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EXHIBIT 10.2  

 
 

EMPLOYMENT AGREEMENT    
  

    This Employment Agreement ("Agreement") is entered into on May 8, 2001 by and between John J. Rangel, an individual (the "Executive"), and
K2 Inc., a Delaware corporation (the "Company"). 

 
 

W I T N E S S E T H    
  

    WHEREAS, the Executive is currently the Senior Vice President—Finance of the Company; and 

    WHEREAS,
the Company and the Executive mutually desire that an employment agreement be entered into setting forth their mutual rights and obligations in respect of the Executive's
employment; 

    NOW,
THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, receipt of which is hereby acknowledged, the parties do
hereby agree as follows: 

 
 

A G R E E M E N T    
    

 1.  EMPLOYMENT BY THE COMPANY AND TERM.  

    (a) POSITION
AND REPORTING. Subject to the terms set forth herein, the Company agrees to employ the Executive as Senior Vice President—Finance and Chief
Financial Officer and the Executive hereby accepts such employment. During the term of the Executive's employment, the Executive will report solely and directly to the Chief Executive Officer of the
Company. 

    (b) FULL
TIME AND BEST EFFORTS. During the term of his employment with the Company, the Executive will devote substantially all of his business time and use his best
efforts to advance the business and welfare of the Company, except for sick leave, vacations and approved leaves of absence. During the term of the Executive's employment, he will not engage in any
other employment or business activities that would be directly harmful or detrimental to, or that may compete with, the business and affairs of the Company, or that would interfere with his duties
hereunder. However, the foregoing will not prevent the Executive from devoting a reasonable amount of time to personal investment, civic and charitable activities. 

    (c) DUTIES.
The Executive will perform such duties as are customarily associated with his position in a corporation of the size and nature of the Company, consistent
with the Bylaws of the Company and as reasonably required by the Board. 

    (d) COMPANY
POLICIES. The employment relationship between the parties will be governed by the general employment policies and practices of the Company, including but
not limited to those relating to protection of confidential information and assignment of inventions, except that when the terms of this Agreement differ from or are in conflict with the Company's
general employment policies or practices, this Agreement will control. 

    (e) TERM.
The term of this Agreement will begin as of May 8, 2001 and end on May 7, 2004 (such three-year period, the "Employment Term"),
unless extended and subject to the provisions for termination set forth herein. This Agreement shall automatically be extended for a period of one year following the Employment Term or any extension
thereof unless the Company shall have notified the Executive, in writing, of its election not to extend this Agreement not less than 120 nor more than 150 days prior to the expiration of this
Agreement. 

2.  COMPENSATION AND BENEFITS.  

    (a) SALARY.
The Executive will receive for services to be rendered hereunder a base salary at the annual rate of $240,000 payable at least as frequently as monthly and
subject to payroll deductions as may be necessary or customary in respect of the Company's salaried employees (the "Base Salary"). 

 

The Base Salary will be subject to review at least annually and to increase at such times and in such amounts as the Board may approve. 

    (b) PARTICIPATION
IN BENEFIT PLANS. During the term of the Executive's employment, the Executive will be entitled to participate in any insurance, hospitalization,
medical, dental, health, accident, disability or similar plan or program of the Company now existing or established hereafter to the extent that he is eligible under the general provisions thereof.
The Company may, in its sole discretion and from time to time, amend, eliminate or establish additional benefit programs as it deems appropriate. The Executive will also participate in all fringe
benefits offered by the Company to any of its senior executives. 

3.  INCENTIVE, BONUS AND OPTION PLANS.  

    During the Executive's employment, the Executive will be entitled to participate, on terms and conditions that are appropriate to his position and
responsibilities at the Company and are no less favorable than those applying to other senior executives of the Company, in any incentive, bonus, deferred compensation, retirement, stock option and
other compensation plans of the Company currently or hereafter made available by the Company to senior executives of the Company. 

4.  PERQUISITES, VACATIONS AND REIMBURSEMENT OF EXPENSES.  

    During the term of the Executive's employment: 

    (a) The
Company will furnish the Executive with, and the Executive will be allowed full use of, office facilities, automobiles, secretarial and clerical assistance and
other Company property and services commensurate with his position and of at least comparable quality, nature and extent to those made available to other senior executives of the Company from time to
time; 

    (b) The
Executive will be allowed vacations and leaves of absence with pay on a basis no less favorable than that applying to other senior executives of the Company; 

    (c) The
Company will reimburse the Executive for all monies which he has expended for purposes of the Company's business, such reimbursement to be effected in
accordance with Company reimbursement policies and procedures from time to time in effect. 

5.  TERMINATION OF EMPLOYMENT.  

    (a) DEFINITIONS.
The following definitions will apply to Sections 5 and 6 as applicable: 

    (i)  CAUSE.
The term "Cause" means: (A) conviction of a felony involving moral turpitude, or (B) willful gross neglect or willful gross misconduct in
carrying out Executive's duties under this Agreement, resulting in material economic harm to the Company, unless Executive believed in good faith that such conduct was in, or not contrary to, the best
interests of the Company. 

    (ii) DISABILITY.
The term "Disability" means the inability of the Executive due to illness (mental or physical), accident, or otherwise, to perform his duties for any
period of 180 consecutive days, as determined by an independent physician selected by the Company and reasonably acceptable to the Executive or his legal representative. Any return to work from a
period of disability must be authorized by the Executive's physician. 

    (iii) GOOD
REASON. The term "Good Reason" means: (A) a material breach of this Agreement by the Company; (B) without the Executive's prior written
consent, assignment to the Executive of duties materially inconsistent in any respect with his position or any other action by the Company that results in a material diminution in the Executive's
position, authority, duties or responsibilities, it being expressly understood that a change in the Executive's reporting responsibility so that he does not report directly and solely to the Board
will constitute "Good 

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Reason"; (C) any transaction in which the Company becomes a subsidiary of another corporation or which is described in clause (iii) or (iv) of the definition of "Change in
Control" in Section 6(a) below; (D) reduction, without the Executive's prior written consent, of the Executive's Base Salary, or his bonus or other cash incentive compensation
opportunity, for any reason other than in connection with the termination of his employment or in connection with, and proportionate to, a Company-wide pay reduction; (E) any
material reduction of fringe benefits provided to the Executive for any reason other than in connection with the termination of the Executive's employment or in connection with any change to the
Company's benefit programs applicable to all Company employees generally made in the normal course of business; (F) assignment of the Executive, without his prior written consent, to a Company
office located more than 20 miles from the Executive's current office location; (G) election by the Company not to extend the term of this Agreement in accordance with Section 1(e)
hereof; or (H) the Company's failure to obtain an agreement from any successor or assign of the Company to assume and to agree to perform this Agreement. A change in the formula, methodology or
factors
considered in determining incentive cash incentive compensation shall not by itself constitute a reduction of the Executive's incentive compensation opportunity for purposes of clause (D)
above. 

    (iv) NOTICE
OF TERMINATION. The term "Notice of Termination" means a notice which indicates the specific termination provision in this Agreement relied upon and sets
forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated. Any purported termination of employment by the Company
or by the Executive must be communicated by written Notice of Termination to the other party hereto in accordance with Section 11(a) hereof. With respect to any termination of employment by the
Executive for Good Reason, the Executive will have 120 days following the occurrence of any event described in Section 5(a)(iii) to provide the Company with Notice of Termination,
and may not do so thereafter. 

    (v) SEVERANCE
TERM. The term "Severance Term" means the remaining period of the Employment Term as of a Termination Date or one full year, whichever is longer. 

    (vi) TERMINATION
DATE. The term "Termination Date" means: (i) if the Executive terminates his employment for Good Reason, the date that is 60 days after
Notice of Termination is given and (ii) if the Executive's employment is terminated by the Company other than for Cause, death or Disability, the date that is 30 days after Notice of
Termination is given. 

    (b) TERMINATION
BY THE COMPANY FOR CAUSE. The Board may terminate the Executive's employment with the Company at any time for Cause, immediately upon notice to the
Executive of the circumstances leading to such termination for Cause. In the event that the Executive's employment is terminated for Cause, the Executive will receive payment for all accrued salary
and vacation time through the Termination Date, which in this event will be the date upon which Notice of Termination is given. The Company will have no further obligation to pay severance of any kind
whether under this Agreement or otherwise nor to make any payment in lieu of notice. 

    (c) TERMINATION
BY THE EXECUTIVE FOR GOOD REASON. The Executive will have the right, at his election, to terminate his employment with the Company by written notice to
the Company to that effect for a period of 120 days following any occurrence constituting Good Reason; PROVIDED, HOWEVER, that termination for Good Reason will not be effective until the
Executive gives written notice specifying the occurrence constituting Good Reason and, PROVIDED that if such occurrence is curable, the Company fails to correct it within 10 days after the
receipt of the applicable notice. 

    (d) TERMINATION
BY THE COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE FOR GOOD REASON. In the event that the Executive's employment is terminated by the Company (other than
pursuant to Section 5(b)) or such employment is terminated by the Executive for Good 

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Reason (and in either such case the Executive is not entitled to benefits pursuant to Section 6(b)), the Company agrees to pay or provide to the Executive as termination compensation the
following: 

    (i)  A
single lump sum payment, payable in cash within five days of the Termination Date, equal to the sum of: 

    (A) the
accrued portion of any Base Salary and vacation through the Termination Date; plus 

    (B) an
amount representing bonus and all other cash incentive compensation for such period determined by multiplying: 

    (I) the
average of such bonus and other cash incentive compensation accrued for each of the three preceding full years, by 

    (II) the
fraction of the year of termination elapsed prior to the Termination Date; plus 

    (C) the
present value of: 

    (I) the
Executive's Base Salary in effect upon the Termination Date for the Severance Term, plus 

    (II) incentive
compensation for the Severance Term, based upon the Executive's average bonus and all other cash incentive compensation accrued for each of the three
preceding full years, 

less
standard withholdings for tax and social security purposes. For the purpose of determining present value, future payments will be discounted at an interest rate equal to the
short-term borrowing rate of the Company. 

    (ii) All
stock options, restricted stock or other equity awards then held by Employee will automatically be deemed amended, without further action on the part of the
Company or the Executive, so that (A) all options will be fully vested and not subject to forfeiture or expiration by reason of the Executive's termination, and will be subject to exercise in
full for one year from the Termination Date;
and (B) all restricted stock or other equity awards will be fully vested and all restrictions thereon will lapse. 

    (iii) Continuation
of benefits as follows: 

    (A) All
benefits provided under Section 2(b) will continue for the remaining period of the Severance Term. Notwithstanding the foregoing, to the extent any such
benefit cannot be provided through the applicable plan of the Company, the Company will provide such benefit outside of the plan or will provide a cash lump sum payment equal to the value of such
additional benefit. 

    (B) The
Company shall meet its obligation under (A) above, in connection with its group medical/dental plan for the period ending on the earlier to occur of:
(i) the end of the Severance Term or (ii) the date the Executive ceases to be eligible for continuation coverage under the Company's group medical/dental plan pursuant to the provisions
of COBRA, by providing the continuation of such coverage at Company expense, contingent upon the Executive's timely election of such coverage under COBRA. 

    (C) To
the extent required to avoid adverse tax consequences under Section 105(h) of the Internal Revenue Code of 1986 (the "Code"), the Company's payments under
this Section 5(d)(iii) will be recognized by the Executive in his taxable income and the Executive will receive, in addition, a "gross-up" payment covering the tax liability
attributable to such recognized income consistent with principles of paragraph 6(c)(v), below. 

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    (iv) Additional
credited service for retirement benefits under all retirement plans, including supplemental retirement plans (if any), equivalent to the Severance Term. 

    (e) TERMINATION
BY REASON OF DEATH OR DISABILITY. This Agreement will terminate upon the death of the Executive; and the Executive's employment hereunder may be
terminated by the Executive or the Company, at either of their election, upon the Executive's Disability. In the event the Executive's employment is terminated as the result of death or Disability,
except as set forth in the following sentence, the Executive, or his estate or legal representative, will be entitled to receive the accrued portion of any Base Salary and vacation through the
Termination Date, plus any unreimbursed business expenses, plus for the remainder of the Employment Term: (i) periodically not less frequently than monthly in accordance with the Company's
normal payroll practice, payments at the rate of his then Base Salary; and (ii) at the normal and customary time for payment of bonuses and all other cash incentive compensation, amounts equal
to the average of such payments accrued for each of the three full preceding years; in each case subject to any applicable withholdings for tax and social security
purposes. The payments provided in this Section 5(e) will be reduced by the amount of any payments made to the Executive pursuant to any disability or life insurance policy provided by the
Company for this purpose, which insurance policy is in addition to any other insurance benefits provided to the Executive as a benefit hereunder. 

6.  BENEFITS UPON CHANGE OF CONTROL.  

    (a) DEFINITIONS.
In addition to the definitions provided in Section 5, the following definition will apply to this Section 6: 

    CHANGE
IN CONTROL. The term "Change in Control" means the occurrence of any of the following events after the date of this Agreement: (i) the acquisition by any individual,
entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (a "Person"), of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors ("Voting Securities"); PROVIDED, HOWEVER, that the following acquisitions will not constitute a Change in Control: (A) any acquisition by the Company,
(B) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (C) any acquisition by the
Executive (or a group including the Executive); (ii) a change in the composition of a majority of the Board within a three-year period, which change has not been approved by a
majority of the persons then surviving as Directors who also comprised the Board immediately prior to the commencement of such period; or (iii) the consummation of any reorganization, merger or
consolidation other than a reorganization, merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 60% of the combined voting power of the Voting Securities of the Company or such surviving entity
outstanding immediately after such reorganization, merger or consolidation; or (iv) the consummation of a plan of complete liquidation of the Company or of an agreement for the sale or
disposition by the Company (in one transaction or a series of transactions) of all or substantially all of the Company's assets. 

    (b) ELIGIBILITY
FOR BENEFITS. The Company agrees to pay to the Executive the benefits specified in Section 6(c) hereof if (i) there is a Change in Control
during the term of this Agreement and (ii) within the period commencing on the date of the Change in Control, or (if earlier) the date of any agreement by the Company to enter into the
transaction resulting in such Change in Control, and ending two years after the Change in Control (A) the Company terminates the employment of the Executive for any reason other than Cause,
death or Disability or (B) the Executive voluntarily terminates employment with the Company for Good Reason. A Change of Control will be deemed to 

5

 

have occurred during the term of this Agreement, for purposes of this paragraph 6(b), if an agreement is entered into during the term of this Agreement for a transaction resulting in a Change
of Control, notwithstanding that the Change of Control transaction is not completed until after the term of this Agreement. 

    (c) BENEFITS
UPON TERMINATION OF EMPLOYMENT. If the Executive is entitled to benefits pursuant to Section 6(b) hereof, in lieu of any payments and benefits
provided in Section 5 the Company agrees to pay or provide to the Executive as termination compensation the following: 

    (i)  A
single lump sum payment, payable in cash within five days of the Termination Date, equal to the sum of: 

    (A) the
accrued portion of any Base Salary and vacation through the Termination Date; plus 

    (B) an
amount representing bonus and all other cash incentive compensation for such period determined by multiplying: 

    (I) the
average of such bonus and other cash incentive compensation accrued for each of the three preceding full years, by 

    (II) the
fraction of the year of termination elapsed prior to the Termination Date; plus 

    (C) 299%
of the sum of: 

    (I) the
Executive's Base Salary in effect upon the Termination Date plus 

    (II) the
Executive's average bonus and all other cash incentive compensation accrued for each of the three preceding full years. 

    (ii) All
stock options, restricted stock or other equity awards then held by Employee will automatically be deemed amended, without further action on the part of the
Company or the Executive, so that
(A) all options will be fully vested and not subject to forfeiture or expiration by reason of the Executive's termination, and will be subject to exercise in full for the remainder of their
stated term; and (B) all restricted stock or other equity awards will be fully vested and all restrictions thereon will lapse. 

    (iii) Continuation
of benefits as follows: 

    (A) All
benefits provided under Section 2(b) will continue for the remaining period of the Severance Term. Notwithstanding the foregoing, to the extent any such
benefit cannot be provided through the applicable plan of the Company, the Company will provide such benefit outside of the plan or will provide a cash lump sum payment equal to the value of such
additional benefit. 

    (B) The
Company shall meet its obligation under (A), above, in connection with its group medical/dental plan for the period ending on the earlier to occur of:
(i) the end of the Severance Term or (ii) the date the Executive ceases to be eligible for continuation coverage under the Company's group medical/dental plan pursuant to the provisions
of COBRA, by providing the continuation of such coverage at Company expense, contingent upon the Executive's timely election of such coverage under COBRA. 

    (C) To
the extent required to avoid adverse tax consequences under Section 105(h) of the Internal Revenue Code of 1986 (the "Code"), the Company's payments under
this Section 6(c)(iii) will be recognized by the Executive in his taxable income and the Executive will receive, in addition, a "gross-up" payment covering the tax liability
attributable to such recognized income consistent with principles of paragraph 6(c)(v), below. 

6

 

    (iv) Additional
credited service for retirement benefits under all retirement plans, including supplemental retirement plans (if any), equivalent to the remaining
period of the Employment Term. 

    (v) In
the event that any amount or benefit that may be paid or otherwise provided to the Executive by the Company or any affiliated company, whether pursuant to this
Agreement or otherwise (collectively, "Covered Payments"), is or may become subject to the tax imposed under Code Section 4999 ("Excise Tax"), the Company will pay to the Executive a
"Reimbursement Amount" equal to the total of: (A) any Excise Tax on the Covered Payments, plus (B) any Federal, state, and local income taxes, employment and excise taxes (including the
Excise Tax) on the Reimbursement Amount (but without reduction for any Federal, state, or local income or employment taxes on such Covered Payments), plus (C) the product of any deductions
disallowed for Federal, state or local income tax purposes because of the inclusion of the Reimbursement Amount in the Executive's adjusted gross income multiplied by the
highest applicable marginal rate of Federal, state, and local income taxation, respectively, for the calendar year in which the Reimbursement Amount is to be paid. For purposes of this
Section 6(c)(v), the Executive will be deemed to pay (Y) Federal income taxes at the highest applicable marginal rate of Federal income taxation for the calendar year in which the
Reimbursement Amount is to be paid and (Z) any applicable state and local income taxes at the highest applicable marginal rate of taxation for the calendar year in which such Reimbursement
Amount is to be paid, net of the maximum reduction in Federal income taxes which could be obtained from the deduction of such state or local taxes if paid in such year (determined without regard to
limitations on deductions based upon the amount of the Executive's adjusted gross income). 

    (d) CHANGES
TO BENEFITS. In the event the Board desires to approve a merger to be accounted for as a "pooling of interests," the Executive will, in good faith,
negotiate with the Company concerning such changes in the foregoing payments and benefits (if any) as may be necessary in order to achieve such accounting treatment. The parties acknowledge that the
Executive's obligation to negotiate in good faith hereunder will not require him to accept a material reduction in the net after tax benefits provided to him hereunder or in any alternative agreement
or arrangement. 

7.  NO OBLIGATION TO MITIGATE DAMAGES.  

    In the event of a termination of the Executive's employment for any reason, the Executive will not be required to seek other employment or to mitigate any of
the Company's obligations under this Agreement, and no amount payable hereunder will be reduced (a) by any claim the Company may assert against the Executive or (b) by any compensation
or benefits earned by the Executive as a result of employment by another employer, self-employment or from any other source after such termination of employment with the Company; PROVIDED,
HOWEVER, that the benefits provided pursuant to Sections 5(d)(iii) and 6(c)(iii)(A) will terminate at such time as the Executive becomes eligible for comparable benefits as the result of
employment by another Person. 

8.  PROPRIETARY INFORMATION OBLIGATIONS.  

    During the Executive's employment pursuant to this Agreement, the Executive will have access to and become acquainted with confidential and proprietary
information of the Company and its subsidiaries, including, but not limited to, information or plans regarding customer relationships, personnel, or sales, marketing, and financial operations and
methods; trade secrets; formulas; devices; secret inventions; processes; and other compilations of information, records, and specifications (collectively, "Proprietary Information"). The Executive
will not disclose any such Proprietary Information directly or indirectly, or use it in any way, either during the Executive's employment pursuant to this Agreement or at any time thereafter, except
as required in the course of his employment for the Company or as authorized in writing by the Company. All files, records, 

7

 

documents, computer-recorded information, drawings, specifications, equipment and similar items relating to the business of the Company or its subsidiaries, whether prepared by the Executive or
otherwise coming into his possession, will remain the exclusive property of the Company or its subsidiaries, as the case may be, and may not be removed from the premises of the Company under any
circumstances whatsoever without the prior written consent of the Company, except when (and only for the period) necessary to carry out the Executive's duties hereunder, and if removed must be
immediately returned to the Company upon any termination of his employment; PROVIDED, HOWEVER, that the Executive may retain copies of documents reasonably related to his interest as a shareholder and
any documents that were personally owned, which copies and the information contained therein the Executive agrees not to use for any business purpose. Notwithstanding the foregoing, Proprietary
Information will not include (a) information which is or becomes generally public knowledge or public except through disclosure by the Executive in violation of this Agreement and
(b) information that may be required to be disclosed by applicable law. 

9.  NON-INTERFERENCE.  

    While employed by the Company and for a period of one year after termination of this Agreement, the Executive agrees not to interfere with the business of the
Company or any subsidiary of the Company by directly or indirectly soliciting, attempting to solicit, or otherwise inducing, any employee of the Company or any subsidiary of the Company to terminate
his or her employment in order to become an employee, consultant or independent contractor to or for any other employer. 

10. NON-COMPETITION.  

    The Executive agrees that, during the Employment Term, he will not, without the prior consent of the Company, directly or indirectly, have an interest in, be
employed by, or be connected with, as an employee, consultant, officer, director, partner, stockholder or joint venturer, in any person or entity owning, managing, controlling, operating or otherwise
participating or assisting in any business which is in competition with the business of the Company, in any location, unless the Executive's employment is terminated by the Company without Cause or by
the Executive for Good Reason; PROVIDED, HOWEVER, that the foregoing will not prevent the Executive from being a stockholder of less than 1% of the issued and outstanding securities of any class of a
corporation listed on a national securities exchange or designated as national market system securities on an interdealer quotation system by the National Association of Securities
Dealers, Inc. 

11. MISCELLANEOUS.  

    (a) NOTICES.
Any notices provided hereunder must be in writing and will be deemed effective upon the earlier of two days following personal delivery (including personal
delivery by telecopy or telex), or the fourth day after mailing by first class mail to the recipient at the address indicated below: 

To
the Company: 

K2 Inc.

4900 South Eastern Avenue

Los Angeles, CA 90040

Attn: Secretary

Telecopier No: (213) 724-0667 

With
a copy to: 

Gibson,
Dunn & Crutcher LLP

333 South Grand Avenue

Los Angeles, California 90071-3197

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Attention: Andrew E. Bogen, Esq.

Telecopier: (213) 229-7520

To
the Executive: 

JOHN
J. RANGEL

K2 Inc.

4900 South Eastern Avenue

Los Angeles, CA 90040 

or
to such other address or to the attention of such other person as the recipient party will have specified by prior written notice to the sending party. 

    (b) SEVERABILITY.
Any provision of this Agreement which is deemed invalid, illegal or unenforceable in any jurisdiction will, as to that jurisdiction and subject to
this Section be ineffective to the extent of such invalidity, illegality or unenforceability, without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any
other provisions of this Agreement invalid, illegal, or unenforceable in any other jurisdiction. If any covenant should be deemed invalid, illegal or unenforceable because its scope is considered
excessive, such covenant will be modified so that the scope of the covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable. 

    (c) ENTIRE
AGREEMENT. This document constitutes the final, complete, and exclusive embodiment of the entire agreement and understanding between the parties related to
the subject matter hereof and supersedes and preempts any prior or contemporaneous understandings, agreements, or representations by or between the parties, written or oral. 

    (d) COUNTERPARTS.
This Agreement may be executed on separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken
together will constitute one and the same agreement. 

    (e) SUCCESSORS
AND ASSIGNS. This Agreement is intended to bind and inure to the benefit of and be enforceable by the Executive and the Company, and their respective
successors and assigns, except that the Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder without the prior written consent of the Company. 

    (f)  AMENDMENTS.
No amendments or other modifications to this Agreement may be made except by a writing signed by both parties. No amendment or waiver of this Agreement
requires the consent of any individual, partnership, corporation or other entity not a party to this Agreement. Nothing in this Agreement, express or implied, is intended to confer upon any third
person any rights or remedies under or by reason of this Agreement. 

    (g) CHOICE
OF LAW. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the laws of the State of California
without giving effect to principles of conflicts of law. 

12. ARBITRATION.  

    (a) Any
disputes or claims arising out of or concerning the Executive's employment or termination by the Company, whether arising under theories of liability or damages
based upon contract, tort or
statute, will be determined exclusively by arbitration before a single arbitrator in accordance with the employment arbitration rules of the American Arbitration Association, except as modified by
this Agreement. The arbitrator's decision will be final and binding on both parties. Judgment upon the award rendered by the arbitrator may be entered in any court of competent jurisdiction. In
recognition of the fact that resolution of any disputes or claims in the courts is rarely timely or cost effective for either party, the Company and the Executive enter this mutual agreement to 

9

 

arbitrate in order to gain the benefits of a speedy, impartial and cost-effective dispute resolution procedure. 

    (b) Any
arbitration will be held in the Executive's place of employment with the Company. The arbitrator must be an attorney with substantial experience in employment
matters, selected by the parties alternately striking names from a list of five such persons provided by the American Arbitration Association (AAA) office located nearest to the place of employment,
following a request by the party seeking arbitration for a list of five such attorneys with substantial professional experience in employment matters. If either party fails to strike names from the
list, the arbitrator will be selected from the list by the other party. 

    (c) Each
party will have the right to take the deposition of one individual and any expert witness designated by the other party. Each party will also have the right to
propound requests for production of documents to any party and the right to subpoena documents and witnesses for the arbitration. Additional discovery may be made only where the arbitrator selected so
orders upon a showing of substantial need. The arbitrator will have the authority to entertain a motion to dismiss and/or a motion for summary judgment by any party and will apply the standards
governing such motions under the Federal Rules of Civil Procedure. 

    (d) The
Company and the Executive agree that they will attempt, and they intend that they and the arbitrator should use their best efforts in that attempt, to conclude
the arbitration proceeding and have a final decision from the arbitrator within 120 days from the date of selection of the arbitrator; PROVIDED, HOWEVER, that the arbitrator will be entitled to
extend such 120-day period for one additional 120-day period. The arbitrator will deliver a written award with respect to the dispute to each of the parties, who must promptly
act in accordance therewith. 

    (e) The
Company will pay any and all reasonable fees and expenses incurred by the Executive in seeking to obtain or enforce any rights or benefits provided by this
Agreement, including all reasonable attorneys' and experts' fees and expenses, accountants' fees and expenses, and court costs (if any) that may be incurred by the Executive in pursuing a claim for
payment of compensation or benefits or other right or entitlement under this Agreement, PROVIDED that the Executive is successful as to at least part of the disputed claim by reason of litigation,
arbitration or settlement. 

    (f)  In
a contractual claim under this Agreement, the arbitrator must act in accordance with the terms and provisions of this Agreement and applicable legal principles
and will have no authority to add, delete or modify any term or provision of this Agreement. 

    IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of the date it is last executed below by either party. 

	

 	
 	

/s/ JOHN J. RANGEL   
 John J. Rangel
	

 	
 	

K2 INC.
	

 	
 	

By:	
 	

/s/ RICHARD M. RODSTEIN   
 Richard M. Rodstein
 President and Chief Executive Officer

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EMPLOYMENT AGREEMENT

W I T N E S S E T H

A G R E E M E N T<PAGE>

                             WORLDPAGES.COM, INC.
                        6801 GAYLORD PARKWAY, SUITE 300
                             DALLAS, TEXAS  75034

                                                                  April 26, 2001

Richard O'Neal
2400 Lakeview Drive
Amarillo, Texas 79109

Dear Mr. O'Neal:

     Reference is made to the Employment Agreement dated as of February 18,
1998 (the "Employment Agreement"), between you and Great Western Directories,
Inc., a Texas corporation ("Great Western").  Great Western is a wholly-owned
subsidiary of WorldPages.com, Inc. (the "Company").  This letter agreement
supersedes the Employment Agreement and the Employment Agreement shall
terminate and be of no further force and effect as of the date hereof.
Accordingly, we are pleased to provide the terms for your continued service
as Chairman of the Board of Directors (the "Board"), on the terms set forth
below.  This letter agreement will become effective on the date hereof (the
"Effective Date").

POSITION:                   You will remain as Chairman of the Board and the
                            Company will use its best efforts to cause you
                            to be re-elected as a director at any meeting of
                            the shareholders during the Term of this
                            Agreement. You shall devote such time,
                            attention, and energy to the business of the
                            Company as are reasonably necessary for you to
                            perform your duties as Chairman of the Board. In
                            no event shall you take any action inconsistent
                            with your relationship and responsibilities as a
                            Company director, or which is intended, or may
                            be reasonably expected, to harm the reputation,
                            business, prospects, or operations of the
                            Company. As of the Effective Date, you shall
                            resign from all positions with the Company other
                            than Chairman of the Board and a member of the
                            Board, including your position as Chief
                            Executive Officer of the Company.

TERM:                       Effective Date through February 18, 2002 (the
                            "Term").

COMPENSATION:               $80,000 per year, payable in equal bi-weekly
                            installments, subject only to such payroll and
                            withholding deductions as may be required by law
                            and other deductions applied generally to other
                            directors of the Company for any director
                            benefit

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                            plans.

BENEFITS:                   You shall receive the benefits that are awarded
                            under the Company's benefit plans during the
                            Term.

COMPLIANCE WITH COMPANY     Reference is made to the Amended and Restated Loan
AGREEMENTS                  Agreement, dated March 30, 2000, among the Company
                            and the financial institutions whose names
                            appear as lenders on the signature pages thereof
                            (the "Bank Agreement"). Reference is also made
                            to certain 5% Convertible Debentures due
                            February 23, 2006 issued by the Company (the
                            "Debentures" and together with the Bank
                            Agreement, the "Company Agreements"). In order
                            not to trigger (i) a "Change of Control", as
                            such term is defined in the Bank Agreement, (ii)
                            a "Change in Control Transaction", as such term
                            is defined in the Debentures or (iii) any other
                            default under applicable provisions of the
                            Company Agreements, you hereby agree that during
                            the Term you shall not (A) resign from the Board
                            or (B) sell more than 30% of the capital stock
                            of the Company that you hold as the "beneficial
                            owner" (as defined in Rule 13d-3 promulgated
                            under the Securities Exchange Act of 1934, as
                            amended), directly or indirectly, as of the
                            closing dates of the Company Agreements. Your
                            agreements under this paragraph shall be
                            terminated automatically to the extent that (i)
                            a "Change of Control", as such term is defined
                            in the Bank Agreement, (ii) a "Change in Control
                            Transaction", as such term is defined in the
                            Debentures and (iii) all other applicable
                            provisions of the Company Agreements, are
                            amended or terminated such that it would not
                            result in a "Change of Control" or "Change in
                            Control Transaction", as the case may be, or
                            default under the Company Agreements if you
                            resign as Chairman of the Board or sell shares
                            of the capital stock of the Company.

CONFIDENTIAL INFORMATION,   You recognize and acknowledge that you have had and
NON-COMPETITION AND NON-    will continue to have access to certain
SOLICITATION:               confidential information and trade secrets of the
                            Company ("Confidential Information"). Such
                            Confidential Information includes, but is not
                            limited to: customer names; contracts; products
                            purchased by customers; production capabilities
                            and processes; customer account and credit data;
                            referral sources; computer programs and
                            software; information relating to confidential
                            or secret designs, processes, formulae, plans,
                            devices, or materials of the Company; business
                            and marketing plans, confidential information
                            and trade secrets relating to the distribution
                            and marketing of the Company's products and
                            services; patents

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                            pending; confidential characteristics of the
                            Company's products and services; customer
                            comments; troubleshooting requirements; product
                            and service development; market development;
                            manuals written by the Company; management,
                            accounting, and reporting systems, procedures,
                            and  programs; contracts, leases, marketing
                            agreements, sales, executive compensation
                            information, plans, and programs; marketing and
                            financial analysis, plans, research, programs,
                            and related information and data; forms,
                            agreements, and legal documents; regulatory and
                            supervisory reports; correspondence; statements;
                            corporate books and records; and other similar
                            information.

                            You acknowledge and agree that this Confidential
                            Information constitutes valuable, special, and
                            unique property of the Company.

                            You will not, at any time during or after the
                            Term or your affiliation with Company, disclose
                            any Confidential Information to any person,
                            firm, partnership, association, company,
                            corporation or other entity (collectively, a
                            "Person") for any reason or purpose.

                            The foregoing restrictions shall not apply to
                            (a) any information in your possession before
                            its disclosure to you by the Company; or (b)
                            information that is or shall lawfully be
                            published or become part of the public domain
                            through no act or omission on your part. The
                            Confidential Information disclosed to you under
                            this letter agreement is not within the
                            foregoing exceptions merely because such
                            information is embraced by more general
                            information in the public domain or in your
                            possession, or merely because portions thereof
                            are in the public domain or in your possession.

                            You hereby further agree that during the Term,
                            you will not, for yourself, or on behalf of any
                            other Person, engage in the sale or marketing of
                            yellow page publishing services or
                            telecommunication services in any city in which
                            the Company provides such services during the
                            Term; provided, however, that the foregoing
                            restrictions shall not apply to the provision of
                            Internet infrastructure services (including,
                            without limitation, online directories, content,
                            e-commerce, advertising and web site
                            production).

                            You hereby further agree that during the Term
                            and for a period of one (1) year thereafter, you
                            will not, for yourself, or on behalf of any
                            other Person, directly or indirectly induce or

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                            attempt to influence any executive, officer,
                            director, consultant, agent, vendor, customer or
                            other Person related to the Company to terminate
                            his, her or its employment or association in any
                            manner whatsoever with the Company; provided,
                            however, that the foregoing restrictions shall
                            not apply to any such Person who terminates his,
                            her or its association with the Company on his,
                            her or its own initiative without any direct or
                            indirect solicitation by or encouragement from
                            you.

                            You understand and hereby acknowledge that, due
                            to the unique nature of the products and
                            services provided by the Company and the need
                            for sales personnel to have a relatively high
                            degree of technical knowledge concerning these
                            products and services, your association with the
                            Company will give you distinct and substantial
                            advantages for potential sales and management
                            activities concerning such products and
                            services. You further understand and hereby
                            acknowledge that because of the definition of
                            products and services covered by this letter
                            agreement, the highly specialized nature of
                            those products and services, the limited size
                            and number of business entities in the business
                            of developing and/or selling those products and
                            services, and the much more numerous
                            opportunities for you to work in your trade with
                            respect to products and services not covered by
                            this letter agreement, the limitations as to
                            time and geographic area contained in the two
                            immediately preceding paragraphs hereof are
                            reasonable and are not unduly onerous on you.
                            You therefore hereby agree that the limitations
                            as to time, geographic area, and scope of
                            activity contained in the two immediately
                            preceding paragraphs hereof do not impose a
                            greater restraint than is necessary to protect
                            the Confidential Information, goodwill, and
                            other business interests of the Company. You
                            also hereby agree that in light of the facts
                            acknowledged above, the substantial investment
                            of the Company in acquiring and developing its
                            business and providing special training to you,
                            and the certain and substantial harm that the
                            Company would suffer if you were to engage in
                            any of the activities described in the two
                            immediately preceding paragraphs hereof, the
                            Company's need for the protection afforded by
                            the two immediately preceding paragraphs hereof
                            is greater than any hardship you might
                            experience by complying with their terms. You
                            also hereby agree that, if any provision of the
                            covenants set forth in the two immediately
                            preceding paragraphs hereof is found to be
                            invalid in part or whole, the Company may elect,
                            but shall not be required, to have such
                            provision reformed, whether as to time,
                            geographic area, scope of activity, or
                            otherwise, as and to the

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                            extent required for its validity under
                            applicable law, and, as so reformed, such
                            provisions shall be enforceable.

                            You hereby acknowledge that a violation or
                            attempted violation on your part of any
                            provision under the headings "Compliance with
                            Company Agreements" and "Confidential
                            Information, Non-Competition and
                            Non-Solicitation" hereof will cause irreparable
                            damage to the Company. Accordingly, in the event
                            of your breach or threatened breach of any of
                            the provisions under the heading "Confidential
                            Information, Non-Competition and Non-
                            Solicitation" hereof, you hereby agree that the
                            Company shall be entitled as a matter of right
                            to an injunction, out of any court of competent
                            jurisdiction, restraining any violation or
                            further violation of such agreements by you or
                            your agents, without showing any evidence of
                            actual monetary loss resulting from such breach,
                            including, but not limited to, restraining you
                            from using or disclosing, in whole or in part,
                            such Confidential Information or trade secrets;
                            rendering any services to any Person to whom any
                            of such information may have been disclosed or
                            is threatened to be disclosed; and/or violating
                            the non-competition or non-solicitation
                            provisions. Nothing herein shall be construed as
                            prohibiting the Company from pursuing any other
                            remedies available to it for such breach or
                            threatened breach, including the recovery of
                            damages and attorneys' fees from you.

TERMINATION:                This letter agreement shall terminate on the
                            occurrence of the earliest of: (i) the end of
                            the Term, (ii) your death or disability, (iii) a
                            Change of Control Event (as defined below), or
                            (iv) Termination for Cause (as defined below).
                            You will be entitled to that part of the
                            compensation and benefits described herein
                            through the day of termination of this letter
                            agreement. Termination of this letter agreement
                            shall not relieve you of any continuing
                            obligations which by the terms hereof expressly
                            survive such termination including, without
                            limitation, the confidentiality and
                            non-solicitation restrictions under the heading
                            "Confidential Information, Non-Competition and
                            Non-Solicitation" hereof and the return of
                            property restrictions under the heading "Return
                            of Property" hereof. For purposes of this
                            paragraph, a "Change of Control Event" shall
                            mean the occurrence of any of the following: i)
                            a merger, consolidation, reorganization, sale of
                            stock or other transaction involving the Company
                            or its stockholders (whether as a single
                            transaction or a series of related transactions,
                            a "Transaction") in which the holders of a
                            majority of the outstanding shares of the
                            Company's capital stock immediately prior to
                            such

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                            Transaction, will not be the holders of a
                            majority of the outstanding shares of the
                            Company's capital stock, or of the entity or
                            entities surviving the Company, immediately
                            after such Transaction, or (ii) a sale of all,
                            or substantially all, of the Company's assets.
                            For purposes of this paragraph, "Termination for
                            Cause" shall mean the occurrence of any of the
                            following (i) your violation  in any material
                            respect of any provision of this letter
                            agreement, (ii) your commission of acts of fraud
                            or dishonesty against the Company, (iii) your
                            conviction of a crime other than a routine
                            traffic violation or (iv) your violation of any
                            Company policies as outlined in any Company
                            policy handbook. The Company shall deliver a
                            letter to you specifying the basis for a
                            Termination for Cause.

RETURN OF PROPERTY:         All data, drawings, documents, contracts,
                            computerized data, information printouts, and
                            tapes, tape recordings, documents, data,
                            accounting records, personnel files, computer
                            terminals, equipment, and other records and
                            written material prepared or compiled by you or
                            furnished to you during your association with
                            the Company shall be the sole and exclusive
                            property of the Company, and none of such data,
                            drawings or other records and written material,
                            or copies thereof, shall be retained by you upon
                            termination of this letter agreement. This
                            Company property shall not be removed from
                            Company premises without the Company's prior
                            written consent.

                            Upon termination of this letter agreement or
                            whenever requested by the Company, you
                            immediately shall deliver to the Company all of
                            the Company property or any of the Company's
                            documents in your possession or under your
                            control, including, but not limited to, all
                            documents or data, Confidential Information,
                            accounting records, computer terminals, data,
                            discs, printouts and tapes and accounting
                            machines provided by the Company. No copies of
                            any such data shall be retained by you.

NOTICES:                    Any notice required or permitted to be given under
                            this letter agreement shall be in writing and
                            addressed to you at 2400 Lakeview Drive,
                            Amarillo, Texas 79109, and to the Company, at
                            6801 Gaylord Parkway, Suite 300, Dallas, Texas
                            75034, Attention: Michael A. Pruss, or to such
                            other address as either party shall designate by
                            written notice to the other. Notices may be sent
                            by messenger or by registered or certified mail,
                            postage prepaid, addressed to the party or parties
                            to be notified, with return receipt requested.
                            Notices sent by messenger shall be deemed
                            received upon their actual receipt of the party
                            to whom they are directed. Notices sent by
                            registered or certified

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                            mail shall be deemed received on the third day
                            following their deposit with the United States
                            Postal Service.

MISCELLANEOUS:              The rights and obligations of the Company under
                            this letter agreement shall inure to the benefit
                            of and shall be binding upon the successors and
                            assigns of the Company. This letter agreement
                            shall be binding upon you and your agents,
                            heirs, executors, administrators and legal
                            representatives. Your rights and obligations
                            hereunder shall not be assignable by you.

                            This letter agreement shall be governed by and
                            construed in accordance with the laws of the
                            State of Texas, without giving effect to the
                            choice of law provisions thereof.

                            This letter agreement may be executed in
                            multiple counterparts, each of which shall be
                            deemed an original and all of which shall
                            constitute one instrument.

                            This letter agreement contains the entire
                            agreement of the parties pertaining to the
                            subject matter hereof and supersedes all prior
                            agreements, understandings, negotiations and
                            discussions, whether oral or written, and there
                            are no other warranties, representations,
                            covenants or agreements among the Company and
                            you in connection with the subject matter hereof.

                            The waiver by the Company of a breach of any
                            provision of this letter agreement by you shall
                            not operate or be construed as a waiver by the
                            Company of any subsequent breach by you.

                            If a court of competent jurisdiction shall
                            adjudge to be invalid any clause, sentence,
                            subparagraph, paragraph or section of this
                            letter agreement, such judgment or decree shall
                            not affect, impair, invalidate, or nullify the
                            remainder of this letter agreement, but the
                            effect thereof shall be confined to the clause,
                            sentence, subparagraph, paragraph, or section so
                            adjudged to be invalid.

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     Please indicate your acceptance of the terms of this letter agreement by
your signature below. Once signed by both parties, this letter agreement
shall be binding on both parties.

                                       Sincerely,

                                       WorldPages.com, Inc.

                                       By:  /s/ Michael A. Pruss
                                            --------------------
                                            Name:  Michael A. Pruss
                                            Title: Vice President and Chief
                                                   Financial Officer

Accepted and Agreed to
as of the date set forth above:

/s/ Richard O'Neal
------------------
Richard O'Neal

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