EXHIBIT 10.24
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of April 6, 2002 (this
"Agreement"), by and between SOLA International, Inc., a Delaware corporation
(the "Company"), and Xxxx Xxxxxxxx (the "Executive").
WHEREAS, the Executive possesses skills and experience that
are of value to the Company; and
WHEREAS, the Company has determined that it is in its best
interest to secure the continued services and employment of the Executive on
behalf of the Company in accordance with the terms of this Agreement and the
Executive is willing to render such services on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
1. Employment Term. Subject to the terms and provisions of
this Agreement, the Company hereby agrees to employ the Executive, and the
Executive hereby agrees to be employed exclusively by the Company, for the
period commencing on the date hereof and ending on the second anniversary of the
date hereof (the "Initial Term"), unless terminated sooner or extended as
hereinafter provided (the "Employment Term"). Unless the Company or the
Executive shall have given the other party written notice not less than 90 days
prior to the expiration of the Initial Term that the Initial Term shall not be
extended, the Initial Term shall automatically be extended for successive
one-year periods (each one-year period an "Additional Term") until either party
shall have given the other party written notice not less than 90 days prior to
the expiration of any Additional Term that such Additional Term shall not be
extended. If either party shall have elected not to extend the Initial Term or
any Additional Term, this Agreement shall terminate upon expiration of such
term, unless terminated sooner as hereinafter provided.
2. Duties. During the Employment Term, the Executive shall
serve as President, American Commercial Operations of the Company, and such
other position(s) as the Chief Executive Officer of the Company (the "CEO") may
reasonably designate. During the Employment Term, the Executive shall be
responsible for the management and control of the day-to-day commercial
operations of the Company's American businesses utilizing the brands SOLA and
American Optical. The Executive shall also perform such other duties, services
and responsibilities as are determined from time to
time by the CEO consistent with the duties of a President, Commercial
Operations. In performing such duties, the Executive will report directly to the
CEO.
The Executive shall devote all of his business time and attention and
ability to the performance of such duties, services and responsibilities, and
will use his best efforts to promote the interests of the Company. The Executive
will not, directly or indirectly, render services of a business, commercial or
professional nature to any other person or organization, whether for
compensation or otherwise, without the prior consent of the CEO.
3. Compensation. In full consideration of the performance by
the Executive of the Executive's obligations during the Employment Term
(including any services by the Executive as an officer, director, employee or
member of any committee of any subsidiary or affiliate of the Company, or
otherwise on behalf of Company), the Executive shall be compensated as follows:
(a) The Executive shall receive a base salary (the "Base
Salary") at an annual rate of $250,000 per year during the Employment Term,
payable in accordance with the normal payroll practices of the Company then in
effect. The Executive will be eligible to receive annual increases in the Base
Salary as determined in the sole discretion of the CEO and approved by the Board
of Directors.
(b) The Executive shall be eligible for a bonus pursuant to
the terms and conditions of the Company's "Management Incentive Plan" or
successor thereto.
The Executive shall be solely responsible for taxes imposed on
the Executive by reason of any compensation and benefits provided under this
Agreement and all such compensation and benefits shall be subject to applicable
withholding taxes.
4. Benefits. In addition to the payments and awards described
in Section 3 of this Agreement, during the Employment Term, the Executive shall
be entitled to participate in any and all employee benefit plans the Company
regularly provides its other executives or employees including, but not limited
to, health, dental, vision, pension or other retirement plans. In addition the
Executive shall be entitled to the other benefits specified on the attached
Schedule.
5. Termination. The Executive's employment with the Company
and the Employment Term shall terminate upon the expiration of the Initial Term
or any Additional Term or upon the earlier occurrence of any of the following
events (the date of termination, the "Termination Date"):
(a) The death or disability of the Executive.
(b) The termination of employment by the Company for Cause. As
used
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herein, "Cause" shall mean Executive's: (i) willful misconduct, neglect of
duties, or any act or omission any or all of which materially adversely affect
the Company's business after receipt from the Company of a detailed statement of
the cause for termination, or (ii) conviction of, or plea of guilty or nolo
contendere to, a felony.
(c) The termination of employment by the Company other than
for Cause.
(d) Resignation by the Executive for Good Reason. As used
herein, "Good Reason" shall mean (i) regular assignment by the Company to the
Executive of duties and responsibilities that materially diminish his position
as President, American Commercial Operations of the Company; or (ii) reduction
of the Executive's Base Salary or a material reduction in his employee benefits
(other than incentive compensation) that is not part of, or is disproportionate
to a general reduction by the Company of executive compensation.
6. Termination Payments. If the Executive's employment with
the Company terminates or the Initial Term or any Additional Term expires, the
Company's, its subsidiaries' and its affiliates' sole obligation hereunder,
except as otherwise provided in this Section 6, shall be to pay the Executive
(a) any accrued and unpaid Base Salary as of the Termination Date and (b) an
amount equal to such reasonable and necessary business expenses incurred by the
Executive in connection with the Executive's employment on behalf of the Company
on or prior to the Termination Date but not previously paid to the Executive
(the "Accrued Compensation"). In addition, if the Executive's employment with
the Company terminates pursuant to either Section 5(c) or Section 5(d) hereof,
or if the Company elects not to extend the Initial Term or any Additional Term
for any reason other than Cause (each, a "Severance Event"), the Company's, its
subsidiaries' and its affiliates' sole obligation hereunder shall be to (a) pay
the Accrued Compensation, (b) continue to pay the Executive the Base Salary (at
the rate in effect at the time of termination of employment) for a period of
twelve months, commencing with the first of the month following the month in
which termination takes place, (c) pay the Executive 100% of the average
Management Incentive Plan compensation (or successor thereto) paid or payable to
him for the three completed fiscal years immediately prior to the date of such
termination (including the year of termination if the Termination Date occurs on
the last day of a fiscal year) (the "MIP Severance"), (d) continue to provide
the Executive with the benefits described in Section 4 of this Agreement for a
period of twelve months after the date of such termination and (e) pay up to
$25,000 for outplacement assistance on behalf of the Executive in the form of
professional consultation and administrative assistance during the twelve months
after the date of such termination, in the latter case, subject to the Company's
approval which may not be unreasonably withheld. All monies due under (b), (c)
and (d) above will be reduced by an amount equivalent to any and all
compensation, in whatever form received or
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promised, that is paid to the executive for services or advice of any kind
provided to another organization or individual during the twelve month period
following termination. The executive recognizes and agrees to promptly and
accurately report all such compensation to the company.
The Company shall have no obligation to the Executive for any
payments or benefits other than the Accrued Compensation if the Executive (i)
elects not to extend the Initial Term or any Additional Term or (ii) terminates
his employment with the Company other than for Good Reason.
7. Executive Covenants.
(a) Unauthorized Disclosure. The Executive recognizes that the
services to be performed during the Employment Term by the Company are special,
unique, and extraordinary and that by reason of the Executive's employment with
the Company the Executive has acquired and will acquire confidential information
and trade secrets concerning the Company's operations ("Company Confidential
Information") and the operations of its affiliates ("Affiliate Confidential
Information"). Accordingly, it is agreed that:
(i) The Executive shall not divulge to any entity or
person, other than the Company or its affiliates, or, in the
event of an assignment of this Agreement pursuant to Section
14 hereof, the assignee and its affiliates, if any, whether
during the Employment Term or after a Severance Event, any
Company Confidential Information concerning the Company's
customer lists, research or development programs or plans,
processes, methods or any other of its trade secrets, except
information that is then available to the public in published
literature and became publicly available through no fault of
the Executive.
(ii) The Executive shall not divulge to any person or
entity, including an assignee of this Agreement and its
affiliates, but excepting the Company and its affiliates,
whether during the Employment Term or after a Severance Event,
any Affiliate Confidential Information acquired by the
Executive concerning the customer lists, research or
development programs or plans, processes, methods or any other
trade secrets of the Company or any affiliate, except
information which is then available to the public in published
literature and became publicly available through no fault of
the Executive.
(iii) The Executive acknowledges that all information
the disclosure of which is prohibited hereby is of a
confidential and proprietary character and of great value to
the Company and its affiliates. Upon a Severance
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Event, the Executive shall forthwith deliver up to the Company
all records, memoranda, data and documents of any description
which refer or relate in any way to Company Confidential
Information or Affiliate Confidential Information and return
to the Company any of its equipment and property which may
then be in the Executive's possession or under the Executive's
personal control. Upon the assignment of this Agreement,
pursuant to Section 14, the Executive shall forthwith deliver
up to the Company all records, memoranda, data and documents
of any description which refer or relate in any way to
Affiliate Confidential Information and return to the Company
any of its equipment and property which may then be in the
Executive's possession or under the Executive's personal
control.
(b) Non-competition. By and in consideration of the Company's
entering into this Agreement and the payments to be made and benefits to be
provided by the Company hereunder, and in further consideration of the
Executive's exposure to the Company Confidential Information and Affiliate
Confidential Information, it is agreed that during the Employment Term, and for
twelve months following a Severance Event, the Executive will not, directly or
indirectly, as an officer, director, stockholder, partner, associate, owner,
employee, consultant or otherwise, become or be interested in or associated with
any other corporation, firm or business engaged in the same or a similar or
competitive business with the Company or any of its affiliates in any
geographical area in which the Company or any of its affiliates are then engaged
in business, provided that the Executive's ownership, directly or indirectly, of
not more than one percent of the issued and outstanding stock of a corporation
the shares of which are regularly traded on a national securities exchange or in
the over-the-counter market shall not, in any event, be deemed to be a violation
of this Subsection.
(c) Non-solicitation. The Executive agrees not to solicit any
person employed by the Company or its affiliates. As used herein, "solicit" or
"soliciting" means any direct or indirect approach or appeals to such an
employee to leave the Company. Indirect solicitation includes but is not limited
to, acting through a third party or parties or characterizing job advertisements
or opportunities in such a fashion so as to entice any employee. The Executive
agrees that, if approached by a Company employee, the Executive will:
(i) Inform the employee of the Executive's
obligations set forth in this subparagraph;
(ii) Refer the employee to the relevant Company Human
Resources personnel; and
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(iii) Request that the employee confirms in writing
to the Company that he has approached the Executive and
confirms that request in a memorandum to such Human Resources
organization.
(d) Remedies. The Company shall be entitled, in addition to
any other right or remedy that it may have at law or in equity with respect to a
breach of this Agreement by the Executive (including the right to terminate
payments pursuant to Section 6 hereof), to an injunction, without the posting of
a bond or other security, enjoining or restraining the Executive from any
violation or threatened violation of this Section 7 and Sections 8 and 9 hereof
and the Executive hereby consents to the issuance of such an injunction.
8. Proprietary Rights. The Executive agrees that any invention
made by the Executive during the Employment Term shall belong to the Company if
(a) it was made in the normal course of the duties of the Executive or in the
course of duties falling outside the Executive's normal duties but specifically
assigned to the Executive, and the circumstances in either case were such that
an invention might reasonably be expected to result from the carrying out of
such duties, or (b) the invention was made in the course of the duties of the
Executive and, at the time of making the invention, because of the nature of the
Executive's duties and the particular responsibilities arising from the nature
of the Executive's duties, the Executive had a special obligation to further the
interests of the Company. In addition, if (a) the Executive during the
Employment Term shall make any improvement or develop any know-how,
copyrightable work or design, (b) such improvement, know-how, copyrightable work
or design is relevant to the business of the Company or any of its subsidiaries,
and (c) such improvement, know-how, copyrightable work or design arose directly
out of any work carried out during the Employment Term, or out of Confidential
Company Information or Confidential Affiliate Information to which the Executive
had access while in the employ of the Company, then such improvement, know-how,
copyrightable work or design shall belong to the Company, whether or not it was
disclosed to the Company during the Employment Term by the Company.
In the event that the Executive makes any invention or develops any
improvement, know-how, copyrightable design or work which belongs to the
Company, the Executive shall fully, freely and immediately communicate the same
to the Company and the Executive shall, if and as desired by the Company execute
all documents and do all acts and things at the Company's cost which may be
necessary or desirable to obtain letters patent or other adequate protection in
any part of the world for such invention, improvement, know-how, copyrightable
work or design and to vest the same in the Company for the Company's benefit.
The Executive hereby irrevocably appoints the Company as the Executive's
attorney in the Executive's name and on the Executive's behalf to execute all
such deeds and documents and to do all such acts and things as may
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be necessary to give effect to this Subsection in the event that the Executive
fails to comply within seven days with the written directions given by the
Company pursuant to this Subsection.
The Executive has been notified and understands that the provisions of
the two immediately preceding paragraphs of this Section 8 do not apply to any
invention that qualifies fully under the provisions of Section 2870 of the
California Labor Code, which states as follows:
(a) Any provision in an employment agreement which provides
that an employee shall assign, or offer to assign, any of his
or her rights in an invention to his or her employer shall not
apply to an invention that the employee developed entirely on
his or her own time without using the employer's equipment,
supplies, facilities, or trade secret information except for
those inventions that either:
(i) Relate at the time of conception or reduction to
practice of the invention to the employer's business,
or actual or demonstrably anticipated research or
development of the employer, or
(ii) Result from any work performed by the employee
for the employer.
(b) To the extent a provision in an employment agreement
purports to require an employee to assign an invention
otherwise excluded from being required to be assigned under
subdivision (a), the provision is against the public policy of
this state and is unenforceable.
9. Non-Disparagement. In the event of a Severance Event both
the Executive and the Company agree that neither of them will disparage the
other in any manner.
10. Moral Rights Waiver. As used herein, "Moral Rights" shall
mean any right to claim authorship of a work, any right to object to any
distortion, or other modification of a work, and any similar right, existing
under the law of any country in the world, or under any treaty. Executive hereby
irrevocably transfers and assigns to the Company any and all Moral Rights that
Executive may have in any services or materials. Executive also hereby forever
waives and agrees never to assert against the Company, its successors or assigns
any and all Moral Rights Executive may have in any services or materials, even
after termination of this Agreement.
11. Release. In consideration of the payments and covenants
under this Agreement, the Executive hereby releases the Company, its employees,
officers, directors,
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subsidiaries, affiliates, successors and assigns and the Company, its
subsidiaries, affiliates, successors and assigns hereby release the Executive
from any and all claims for relief or causes of action relating to any matters
of any kind arising out of his employment (or its termination) with the Company
arising prior to the date hereof.
The Executive expressly waives all rights and remedies under Section
1542 of the Civil Code of the State of California, which provides as follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
The Executive understands that if the facts with respect to
which this Agreement is executed are found hereafter to be different from the
facts that he now believes to be true, the Executive expressly accepts and
assumes the risk of such possible differences in facts and agrees that this
Agreement shall be and remain effective notwithstanding such differences in
facts.
12. Notices. All notices, consents, waivers or demands of any
kind which either party to this Agreement may be required or may desire to serve
on the other party in connection with this Agreement shall be in writing and may
be delivered by personal service or sent by telegraph or cable or sent by
registered or certified mail, return receipt requested with postage thereon
fully prepaid. All such communications shall be addressed as follows:
The Company: Sola International, Inc.
Torrey View Corporate Centre
Suite 300
10590 Xxxx Xxxxx Xxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X Xxxxxx
The Executive: Xxxx Xxxxxxxx
[ ]
[ ]
If sent by telegraph or cable, a confirmed copy of such telegraphic or
cable notice shall be promptly sent by mail (in the manner provided above) to
the addressees. Service of any such communication made only by mail shall be
deemed complete on the date of actual delivery as shown by the addressee's
registry or certification receipt or at the expiration of the third (3rd)
business day after the date of mailing whichever is later in
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time. Either party hereto may from time to time, by notice in writing served
upon the other as aforesaid, designate a different mailing address or a
different person to which such notices or demands are thereafter to be addressed
or delivered. Nothing contained in this Agreement shall excuse either party from
giving oral notice to the other when prompt notification is appropriate, but any
oral notice given shall not satisfy the requirement of written notice as
provided in this paragraph.
13. Governing Law. This Agreement shall be governed and
construed and enforced in accordance with the laws of the State of California
(regardless of that jurisdiction or any other jurisdictions' choice of law
principles).
14. Assignment. The Company may assign this Agreement to any
affiliate of the Company or to any non-affiliate of the Company that shall
succeed to the business and assets of the Company. In the event of such
assignment, the Company shall cause such affiliate or non-affiliate as the case
may be, to assume the obligations of the Company hereunder by written agreement
addressed to the Executive concurrently with any assignment with the same effect
as if such assignee were the Company hereunder. This Agreement is personal to
the Executive and the Executive may not assign any rights or delegate any
responsibilities hereunder without the prior approval of the Company.
15. Entire Agreement. This Agreement is the entire Agreement
between the Company and the Executive with respect to the subject matter hereof
and cancels and supersedes any and all other agreements regarding the subject
matter hereof between the parties. This Agreement may not be altered, modified,
changed, or discharged except in writing signed by both of the parties.
16. Severability. If any one or more of the provisions (or any
part thereof) of this Agreement, or any application thereof to the
circumstances, shall be held to be invalid, illegal or unenforceable in any
respect the remaining provisions (or any part thereof) shall not in any way be
affected or impaired thereby.
17. Arbitration. Except as otherwise provided in Section 7(d)
hereof, with respect to any controversy arising out of or relating to this
Agreement, or the subject matter thereof, such controversy shall be settled by
final and binding arbitration in San Diego, California or such other location as
the company may determine, in accordance with the then existing rules ("the
Rules") of the American Arbitration Association ("AAA") and judgment upon the
award rendered by the arbitrators may be entered in any court having
jurisdiction thereof; provided, however, that the law applicable to any
controversy shall be the law of California, regardless of its or any
jurisdiction's choice of law principle. Arbitration shall be the sole and
exclusive remedy for the resolution of the disputes described above. In any such
arbitration, the award or decision shall be rendered by a majority of the
members of a board of arbitration consisting of three members, one of whom shall
be appointed by each party and the third of whom shall be the chairman of
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the panel and be appointed by mutual agreement of said two party appointed
arbitrators. In the event of the failure of said two arbitrators to agree,
within five working days after the commencement of the arbitration, upon
appointment of the third arbitrator, the third arbitrator shall be appointed by
the AAA in accordance with the Rules. In the event that either party shall fail
to appoint an arbitrator within five days after the commencement of the
arbitration proceeding, such arbitrator and the third arbitrator shall be
appointed by the AAA in accordance with the Rules. The arbitrators are empowered
but not limited in making an award in favor of the Executive to require any act
or acts that they believe necessary to effectuate the intent of this Agreement.
The Company agrees that any costs of any arbitration borne by the Executive,
including the Executive's reasonable attorneys' fees and expenses and the costs,
fees and expenses of the Executive's appointed arbitrator, shall be borne by the
Company to the extent attributable to issues on which the Executive prevails on
the merits.
18. Excise Tax Limitation.
(a) Notwithstanding anything contained in this Agreement to
the contrary, to the extent that the payments and benefits provided under this
Agreement and benefits provided to, or for the benefit of, the Executive under
any other Company plan or agreement (such payments or benefits are collectively
referred to as the "Payments") would be subject to the excise tax (the "Excise
Tax") imposed under Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), the Payments shall be reduced (but not below zero) if and
to the extent necessary so that no Payment to be made or benefit to be provided
to the Executive shall be subject to the Excise Tax (such reduced amount is
hereinafter referred to as the "Limited Payment Amount"). Unless the Executive
shall have given prior written notice specifying a different order to the
Company to effectuate the foregoing, the Company shall reduce or eliminate the
Payments, by first reducing or eliminating the portion of the Payments which are
not payable in cash and then by reducing or eliminating cash payments, in each
case in reverse order beginning with payments or benefits which are to be paid
the farthest in time from the Determination (as hereinafter defined). Any notice
given by the Executive pursuant to the preceding sentence shall take precedence
over the provisions of any other plan, arrangement or agreement governing the
Executive's rights and entitlements to any benefits or compensation.
(b) The determination of whether the Payments shall be reduced
to the Limited Payment Amount pursuant to this Agreement and the amount of such
Limited Payment Amount shall be made, at the Company's expense, by an accounting
firm selected by the Executive which is one of the five largest accounting firms
in the United States (the "Accounting Firm"). The Accounting Firm shall provide
its determination (the "Determination"), together with detailed supporting
calculations and documentation to the Company and the Executive within ten (10)
days of the date of termination, if
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applicable, or such other time as requested by the Company or by the Executive
(provided the Executive reasonably believes that any of the Payments may be
subject to the Excise Tax) and if the Accounting Firm determines that no Excise
Tax is payable by the Executive with respect to the Payments, it shall furnish
the Executive and the Company with an opinion reasonably acceptable to the
Executive that no Excise Tax will be imposed with respect to any such Payments.
The Determination shall be binding, final and conclusive upon the Company and
the Executive.
19. Non-Waiver of Rights. The failure to enforce at any time
the provisions of this Agreement or to require at any time performance by any
other party of any provisions hereof shall in no way be construed to be a waiver
of such provisions or to affect either the validity of this Agreement or any
part hereof, or the right of any party to enforce each and every provision in
accordance with its terms. No waiver by any party hereto of any breach by any
other party hereto of any provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions at the
time or at any prior or subsequent time.
20. Headings. The headings contained herein are solely for the
purposes of reference, are not part of this Agreement and shall not in any way
affect the meaning or interpretation of this Agreement.
21. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
22. THE EXECUTIVE ACKNOWLEDGES THAT HE HAS HAD THE OPPORTUNITY
TO CONSULT WITH THE ADVISOR OF HIS CHOICE AND THAT HE HAS FREELY AND VOLUNTARILY
ENTERED INTO THIS AGREEMENT.
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IN WITNESS WHEREOF, the Company has caused this Employment
Agreement to be executed by authority of its Board of Directors, and the
Executive has hereunto set the Executive's hand, on the day and year first above
written.
Sola International, Inc.:
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: President/CEO
Executive:
/s/ Xxxx Xxxxxxxx
-----------------------------------
Xxxx Xxxxxxxx
333076
Schedule of Continuing Benefits Entitlement Pursuant to
Paragraph 4 of the Attached Agreement between SOLA International Inc. and Xxxx
Xxxxxxxx.
1. PROVISION OF A COMPANY CAR.
2. PAYMENT OF AN EXPATRIATE HOUSING ALLOWANCE, SUBJECT TO THE EXECUTIVE'S
CONTINUING RESIDENCE IN CALIFORNIA.
3. REIMBURSEMENT OF REPATRIATION COSTS (INCLUDING REAL ESTATE AGENTS
COMMISSIONS ON THE SALE OF HIS HOME) IN THE EVENT THAT THE EXECUTIVE
RELOCATES BACK TO THE UNITED KINGDOM.
4. PROVISION OF TAX RETURN PREPARATION AND ADVICE.
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5. PARTICIPATION IN COMPANY RETIREMENT PLANS.
6. REIMBURSEMENT OF TRAVEL EXPENSES FOR FAMILY HOME LEAVE WHILE RESIDENT
IN THE UNITED STATES.
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