1
EXHIBIT 10.67
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), effective this 1st day of
May, 1999 (the "Effective Date"), is entered into by and between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
("Executive") and Oakley, Inc., a Washington corporation ("Company").
WHEREAS, Executive is currently serving as a member of the Board of
Directors of the Company (the "Board");
WHEREAS, the Company wishes to employ Executive;
WHEREAS, Executive is willing to commit himself to serve the Company on
the terms and conditions herein provided; and
WHEREAS, in order to effect the foregoing, the Company and Executive
wish to enter into this Agreement on the terms and conditions herein provided.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Employment. The Company does hereby employ, engage and hire
Executive as Chief Executive Officer of the Company, and Executive does hereby
accept and agree to such hiring, engagement and employment. In such capacity,
Executive shall have such executive and managerial powers and duties with
respect to the Company as may be from time to time reasonably assigned to him by
the Board. Except for sick leave, reasonable vacations and excused leaves of
absence, Executive shall, throughout his period of employment, devote
substantially all his working time, attention, knowledge and skills, diligently
and to the best of his ability, to the performance of such duties in furtherance
of the business of the Company.
2. Term of Agreement. The term ("Term") of this Agreement shall
commence on the Effective Date and shall continue for a period of three (3)
years; provided, however, that on each anniversary of the Effective Date, at
which time the remaining term of the Agreement is two years, the Term of the
Agreement shall automatically be extended for one additional year unless, not
later than sixty (60) days prior to any such anniversary, either party shall
have given written notice to the other that it does not wish to extend the Term
of the Agreement. Notwithstanding anything to the contrary, the Company and
Executive agree that Executive's first day of employment with the Company shall
be Monday, May 3, 1999.
2
3. Compensation.
(a) Signing Bonus. The Company shall pay to Executive a signing
bonus in the amount of $250,000, payable on the first business day following the
Effective Date, in accordance with the Company's normal payroll practices and
procedures.
(b) Base Salary. During the Term of the Agreement, Executive shall
be paid an annual base salary (the "Base Salary") in the amounts set forth
below, which amounts shall be paid in accordance with the Company's normal
payroll practices and procedures:
(i) First Year Base Salary. With respect to the period
commencing on the Effective Date and ending on the day prior to the first
anniversary of the Effective Date, Executive shall be paid an annual Base Salary
at the rate of $350,000 (the "First Year Base Salary").
(ii) Second Year Base Salary. With respect to the period
commencing on the first anniversary of the Effective Date and ending on the day
prior to the second anniversary of the Effective Date, Executive shall be paid
an annual Base Salary at the rate of (i) if the Company meets the 1999
Performance Bonus Target (as defined in Section 3(c)(i)), the First Year Base
Salary plus $25,000, and (ii) if the Company does not meet the 1999 Performance
Bonus Target, his First Year Base Salary (the "Second Year Base Salary").
(iii) Third Year Base Salary. With respect to the period
commencing on the second anniversary of the Effective Date and ending on the day
prior to the third anniversary of the Effective Date, Executive shall be paid an
annual Base Salary at the rate of (i) if the Company meets the 2000 Performance
Bonus Target (as defined in Section 3(c)(ii)), the Second Year Base Salary plus
$25,000, and (ii) if the Company does not meet the 2000 Performance Bonus
Target, his Second Year Base Salary minus $25,000, but in no event shall
Executive's Base Salary for such period be at a rate less than the First Year
Base Salary (the "Third Year Base Salary").
2
3
(iv) Future Years' Base Salary. With respect to each additional
twelve-month period commencing on an anniversary of the Effective Date occurring
during the Term, Executive shall be paid an annual Base Salary at the rate of
(i) if the Company meets the Performance Bonus target for the calendar year
immediately preceding the commencement of each such additional twelve-month
period, his Base Salary as in effect immediately prior to the commencement of
such twelve-month period plus $25,000, or (ii) if the Company does not meet the
Performance Bonus target for the calendar year immediately preceding the
commencement of each such additional twelve-month period, his Base Salary as in
effect immediately prior to the commencement of such twelve-month period minus
$25,000, but in no event shall Executive's Base Salary be at a rate less than
the First Year Base Salary. By way of example only, if the Company meets the
Performance Bonus target determined by the Board in its sole discretion for the
calendar year ended December 31, 2001, Executive shall be paid an annual Base
Salary, for the period May 1, 2002 through April 30, 2003, at the rate of his
Third Year Base Salary plus $25,000.
(c) Performance Bonus. During the Term of the Agreement, Executive
shall be eligible to receive performance bonuses pursuant to the terms and
conditions of the Company's Executive Officer Performance Bonus Plan (the "Bonus
Plan") and otherwise on the terms and conditions of subparagraphs (i) through
(iv) of this Section 3(c) (each, a "Performance Bonus"). With the exception of
the 1999 Performance Bonus (as defined below), which shall be measured with
respect to the period commencing on the Effective Date and ending on December
31, 1999, each Performance Bonus shall be measured with respect to a calendar
year (each, a "Performance Period"). Any Performance Bonus earned shall be
payable as soon as reasonably practicable following the determination of the
amount thereof and in accordance with the Company's normal payroll practices and
procedures. Any Performance Bonus payable under this Agreement shall be deemed
not to accrue until the last day of the period with respect to which such
Performance Bonus would otherwise be scheduled to be paid. All computations of
EPS (as defined below) shall be as if any stock dividend or stock split
occurring after the Effective Date had not occurred.
(i) 1999 Performance Bonus. With respect to the period
commencing on the Effective Date and ending on December 31, 1999, if the
Company's diluted net income per common share ("EPS"), as determined by the
Company's independent accountants in accordance with generally accepted
accounting principles ("GAAP"), for the calendar year ended December 31, 1999,
equals or exceeds $0.45 per share (without giving effect to any rounding to the
nearest whole cent) ("1999 Performance Bonus Target"), Executive shall be
entitled to receive a Performance Bonus equal to sixty percent (60%) of his
First Year Base Salary (the "1999 Performance Bonus"). If the Company's EPS, as
determined in the preceding sentence, is less than $0.45 per share, Executive
shall be entitled to receive a 1999 Performance Bonus equal to $100,000.
3
4
(ii) 2000 Performance Bonus. With respect to the period
commencing on January 1, 2000, and ending on December 31, 2000, if the Company's
EPS, as determined by the Company's independent accountants in accordance with
GAAP, for such period equals or exceeds $0.60 per share (without giving effect
to any rounding to the nearest whole cent) (the "Second Year Performance Bonus
Target"), Executive shall be entitled to receive a Performance Bonus equal to
sixty percent (60%) of his Second Year Base Salary (the "2000 Performance
Bonus").
(iii) 2001 Performance Bonus. With respect to the period
commencing on January 1, 2001 and ending on December 31, 2001, if the Company's
EPS, as determined by the Company's independent accountants in accordance with
GAAP, for such period equals or exceeds $0.81 per share (without giving effect
to any rounding to the nearest whole cent) (the "Third Year Performance Bonus
Target"), Executive shall be entitled to receive a Performance Bonus equal to
sixty percent (60%) of his Third Year Base Salary (the "2001 Performance
Bonus").
(iv) Future Performance Bonus. With respect to any additional
Performance Periods occurring during the Term, Executive's Performance Bonus and
Performance Bonus targets, if any, shall be determined by the Board in its sole
discretion.
(d) Stock Options and Restricted Stock. Subject to approval by the
Board, Executive shall be granted options (the "Options") and restricted stock
("Restricted Stock") pursuant to the Company's 1995 Stock Incentive Plan (the
"Stock Plan") to acquire shares of common stock, par value $0.01 per share
("Common Stock"), of the Company upon the terms and conditions set forth in
subparagraphs (i) through (iii) of this Section 3(d). The Options are intended
to qualify as incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), to the fullest extent
permitted by such Section of the Code. To the extent any such Options do not
qualify as incentive stock options, such Options shall be deemed non-qualified
stock options. The term of the Options shall be ten years from the date of
grant.
(i) Initial Options. Executive hereby acknowledges that he has
been granted Options to purchase 500,000 shares of Common Stock at a per share
exercise price equal to $7 5/8 (the "Initial Options"). The Initial Options vest
in four equal, annual installments.
4
5
(ii) First Milestone Options. If, at any time during the Term,
the aggregate market value of the Company's Common Stock first exceeds one
billion dollars for a period of 30 consecutive trading days, Executive shall be
granted Options to purchase an additional 200,000 shares of the Company's Common
Stock, at a per share exercise price equal to the Fair Market Value (as defined
in the Stock Plan) of the Company's Common Stock as of the last day of such
period (the "First Milestone Options"). The First Milestone Options shall vest
and become exercisable in three equal, annual installments.
(iii) Second Milestone Options and Restricted Stock Award. If,
at any time during the Term, the aggregate market value of the Company's Common
Stock first exceeds two billion dollars for a period of 30 consecutive trading
days, Executive shall be granted (i) Options to purchase an additional 100,000
shares of the Company's Common Stock, at a per share exercise price equal to the
Fair Market Value (as defined in the Stock Plan) of the Company's Common Stock
as of the last day of such period (the "Second Milestone Options") and (ii) an
award of Restricted Stock consisting of 100,000 shares of the Company's Common
Stock (the "Restricted Stock Award"). The Second Milestone Options and
Restricted Stock Award shall vest and become exercisable in three equal, annual
installments.
4. Fringe Benefits.
(a) Welfare and Other Fringe Benefits. Executive shall be entitled
to participate in any fringe and other benefit programs adopted from time to
time by the Company for the benefit of its senior executives.
(b) Relocation Reimbursement. The Company shall reimburse Executive
for expenses incurred in connection with his relocation from Chicago, Illinois
to Southern California. The Company's reimbursement obligation shall include (i)
the reasonable cost of moving Executive's personal items from Chicago, Illinois
to Southern California, (ii) reasonable closing costs on the sale of Executive's
condominium unit located in Chicago, Illinois and reasonable closing costs on
Executive's purchase of a residence in Southern California, (iii) a reasonable
allowance for the rental of temporary housing and meals for a period of three
(3) months commencing on the Effective Date and, (iv) thereafter, a reasonable
allowance for the rental of temporary housing only until the earlier of (A) the
date of closing of escrow on Executive's purchase of a residence in Southern
California and (B) the date twelve months following the Effective Date.
(c) Car Allowance. Executive shall be provided with a leased
automobile suitable to Executive's status with the Company, provided that the
payments for such leased automobile are reasonable, as determined by the Board
in its sole discretion.
5
6
(d) Business Expenses. Executive shall be entitled to reimbursement
for necessary and reasonable business expenses incurred in the performance of
his duties.
(e) Vacation. Executive shall accrue vacation at the rate of
twenty-five days per year. Executive may not accrue vacation benefits in excess
of twenty-five days at any time (the "Maximum Accrual"). Once the Maximum
Accrual has been reached, Executive shall cease to accrue vacation until the
accrued vacation balance has been reduced.
5. Termination of Employment.
(a) Death. If Executive dies while employed by the Company, his
employment shall immediately terminate and the Company's obligation to pay
Executive's Base Salary and Performance Bonus shall cease as of the date of
death; provided, however, that Executive's estate shall be entitled to receive
Executive's (i) accrued Base Salary through the date of termination, (ii) a pro
rata Performance Bonus for the portion of the year elapsed prior to Executive's
death, but only if the Performance Bonus target for the Performance Period in
which Executive's death occurs is met, as and when determined by the Board in
accordance with the terms of the Bonus Plan and Section 3(c) above and (iii) any
benefits payable under applicable welfare benefit plans. Notwithstanding
anything to the contrary contained in this Section 5(a), if Executive's death
occurs on or before December 31, 1999 and the 1999 Performance Bonus Target is
not met, Executive's estate will be entitled to a pro rata portion of the
$100,000 1999 Performance Bonus for the portion of the calendar year elapsed
prior to Executive's death.
(b) Disability. If as a result of Executive's incapacity due to
physical or mental illness ("Disability"), Executive shall have been absent from
the full-time performance of his duties with the Company for six consecutive
months, the Company may, upon 30 days' notice to Executive, terminate
Executive's employment. Upon termination for Disability, Executive shall be
entitled to receive his full Base Salary during any period of Disability prior
to termination for Disability. In addition, Executive shall be entitled to
receive the following benefits, which benefits shall be payable in accordance
with the Company's normal payroll practices and procedures: (i) his Base Salary
for twelve months payable at the rate in effect at the time of termination, (ii)
a pro rata Performance Bonus for the portion of the year elapsed prior to
termination on account of Executive's Disability, but only if the Performance
Bonus target for the Performance Period in which such termination occurs is met,
as and when determined by the Board in accordance with the terms of the Bonus
Plan
6
7
and Section 3(c) above, and (iii) any benefits payable under applicable welfare
benefit plans. Notwithstanding anything to the contrary contained in this
Section 5(b), if Executive's termination of employment for Disability occurs on
or before December 31, 1999 and the 1999 Performance Bonus Target is not met,
Executive will be entitled to a pro rata portion of the $100,000 1999
Performance Bonus for the portion of the calendar year elapsed prior to such
termination. Such payment shall not affect Executive's rights under any Company
disability plan in which Executive may then be a participant.
(c) Termination for Cause. The Company shall have the right to
terminate Executive's employment for Cause by giving Executive written notice of
the effective date of such termination. For purposes of this Agreement, "Cause"
shall mean (i) Executive's conviction of or guilty plea to the commission of an
act or acts constituting a felony under the laws of the United States or any
state thereof, (ii) action by Executive involving personal dishonesty, theft or
fraud in connection with Executive's duties as an officer of the Company, (iii)
a breach of any one or more material terms of this Agreement (including, but not
limited to, the Confidentiality, Non-Competition and Non-Solicitation provisions
contained in Section 8 hereof)), and (iv) Executive's willful failure to abide
by or follow lawful directions of the Board. No purported termination of
Executive's employment for Cause pursuant to (iv) above shall be effective
unless Executive shall have 30 days to cure any acts or omissions purported to
constitute Cause by reason of (iv) above. If the Company terminates Executive's
employment for Cause, the Company shall have no further obligation under this
Agreement from and after the date of termination; provided, however, that
Executive shall be entitled to receive his accrued Base Salary through the date
of termination and any benefits payable under applicable welfare benefit plans.
(d) Voluntary Termination by Executive. In the event that
Executive's employment with the Company is voluntarily terminated by Executive
other than for Good Reason, the Company shall have no further obligation under
this Agreement from and after the date of termination; provided, however, that
Executive shall be entitled to receive his accrued Base Salary through the date
of termination and any benefits payable under applicable welfare benefit plans.
For purposes of this Agreement, "Good Reason" shall mean a material breach by
the Company of any provision of this Agreement.
(e) Other Termination. If Executive's employment is terminated prior
to the expiration of the Term (i) by the Company for any reason other than as a
result of Executive's death or Disability or for Cause, or (ii) by Executive for
Good Reason, then Executive shall be entitled to receive his accrued Base Salary
through the date of termination and any benefits payable under applicable
welfare benefit
7
8
plans. In addition, Executive shall also be entitled to receive the following
benefits, which benefits shall be payable in accordance with the Company's
normal payroll practices and procedures: (i) if such termination occurs prior to
the first anniversary of the Effective Date, an amount equal to (A) his Base
Salary for the period commencing with his date of termination and ending on the
second anniversary of the Effective Date payable at the rate in effect at the
time of termination, plus (B) a Performance Bonus for the Performance Period in
which such termination occurs and the succeeding Performance Period; provided,
however, that the Performance Bonus target for each such period is met, as and
when determined by the Board in accordance with the terms of the Bonus Plan and
Section 3(c) above, or (ii) if such termination occurs after the first
anniversary of the Effective Date, an amount equal to (A) his Base Salary for
twelve months at the rate in effect on the date of termination, plus (B) a
Performance Bonus, if the Performance Bonus Target for the Performance Period in
which such termination occurs is met, as and when determined by the Board in
accordance with the terms of the Bonus Plan and Section 3(c) above.
Notwithstanding anything to the contrary contained in this Section 8(c), if
Executive's employment is terminated on or before December 31, 1999 (i) by the
Company for any reason other than Executive's death, Disability or for Cause or
(ii) by Executive for Good Reason and the First Year Performance Target is not
met, Executive will be entitled to a pro rata portion of the $100,000 1999
Performance Bonus for the portion of the calendar year elapsed prior to such
termination.
6. Assignment of Intellectual Property Rights.
(a) Definition of "Inventions". As used herein, the term
"Inventions" shall mean all inventions, discoveries, improvements, trade
secrets, formulas, techniques, data, programs, systems, specifications,
documentation, algorithms, flow charts, logic diagrams, source codes, processes,
and other information, including works-in-progress, whether or not subject to
patent, trademark, copyright, trade secret, or mask work protection, and whether
or not reduced to practice, which are made, created, authored, conceived, or
reduced to practice by Executive, either alone or jointly with others, during
the period of employment with the Company (including, without limitation, all
periods of employment with the Company prior to the Effective Date) which (A)
relate to the actual or anticipated business, activities, research, or
investigations of the Company or (B) result from or is suggested by work
performed by Executive for the Company (whether or not made or conceived during
normal working hours or on the premises of the Company), or (C) which result, to
any extent, from use of the Company's premises or property, unless, in the case
of clause (C) only, (i) Executive has reimbursed the Company in an amount equal
to the value of the use of such premises or property (as determined by the
Company based upon the Company's all in cost, which shall include without
limitation compensation and overhead expense) and (ii) the Company approved the
use of its premises or property prior to the use thereof by Executive.
8
9
(b) Work for Hire. Executive expressly acknowledges that all
copyrightable aspects of the Inventions are to be considered "works made for
hire" within the meaning of the Copyright Act of 1976, as amended (the "Act"),
and that the Company is to be the "author" within the meaning of such Act for
all purposes. All such copyrightable works, as well as all copies of such works
in whatever medium fixed or embodied, shall be owned exclusively by the Company
as of its creation, and Executive hereby expressly disclaims any and all
interest in any of such copyrightable works and waives any right of droit morale
or similar rights.
(c) Assignment. Executive acknowledges and agrees that all
Inventions constitute trade secrets of the Company and shall be the sole
property of the Company or any other entity designated by the Company. In the
event that title to any or all of the Inventions, or any part or element
thereof, may not, by operation of law, vest in the Company, or such Inventions
may be found as a matter of law not to be "works made for hire" within the
meaning of the Act, Executive hereby conveys and irrevocably assigns to the
Company, without further consideration, all his right, title and interest,
throughout the universe and in perpetuity, in all Inventions and all copies of
them, in whatever medium fixed or embodied, and in all written records,
graphics, diagrams, notes, or reports relating thereto in Executive's possession
or under his control, including, with respect to any of the foregoing, all
rights of copyright, patent, trademark, trade secret, mask work, and any and all
other proprietary rights therein, the right to modify and create derivative
works, the right to invoke the benefit of any priority under any international
convention, and all rights to register and renew same. Executive understands
that Inventions do not include, and the obligations set forth above in this
Section 5(c) do not apply to, subject matter that qualifies fully under the
provisions of Section 2870 of the California Labor Code.
(d) Proprietary Notices; No Filings; Waiver of Moral Rights.
Executive acknowledges that all Inventions shall, at the sole option of the
Company, bear the Company's patent, copyright, trademark, trade secret, and mask
work notices.
Executive agrees not to file any patent, copyright, or trademark
applications relating to any Invention, except with prior written consent of an
authorized representative of the Company (other than Executive).
9
10
Executive hereby expressly disclaims any and all interest in any
Inventions and waives any right of droit morale or similar rights, such as
rights of integrity or the right to be attributed as the creator of the
Invention.
(e) Further Assurances. Executive agrees to assist the Company, or
any party designated by the Company, promptly on the Company's request, whether
before or after the termination of employment, however such termination may
occur, in perfecting, registering, maintaining, and enforcing, in any
jurisdiction, the Company's rights in the Inventions by performing all acts and
executing all documents and instruments deemed necessary or convenient by the
Company, including, by way of illustration and not limitation:
(i) Executing assignments, applications, and other documents and
instruments in connection with (A) obtaining patents, copyrights,
trademarks, mask works, or other proprietary protections for the
Inventions and (B) confirming the assignment to the Company of all
right, title, and interest in the Inventions or otherwise establishing
the Company's exclusive ownership rights therein.
(ii) Cooperating in the prosecution of patent, copyright,
trademark and mask work applications, as well as in the enforcement of
the Company's rights in the Inventions, including, but not limited to,
testifying in court or before any patent, copyright, trademark or mask
work registry office or any other administrative body.
Executive shall be reimbursed for all out-of-pocket costs incurred
in connection with the foregoing, if such assistance is requested by the Company
after the termination of Executive's employment. In addition, to the extent
that, after the termination of employment for whatever reason, Executive's
technical expertise shall be required in connection with the fulfillment of the
aforementioned obligations, the Company shall compensate Executive at a
reasonable rate for the time actually spent by Executive at the Company's
request rendering such assistance.
(f) Power of Attorney. Executive hereby irrevocably appoints the
Company to be his Attorney-In-Fact to execute any document and to take any
action in his name and on his behalf and to generally use his name for the
purpose of giving to the Company the full benefit of the assignment provisions
set forth above.
(g) Disclosure of Inventions. Executive shall make full and prompt
disclosure to the Company of all Inventions subject to assignment to the
Company, and all information relating thereto in Executive's possession or under
his control as to possible applications and use thereof.
10
11
7. No Violation of Third-Party Rights. Executive represents, warrants,
and covenants that he:
(a) shall not, in the course of employment, infringe upon or violate
any proprietary rights of any third party (including, without limitation, any
third party confidential relationships, patents, copyrights, mask works, trade
secrets, or other proprietary rights);
(b) is not a party to any conflicting agreements with third parties
which shall prevent him from fulfilling the terms of employment and the
obligations of this Agreement;
(c) does not have in his possession any confidential or proprietary
information or documents belonging to others and shall not disclose to the
Company, use, or induce the Company to use, any confidential or proprietary
information or documents of others; and
(d) agrees to respect any and all valid obligations which he may now
have to prior employers or to others relating to confidential information,
inventions, or discoveries which are the property of those prior employers or
others, as the case may be.
Executive has supplied or shall promptly supply to the Company a
copy of each written agreement to which Executive is subject (other than any
agreement to which the Company is a party) which includes any obligation of
confidentiality, assignment of Inventions, or non-competition.
Executive agrees to indemnify and save harmless the Company from
any loss, claim, damage, cost or expense of any kind (including without
limitation, reasonable attorney fees) to which the Company may be subjected by
virtue of a breach by Executive of the foregoing representations, warranties,
and covenants.
8. Confidential Information; Non-Competition and Non-Solicitation.
(a) Confidentiality. Executive acknowledges that in his employment
hereunder he shall occupy a position of trust and confidence. Executive shall
not, except as may be required in the normal course of business to perform his
duties
11
12
hereunder or as required by applicable law, without limitation in time or until
such information shall have become public other than by Executive's unauthorized
disclosure, disclose to others, whether directly or indirectly, any Confidential
Information regarding the Company, its subsidiaries and affiliates.
"Confidential Information" shall mean information about the Company, its
subsidiaries and affiliates, and their respective clients and customers that is
not disclosed by the Company for financial reporting purposes and that was
learned by Executive in the course of his employment by the Company, its
subsidiaries and affiliates, including (without limitation) any proprietary
knowledge, trade secrets, data, formulae, information and client and customer
lists and all papers, resumes, and records (including computer records) of the
documents containing such Confidential Information. Executive acknowledges that
such Confidential Information is specialized, unique in nature and of great
value to the Company, its subsidiaries and affiliates, and that such information
gives the Company a competitive advantage. The Executive agrees to (i) deliver
or return to the Company, at the Company's request at any time or upon
termination or expiration of his employment or as soon thereafter as possible,
(A) all documents, computer tapes and disks, records, lists, data, drawings,
prints, notes and written information (and all copies thereof) furnished by the
Company, its subsidiaries and affiliates, or prepared by the Executive during
the term of his employment by the Company, its subsidiaries and affiliates, and
(B) all notebooks and other data relating to research or experiments or other
work conducted by Executive in the scope of employment or any Inventions made,
created, authored, conceived, or reduced to practice by Executive, either alone
or jointly with others, and (ii) make full disclosure relating to any
Inventions.
If Executive would like to keep certain property, such as material
relating to professional societies or other non-confidential material, upon the
termination of employment with the Company, he agrees to discuss such issues
with the Company. Where such a request does not put Confidential Information of
the Company at risk, the Company shall customarily grant the request.
(b) Non-Competition. During the Term of this Agreement and for a
period of two (2) years thereafter, Executive shall not, directly or indirectly,
without the prior written consent of the Company, provide consultative services
or otherwise provide services to (whether as an employee or a consultant, with
or without pay), own, manage, operate, join, control, participate in, or be
connected with (as a stockholder, partner, or otherwise), any business,
individual, partner, firm, corporation, or other entity that is then a
competitor of the Company, its subsidiaries and affiliates, including without
limitation any entity engaged in the design, manufacture and/or distribution of
eyewear (each such competitor a "Competitor of the Company"); provided, however,
that the "beneficial ownership" by Executive, either individually or as a member
of a "group," as such terms are used in Rule 13d of the
12
13
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), of not more than five percent (5%) of the voting
stock of any publicly held corporation shall not alone constitute a violation of
this Agreement; provided, however, that if Executive's employment is terminated
(i) by the Company without Cause, (ii) by Executive for Good Reason or (iii) by
reason of the expiration of the Term of this Agreement, the non-competition
agreement provided for in this subparagraph (b) shall terminate as of the date
of such termination of employment. Executive and the Company acknowledge and
agree that the business of the Company is global in nature, and that the terms
of the non-competition agreement set forth herein shall apply on a worldwide
basis.
(c) Non-Solicitation of Customers and Suppliers. During the Term of
this Agreement and for a period of two (2) years thereafter, Executive shall
not, directly or indirectly, influence or attempt to influence customers or
suppliers of the Company or any of its subsidiaries or affiliates, to divert
their business to any Competitor of the Company; provided, however, that if
Executive's employment is terminated (i) by the Company without Cause, (ii) by
Executive for Good Reason or (iii) by reason of the expiration of the Term of
this Agreement, the non-solicitation agreement provided for in this subparagraph
(c) shall terminate as of the date of such termination of employment.
(d) Non-Solicitation of Employees. Executive recognizes that he
possesses and shall possess Confidential Information about other employees of
the Company, its subsidiaries and affiliates, relating to their education,
experience, skills, abilities, compensation and benefits, and inter-personal
relationships with customers of the Company, its subsidiaries and affiliates.
Executive recognizes that the information he possesses and shall possess about
these other employees is not generally known, is of substantial value to the
Company, its subsidiaries and affiliates in developing their business and in
securing and retaining customers, and has been and shall be acquired by him
because of his business position with the Company, its subsidiaries and
affiliates. Executive agrees that, during the Term of this Agreement and for a
period of two (2) years thereafter, he shall not, directly or indirectly,
solicit or recruit any employee of the Company, its subsidiaries and affiliates
(i) for the purpose of being employed by him or by any Competitor of the Company
on whose behalf he is acting as an agent, representative or employee and that he
shall not convey any such confidential information or trade secrets about other
employees of the Company, its subsidiaries and affiliates to any other person or
(ii) for any other purpose or no purpose.
13
14
(e) Injunctive Relief. It is expressly agreed that the Company shall
or would suffer irreparable injury if Executive were to compete with the Company
or any subsidiary or affiliate of the Company in violation of any of the
provisions of this Section 8 and that the Company would by reason of such
competition be entitled to injunctive relief in a court of appropriate
jurisdiction, and Executive further consents and stipulates to the entry of such
injunctive relief in such a court prohibiting Executive from so competing with
the Company or any subsidiary or affiliate of the Company in violation of this
Agreement.
(f) Survival of Provisions. Except as otherwise provided herein, the
obligations contained in this Section 8 shall survive the termination or
expiration of Executive's employment with the Company and shall be fully
enforceable thereafter. If it is determined by a court of competent jurisdiction
in any state that any restriction in this Section 8 is excessive in duration or
scope or is unreasonable or unenforceable under the laws of that state, it is
the intention of the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent permitted by the law of
that state.
9. Notices. All notices and other communications under this Agreement
shall be in writing and shall be given by fax or first class mail, certified or
registered with return receipt requested, and shall be deemed to have been duly
given three (3) days after mailing or twenty-four (24) hours after transmission
of a fax to the respective persons named below:
If to Company: Oakley, Inc.
One Icon
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chairman of the Board
If to Executive: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o Oakley, Inc.
One Icon
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Either party may change such party's address for notices by notice duly given
pursuant hereto.
10. Attorneys' Fees. In the event judicial determination is necessary
of any dispute arising as to the parties' rights and obligations hereunder, each
party shall have the right, in addition to any other available relief, to
attorneys' fees based on a determination by the court of the extent to which
each party has prevailed as to the material issues raised in determination of
the dispute.
14
15
11. Indemnification. The Company shall indemnify and hold Executive
harmless to the maximum extent permitted under applicable law during the Term,
and following the Term the Executive shall remain covered under any Director and
Officer liability insurance policies for matters arising during the Term.
12. Withholding. Any payments provided for hereunder shall be paid net
of any applicable withholding required under Federal, state or local law and any
additional withholding to which Executive has agreed.
13. No Mitigation; No Offset. Executive shall not be required in any
way to mitigate the amount of any payment provided for in this Agreement, and
such payments shall not be subject to offset against compensation earned as the
result of employment with another employer.
14. Assignment; Successors. This Agreement is personal in nature and
neither of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder; provided, that
in the event of the merger, consolidation, transfer or sale of all or
substantially all of the assets of the Company with or to any other individual
or entity, this Agreement shall be binding upon and inure to the benefit of such
successor, and such successor shall discharge and perform all the promises,
covenants, duties and obligations of the Company hereunder.
15. Governing Law. This Agreement and the legal relations thus created
between the parties hereto shall be governed by and construed under and in
accordance with the laws of the State of California.
16. Waiver; Modification. Failure to insist upon strict compliance with
any of the terms, covenants, or conditions hereof shall not be deemed a waiver
of such term, covenant, or condition, nor shall any waiver or relinquishment of,
or failure to insist upon strict compliance with, any right or power hereunder
at any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times. This Agreement shall not be modified in any
respect except by a writing executed by each party hereto.
17. Severability. In the event that a court of competent jurisdiction
determines that any portion of this Agreement is in violation of any statute or
public policy, only the portions of this Agreement that violate such statute or
public policy shall be stricken. All portions of this Agreement that do not
violate any statute or public policy shall continue in full force and effect.
Further, any court order striking any portion of this Agreement shall modify the
stricken terms as narrowly as possible to give as much effect as possible to the
intentions of the parties under this Agreement.
15
16
18. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Executive has hereunto signed this
Agreement, as of the date referred to above.
OAKLEY, INC.
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Its: CHAIRMAN
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
16