EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement"), effective this 16th day of
January, 1997 (the "Effective Date"), is entered into by and between ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ("Employee") and Oakley, Inc., a Washington corporation ("Company").
In consideration of the mutual agreements hereinafter set forth,
Employee and the Company have agreed and do hereby agree as follows:
EMPLOYMENT. The Company does hereby employ, engage and hire
Employee as Chief Financial Officer of the Company, and Employee does hereby
accept and agree to such hiring, engagement and employment. In such capacity,
Employee 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 of Directors. Except for sick leave, reasonable vacations and
excused leaves of absence, Employee 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.
TERM OF AGREEMENT. The term ("Term") of this Agreement shall
commence on the Effective Date and shall continue for a period of two (2)
years; PROVIDED, HOWEVER, that on each anniversary of the Effective Date the
Term of the Agreement shall automatically be extended for one additional year
unless, not less than three months 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.
COMPENSATION.
BASE SALARY. The Company shall pay Employee an annual base
salary no less than at the rate of $145,000 per year, payable in equal biweekly
installments or at such other times as Employee and the Company shall agree.
Employee's base salary may be increased as determined by the Board of Directors
of the Company in its sole discretion.
BONUS. Employee shall be eligible to participate in the
Company's Performance Bonus Plan. Employee's annual target bonus under the
Performance Bonus Plan shall not be less than $60,000.
STOCK OPTION GRANT. The Board of Directors of the Company
has determined to grant Employee a stock option (the "Option") to purchase
60,000 shares of Oakley common stock, par value $.01 per share (the "Common
Stock"). The Option shall (i) be an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code to the extent permitted by
law, and a non-qualified stock option otherwise, (ii) be effective as of
Employee's hire date, December 20, 1996 (the "Date of Grant"), (iii) have a
term of 10 years from the Date of Grant, (iv) have an exercise price
equal to the closing price of the Common Stock on the New York Stock Exchange
on the Date of Grant, (v) vest and become exercisable in equal 25% installments
on each of the first four anniversaries of the Date of Grant, and (vi) contain
such other terms and conditions as generally apply to option grants made to the
Company's senior executives.
FRINGE BENEFITS. Employee 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. In addition, the Company
shall reimburse Employee, in an aggregate amount not to exceed $50,000, against
the following costs and expenses incurred by Employee in selling his Carlsbad
residence and moving to a new residence in Orange County (the "Reimbursement
Amount"):
(i) Standard brokers commissions incurred in selling
Employee's Carlsbad residence;
(ii) Any loss on the sale of Employee's Carlsbad
residence, as measured by the difference between the actual selling price of
the Carlsbad residence and Employee's cost basis therein; and
(iii) Employee's "hard" moving costs in moving from
Carlsbad to his new Orange County residence, excluding loan points and any
other interest-related costs, but otherwise including the normal costs of
escrow.
The Company shall also provide Employee with an income tax
"gross-up" with respect to any federal or state income tax liability incurred
by Employee resulting from any portion of the Reimbursement Amount being
included in Employee's taxable income.
TERMINATION OF EMPLOYMENT.
DEATH. If Employee dies while employed by the Company,
his employment shall immediately terminate and the Company's obligation to
pay Employee's base salary and bonus shall cease as of the date of death.
Employee's beneficiaries or his estate shall receive benefits in accordance
with any Company plans then in effect.
DISABILITY. If as a result of Employee's incapacity due to
physical or mental illness ("Disability"), Employee 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 Employee, terminate Employee's
employment. Within ten days following such termination for Disability, the
Company shall pay Employee an amount equal to one year's base salary. Such
payment shall not affect Employee's rights under any Company disability plan in
which Employee may then be a participant.
TERMINATION FOR CAUSE. The Company shall have the right to
terminate Employee's employment for Cause by giving Employee written notice
of the effective date of such termination. For purposes of this Agreement,
"Cause" shall mean fraud, misappropriation, embezzlement or other act of
material misconduct against the Company, or substantial or willful failure to
perform specific and lawful directives of the Company's Board of Directors
consistent with Employee's employment. If the Company terminates Employee's
employment for Cause, the Company shall have no further obligation under this
Agreement from and after the date of termination.
VOLUNTARY TERMINATION BY EMPLOYEE. In the event that
Employee's employment with the Company is voluntarily terminated by Employee
other than for Good Reason, the Company shall have no further obligation
under this Agreement from and after the date of termination. For purposes of
this Agreement, "Good Reason" shall mean any material breach by the Company
of any provision of this Agreement.
OTHER TERMINATION. If Employee's employment is
terminated (i) by the Company for any reason other than Employee's death or
disability or for Cause or (ii) by Employee for Good Reason, the Company
shall pay Employee the balance due under the Term of this Agreement as if
Employee had remained in the Company's employ at an annual rate of
compensation equal to his then base salary and, at the end of each remaining
fiscal year ending during the Term of this Agreement, a bonus equal to the
amount of Employee's annual target bonus under the Performance Bonus Plan as
in effect at the time of such termination.
ASSIGNMENT OF INTELLECTUAL PROPERTY RIGHTS.
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 Employee, 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 Employee 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.
WORK FOR HIRE. Employee 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 Employee
hereby expressly disclaims any and all interest in any of such copyrightable
works and waives any right of DROIT MORALE or similar rights.
ASSIGNMENT. Employee 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, Employee 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
Employee'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.
PROPRIETARY NOTICES; NO FILINGS; WAIVER OF MORAL RIGHTS.
Employee 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.
Employee 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 Employee).
Employee 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.
FURTHER ASSURANCES. Employee 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:
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.
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.
Employee 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 Employee's employment. In addition, to
the extent that, after the termination of employment for whatever reason,
Employee's technical expertise shall be required in connection with the
fulfillment of the aforementioned obligations, the Company shall compensate
Employee at a reasonable rate for the time actually spent by Employee at the
Company's request rendering such assistance.
POWER OF ATTORNEY. Employee 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.
DISCLOSURE OF INVENTIONS. Employee shall make full and
prompt disclosure to the Company of all Inventions subject to assignment to
the Company, and all information relating thereto in Employee's possession or
under his control as to possible applications and use thereof.
NO VIOLATION OF THIRD-PARTY RIGHTS. Employee represents,
warrants, and covenants that he:
will 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);
is not a party to any conflicting agreements with third
parties which will prevent him from fulfilling the terms of employment and
the obligations of this Agreement;
does not have in his possession any confidential or
proprietary information or documents belonging to others and will not
disclose to the Company, use, or induce the Company to use, any confidential
or proprietary information or documents of others; and
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.
Employee has supplied or shall promptly supply to the Company a
copy of each written agreement to which Employee 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.
Employee 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 Employee of the foregoing representations,
warranties, and covenants.
CONFIDENTIAL INFORMATION AND NON-COMPETITION.
CONFIDENTIALITY. Employee acknowledges that in his
employment hereunder he will occupy a position of trust and confidence.
Employee shall not, except as may be required in the normal course of
business to perform his duties hereunder or as required by applicable law,
without limitation in time or until such information shall have become public
other than by Employee's unauthorized disclosure, disclose to others or use,
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 Employee 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. Employee 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 Employee 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
Employee 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 Employee in the scope of employment or
any Inventions made, created, authored, conceived, or reduced to practice by
Employee, either alone or jointly with others, and (ii) make full disclosure
relating to any Inventions.
If Employee 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 will customarily
grant the request.
NON-COMPETITION. During the Term of this Agreement and
for a period of two (2) years thereafter, Employee 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 Employee, either individually or as a member of
a "group," as such terms are used in Rule 13d of the 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. Employee 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.
NON-SOLICITATION OF CUSTOMERS AND SUPPLIERS. During the
Term of this Agreement and for a period of two (2) years thereafter, Employee
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.
NON-SOLICITATION OF EMPLOYEES. Employee recognizes that
he possesses and will 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.
Employee recognizes that the information he possesses and will 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 will be acquired by him
because of his business position with the Company, its subsidiaries and
affiliates. Employee agrees that, during the Term of this Agreement and for
a period of two (2) years thereafter, he will not, directly or indirectly,
solicit or recruit any employee of the Company, its subsidiaries and
affiliates 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 will not convey any such confidential information or
trade secrets about other employees of the Company, its subsidiaries and
affiliates to any other person.
INJUNCTIVE RELIEF. It is expressly agreed that the
Company will or would suffer irreparable injury if Employee were to compete
with the Company or any subsidiary or affiliate of the Company in violation
of any of the provisions of this
Section 7 and that the Company would by reason of such competition be
entitled to injunctive relief in a court of appropriate jurisdiction, and
Employee further consents and stipulates to the entry of such injunctive
relief in such a court prohibiting Employee from so competing with the
Company or any subsidiary or affiliate of the Company in violation of this
Agreement.
SURVIVAL OF PROVISIONS. The obligations contained in
this Section 7 shall survive the termination or expiration of Employee'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 7 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.
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.
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If to Employee: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Either party may change such party's address for notices by notice duly given
pursuant hereto.
INDEMNIFICATION. The Company shall indemnify and hold
Employee harmless to the maximum extent permitted under applicable law.
NO MITIGATION; NO OFFSET. Employee 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.
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.
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.
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.
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.
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.
COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer, and Employee has hereunto signed
this Agreement, as of the date referred to above.
OAKLEY, INC.
______________________________
By: ________________________
Its: ________________________
______________________________
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