1
EXHIBIT 10.68
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"),
effective this 1st day of May, 1999 (the "Amendment Date"), is entered into by
and between R. Link Xxxxxxx ("Employee") and Oakley, Inc., a Washington
corporation ("Company").
WHEREAS, Employee and the Company have previously entered into that
certain employment agreement dated January 31, 1997 (the "Effective Date"), as
amended effective February 1, 1997, as further amended effective April 13, 1998,
and as further amended May 12, 1998 (the "Old Employment Agreement"); 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 the Chief Operating 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 and/or the Chief Executive Officer 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
continue through January 31, 2002; provided, however, that on each anniversary
of the Effective Date at which time the remaining term of the Agreement is one
year, the Term of the Agreement shall automatically be extended for one
additional year unless, not later 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.
2
3. Compensation.
(a) Base Salary. The Company shall pay Employee an annual base
salary no less than at the rate of $350,000 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. Subject to subsection (c) below, 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
$200,000.
(c) Stock Options. Employee acknowledges and agrees that, in lieu of
payment of the bonus, if any, Employee may otherwise be entitled to under the
Company's Performance Bonus Plan for the Company's fiscal 1999, Employee was
granted in April 1999 a stock option (the "Option"), pursuant to the Company's
1995 Stock Incentive Plan (the "Stock Plan") and form of option agreement
previously approved by the Board of Directors (as modified herein), to purchase
110,000 shares of common stock, par value $0.01 per share ("Common Stock"), of
the Company at a per share exercise price equal to $ 7 5/8. The Option shall
vest and become exercisable in equal 25% installments on each of the first four
anniversaries of the date of grant. The term of the Option shall be ten years
from the date of grant. The Option is intended to qualify as an incentive stock
option within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "Code"), to the fullest extent permitted by such Section of the
Code. To the extent any portion of such Option does not qualify as an incentive
stock option, such portion of the Option shall be deemed a non-qualified stock
option.
(d) 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) Early Termination. If Employee's employment with the Company is
terminated by the Employee or by the Company in each case for any reason on or
before January 31, 2000, (i) the Company shall pay to Employee (or, in the case
of Employee's death, to Employee's beneficiaries or his estate) the sum of
$500,000 (the "Early Termination Payment") in full on the date of termination of
employment in accordance with the Company's normal payroll practices and
procedures. Any termination pursuant to this paragraph shall relieve each party
hereto from any obligation pursuant to Section 1 hereof. The Early Termination
Payment shall be in lieu of any benefits provided for in subsection (b) below
other than Employee's rights under any Company disability plan in which Employee
may then be a participant.
2
3
(b) Termination Generally. If Employee's employment with the Company
is terminated after January 31, 2000 Employee will be entitled to benefits as
follows:
(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. 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. Such payment 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 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.
For purposes of this Agreement, "Good Reason" shall mean a material
breach by the Company of any provision of this Agreement.
3
4
(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.
(c) 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 (d) below.
(d) 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 (c) 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.
(e) 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
4
5
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 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 (e) 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.
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 (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, 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.
5
6
(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.
6
7
(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;
7
8
(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
8
9
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
9
10
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 (i) 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
shall not convey any such confidential information or trade secrets about other
employees of the Company, its subsidiaries and affiliates to any other person or
(ii) for any other purpose or no purpose.
(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.
10
11
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
Attention: Chairman of the Board
If to Employee: R. Link Xxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxxx, 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. 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. In addition, 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.
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.
11
12
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 counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
17. Termination of Old Employment Agreement. The Old Employment
Agreement is hereby amended, restated and superseded in its entirety as of the
date hereof. Employee acknowledges and agrees that no rights or benefits that
Employee may have accrued in connection with a termination for Good Reason (as
such term was defined in the Old Employment Agreement) prior to the Amendment
Date shall have any force or effect following the Amendment Date.
12
13
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.
/s/ Xxxxx Xxxxxxx
-------------------------------------
By: XXXXX XXXXXXX
Its: CHAIRMAN OF THE BOARD
/s/ Link Xxxxxxx
-------------------------------------
R. LINK XXXXXXX
13
