EXHIBIT 10.16
August 1, 2000
PERSONAL AND CONFIDENTIAL
Xxxxxxx X. Exon, Esq.
Quiksilver, Inc.
00000 Xxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx, XX 00000
Re: Employment at Quiksilver, Inc.
Dear Charlie:
This letter ("Agreement") will confirm our understanding and
agreement regarding your employment with Quiksilver, Inc. ("Quiksilver" or the
"Company"), commencing on August 1, 2000 ("Date of Hire"), and will be effective
as of that date. This Agreement completely supersedes and replaces any
negotiations, discussions, understandings or agreements, express or implied, you
and the Company have had regarding your employment.
1. Position; Exclusivity of Employment. Your position will be
Executive Vice President, Business and Legal Affairs -
International, and you will initially report to me. A
current job description for your position is contained on
Addendum "A" attached hereto. During your employment with
Quiksilver, you will devote your full professional and
business time, interest, abilities and energies to the
Company and will not engage in any business activities
competitive with or adverse to the Company's business or
welfare, whether alone, as an employee, as an attorney, as
a partner, as a member, or as a shareholder, officer or
director of any other corporation or law firm, or as a
trustee, fiduciary or in any other similar representative
capacity of any other entity. The Company agrees that you
will be insured against, indemnified or otherwise covered
for legal malpractice or similar claims that may arise out
of your carrying out your duties and responsibilities
hereunder.
2. Base Salary. Your base salary will be $25,000 per month
($300,000 on an annualized basis), less applicable
withholdings and deductions, paid on the Company's regular
payroll dates. Your salary will be reviewed at the time
management salaries are reviewed periodically and may be
adjusted (up or
down) at the Company's discretion in light of Quiksilver's
performance, your performance, market conditions and other
factors deemed relevant by the Company; provided, however,
that your base salary will not be reduced below its
initial level through July 31, 2003, should your
employment continue through that date.
3. Bonus. For the Company's fiscal years ending October 31 of
2000, 2001, 2002 and 2003, you shall be eligible to
receive a bonus or bonuses based on the criteria set forth
on Addendum "B" attached hereto, for that portion of the
fiscal year during which you are so employed. Any bonus
earned pursuant to Addendum "B" shall be paid within ten
(10) days following the date the Company publicly releases
its annual audited financial statements (the "Bonus
Payment Date"), and shall be less applicable withholdings
and deductions. In the event that your employment with the
Company is terminated prior to the end of the applicable
fiscal year (including by reason of termination,
resignation, disability or death), you shall be entitled
to receive a pro rata portion of the bonus otherwise
payable to you based upon the actual number of days which
you were employed by the Company during the applicable
fiscal year, which shall be paid on the Bonus Payment
Date. The Company has made no representations or
commitments regarding the existence or components of any
bonus program should you remain employed with the Company
after October 31, 2003.
4. Vacation. Since Quiksilver does not have a vacation policy
for executives of your level, no vacation days will be
treated as earned or accrued.
5. Health Insurance. You (and any eligible dependents you
elect) will be covered by the Company's group health
insurance programs on the same terms and conditions
applicable to comparable employees. The Company reserves
the right to change, modify, or eliminate such coverage in
its discretion.
6. Life Insurance. The Company will pay the premium on a term
life insurance policy on your life with a company and
policy of our choice, and a beneficiary of your choice, in
the face amount determined by the Company of not less than
$1,000,000. Our obligation to obtain and maintain this
insurance is contingent upon your establishing and
maintaining insurability, and we are not required to pay
premiums for such a policy in excess of $2,500 annually.
7. Stock Options. Pursuant to the terms of the Company's 2000
Stock Option Plan, and subject to formal approval by the
Board of Directors, the Company will grant you a
non-qualified stock option for 30,000 shares of the
Company's common stock. None of these options shall vest
until such time as you and the Company enter into a
written stock option agreement,
which shall provide, among other things, that none of
these options shall vest until one year from your Date of
Hire, at which time one-third of such options (10,000
shares) shall vest, with each remaining one-third (10,000
shares each) vesting on the second and third anniversary
of your Date of Hire, respectively; provided, however,
that all such unvested options shall vest immediately on
the effective date of a Change in Control as defined in
Addendum "C" attached hereto. All unvested options shall
automatically terminate upon your termination of
employment.
8. At-Will Employment; Termination. Notwithstanding anything
to the contrary in this Agreement, express or implied,
your employment is for an unspecified term, and either you
or the Company may terminate such employment at will and
with or without Cause or notice at any time for any
reason. This aspect of your employment relationship can
only be changed by an individualized written agreement
signed by both you and the Chairman of the Board of the
Company.
The Company may also terminate your employment
immediately, without notice, and without further
obligation for Cause, which shall include, but not be
limited to, (i) your death, (ii) your permanent disability
which renders you unable to perform your duties and
responsibilities for a period in excess of three
consecutive months, (iii) willful misconduct in the
performance of your duties, (iv) violation of the Rules of
Professional Responsibility of the State Bar of
California, including any discipline or suspension, (v)
loss of your license to practice law in the State of
California, (vi) commission of a felony or any violation
of law involving moral turpitude or dishonesty, (vii)
self-dealing, (viii) willful breach of duty, (ix) habitual
neglect of duty, (x) a material breach by you of your
obligations under Paragraphs 1, 10 or 12 of this
Agreement, or (xi) sustained unsatisfactory performance
following notice to improve.
If the Company elects to terminate your employment without
Cause, or you terminate your employment for Good Reason
(as defined below), the Company will continue to pay your
base salary (but not any bonuses, overrides, insurance, or
other employment benefits) on its regular payroll dates
for a period of twelve (12) months following the date of
termination and shall have no further obligation or
liability to you.
"Good Reason" for you to terminate employment means a
voluntary termination within six (6) months following a
Change in Control (as defined in Addendum "C") as a result
of (i) the assignment to you of duties materially
inconsistent with your position as set forth above without
your consent, (ii) a material change in your reporting
level from that set forth in this Agreement without your
consent, (iii) a material diminution of your authority
without your consent, (iv) a material breach by the
Company of its obligations under this Agreement, or (v) a
failure by the Company to
obtain from any successor, before the succession takes
place, an agreement to assume and perform the obligations
contained in this Agreement.
9. Trade Secrets; Confidential and/or Proprietary
Information; Attorney-Client Privilege. The Company owns
certain trade secrets and other confidential and/or
proprietary information which constitute valuable property
rights, which it has developed through a substantial
expenditure of time and money, which are and will continue
to be utilized in the Company's business and which are not
generally known in the trade. This proprietary information
includes the list of names of the customers and suppliers
of the Company, and other particularized information
concerning the products, finances, processes, material
preferences, fabrics, designs, material sources, pricing
information, production schedules, sales and marketing
strategies, sales commission formulae, merchandising
strategies, order forms and other types of proprietary
information relating to our products, customers and
suppliers. You agree that you will not disclose and will
keep strictly secret and confidential all trade secrets
and proprietary information of the Company, including, but
not limited to, those items specifically mentioned above.
You also agree to preserve in the strictest of confidence
all information and documents falling within the
attorney-client and/or attorney work product privileges,
which privileges survive the termination of your
employment relationship with the Company.
10. Expense Reimbursement. The Company will reimburse you for
documented reasonable and necessary business expenses
incurred by you while engaged in business activities for
the Company's benefit on such terms and conditions as
shall be generally available to other executives of the
Company. In your case, this will include annual dues to
maintain your active membership in the State Bar of
California, including section dues of the Business Law
Section.
11. Compliance With Business Policies. You will devote your
full business time and attention to Quiksilver and will
not be involved in other business ventures that would
interfere with your duties under Paragraph 1 above without
express authorization from me or the Company's Board of
Directors. You will be required to observe the Company's
personnel and business policies and procedures as they are
in effect from time to time. In the event of any
conflicts, the terms of this Agreement will control.
12. Entire Agreement. This Agreement, its addenda, the 2000
Stock Option Plan, and any stock option agreements the
Company may enter into with you contain the entire
integrated agreement between us regarding these issues,
and no modification or amendment to this Agreement will be
valid
unless set forth in writing and signed by both you and the
Chairman of the Board of the Company.
13. Arbitration as Exclusive Remedy. To the fullest extent
allowed by law, any dispute, controversy or claim arising
out of or relating to this Agreement, the breach thereof,
or any aspect of your employment or the cessation thereof
must be settled exclusively by final and binding
arbitration before a single arbitrator in Orange County,
California, under the National Rules for the Resolution of
Employment Disputes of the American Arbitration
Association ("AAA"), as the exclusive remedy for such
dispute, controversy or claim. In any such arbitration,
the parties may conduct discovery to the same extent as
would be permitted in a court of law. The Company shall
pay the arbitrator's fees and any AAA administrative
expenses. Possible disputes covered by this agreement to
arbitrate include (but are not limited to) wage, contract,
discrimination, and other employment-related claims under
laws known as Title VII of the Civil Rights Act, the
California Fair Employment and Housing Act, the Americans
With Disabilities Act, the Age Discrimination in
Employment Act, and any other statutes or laws relating to
an employee's relationship with his employer. However,
claims for workers' compensation benefits and unemployment
insurance are not covered by this arbitration agreement,
and such claims may be presented by you to the appropriate
court or state agency as provided by California law. The
arbitrator shall issue a reasoned, written decision, and
shall have full authority to award all remedies available
in a court of law. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction
thereof. BY ENTERING INTO THIS ARBITRATION AGREEMENT, BOTH
YOU AND THE COMPANY VOLUNTARILY ARE GIVING UP ANY RIGHTS
TO A COURT OR JURY TRIAL.
14. Successors and Assigns. This Agreement will be assignable
by the Company to any successor or to any other company
owned or controlled by the Company, and will be binding
upon any successor to the business of the Company, whether
direct or indirect, by purchase of securities, merger,
consolidation, purchase of all or substantially all of the
assets of the Company or otherwise.
Please sign, date and return the enclosed copy of this letter to
me for our files to acknowledge your agreement with the above. Charlie, all of
us at Quiksilver very much look forward to you joining our organization and
continuing our professional relationship.
Best personal regards.
Very truly yours,
Xxxxxx X. XxXxxxxx, Xx.
Chairman and Chief Executive Officer
Enclosure
ACKNOWLEDGED AND AGREED:
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Xxxxxxx X. Exon
Dated:
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