AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement"),
effective as of this 12th day of May, 1998, is entered into by and between
Xxxxxx X. Xxxxxx ("Employee") and Oakley, Inc., a Washington corporation
("Company").
WHEREAS, Employee and the Company have previously entered into that
certain employment agreement (the "Old Employment Agreement") dated October 6,
1997 (the "Effective Date"); and
WHEREAS, Employee and the Company desire to amend and restate in its
entirety the Old Employment Agreement.
NOW, THEREFORE, in consideration of the mutual agreements hereinafter
set forth, Employee and the Company have agreed and do hereby agree as follows:
1. 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 or the President, Chief Executive Officer or Chief Operating
Officer of the Company, including without limitation responsibility for the
accounting, finance and investor relations functions of the Company. 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.
2. 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.
3. COMPENSATION.
(a) BASE SALARY. The Company shall pay Employee an annual base
salary no less than at the rate of $195,000 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.
(b) BONUS. Commencing January 1, 1998, 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
$80,000. Employee shall not be eligible to receive an annual performance bonus
with respect to the year ending December 31, 1997.
(c) STOCK OPTION GRANT. The Board of Directors of the Company
has determined to grant Employee a stock option (the "Option") to purchase
90,000 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 the Effective
Date (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.
(d) RELOCATION. As a condition of his employment with the
Company, Employee agrees to relocate his principal residence from San Diego
County to Orange County, California as soon as reasonably practicable. In
accordance therewith, Employee agrees (i) to purchase a home in Orange County
(the "Orange County Residence") as soon as reasonably practicable (but in no
event later than January 31, 1998), (ii) to move his principal residence to the
Orange County Residence as soon as reasonably practicable after the date of such
purchase, and (iii) thereafter to maintain his principal residence in Orange
County throughout the remainder of the Term. In consideration thereof, and to
assist Employee in acquiring the Orange County Residence, Company agrees to
provide Employee with the following relocation benefits:
i) DATE OF HIRE BONUS. On Employee's first day of work
at the Company, the Company shall pay Employee a one-time cash bonus in the
amount of $10,000.
ii) RELOCATION BONUS. If Employee purchases the Orange
County Residence on or before January 31, 1998 and moves his principal
residence to the Orange County Residence as soon as reasonably practicable
thereafter, then, within five (5) business days following the date Employee
begins permanent residence in the Orange County Residence, the Company
shall pay Employee an additional one-time cash bonus in the amount of
$60,000.
iii) ADVANCE. The Company agrees to provide Employee with
an advance (the "Advance") on his base salary in the amount of $50,000,
such amount to be paid to Employee within five (5) business days following
the date Employee commences employment with the Company. To offset the
Advance, Employee's base salary as set forth in Section 3(a) shall be
reduced on a pro rata basis during the two-year period following the
Effective Date, with the entire remaining amount of the Advance to be
repaid by Employee in full immediately in the event Employee's employment
with the Company is terminated under any circumstances prior to the end of
such two-year period. Employee agrees that the Company shall have the
right to offset the amount of any remaining portion of the Advance against
any severance or other payments or obligations of the Company upon or
following such termination of employment.
iv) HOUSING ALLOWANCE. During the Term, until such time
as Employee no longer reasonably requires a second residence in San Diego
County, California, the Company shall pay Employee a housing allowance in
the amount of $1,500 per month. It is expressly understood that Employee's
requirement of a San Diego residence relates solely to his desire to permit
his existing children to complete their primary education in San Diego
County, and that the housing allowance provided for herein shall terminate
at such time as none of such children is attending junior or senior high
school in San Diego County. Employee agrees to provide the Company timely
notice of any change in circumstances relating to his requirement of a San
Diego residence.
(e) 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.
4. TERMINATION OF EMPLOYMENT.
(a) 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 shall cease as of the date of death. Within ten (10)
days following such death, the Company shall pay to Employee's estate an amount
equal to Employee's then current target bonus under the Performance Bonus Plan,
prorated through the date of death. Employee's beneficiaries or his estate
shall receive benefits in accordance with any Company plans then in effect.
(b) 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 (10) days following such termination for Disability, the
Company shall pay Employee an amount equal to one year's base salary plus an
amount equal to Employee's target bonus under the Performance Bonus Plan,
prorated through the date of such termination. Such payment shall not affect
Employee's rights under any Company disability plan in which Employee may then
be a participant.
(c) 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 (i) fraud, misappropriation, embezzlement or other act of material
misconduct against the Company, or (ii) substantial or willful failure to
perform specific and lawful directives of the Board of Directors or the
President, Chief Executive Officer or Chief Operating Officer of the Company
consistent with Employee's employment or (iii) other material breach of this
Agreement by Employee. 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.
(d) VOLUNTARY TERMINATION BY EMPLOYEE. In the event that
Employee's employment with the Company is voluntarily terminated by Em-
ployee other than for Good Reason, the Company shall have no further obligation
under this Agreement from and after the date of termination. In addition, if
such termination occurs prior to the one year anniversary of the Effective Date,
Employee shall be required to repay to the Company immediately a pro rata
portion of the hiring and relocation bonuses provided for in Sections 3(d)(i)
and (ii) above, such proration to be calculated by multiplying the amount of
such bonuses by a fraction, the numerator of which is the number of days between
the date of such termination and October 6, 1998, and the denominator of which
is 365. For purposes of this Agreement, "Good Reason" shall mean any material
breach by the Company of any provision of this Agreement.
(e) 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
(x) his base salary for a period equal to the LESSER of twelve months or the
remaining Term of this Agreement (the "Severance Period"), in either case as if
Employee had remained in the Company's employ at an annual rate of compensation
equal to his base salary as of the date of termination, and (y) an amount equal
to the product of (A) Employee's annual target bonus under the Performance Bonus
Plan as in effect at the time of such termination and (B) a fraction, the
numerator of which is the number of full months in the Severance Period, and the
denominator of which is 12.
5. 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 Employee, either alone or jointly with others, during the
period of employment with the Company 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, unless, in the case of clause (C) only, (i) Employee 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 Employee.
(b) 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.
(c) 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. Employee 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.
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.
(e) 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:
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.
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.
(f) 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.
(g) 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.
6. NO VIOLATION OF THIRD-PARTY RIGHTS. Employee represents,
warrants, and covenants that he:
(a) 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);
(b) 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;
(c) 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
(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.
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.
7. CONFIDENTIAL INFORMATION AND NON-COMPETITION.
(a) 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.
(b) 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 Employee's employment is terminated
(i) by the Company without Cause, (ii) by Employee 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.
(c) 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
Employee's employment is terminated (i) by the Company without Cause, (ii) by
Employee 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. 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.
(e) 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.
(f) 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.
8. 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
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
If to Employee: Xxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Either party may change such party's address for notices by notice duly given
pursuant hereto.
9. INDEMNIFICATION. The Company shall indemnify and hold
Employee harmless to the maximum extent permitted under applicable law.
10. NO MITIGATION; NO OFFSET. Except as provided in Section
3(d)(iii) hereof, 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.
11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. OLD EMPLOYMENT AGREEMENT SUPERSEDED. The Old Employment
Agreement is hereby amended, restated and superseded in its entirety as of the
date hereof.
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.
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By: R. Link Xxxxxxx
Its: Chief Executive Officer
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XXXXXX X. XXXXXX
