AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit
10.1
AMENDMENT
TO EMPLOYMENT AGREEMENT
AMENDMENT,
dated September 19, 2007
(the "Amendment"), to the Employment Agreement, dated September 19, 2005 (the
"Employment Agreement"), by and between D. Xxxxx Xxxxxx ("Employee") and Oakley,
Inc., a Washington corporation (the "Company").
WHEREAS,
Employee and the Company have
previously entered into the Employment Agreement;
and
WHEREAS,
Employee desires to continue
to provide the Company with his services and the Company desires to continue
to
employ Employee on the terms and subject to the conditions set forth
herein.
NOW,
THEREFORE, in consideration of the
mutual agreements hereinafter set forth, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Employee and the Company have agreed and do hereby agree, to amend the
Employment Agreement as follows, effective as of the date hereof:
1. The
introductory paragraph of Section 4(a) of the Employment Agreement is hereby
amended by adding "when such bonuses would otherwise have been paid if Employee
remained employed" in the sixth line after "unpaid bonuses earned for completed
prior years."
2. Section
4(a)(v) of the Employment Agreement is hereby amended by (i) inserting ", within
45 days following the termination of employment," in the fourth line after
"unilateral release", (ii) adding ", which changes the Company shall present
in
writing to Employee within ten (10) days after such termination or be deemed
to
waive its right to do so (the “Release of Claims”)" to the end
of the last line immediately prior to the closed parenthetical, and (iii) adding
"the following amounts, provided, however, that if such
termination is on or after November 16 of a calendar year, the payment of such
amounts shall not be made until the next calendar year notwithstanding when
the
Release of Claims is signed and becomes effective:" immediately following the
closed parenthetical.
3. The
Employment Agreement is hereby amended by adding the following language at
the
beginning of each of Sections 4(a)(v)(1) and (4): "subject to the
provisions of Section 24(b) hereof,"
4. The
Employment Agreement is hereby amended by deleting all of the language following
"(the "Stub Period Bonus")" in Section 4(a)(v)(3) and substituting in its place
the following language: "payable when bonuses would have been paid in
the following calendar year if Employee had remained employed."
5. The
first full paragraph immediately following Section 4(a)(v)(4) is hereby deleted
in its entirety.
6. The
following shall be added as a new subsection (c) under Section 4 and the former
subsection (c) shall be renumbered as subsection (d):
"(c) Long-Term
Incentive Plan Awards. Upon a termination of employment (i) by
Employee with Good Reason or (ii) by the Company other than for Cause, death
or
Disability (each a “Separation”), Employee shall be entitled to
the following with respect to his unvested cash and deferred stock awards under
the Company's Long-Term Incentive Plan (collectively, the “LTIP
Awards”):
(i) Cash
Awards.
(1) For
any
Separation that occurs in connection with or within 24 months following the
consummation of a Change in Control and that occurs prior to the certification
(the “Certification”) of the applicable performance goals set
forth in LTIP Awards by the administrator of the LTIP (the “Plan
Administrator”), Employee shall be entitled to one hundred percent
(100%) of the cash amount payable upon satisfaction of the performance goals
as
certified by the Plan Administrator, with such cash amount pro rated based
on
the number of days Employee was employed by the Company during the applicable
performance period. Such cash amount shall be paid out in full on the
first date that any payment is made on a similar award, based on the same
performance criteria and performance period, to any other officer of the Company
who is still employed by the Company through such payment date on the same
date such payment would be due if Employee had continued in active
employment.
(2) For
any
other Separation that does not fall within subsection (1) immediately above
that
occurs prior to the Certification, if Employee was employed by the Company
for
at least two-thirds (2/3) of the performance period underlying the applicable
cash award, Employee shall be entitled to fifty percent (50%) of the cash amount
payable upon satisfaction of the performance goals as certified by the Plan
Administrator of the LTIP, with such cash amount pro rated based on the number
of days Employee was employed by the Company during the applicable performance
period. Such cash amount shall be paid out in full on the first date
that any payment is made on a similar award, based on the same performance
criteria and performance period, to any other officer of the Company who is
still employed by the Company through such payment date on the same date
such payment would be due if Employee had continued in active
employment.
(3) For
any
Separation that occurs on or after the Certification, 100% of Employee’s then
unvested cash awards shall become immediately vested as of the termination
date. Such cash award shall be paid out in full within 10 business days
following the effective date of the Release of Claims.
(ii) Deferred
Stock Awards
(1) For
any
Separation that occurs in connection with or within 24 months following the
consummation of a Change in Control and that occurs prior to the Certification,
Employee shall be entitled to the greater of (x) one hundred percent (100%)
of
the shares payable upon satisfaction of the performance goals as certified
by
the Plan Administrator of the LTIP, with such number of shares pro rated based
on the number of days Employee was employed by the Company during the applicable
performance period and (y) one hundred percent (100%) of the shares payable
upon
immediate vesting of the target shares. Such shares shall be
paid out in full on the first date that any payment is made on a similar award,
based on the same performance criteria and performance period, to any other
officer of the Company who is still employed by the Company through such payment
date on the same date such payment would be due if Employee had continued
in active employment.
(2) For
any
other Separation that does not fall within subsection (1) immediately above
that
occurs prior to the Certification, if Employee was employed by the Company
for
at least two-thirds (2/3) of the performance period underlying the applicable
deferred stock award, Employee shall be entitled to fifty percent (50%) of
the
shares payable upon satisfaction of the performance goals as certified by the
Plan Administrator of the LTIP, with such number of shares pro rated based
on
the number of days Employee was employed by the Company during the applicable
performance period. Such shares shall be paid out in full on the
first date that any payment is made on a similar award, based on the same
performance criteria and performance period, to any other officer of the Company
who is still employed by the Company through such payment date on the same
date such payment would be due if Employee had continued in active
employment.
(3) For
any
Separation that occurs on or after the Certification, 100% of Employee’s then
unvested deferred stock awards shall become immediately vested as of the
termination date. Such deferred stock award shall be paid out in full
within 10 business days following the effective date of the Release of
Claims.
7. The
following shall be added as a new Section 24 of the Agreement:
"24. Section
409A.
(a) It
is intended that this Agreement shall comply with the provisions of Section
409A
of the Internal Revenue Code and the regulations and guidance promulgated
thereunder (“Section 409A”) so as not to subject Employee to
the payment of additional taxes and interest under section 409A of the
Code. In furtherance of this intent, this Agreement shall be
interpreted, operated, and administered in a manner consistent with these
intentions, and to the extent that any regulations or other guidance issued
under section 409A of the Code would result in Employee being subject to payment
of additional income taxes or interest under section 409A of the Code, the
Company agrees to amend this Agreement as may be necessary in order to avoid
the
application of such taxes or interest under section 409A of the
Code.
(b) Notwithstanding
any provision to the contrary in this Agreement, if the Employee is deemed
on
the date of termination to be a "specified employee" within the meaning of
that
term under Section 409A(a)(2)(B), then with regard to any payment or the
provision of any benefit that is specified as subject to this paragraph, such
payment or benefit shall not be made or provided (subject to the last sentence
of this paragraph) prior to the earlier of (i) the expiration of the six
(6)-month period measured from the date of the Employee’s “separation from
service” (as such term is defined under Section 409A), and (ii) the date of the
Employee’s death (the “Delay Period”). Upon the
expiration of the Delay Period, all payments and benefits delayed pursuant
to
this paragraph (whether they would have otherwise been payable in a single
sum
or in installments in the absence of such delay) shall be paid or reimbursed
to
the Employee in a lump sum, and any remaining payments and benefits due under
this Agreement shall be paid or provided in accordance with the normal payment
dates specified for them herein."
8. The
following proviso shall be added to the end of Section 1 and to the end of
the
second paragraph of Section 2 of Exhibit D to the Employment
Agreement:
";
provided
that in no event shall such Gross-Up Payment (or any reimbursement of expenses
to Employee for legal, accounting or related expenses) be made after the end
of
Employee's taxable year of the year following the year in which the Excise
Tax
is remitted to the Internal Revenue Service (or in which such expenses are
incurred by Employee)."
9. Except
as otherwise provided herein, the remaining terms of the Employment Agreement
shall remain in full force and effect.
IN
WITNESS WHEREOF, the Company has
caused this Amendment to be executed by its duly authorized officer, and
Employee has hereunto signed this Amendment, as of the date first above
written.
OAKLEY,
INC.
By:
Xxxxxxx
Xxxxxxx
Its: Chief
Financial Officer
D.
XXXXX XXXXXX
