Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of April 1, 2004 (this "Agreement"), by and
between SOLA International, Inc., a Delaware corporation (the "Company"), and
Xxxxx Xxxxxxx (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. Duties. During the Employment Term, the Executive shall serve as Executive
Vice President and General Manager, North America and such other
position(s) as the Chief Executive Officer of the Company (the "CEO") may
reasonably designate.
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.
2. Compensation. In full consideration of the performance by the Executive of
the Executive's obligations during his employment (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:
Your remuneration package as an executive of the Company will be as
follows:
2.1. A base salary of US$ 330,000.
2.2. The Executive will be eligible for a bonus pursuant to the terms and
conditions of the Company's "Management Incentive Plan". I have
provided you with an outline of how I intend to structure your
incentive plan in this role.
2.3. A company car allowance in the sum of US$ 800 per month.
2.4. You will continue to be a member of the SOLA Australia
Superannuation Fund, which will be paid at the rate of an equivalent
Australian salary rather than a direct translation of your US
salary.
3. Benefits.
(i) In addition to the payments and awards described in Section 3 of this
agreement, during your employment, 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.
(ii) The Company will pay your telephone rental and reimburse you for all
business related calls.
4. Vacation. You will be entitled to 20 days Annual Leave with no annual
leave loading.
5. Termination. Employment with the Company may be terminated by either party
upon the occurrence of any of the following events:
5.1. The death or disability of the Executive.
5.2. The termination of employment by the Company for Cause. As used
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.
5.3. If the Executive's employment is terminated by SOLA, other than for
cause, prior to September 30, 2005 the Executive's current 18 month
severance agreement will apply.
5.4. If termination of employment by the Executive or the Company occurs
after October 1, 2005, other than for cause, notice of termination
of employment by either side is 6 months and must be given in
writing.
5.5. 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 Executive Vice President and General Manger, North
America 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 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 5.3, Section 5.4 or Section
5.5 hereof, 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 the appropriate termination
period as detailed in 5.3 and 5.4 above, commencing with the first of the
month following the month in which termination takes place, (c) pay the
Executive the appropriate percentage, determined by the termination period
detailed in 5.3 and 5.4 above, 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 3 of this Agreement
for a period of six months after the date of such termination and (e) pay
up to AU$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
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 terminates
his employment with the Company other than for Good Reason.
7. Executive Covenants.
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(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 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 his
employment, and for twelve months following a Severance Event or the
termination of his employment by the Executive other than for Good
Reason, 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
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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
(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 his employment 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 his employment 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 his employment, 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 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:
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(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, 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.
00000 Xxxx Xxxxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X Xxxxxx
The Executive: Xxxxx Xxxxxxx [ ]
Date [ ]
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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 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 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.
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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 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 X. Xxxxxx
------------------------
Name: Xxxxxx X Xxxxxx
Title: President and CEO
Executive:
/s/ Xxxxx Xxxxxxx
----------------------------------
Xxxxx Xxxxxxx
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