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Exhibit 10.38
AMENDMENT #1 TO AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDMENT, dated December 31, 1999 (the "Amendment"), to the Amended and
Restated Employment Agreement, dated May 1, 1999 (the "Employment Agreement"),
between R. Link Xxxxxxx (the "Employee") and Oakley, Inc., a Washington
corporation (the "Company").
WHEREAS, the Employee and the Company have previously entered
into the Employment Agreement; and
WHEREAS, the Employee desires to continue to provide the Company
with his services and the Company desires to continue to employ the 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, the Employee and the
Company have agreed and do hereby agree to amend the Employment Agreement as
follows, effective as of the date first written above:
1. Termination of Employment. Section 4 of the Employment
Agreement is hereby amended in its entirety to read as follows:
"4. Termination of Employment
(a) Termination Generally. If Employee's employment with
the Company is terminated, Employee will be entitled to benefits as set forth
below.
i 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; provided, however, that if Employee's death occurs on or
before January 31, 2002, the Company shall pay to Employee's
beneficiaries or his estate an amount equal to $500,000; provided,
further, that such amount shall be paid only from the proceeds, if any,
received by the Company pursuant to any life insurance on Employee's
life for the benefit of the Company. If Employee's death occurs after
January 31, 2002, Employee's beneficiaries or his estate shall receive
benefits in accordance with any Company plans then in effect.
ii 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; provided, however,
that if Employee is terminated for Disability on or before January 31,
2002, the Company shall only pay to Employee the sum of $500,000 in full
on the date of termination of employment in accordance with the
Company's normal payroll practices and procedures. Any payment pursuant
to this Section 4(a)(ii) shall not affect Employee's rights under any
Company disability plan in which Employee may then be a participant.
iii Termination for Cause. The Company shall have
the right to terminate Employee's employment for Cause by giving
Employee written notice of the
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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.
iv 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;
provided, however, that if such termination occurs on or before January
31, 2002, the Company shall pay to Employee the sum of $500,000 in full
on the date of termination of employment in accordance with the
Company's normal payroll practices and procedures. For purposes of this
Agreement, "Good Reason" shall mean a material breach by the Company of
any provision of this Agreement. Any termination of employment pursuant
to this subsection (iv) shall relieve each party hereto from any
obligation pursuant to Section 1 hereof.
v 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. In addition, the Company shall pay Employee his base salary
accrued through the date of termination and, with respect to any fiscal
year ended prior to the date of termination as to which no annual bonus
under the Performance Bonus Plan had yet been paid, an annual bonus
determined on the basis of the performance goals and objectives
applicable to Employee for such year.
(b) Acceleration of Stock Options. If Employee's
employment is terminated by the Company for any reason other than Employee's
death or disability or for Cause, the vesting of that portion of Employee's
stock options that are outstanding as of the date of Employee's termination, if
any, which would have vested within one year after the date of Employee's
termination shall be accelerated and such stock options shall be immediately
exercisable and shall remain exercisable pursuant to subsection (c) below.
(c) Extension of Exercise Period of Stock Options.
Notwithstanding anything to the contrary contained herein or in Employee's
existing or future stock option agreements, if Employee's employment is
terminated by the Employee or by the Company for any reason during the Term of
this Agreement, Employee shall be entitled to exercise his stock options to the
extent vested on the date of his termination (including any stock options
accelerated pursuant to subsection (b) above) for a period of two years from
such date of termination. If Employee does not exercise his incentive stock
options on or before the date three months following his termination of
employment with the Company, his incentive stock options will thereafter be
treated as non-qualified stock options in accordance with Section 422 of the
Code.
(d) Consulting Services. Upon termination of Employee's
employment with the Company for any reason other than by reason of Employee's
death or Disability, the Employee shall, at the election of the Company, which
election must be exercised in writing and received by Employee within fifteen
(15) days of the effective date of such termination, provide consulting services
to the Company on such projects or matters within the expertise of Employee
and/or in which he was involved or of which he had knowledge during his
employment with the Company that the Board of Directors or the Chairman of the
Board of the Company may reasonably request of him from time to time. The term
of the consulting period under this Agreement shall
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begin on the date of exercise (the "Exercise Date") of the option by the Company
and shall continue for a period of two (2) years from the Exercise Date. In
return for said consulting services, the Employee shall be compensated at the
rate of $50,000 per year, payable in equal bi-weekly installments or such other
time or times as the Company and Employee shall agree. The Company understands
and agrees that Employee's engagement to provide consulting services pursuant to
this subsection (d) shall be nonexclusive and limited in time so as to permit
Employee to perform duties on a full-time basis for one or more employers."
2 No Mitigation; No Offset. The second sentence of Section 10 of
the Employment Agreement is hereby amended in its entirety to read as follows:
"In addition, except as otherwise provided in Section 4(a)(i), nothing contained
herein shall be construed to limit in any way Employee's rights or interests in
or to accrued vacation, qualified or nonqualified compensatory arrangements in
accordance with the terms thereof (including the Company's 401(k) plan and
deferred compensation plan) or any other employee benefit vested on Employee's
date of termination."
3 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 Agreement to be
executed by its duly authorized officer, and the Employee has hereunto signed
this Agreement, as of the date first above written.
OAKLEY, INC.
/s/ Xxx Xxxxxxx
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By: Xxx Xxxxxxx
Its: Chief Executive Officer
/s/ Link Xxxxxxx
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R. LINK XXXXXXX
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