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EXHIBIT 10.42
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is effective as of October
1, 2000 (the "Effective Date") between Oakley, Inc., a Washington corporation
("Oakley") and Xxxxx Xxxxxx Xxxx Calvallero ("Employee"), and reflects the
agreement governing the parties' relationship as of January 1, 2000.
WHEREAS, Employee was employed by Oakley Mexico, Inc., S.A. de C.V., a
Mexican Corporation and a wholly owned subsidiary of Oakley from December 1995
to April 1998;
WHEREAS, Employee has been acting in the capacity of Director of
International Sales for Oakley since April, 1998 and as Director of Oakley
Worldwide since September 1999;
WHEREAS, Employee and Oakley entered into an Employment Agreement dated
April 1, 1998 that was to remain in effect until March 31, 2000;
WHEREAS, Employee has been promoted to the position of Vice President
of Oakley Worldwide;
WHEREAS, Oakley and Employee wish to enter into this Agreement to set
forth the new terms and conditions of Employee's employment with Oakley;
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Employment. Employee is employed on a full-time basis as Vice
President of Oakley Worldwide from the date hereof ("Effective Date") through
the term of this Agreement. Said employment is contingent upon Employee's
maintenance of the legal right to work in the United States, but Oakley will
take such actions within its power as are necessary to enable Employee to
maintain such right. Employee shall be based solely in the United States, and
shall oversee Oakley's sales in the United States as well as Oakley's entire
business outside of the United States. Employee shall also have such other
duties and responsibilities as the Board of Directors or officers of Oakley
shall designate consistent with his position as described above.
2. Term. The term of employment under this Agreement shall be for the
period commencing on the Effective Date and ending on December 31, 2003, and
shall automatically renew for additional one year terms, unless either party
provides written notice of termination at least 60 days prior to the end of any
such term.
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3. Compensation.
a. Base Salary. As compensation for Employee's services to
Oakley, Oakley shall pay to Employee an annual salary in the sum of
$150,000, less legal deductions, payable biweekly in accordance with
Oakley's normal payroll practices. Such salary will be reviewed for an
increase by Oakley no later than December 31, 2001.
b. Sales Commission. During the term of this Agreement,
Employee shall also be entitled to a sales commission in an amount
equal to .0402% of Oakley consolidated international net sales
(excluding net sales of any non-Oakley-branded products other than One
Xcel products distributed by Oakley's international sales offices.)
Commission targets will be subject to annual review per each calendar
year, based on the international sales levels. Beginning January 1,
2001, the commission payable and commission target shall include
consideration of U.S. sales.
Unless otherwise agreed in writing by the parties, all sales
commission under this section 3(b) shall be payable to Employee by the
20th of every month with respect to the previous month's sales.
For purposes of the foregoing, sales commission shall be
calculated upon the net amount of all invoices for products or
accessories rendered, after all trade discounts, freight and
transportation allowances, sales taxes, C.O.D. charges, insurance and
related expenses have been deducted and after deducting customer
credits, including product returns, additional discounts, allowances
and refunds.
c. Annual Bonus. Employee shall be eligible to participate in
Oakley's Executive Officer Bonus Plan, and Employee's annual target
bonus (per each calendar year) under said plan shall not be less than
$20,000.
d. Performance Bonus. Employee will be entitled to an
additional $15,000 annual bonus, per each calendar year, based on the
achievement of operating income targets by Oakley international
subsidiaries, as set forth in Oakley's annual business plan (excluding
any xxxx to market exchange gains or losses on subsidiary payables to
Oakley, Inc.). Such bonus shall be payable as follows: $2,500 for
achievement of operating income target for each of Oakley Japan, Oakley
Canada, Oakley Europe, Oakley UK and Oakley South Pacific and $1,250
for achievement of operating income target for each of Oakley Mexico
and Oakley Africa.
e. House Completion Loan. The parties acknowledge the
existence of an outstanding loan from Oakley to Employee that was
referred to in Employee's previous employment agreement as the "House
Completion Loan". The outstanding loan balance, including any unpaid
interest, as of December 31, 1999 is $152,409.21. Employee acknowledges
receipt of a bonus paid by Oakley in the year 2000 in the sum
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of $25,000, the net balance of which was directly applied to the loan
balance on the Home Completion Loan. Employee agrees to pay interest on
the outstanding balance of such loan at the rate of six percent (6%)
interest to be paid monthly out of Employee's Sales Commission.
f. Additional Bonus. Employee will be entitled to an
additional $25,000 bonus on or about January 1, 2001, if there is any
remaining unpaid balance on the House Completion Loan at that time. The
net balance of such bonus will be first directly applied to the
remaining Home Completion Loan balance. If, however, the House
Completion Loan is paid in full prior to January 1, 2001, $30,000 will
be added to the commission target amount for the year 2001.
4. Participation in Retirement and Employee Benefit Plans. The Employee
shall be entitled to participate in any plan of Oakley relating to pension,
thrift, profit sharing, or other retirement or employee benefits that Oakley has
adopted or may adopt for the benefit of its employees. In addition, Oakley will
provide the Employee with major medical insurance and sick leave on the same
basis as is provided other similarly-situated Oakley employees. Oakley will also
continue paying premiums by and through its subsidiary Oakley Mexico on the
term-life insurance policy (with an annual premium not to exceed $4,000) and the
disability insurance policy (with an annual premium not to exceed $2,000)
previously purchased by Oakley or its subsidiary Oakley Mexico which provides
for benefits in the event that this Agreement is terminated prior to December
31, 2001 by reason of the Employee's death or Disability, in the aggregate
amount of U.S. $500,000.
5. Other Benefits. Employee shall earn the equivalent of three weeks
paid vacation every 12 months of active employment under this Agreement. In
addition, Employee shall be entitled to other applicable paid and unpaid time
off and benefits as is provided to other exempt employees and explained in the
Oakley Employee Handbook.
6. Termination.
a. Death or Disability. If, as a result of the Employee's
incapacity due to physical or mental illness not caused by an
industrial injury, he shall have been absent from the full-time
performance of his duties with Oakley for six (6) consecutive months,
and within thirty (30) days after Notice of Termination (as defined
below) is given he shall not have returned to the full-time performance
of his duties for a substantial period of time, his employment may be
terminated by Oakley for "Disability." The Employee's employment will
also terminate upon his death.
b. For Cause. Oakley may terminate the Employee for "Good
Cause." Termination by Oakley of the Employee's employment for "Good
Cause" shall mean termination upon (1) the willful and continued
failure by the Employee to substantially perform his duties with Oakley
(other than any such failure resulting from his incapacity due to
physical or mental illness), after a written demand for substantial
performance is delivered to him by the Board, which demand specifically
identifies the
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manner in which the Board believes that he has not substantially
performed his duties and provides Employee with a 30 day period in
which to remedy such willful nonperformance to Oakley's satisfaction;
(2) the willful engaging by the Employee in conduct which is
demonstrably and materially injurious to Oakley, monetarily or
otherwise; and (3) failure to maintain legal employment status as set
forth in Paragraph 1 above. For purposes of this Subsection, no act, or
failure to act, on the Employee's part shall be deemed "willful" unless
done, or omitted to be done, by him not in good faith and without
reasonable belief that his action or omission was in the best interest
of Oakley, and, subject to such criteria, the determination of whether
an act, or failure to act, was "willful" shall conclusively be made by
the Board.
c. Good Reason. "Good Reason" for termination by the Employee
of the Employee's employment shall mean the occurrence (without the
Employee's express written consent) of any material breach by Oakley of
any provision of this Agreement, unless corrected in all material
respects within 30 days following the Notice of Termination (as defined
below) given in respect thereof. Additionally, Employee shall have the
right to terminate his employment for "good reason" if he terminates
his employment because Link Xxxxxxx ceases to be employed by Oakley or
Xxx Xxxxxxx ceases to have significant involvement in the management of
Oakley's business, either as an employee, consultant or member of the
Board of Directors.
d. Notice of Termination. Any purported termination of the
Employee's employment by Oakley or by him shall be communicated by
Notice of Termination to the other party hereto in accordance with
Section 13. "Notice of Termination" shall mean a written notice that
shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Employee's employment under the provision so indicated.
e. Date of Termination. "Date of Termination" shall mean (1)
if the Employee's employment is terminated by his death, the date of
his death; (2) if the Employee's employment is terminated for
Disability, thirty (30) days after Notice of Termination is given
(provided that he shall not have returned to the full-time performance
of his duties for a substantial period of time during such thirty (30)
day period); (3) if the Employee's employment is terminated for Good
Cause, the date specified in the Notice of Termination; (4) if the
Employee's employment is terminated by the Employee for Good Reason,
thirty (30) days after Notice of Termination is given (provided that
any such breach of this Agreement by Oakley is not corrected in all
material respects during such thirty (30) day period); and (5) if the
Employee's employment is terminated for any other reason, the date
specified in the Notice of Termination.
f. Compensation upon Termination without Good Cause or for
Good Reason. If the Employee's employment by Oakley should be
terminated (x) by Oakley
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other than for Cause or (y) by the Employee for Good Reason, he shall
be entitled to the benefits provided below:
(i) Oakley shall pay to the Employee, no later than
the fifth day following the Date of Termination, his full base
salary through the Date of Termination at the rate in effect
at the time Notice of Termination is given, plus, at the time
such payments are due, all other amounts to which he is
entitled as of the Date of Termination including any bonuses
on a pro rata basis and commissions the Employee has earned,
including commissions on any orders booked but not invoiced on
the Date of Termination;
(ii) Oakley shall pay the Employee the sum of
$260,000, payable within 30 days of the Date of Termination;
(iii) Oakley shall continue in effect for the benefit
of the Employee all insurance or other provisions for
indemnification, defense or hold-harmless of officers or
directors of Oakley which are in effect on the date the Notice
of Termination is sent to the Employee with respect to all of
his acts and omissions while an officer or director as fully
and completely as if such termination had not occurred, and
until the final expiration or running of all periods of
limitation against actions which may be applicable to such
acts or omissions.
g. Compensation upon Termination for Death or Disability. If
the Employee's employment by Oakley should be terminated by Oakley for
Disability or by reason of his death:
(i) Oakley shall pay to the Employee no later than
the fifth day following the Date of Termination, his full base
salary through the Date of Termination at the rate in effect
at the time Notice of Termination is given, plus, at the time
such payments are due, all other amounts to which he is
entitled as of the Date of Termination including any bonuses
on a pro rata basis and commissions the Employee has earned,
including commissions on any orders booked but not invoiced on
the Date of Termination.
(ii) Oakley shall continue in effect for the benefit
of the Employee all insurance or other provisions for
indemnification, defense or hold-harmless of officers or
directors of Oakley which are in effect on the date the Notice
of Termination is sent to the Employee with respect to all of
his acts and omissions while an officer or director as fully
and completely as if such termination had not occurred, and
until the final expiration or running of all periods of
limitation against actions which may be applicable to such
acts or omissions.
h. Compensation upon Termination for Good Cause or without
Good Reason. If Oakley terminates Employee's employment for Good Cause
or the
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Employee terminates without Good Reason as defined hereunder, Employee
shall receive only that compensation which is due and payable as of the
Date of Termination.
i. Relocation Expenses. If this agreement is terminated by
Oakley without Good Cause or by Employee for Good Reason or is not
renewed for any reason by either party, Oakley will reimburse Employee
for the actual, customary and reasonable costs Employee incurs as a
result of relocating his and his immediate family's residence to
Mexico, if such relocation is chosen by Employee. In order to be
reimbursed, Employee must submit to Oakley all original receipts and
related documentation.
j. Mitigation. The Employee shall not be required to mitigate
the amount of any payment provided for in this Section 6 by seeking
other employment or otherwise.
7. No Assignments. This Agreement is personal to each of the parties
hereto. No party may assign or delegate any rights or obligations hereunder
without first obtaining the written consent of the other parties hereto.
However, in the event of the death of the Employee, all rights to receive
payments hereunder shall become rights of the Employee's estate.
a. As used in this Agreement, "Company" shall mean Oakley as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
b. This Agreement shall inure to the benefit of and be
enforceable by the Employee and his personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and legatees. If the Employee should die while any amount would still
be payable to him hereunder had he continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to his devisee, legatee or other designee or,
if there is no such designee, to his estate.
8. Confidential Information. Employee acknowledges that the nature of
the Employee's engagement by Oakley is such that Employee shall have access to
information of a confidential and/or trade secret nature which has great value
to Oakley and which constitutes a substantial basis and foundation upon which
the business of Oakley is based.
Employee acknowledges that he has signed an Employee
Confidentiality Agreement stating that Employee will hold in trust and
confidence any confidential information learned as an employee of Oakley, except
in the course and scope of his employment. The Employee Confidentiality
Agreement shall remain in force and effect separate and apart from this
Agreement, and will survive the termination of this Agreement, no matter what
the reason.
9. No Solicitation. Employee promises and agrees that during the term
of this Agreement and for three years thereafter, he will not influence or
attempt to influence customers or suppliers of Oakley or any of its present or
future subsidiaries or affiliates, either
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directly or indirectly, to divert their business to any individual, partnership,
firm, corporation or other entity then or proposed to be in competition with the
business of Oakley or any subsidiary or affiliate of Oakley.
10. Noninterference with Employees. In order to protect the
Confidential Information, Employee agrees that during the term hereof and for a
period of one year thereafter, Employee will not, directly or indirectly, induce
or entice any employee of Oakley to leave such employment or cause anyone else
to leave such employment.
11. Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, to achieve the intent of the parties to the extent possible. In any
event, all other provisions of this Agreement shall be deemed valid and
enforceable to the extent possible.
12. Notices. Any notice or other communication provided for in this
Agreement shall be in writing and sent if to Oakley to its principal office at:
Oakley, Inc.
One Icon
Xxxxxxxx Xxxxx, XX 00000
Attention: Chief Operating Officer
or at such other address as Oakley may from time to time in writing designate,
and if to Employee at or at such address as Employee may from time to time in
writing designate. Each such notice or other communication shall be effective
(i) if given by telecommunication and a verification of receipt is received,
(ii) if given by mail, three days after such communication is deposited in the
mails, with first class postage prepaid, addressed as aforesaid or (iii) if
given by any other means, when actually delivered at such address.
13. Entire Agreement. This letter contains the entire Agreement with
respect to Employee's employment. It supersedes any and all other Agreements,
either oral or in writing, with respect to the employment relationship,
including specifically, Employee's prior Employment Agreement with dated April
1, 1998. Employee and Oakley acknowledge and agree that no representations,
inducements, promises or Agreements, oral or otherwise, have been made between
Employee and Oakley, or anyone acting on his or its behalf with respect to the
matters hereof which are not included in this Agreement.
14. Amendments. No amendment or modification of the terms of this
Agreement shall be valid unless made in writing and duly executed by Employee
and an authorized officer of Oakley.
15. Waiver. No failure on the part of any party to exercise or delay in
exercising any right hereunder shall be deemed a waiver thereof or of any other
right, not shall any single or partial exercise preclude any further or other
exercise of such right or any other right.
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16. Governing Law. This Agreement, and the legal relations between the
parties, shall be governed by and construed in accordance with the laws of the
State of California. The parties agree that any dispute arising hereunder shall
be brought in the state or federal courts located in Orange County, California,
agree to submit to the personal jurisdiction of those courts, and waive their
right to have any dispute hereunder brought or tried elsewhere.
17. Attorneys' Fees. If any litigation shall occur between Employee and
Oakley which litigation arises out of or as a result of this Agreement or the
acts of the parties hereto pursuant to this Agreement, or which seeks an
interpretation of this Agreement, the prevailing party shall be entitled to
recover all costs and expenses of such litigation, including reasonable
attorneys' fees and costs.
18. Withholding. All compensation payable hereunder, including salary
and other benefits, shall be subject to applicable taxes, withholding and other
required, normal or elected deductions.
19. Counterparts. This Agreement and any amendment hereto may be
executed in one or more counterparts. All of such counterparts shall constitute
one and the same Agreement and shall become effective when a copy signed by each
party has been delivered to the other party.
20. Full Knowledge. Both parties agree that this document is executed
with full knowledge of its contents, truly reflecting their will.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date written hereunder.
Oakley, Inc. Xxxxx Xxxxxx Xxxx Xxxxxxxxx
/s/ Link Xxxxxxx /s/ Xxxxx Xxxxxx Xxxx Xxxxxxxxx
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By: Link Xxxxxxx
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Its: Chief Operating Officer
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Date: October 1, 2000 Date: October 1, 2000
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