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Exhibit 10.39
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
("Agreement"), effective as of the 1st day of January, 2000 (the "Effective
Date"), is entered into by and between Xxxxxx X. Xxxxxx ("Employee") and Oakley,
Inc., a Washington corporation (the "Company").
WHEREAS, Employee and the Company have previously entered into
that certain employment agreement dated October 6, 1997, which agreement was
amended and restated effective May 12, 1998 (collectively, 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 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 of the Company (the "Board") 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 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 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 $230,000 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 in its
sole discretion.
(b) Bonus. 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.
(c) 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
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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.
(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. In addition Employee
shall be entitled to accrue vacation benefits at the rate of no less than three
weeks per each twelve-month period.
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 Employee's 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 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 Employee
other than for Good Reason (as defined below), 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 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 greater of eighteen
(18) 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.
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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.
(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.
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(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
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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. 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 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 busin-
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ess 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 (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.
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
[Address]
[City]
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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.
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. 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.
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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/ Link Xxxxxxx
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By: R. Link Xxxxxxx
Its: Chief Operating Officer
/s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
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