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EXHIBIT 10.41
INDEMNIFICATION AGREEMENT
This
Indemnification Agreement is made as of this 3rd day of November
2005,
by and between OAKLEY, INC., a Washington corporation (the
"Company"), and
RICHARD SHIELDS ("Indemnified Party").
WHEREAS,
as of the date hereof, the Company has provisions for
indemnification of its directors and officers in Article V of its
Articles of
Incorporation (the "Articles of Incorporation") and Article VII of
its Amended
and Restated Bylaws (the "Bylaws") which provide for
indemnification of the
Company's directors and officers to the fullest extent permitted by
law;
WHEREAS,
the indemnification provisions in the Bylaws provide that the
right
of indemnification is a contract right of the covered parties;
WHEREAS,
the Bylaws provide that the Company may maintain, at its
expense,
insurance to protect itself and any of its directors and officers
against
liability asserted against such persons incurred in such capacity
whether or not
the Company has the power to indemnify such persons against the
same liability
under Section 23B.08.510 or .520 of the Act (as defined below) or a
successor
statute;
WHEREAS,
the Company and the Indemnified Party recognize that the
officers
and directors of publicly owned companies are frequently joined as
parties to
Proceedings (as defined below) against their respective companies
as a result of
their serving in such capacity; and
WHEREAS,
in order to induce Indemnified Party to serve or continue to
serve
the Company, the Company wishes to confirm the contract
indemnification rights
provided in the Bylaws and agrees to provide Indemnified Party with
the benefits
contemplated by this Agreement and to supplement the provisions of
this
Agreement with directors' and officers' liability insurance
maintained by the
Company.
NOW,
THEREFORE, in consideration of the promises, conditions,
representations and warranties set forth herein, and other good and
valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the
Company and Indemnified Party hereby agree as follows:
1. Definitions. The following terms, as used herein, shall have
the
following respective meanings; other capitalized terms used and not
specifically
defined in this Section 1 shall have the meanings provided
elsewhere in the
Agreement and in the Bylaws:
(a) "Act" means the Washington Business Corporation Act RCW
Title
23B, as amended from time to time.
(b) "Adjudication" shall refer to a final, non-appealable
decision
by a court of competent jurisdiction. "Adjudged" shall have a
correlative
meaning.
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(c) "Covered Amount" means any Loss, Fine and Expense, to the
extent
such Loss, Fine or Expense, in type or amount, is not insured under
the D&O
Insurance maintained by the Company from time to time.
(d) "Covered Act" means any act or omission of the Indemnified
Party
in his or her capacity as a director, officer, employee, agent,
fiduciary or
consultant of the Company alleged by any claimant or any claim
against
Indemnified Party by reason of him or her serving in such a
capacity, or by
reason of Indemnified Party serving, at the request of the Company,
in such
capacity with another corporation, partnership, employee benefit
plan, trust or
other enterprise, in all cases, whether such alleged act or
omission occurred
before or after the date of this Agreement.
(e) "D&O Insurance" means the liability insurance which the
Company
may purchase on behalf of Indemnified Party against liability
asserted against
or incurred by Indemnified Party in connection with claims arising
from Covered
Acts, whether or not the Company would have the power to indemnify
the
individual against the same liability under Section 23B.08.510 or
23B.08.520 of
the Act.
(f) "Determination" means a determination, based on the facts
known
at the time, made:
(i) by the Board of Directors by majority vote of a quorum
consisting of directors not at the time parties to the
Proceeding;
(ii) if a quorum cannot be obtained under clause (i), by
majority vote of a duly designated committee of the Board of
Directors, in the
manner provided by Section 23B.08.550(2)(b) of the Act;
(iii) by special legal counsel, selected in the manner provided
by Section 23B.08.550(2)(c) of the Act, in a written opinion;
or
(iv) by a majority of the shareholders of the Company,
excluding
shares owned or voted under the control of directors who are at the
time parties
to the Proceeding.
"Determined" shall have a correlative meaning.
(g) "Excluded Claim" means any payment for Losses, Fines or
Expenses
in connection with any claim relating to or arising out of:
(i) acts or omissions of the Indemnified Party Adjudged to be
intentional misconduct or a knowing violation of law;
(ii) conduct of the Indemnified Party Adjudged to be in
violation of Section 23B.08.310 of the Act; or
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(iii) any transaction with respect to which it was Adjudged
that
such Indemnified Party personally received a benefit in money,
property, or
services to which the Indemnified Party was not legally
entitled.
(h) "Expenses" means any reasonable expenses incurred by
Indemnified
Party as a result of a claim or claims made against Indemnified
Party from
Covered Acts, including, without limitation, reasonable counsel
fees and costs
of investigative, judicial or administrative proceedings or
appeals.
(i) "Fines" means any fine or penalty including, with respect to
an
employee benefit plan, any excise tax assessed with respect
thereto.
(j) "Losses" means amounts, as determined by an Adjudication,
which
the Indemnified Party is legally obligated to pay as a result of a
claim or
claims arising from Covered Acts, including, without limitation,
Fines, damages
and judgments and sums paid in settlement of such claim or
claims.
(k) "Proceeding" means any threatened, pending or completed
action,
suit, proceeding or investigation, whether civil, criminal or
administrative
whether formal or informal.
2. Maintenance of D&O Insurance.
(a) The Company hereby covenants and agrees that, so long as
Indemnified Party shall continue to serve as a director or
executive officer of
the Company and thereafter, for so long as Indemnified Party shall
be subject to
any possible Proceeding arising from any Covered Act, the Company,
subject to
Section 2(c), shall maintain in full force and effect D&O
Insurance.
(b) In all policies of D&O Insurance, Indemnified Party shall
be
named as an insured in such a manner as to provide Indemnified
Party the same
rights and benefits, and the same limitations, as are accorded to
the Company's
directors or executive officers most favorably insured by such
policy.
(c) The Company shall have no obligation to maintain D&O
Insurance
if the Company, by majority vote of the Board of Directors,
determines in good
faith that such insurance is not reasonably available, the premium
costs for
such insurance are disproportionate to the amount of coverage
provided, or the
coverage provided by such insurance is limited by exclusions so as
to provide an
insufficient benefit; provided, however, that such decision shall
not adversely
affect coverage of D&O Insurance for periods prior to such
decision without the
unanimous vote of all directors.
3. Indemnification. The Company shall indemnify Indemnified Party
up to
the Covered Amount and shall advance any and all Expenses to
Indemnified Party
in connection with any Proceeding or any Covered Act, subject, in
each case, to
the further provisions of this Agreement. This Agreement is made
pursuant to and
to effectuate the indemni
