time with Licensee’s written consent; and (ii) all of Licensor’s right, title and interest in the trademark “Hawk” and any and all stylized presentations of the word “Hawk” that have ever been used by Licensor as trademarks in conjunction with the production, manufacture, distribution, promotion and sale of merchandise of any kind in the United States (samples of which are attached hereto as EXHIBIT B).

 

9.                                      “Ultimate Parent” means Quiksilver, Inc., a Delaware corporation. 

 

Article II.                 License

 

1.                                      Grant of License.

 

(a)                                 Licensor hereby grants to Licensee and Licensee’s Affiliates an exclusive license to use the Trademarks upon or in connection with production, manufacture, distribution, promotion and sale of the Licensed Goods throughout the Territory in a manner consistent with Licensor’s prior usage thereof, specifically, as generally associated with the surf, skate, and skateboarding lifestyle, and skateboarding personality Tony Hawk. Licensor does not own, and does not purport to convey, any rights in and to the generic word “hawk” other than as a proper noun.

 

(b)                                 So long as Licensor or its Affiliates do not have a pre-existing exclusive arrangement or existing plans to enter into an exclusive arrangement with any third party with respect to the Trademarks in an area other than the Territory, or are not themselves currently exploiting the Trademarks and to not have plans to do so in the foreseeable future in such an area, at the time Licensee formulates plans to open and operate Kohl’s branded retail stores in such area, the license granted herein shall extend to such area and the definition of “Territory” contained herein shall thereafter be deemed to include such area. At the appropriate time, Licensee will consult with Licensor in connection with Licensee’s expansion of its business into areas other than the Territory, and, if appropriate, the parties will execute a written amendment revising the definition of “Territory” to include such area. The parties understand that Licensee’s stores outside of the Territory as currently defined might not be branded “Kohl’s,” but will be of a similar format and be positioned in a similar or better market segment as are the Kohl’s stores in the Territory as currently defined.

 

2

 

(c)                                  Licensor also hereby grants to Licensee and Licensee’s Affiliates a non-exclusive license to use the Trademarks on a worldwide basis in connection with the production and manufacture of such Licensed Goods so long as they are not sold outside the Territory or the additional areas referenced above in subsection II(1)(b).

 

(d)                                 Licensor agrees that the Trademarks shall not be used in connection with the production, manufacture, distribution, promotion or sale of any merchandise other than the Licensed Goods (“Additional Uses”), without Licensee’s written consent. In the event Licensor intends to directly utilize the Trademarks in connection with an Additional Use, then Licensee shall be offered the opportunity to expand this Agreement to include the Additional Use on the terms and conditions set forth in this Agreement. In the event the contemplated Additional Uses are proposed to be by a third party, then Licensee shall have the right to match the terms of the contemplated third-party transaction for the Additional Uses, but in no event shall the terms and conditions of such arrangement be less favorable to Licensee than those set forth in this Agreement.

 

(e)                                  The license is nondivisible, nonassignable, and nonsublicensable.

 

2.                                      Limitations on License.

 

(a)                                 Except as set forth in this Agreement, no other right or license is granted by Licensor to Licensee or by Licensee to Licensor, either express or implied, with respect to any other trademark, trade name, service mark, or other intellectual properly right owned, possessed, or licensed by or to Licensor. Licensee shall not use the Trademarks in any manner not specifically authorized by this Agreement.

 

(b)                                 Licensee acknowledges that Licensor’s relationships with its dealers, distributors and licensees throughout the world are valuable to Licensor, and that Licensor’s ability to control the distribution of Licensed Goods is essential to the continued viability of the licensed brand. Therefore, Licensee agrees that Licensee shall not knowingly authorize the resale or transfer of any Licensed Goods to any other retailer, wholesaler, intermediary, or agent of any other person or entity, foreign or domestic, that Licensee knew or should have known had the intent to resell the Licensed Goods, without Licensor’s consent

 

Article III.                                    Royalties

 

1.                                      Royalty Rate. Licensee agrees to pay a royalty to Licensor according to the following chart:

 

	
Annual Net Sales
    	
 
    	
Royalty
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
$ 0 to $125 million
    	
 
    	
4.0
    	
%
    
	
Over $125 million to $225 million 
    	
 
    	
3.5
    	
%
    
	
Over $225 million to $325 million 
    	
 
    	
3.0
    	
%
    
	
Over $325 million 
    	
 
    	
2.5
    	
%
    

 

3

 

2.                                      Guaranteed Minimum Royalties. Licensee shall pay to Licensor the Guaranteed Minimum Royalties opposite the respective Contract Years:

 

	
Contract Year
    	
 
    	
Minimum Guaranteed Royalty
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
$1.5 million
    	
 
    
	
2
    	
 
    	
$4 million
    	
 
    
	
3
    	
 
    	
$5.0 million
    	
 
    
	
4
    	
 
    	
$5.875 million
    	
 
    
	
5
    	
 
    	
$6.75 million
    	
 
    
	
Each year of any Renewal   Term
    	
 
    	
$6.75 million
    	
 
    

 

Minimum Guaranteed Royalties will be due and payable on a Contract Quarterly basis, as more specifically set forth below.

 

Article IV.                                     Design Services

 

1.                                      Design Services. Licensor shall provide all necessary design services with respect to the Licensed Goods based on parameters and guidelines established by Licensee in consideration of Licensee’s planned sales volumes and store fixture allocations.  Such design services shall be provided by a team of professional designers retained or otherwise employed by Licensor, at Licensor’s sole expense. Licensor’s design team staffing shall be subject to approval by Licensee, which approval shall not be unreasonably withheld. Licensor’s design team shall collaborate with Licensee’s product development team to plan and design mutually acceptable: (a) product designs, (b) packaging and labeling creative and design, (c) graphic art for the Licensed Goods (i.e., screen prints, embroideries, appliqués), (d) creative concept and design services with respect to in-store graphics and presentation, as well as national advertising in magazines, newspaper inserts, internet television, radio and other media.

 

2.                                      Design Fee. Licensee will pay Licensor the sum of $1.5 million as a non-refundable fee for past design services, which sum will be paid as follows:

 

(a)                                 $750,000 on or prior to August 1, 2005; and

 

(b)                                 $750,000 on or prior to February 1, 2006.

 

Article V.                                          Term

 

1.                                 Initial Term. The Initial Term of this Agreement shall commence on January 30, 2006 and shall consist of Five (5) consecutive Contract Years, ending on January 29, 2011.

 

2.                                 Renewal Term. If Licensee is not then in material default of the terms of this Agreement, this Agreement may be renewed by Licensee, in Licensee’s sole discretion, for up to three (3) additional terms of five (5) Contract Years each (“Renewal Terms”), provided that, for each such renewal, the following conditions have been met: (a) Licensee has notified Licensor in writing of its election not to renew this Agreement no later than 12 months prior to the expiration of the then-current term, and (b) Licensee has paid to Licensor Royalties pursuant to this Agreement of at least $6.75 million during the fifth Contract Year of the then-expiring term. Licensor may, in its sole discretion, waive condition (b) contained herein.

 

4

 

Article VI.                                     Marking, Quality Control and Maintenance

 

1.                                      Trademarks. Licensee shall use the Trademarks in accordance with the terms and conditions set forth in this Agreement. Licensee, shall use upon or in connection with the Licensed Goods the symbol TM or, where a United States Federal Trademark Registration has been obtained, the symbol ®. Licensee shall not otherwise affix or use such in connection with nor use any other trademark or trade name in connection with the Licensed Goods without Licensor’s prior written approval.

 

2.                                      Standards. Licensee shall use commercially reasonable efforts to ensure that (i) the quality and workmanship of all Licensed Goods manufactured by or on behalf of Licensee shall be consistent with corresponding products sold by Licensee from time to time under Licensee’s best licensed and “private label” lines of products; (ii) shall in no manner adversely affect any rights of ownership of Licensor in the Trademarks and shall in no manner derogate or detract from the repute of Licensor or the Trademarks; and (iii) shall in all respects (including, without limitation, the manufacture, sale, marketing and advertising) be in accordance with all of the terms and provisions of this Agreement, with all applicable laws, rules and regulations.

 

3.                                      Quality Control. From time to time at Licensor’s reasonable request, Licensee shall make available to Licensor in a mutually convenient manner, current samples of Licensed Goods so that Licensor may inspect the quality of such Licensed Goods. Licensor agrees that it will not object to the Licensed Goods on the basis of quality so long as the quality is consistent with the standards set forth in subsection VI(2) above. If the Licensed Goods do not meet those standards, Licensee will work in good faith to correct the quality issues, and if it cannot do so in a reasonable manner, Licensee shall discontinue the subject item(s).

 

4.                                      Quality Control Standards. Concurrently with the execution of this Agreement, and on an annual basis thereafter, Licensee shall provide Licensor with a written copy of Licensee’s quality control standards and procedures.

 

5

 

5.                                      Concept Meetings

 

Licensee and Licensor shall meet twice annually, once with respect to Spring and once with respect to Fall of each year (each a “Concept Meeting”) to review and consult with respect to the direction and types of Licensed Goods to be produced for the next season and the concepts and trends being emphasized. It is contemplated that members of Licensee’s merchandising teams will attend the Concept Meetings and that Licensor will be given samples, pictures or drawings of proposed Licensed Goods and samples of any tags, labels and packaging materials proposed to be used by Licensee in connection with Licensed Goods. Licensee agrees to give good faith consideration to Licensor’s comments and suggestions, but Licensor acknowledges that Licensed Goods shall be developed, modified and executed in Licensee’s sole discretion. Upon Licensor’s reasonable request from time to time, Licensee shall submit to Licensor then current samples of specified Licensed Goods. It is understood that Licensor, may, in rare cases, find one or more Articles to be so objectionable that it requests that Licensee stop producing or selling the Licensed Goods, provided, however, that any such objections will be made by Licensor only where Licensor determines in good faith that such Licensed Goods would materially and adversely affect the value and image of the Trademarks. Any such request made by Licensor shall be in writing and the parties acknowledge that any necessary changes to, or discontinuation of, any Licensed Goods will be implemented in a manner so as to cause the least disruption of the business to be conducted by Licensee hereunder.

 

Upon Licensor’s reasonable request from time to time, Licensee shall submit to Licensor then current samples of marketing materials, for example, advertising, promotional, publicity or other exploitation materials produced and used by Licensee in connection with the Licensed Goods.

 

6.                                      Contract Manufacturers. Licensee shall be entitled to contract the manufacture of Licensed Products without the prior written approval of Licensor provided contractor has signed EXHIBIT C (manufacturers agreement) and a copy of said agreement is sent to Licensee. Licensee shall use commercially reasonable efforts to ensure that all Licensed Products are manufactured, marketed, sold, labeled and packaged in accordance with Licensee’s then current “Terms of Engagement”, available for review on kohlspartners.com. In connection therewith, Licensee shall monitor the performance of its contractors to assure compliance with such Terms of Engagement in a manner consistent with Licensee’s practices for corresponding products of Licensee’s best licensed and “private label” lines of products,

 

Article VII.                                Trademark Registration

 

1.                                      At the request of Licensor, and without compensation to Licensee other than reimbursement of Licensee’s reasonable expenses, Licensee shall promptly do such acts and execute, acknowledge, and deliver all such papers as may be necessary or desirable, in the sole discretion of Licensor, to obtain, maintain, protect, and/or vest in Licensor the entire right, title, and interest in and to any Trademark in the Territory; including rendering such assistance as Licensor may request in any litigation, Patent and Trademark Office proceeding, or other proceeding.

 

2.                                      Licensor shall use commercially reasonable efforts to protect the Trademarks in the Territory and take such actions as necessary to allow Licensee to take full advantage of the rights afforded to Licensee hereunder. In the event that Licensee learns of any infringement, imitation or counterfeiting of the Trademarks or of any use by any person of a trademark similar to the Trademarks, it shall notify Licensor. Upon receiving notice of any potential infringement, Licensor shall take commercially reasonable actions to protect its rights in and to the Trademarks. If requested to do so by Licensor, Licensee shall cooperate with Licensor in all respects in connection therewith, including by being a plaintiff or co-plaintiff and/or by causing its officers to execute pleadings and other necessary documents.

 

6

 

In the event commercially reasonable action is not taken by Licensor within 30 days after its receipt of notice from Licensee, Licensee shall have the right (but not the obligation) to take such action as it deems advisable for the protection of its rights in and to the Trademarks as set forth in this Agreement but no settlement of any claim shall be made without the approval of Licensor, which approval shall not be withheld or delayed unreasonably. Even if appropriate action is taken by Licensor, Licensee may, at its own expense, be represented by its own counsel in such action. In any case, Licensor and Licensee shall keep each other fully advised of all developments and shall cooperate fully with each other in all respects in connection with any action arising under this subsection. All costs, fees and expenses (including investigatory expenses and legal expenses such as attorneys’ fees, court costs and filing fees) incurred in connection with any action taken under this subsection shall be borne by the party taking such action, and such party shall be entitled to retain any damages awarded in any such action.

 

3.                                      All use of the Trademarks by Licensee and the goodwill generated thereby shall inure to the benefit and be the property of Licensor.

 

4.                                      In the event that Licensee designs, manufactures, packages or distributes any merchandise or other materials related to the Licensed Goods that qualify for protection under the United States patent or, with respect to marketing materials, copyright laws, Licensee shall have the ownership of all such rights and shall have the exclusive right to seek and maintain patent or copyright protection therefor.

 

Article VIII.                           Validity of Rights

 

Licensee shall not contest Licensor’s ownership of the Trademark or Licensee’s obligation to assign any rights hereunder including any rights Licensee may create in the Trademark. Licensee shall not contest or impair these rights, either directly or indirectly, or in any way assist others to contest or impair the same and hereby expressly acknowledge Licensor’s superior rights. This obligation shall survive any termination of this Agreement.

 

Article IX.                                    Warranties and Indemnities

 

1.                                      Licensor warrants that: (a) Licensor has all right, title, and interest in and to the Trademarks and the right to license the Trademarks; (b) Licensor has no notice of any threatened challenge to Licensor’s ownership of the Trademarks; (c) the use of the Trademarks by Licensee as contemplated in this Agreement will not violate the intellectual property rights of any other parties; and (d) Licensor has the right to enter this Agreement, and to agree to the terms and conditions of this Agreement.

 

2.                                      Licensee warrants that it has the right to enter into this Agreement and to agree to the terms and conditions of this Agreement.

 

3.                                      Licensee’s Indemnity. Licensee shall indemnify, hold harmless, and defend (and pay any and all other expenses and attorney’s fees, in connection therewith) Licensor and its officers, directors, agents, and employees, from and against any and all liability, loss, claims, and/or actions arising out of any alleged defect in any Licensed Good.

 

7

 

4.                                      Licensor’s Indemnity. Licensor and its Ultimate Parent shall indemnify, hold harmless, and defend (and pay any and all other expenses and attorney’s fees, in connection therewith) Licensee and its officers, directors, agents, and employees, from and against any and all liability, loss, claims, and/or actions arising out of any claim, allegation or assertion that Licensee’s use of the Trademarks in accordance with this Agreement infringes upon the trademark, copyright or other proprietary rights of any third party.

 

5.                                      Mutual Indemnity. Each party shall indemnify, hold harmless, and defend (and pay any and all other expenses and attorney’s fees, in connection therewith) the other party and such other party’s officers, directors, agents, and employees, from and against any and all liability, loss, claims, and/or actions arising out of:

 

(a)                                 Any alleged unauthorized use of any Trademark (except as to any right licensed hereunder) by the indemnifying party;

 

(b)                                 Any alleged libel or slander against, or invasion of, the right of privacy or publicity or any other similar right of any third party (except as to any right licensed hereunder);

 

(c)                                  Any claim by a third party resulting from the indemnifying party’s breach or alleged breach of any term or condition of this Agreement.

 

The warranties and indemnities set forth herein shall survive termination of the Agreement.

 

6.                                      Insurance. Licensee warrants that it shall promptly obtain and maintain, at its sole cost and expense, standard Commercial General Liability, Product Liability and Advertising Liability Insurance in the amount of two (2) million dollars “Combined Single Limit.”

 

Article X.                                         Books, Records and Payments

 

1.                                      Statements. Licensee shall throughout the Initial Term and any Renewal Term of this Agreement render statements to Licensor on a quarterly basis within sixty (60) days after the end of each Contract Quarter. Such statement shall include:

 

(a)                                 The aggregate Net Sales of the Licensed Goods for such month; and

 

(b)                                 Any other information that may be required under any other provision of this Agreement or that may, from time to time, be reasonably required by Licensor.

 

2.                                      Royalty Payments. Within sixty(60) days after the end of each Contract Quarter, along with the statements rendered to Licensor pursuant to Article X, Section 1, Licensee shall remit to Licensor any royalties then due and owing. Payments by Licensee to Licensor will be such that within sixty (60) days’ after the end of each Contract Quarter of each respective Contract Year, Licensee will have paid to Licensor an amount at least equal to the appropriate proportion of the Minimum Guaranteed Royalty then due and owing for such Contract Year. During the first Contract Year, however, Licensee shall have no obligation to make any royalty payments with respect to the first $37,500,000 in Net Sales (other than the Minimum Guaranteed Royalty if Net Sales do not exceed $37,500,000 for such Contract Year), and shall have no obligation to make a payment against the Minimum Guaranteed Royalty (unless a royally is otherwise owed on actual Net Sales) until thirty days’ after the end of third Contract Quarter, at which time Licensee must have paid to Licensor royalties equal to at least one-half of the first Contract Year’s Minimum Guaranteed Royalty (an amount of royalties equal to at least the balance of the Minimum Guaranteed Royalty for the first Contract Year being due and payable at the latest by sixty (60) days after the end of the first Contract Year).

 

8

 

3.                                      Books and Records. During the term of this Agreement, Licensee shall keep accurate books of account and records in accordance with generally accepted accounting principles covering all transactions relating to this Agreement at Licensee’s principal place of business for not less than three years after the Contract Quarter to which such books of account and records relate, and shall allow Licensor and its representative to audit such books of account and records and to make copies thereof at Licensor’s expense; if any such audit reveals royalties due Licensor in excess of three percent (3%) more than the royalties paid to Licensor for the period covered by such audit, all reasonable and documented audit fees, costs, and expenses shall be borne by Licensee, in addition to which interest shall be added to the amount discovered to be due, from the first dollar more than the royalties actually paid, at an accrued rate of six percent (6%) per annum, or, if lower, the maximum legal rate.

 

4.                                      Final Royalty Determination. In the event that an auditor representing Licensee shall disagree with Licensor as to whether the amount owed exceeds the above-described three percent (3%), then the auditor representing Licensee and the auditor representing Licensor shall jointly select a third auditor whose determination of the amount owed shall be final and binding upon Licensee and Licensor. If such third auditor concludes that royalties due Licensor are not in excess of three percent (3%) more than the royalties paid to Licensor for the period covered by such audit, then all reasonable and documented audit fees, costs, and expenses of all three auditors shall be borne by Licensor.

 

5.                                      Right to Contest. The receipt and deposit of monies by Licensor shall not prevent or limit Licensor’s right to contest the accuracy and/or correctness of any statement in respect of such monies.

 

6.                                      Confidentiality. Licensor agrees to hold in confidence any information provided by Licensee under this Agreement, including without limitation the information provided pursuant to this Article, in accordance with the Confidentiality and Nondisclosure Agreement between Licensor and Licensee dated April 11, 2005.

 

Article XI.                                    Termination

 

1.                                      Termination for Breach. In the event either Licensee or Licensor fails to perform any of their respective obligations under this Agreement and (i) such default is not curable, or (ii) such default is curable but continues uncured for a period of 30 days after written notice thereof has been given to the defaulting party by the other party, or (iii) such default is curable, but not within 30 days, and all reasonable steps necessary to cure the default have not been taken by the defaulting party within the 30-day period or the defaulting party is not diligently taking all steps necessary to cure the default as promptly as practicable or, in any event, the default continues to remain uncured for at least 60 days after such notice, the other party may terminate this Agreement upon written notice to the defaulting party. Any termination of this Agreement will not preclude the non-breaching party from seeking damages for such breach, and pursuing any other remedy for such breach available to it under the law.

 

9

 

2.                                      Licensee’s Termination. It is understood that Licensee’s willingness to enter into this Agreement is premised upon Tony Hawk’s general good standing and character reputation in the business community. The value of the rights provided to Licensee hereunder may be substantially diminished in the event Tony Hawk commits an act that: (1) would reasonably shock or offend a majority of the community; (2) a reasonable person would conclude ridicules public decency, or (3) results in Tony Hawk’s conviction on felony or morals-related criminal charges. In the event Licensee’s sales of Licensed Goods are materially adversely affected by such an act, Licensee may, at its option, terminate this Agreement on thirty (30) days’ written notice to Licensor, and from the effective date of such termination, Licensee shall have no further obligations hereunder, provided such notice is given no later than sixty (60) days’ after the date it is conclusively determined the act occurred.

 

Further, Licensee may terminate this Agreement for any reason at the end of the fifth Contract Year of the Initial Term or any Renewal Term if it gives Licensor written notice of its intent to do so at least twelve (12) months prior to the end of such fifth Contract Year.

 

3.                                      Rights Upon Termination. Upon the expiration of this Agreement or any earlier termination of this Agreement:

 

(a)                                 All rights granted to Licensee hereunder shall automatically revert to Licensor and Licensee shall execute any and all documents evidencing such automatic reversion;

 

(b)                                 Licensee shall, at Licensor’s discretion, either deliver to Licensor all patterns, proofs, and any other material that reproduce the Trademarks or give to Licensor satisfactory proof of the destruction thereof;

 

(c)                                  Licensee shall, within two month(s) after such expiration or termination, deliver to Licensor a complete and accurate statement indicating the number, description, and whereabouts of all Licensed Goods on hand and/or in the process of manufacture, as of both the date of such expiration or termination and the date of such statement;

 

(d)                                 Licensor shall have the right to enter onto Licensee’s premises and/or the premises of any subcontractor of Licensee, to the extent that Licensee has the right to grant such entry, to conduct physical inventories to verify the accuracy of the above-described statement;

 

(e)                                  Licensee may sell existing inventories of Licensed Goods (including Licensed Goods on order) on a nonexclusive basis, for a period of 180 days, subject to all of the other terms and conditions of this Agreement, including, but not limited to, Licensee’s obligation to provide reports and make royally payments to Licensor. Such sales must be through the same channels used by Licensee prior to the termination of this Agreement.

 

Article XII.                               Assignments

 

Neither this Agreement nor any of the rights or duties hereunder nor the license granted hereby may be assigned, sub-licensed, encumbered or otherwise transferred in any way by Licensee, without the prior written consent and agreement of Licensor, which may be withheld in Licensor’s sole and absolute discretion. Any purported assignment, sub-license, encumbrance or other transfer shall be null and void and shall constitute a default hereunder by Licensee.

 

10

 

Article XIII.                          General

 

1.                                           Notices. All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be delivered either by personal service, overnight mail, facsimile or by United States mail, registered or certified mail, postage prepaid, return receipt requested, and addressed as follows:

 

If to Licensor:

Mr. Charles Exon
 Hawk Designs, Inc.
 15202 Graham Street
 Huntington Beach, CA 92649
 Facsimile: 714-889-4250

 

If to Licensee:

Ms. Peggy Eskenasi
 Kohl’s Department Stores,, Inc.
 N56 W17000 Ridgewood Dr.
 Menomonee Falls, WI 53051
 Facsimile: 262-703-6143

 

With a copy to:

General Counsel
 Kohl’s Department Stores, Inc.
 N56 W17000 Ridgewood Dr.
 Menomonee Falls, WI 53051
 Facsimile: 262-703-7274

 

If delivered personally, such notices or other communications shall be deemed delivered upon delivery. If sent by fax, such notice or other communications shall be deemed delivered when received provided that the sender has confirmation of receipt. If sent by overnight or United States mail, registered or certified mail, postage prepaid, return receipt requested, such notices or other communications shall be deemed delivered upon delivery or refusal to accept delivery as indicated on the return receipt. Either party may change its address at any time by written notice to the other party as set forth above.

 

2.                                      Governing Law and Jurisdiction. This Agreement shall be deemed entered into in the State of Wisconsin and shall be construed and governed solely by the laws of such State except to the extent that the choice-of-law rules of that State would result in the application of the law of any other State.

 

3.                                      Amendment. No amendment or modification of this Agreement shall be valid or binding unless the same shall be made in writing and signed on behalf of each party by their respective proper officers duly authorized to do so.

 

4.                                      Captions and Definitions. The captions in this Agreement are inserted for convenience only and shall not be construed as limiting in any manner.

 

The definitions provided in this Agreement and set forth in Article I are referred to by fully capitalizing such definitions throughout this Agreement. The definitions of such terms are understood to be applicable to both singular and plural uses of such defined terms.

 

11

 

5.                                      No Waiver. The failure to enforce any of the terms and conditions of this Agreement by either of the parties hereto shall not be deemed a waiver of any other right or privilege under this Agreement or a waiver of the right to thereafter claim damages for any deficiencies resulting from any misrepresentation, breach of warranty, or nonfulfillment of any obligation of any other party to this Agreement.

 

In order for there to be a waiver of any term or condition of this Agreement, such waiver must be in writing and signed by the party making such waiver.

 

6.                                      Attorneys’ Fees. In any action brought by a party hereto under this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys’ fees, costs, and expenses of suit.

 

7.                                      Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be an original.

 

8.                                      Preamble. The preamble to this Agreement is hereby incorporated and by this reference shall hereby become part of this Agreement as if set forth herein word for word.

 

INTENTIONALLY LEFT BLANK

 

12

 

9.                                      Cooperation. The parties to this Agreement shall at any and all times, upon request by the other party, or its legal representative, make, execute, and deliver any and all such other and further instruments as may be necessary or desirable for the purpose of giving full force and effect to the provisions of this Agreement, without charge therefor.

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed personally or, as appropriate, by its duly authorized officers, of the date first above written.

 

 

	
 
    	
LICENSEE:
    	
Kohl’s   Department Stores, Inc.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Peggy Eskenasi
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Peggy   Eskenasi
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President - P.D 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
LICENSOR:
    	
Hawk   Designs, Inc.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Bill Bussiere
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Bill   Bussiere
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
Chief   Financial Officer
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
ULTIMATE   PARENT:
    	
Quiksilver, Inc.   (for purposes of indemnity only—Art. IX, para. 4)
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/   Charles Exon
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
Charles   Exon
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
General   Counsel
    

 

13

 

EXHIBIT A

 

 

	
Int.  Cl.: 25
    	
 
    
	
 
    	
 
    
	
Prior U.S. Cls.: 22 and 39
    	
Reg. No. 2,299,696
    
	
 
    	
 
    
	
United States Patent and   Trademark Office
    	
Registered Dec. 14, 1999
    

 

TRADEMARK
 PRINCIPAL REGISTER

 

TONY HAWK

 

	
HAWK, ANTHONY (UNITED STATES CITIZEN)
    	
HEADWEAR, IN   CLASS 25 (U.S. CLS. 22 AND 39).
    
	
31878 DEL OBISPO
    	
FIRST USE 3-1-1998; IN COMMERCE 6-15-1998.
    
	
STE 118-514
    	
 
    
	
SAN JUAN CAPISTRANO, CA 92675
    	
THE NAME “TONY HAWK” IDENTIFIES A LIVING INDIVIDUAL WHOSE CONSENT IS OF   RECORD.
    
	
FOR: CLOTHING, NAMELY, BELTS, COATS,
    	
 
    
	
JACKETS, JERSEYS, PANTS, RAINWEAR,
    	
SER. NO. 75-530,117, FILED 8-3-1998.
    
	
SHIRTS, SHORTS, SWEAT PANTS, SWEAT
    	
 
    
	
SHIRTS, SWEATERS, T-SHIRTS, TANK TOPS,
    	
ANDREW   A. ROPPEL, EXAMINING ATTORNEY
    
	
WIND-RESISTANT JACKETS; FOOTWEAR,
    	
 
    

 

 

	
Int. Cl.: 18
    	
 
    
	
 
    	
 
    
	
Prior U.S. Cls.: 1, 2, 3, 22, and 41
    	
Reg. No. 2,849,404
    
	
 
    	
 
    
	
United States Patent and Trademark Office
    	
Registered June 1, 2004
    

 

TRADEMARK

PRINCIPAL REGISTER

 

TONY HAWK

 

	
HAWK   DESIGNS, INC. (CALIFORNIA CORPORATION)
    	
 
    	
THE   NAME “TONY HAWK” IDENTIFIES A LIVING INDIVIDUAL WHOSE CONSENT IS OF RECORD.
    
	
15202   GRAHAM STREET
    
	
HUNTINGTON   BEACH, CA 92649
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
FOR: BACKPACKS, DUFFEL BAGS AND WALLETS, IN CLASS 18 (U.S.   CLS. 1, 2, 3, 22 AND 41).
    	
 
    	
 
    
	
 
    	
SN 78-158,946, FILED 8-28-2002.
    
	
 
    	
 
    	
 
    
	
FIRST USE 11-29-2000; IN COMMERCE 11-29-2000.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
OWNER OF U.S. REG. NO. 2,299,696.
    	
 
    	
WANDA   KAY PRICE, EXAMINING ATTORNEY
    

 

 

	
Int.   Cl.: 25
    	
 
    
	
 
    	
 
    
	
Prior   U.S. Cls.: 22 and 39
    	
Reg. No. 2,931,627
    
	
 
    	
 
    
	
United   States Patent and Trademark Office
    	
Registered Mar. 8, 2005
    

 

TRADEMARK

PRINCIPAL REGISTER

 

 

	
HAWK DESIGNS, INC. (CALIFORNIA CORPORATION)
    	
FIRST USE 11-24-2000; IN COMMERCE 11-24-2000.
    
	
15202 GRAHAM STREET
    	
 
    
	
HUNTINGTON BEACH, CA 92649
    	
SEC. 2(F).
    
	
 
    	
 
    
	
FOR:   CLOTHING AND HEADGEAR, NAMELY, SHIRTS, T-SHIRTS, SWEATSHIRTS, SWEATPANTS,
    	
 
    
	
TANK TOPS, SHORTS, PANTS, JACKETS, SWEA-
    	
SN 78-168,632, FILED 9-27-2002.
    
	
TERS, SOCKS, BELTS, GLOVES, THERMAL T-
    	
 
    
	
SHIRTS, HATS, CAPS, AND VISORS, AND SNOW
    	
 
    
	
HATS, IN CLASS 25 (U.S. CLS. 22 AND 39).
    	
KIMBERLY   PERRY, EXAMINING ATTORNEY
    

 

 

	
Int.   Cl.: 18
    	
 
    
	
 
    	
 
    
	
Prior   U.S. Cls.: 1, 2, 3, 22, and 41
    	
Reg. No. 2,855,111
    
	
 
    	
 
    
	
United States Patent and Trademark Office
    	
Registered June 15, 2004
    

 

TRADEMARK

PRINCIPAL REGISTER

 

 

	
HAWK   DESIGNS, INC. (CALIFORNIA CORPORATION)
   15202 GRAHAM STREET
   HUNTINGTON BEACH, CA 92649
    	
FIRST   USE 11-29-2000; IN COMMERCE 11-29-2000.
    
	
 
    	
SN   78-170,181, FILED 10-2-2002.
    
	
FOR:   LUGGAGE, BACKPACKS, WALLETS, FANNY PACKS, TRAVEL BAGS, TOTE BAGS, DUFFEL   BAGS, AND ATHLETIC BAGS, IN CLASS 18 (U.S. CLS. 1, 2, 3, 22 AND   41).
    	
ARETHA   MASTERSON, EXAMINING ATTORNEY
    

 

 

EXHIBIT B

 

 

 

 

 

 

 

 

EXHIBIT C

 

 

EXHIBIT C

(Letter from Licensee to Contractor)

 

Re:      Manufacture of Products Using the “Tony Hawk” and “Hawk” Trademarks

 

Gentlemen:

 

We are a licensee of Hawk Designs, Inc., a subsidiary of Quiksilver, Inc. (“Licensor”) and have the exclusive right to use various “Tony Hawk” and “Hawk” trademarks (collectively, “Hawk trademarks”) upon or in connection with production, manufacture, distribution, promotion and sale of various classifications of products, including those listed on Schedule 1 hereto (the “Hawk products”). We have engaged you as a manufacturer for products bearing the Hawk trademarks. This letter sets forth and limits your sole authorization for use of the Hawk trademarks in connection with manufacturing products for us.

 

You shall not use the Hawk trademarks in any manner whatsoever other than as directed by us. You shall affix or apply the Hawk trademarks to the products and/or packaging materials strictly in conformity with specifications provided by us or as otherwise directed by us. You agree to order any Hawk logoed packaging, labeling, trim or product only from manufacturers that have been pre-approved by us. We will provide you with a list of such currently approved manufacturers. If you desire to add a manufacturer to such list, you will need to provide all information, necessary for us to make a determination as to whether to approve such manufacturer.

 

You shall not use any other name, trademark or design in connection with Hawk packaging materials unless so directed by us.

 

You represent and warrant that all merchandise that you manufacture for us will be manufactured by you in your factory or factories set forth in Schedule 2 hereof or by your subcontractors in their factories whose locations are set forth on Schedule 2 hereof and that all merchandise will be labeled accordingly with the correct country of origin and in accordance with the laws, rules and regulations of the governments of the countries where the Hawk products manufactured by you are sold at retail. All your subcontractors must sign a Maker’s Certificate, also.

 

Your manufacturer’s RN number is                                   .

 

In the event that any Hawk products are rejected by us, because the products are defective in quality or otherwise defective, you agree to immediately remove all labels, tabs, snaps, and other markings bearing the Hawk trademarks on such products before disposing of them (other than the care label if shipped to the United States). In the event that such markings cannot be removed from the products, they must be destroyed, or marked “Irregular” and you must contact us.

 

In the event that any Hawk products are rejected by us because they are shipped late, the order for such products has been canceled, or for any other reason, you agree to immediately remove all labels, tabs, snaps, and other markings bearing the Hawk trademarks on such products before disposing of them (other than the care label if shipped to the United States). In the event that such markings cannot be removed from the products, you agree to immediately notify us that such markings cannot be removed and then you may either immediately destroy them or with our approval sell them to any approved retailer. Prior to contacting any diverters, jobbers, or make any international sales, you must contact us and advise to whom you intend to sell such products, and if we approve your buyer, you may sell such products only to such buyer. 

 

14

 

You shall at all times adhere to Kohl’s quality control guidelines and Kohl’s Vendor Partner Terms of Engagement.

 

You should not directly or indirectly, disclose or use at any time (either during or after the completion of your manufacturing obligations, except to or for our benefit as we may direct) any confidential information of ours. All information and supporting materials of any kind (and rights arising therefrom) relating to the production, design, sale or marketing of any product bearing the Hawk trademarks are and will be ours and/or the Licensor’s sole property and are to be used solely in accordance with our instructions, and under no circumstances, are to be used by you, or any of your employees, or anyone else, in relation to any non-Hawk product or trademark.

 

You shall permit Licensor or its agent to inspect your activities and premises.

 

In the event of your failure to abide by any of the foregoing, Licensor or we may seek all legal remedies against you, including seeking compensation for all damages sustained as a result of your actions or omissions, as well as injunctive relief.

 

You acknowledge that you do not have any claims against Licensor arising out of this Agreement and that you will only look to us in connection with any claim under this Agreement.

 

This Agreement shall commence as of the date hereof and shall continue in effect for such period of time as we continue your engagement as a manufacturer of Hawk products.

 

We have the right to terminate this Agreement immediately upon written notice to Manufacturer in the event of (a) your affirmative act of insolvency, (b) the appointment of any receiver or trustee to take possession of your properties, (c) the winding-up, sale, consolidation, merger or any sequestration by governmental authority of your business or facility, or (d) your material breach of any significant provision hereof. In addition, should the Trademark License Agreement in effect between Licensor and us expire or be terminated, for any reason, the Agreement shall likewise terminate.

 

Please execute and return the enclosed copy of this letter to the undersigned acknowledging your agreement to abide by the foregoing.

 

	
Licensee   Name: (print)
    	
 
    	
 
    	
Signature:
    	
 
    
	
 
    	
 
    
	
Licensee (Company) Name: (print)
    	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    
	
ACCEPTED AND AGREED:
    	
 
    
	
 
    	
 
    
	
Maker Name:(print)
    	
 
    	
 
    	
Signature:
    	
 
    
	
 
    	
 
    
	
Maker (Company) Name:(print)
    	
 
    	
 
    	
Date:
    	
 
    
										

 

15

 

Schedule 1 to Letter from Licensee to Contractor

 

Categories of merchandise that Licensee has the right to design, manufacture and sell.

 

 

	
DBA:
    	
 
    	
NAME   (print)
    	
 
    	
RN   #
    

 

 

At the time you cease to be an approved Maker, you shall either sell to Licensor (at cost) all labels in your possession or destroy such labels.

 

16

 

Schedule 2 to Letter From Licensee to Contractor

 

A.                              The Name and Address of all of your locations where you manufacture Hawk products are:

 

B.                              The Name and Address of all your Sub-Contractors’ locations where you have Hawk products manufactured for you are:

 

17

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