<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-15131
QUIKSILVER, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0199426
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1740 Monrovia Avenue
Costa Mesa, California 92627
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (714) 645 - 1395
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of each exchange
Title of each class on which registered
------------------- ---------------------
<S> <C>
None None
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
The number of shares outstanding of registrant's Common Stock, par value
$.01 per share, at April 30, 1995 was 6,684,889.
<PAGE> 2
QUIKSILVER, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page No.
<S> <C>
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets
April 30, 1995 (Unaudited) and October 31, 1994 .... 2
Consolidated Statements of Income (Unaudited)
Three Months ended April 30, 1995 and 1994
Six Months ended April 30, 1995 and 1994 ........... 3
Consolidated Statements of Cash Flows (Unaudited)
Six Months ended April 30, 1995 and 1994 ........... 5
Notes to Consolidated Financial Statements ................ 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ...... 7
Part II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.......... 10
Item 6. Exhibits and Reports on Form 8-K ............................ 10
SIGNATURES .................................................................. 11
</TABLE>
1
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
QUIKSILVER, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
April 30, October 31,
(Amounts in thousands except share data) 1995 1994
- ----------------------------------------------------------------- ------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents ................ $ 2,702 $ 682
Trade accounts receivable, less allowance
for doubtful accounts of $2,919 (1995)
and $2,202 (1994) ...................... 38,862 29,974
Other receivables ........................ 1,676 1,548
Inventories - Note 3 ..................... 25,277 21,609
Prepaid expenses ......................... 956 917
------- -------
Total current assets ................... 69,473 54,730
Equipment, less accumulated depreciation and
amortization of $6,772 (1995) and $6,194
(1994) ................................... 6,976 6,133
Trademark and consulting agreement, less
accumulated amortization of $1,235 (1995)
and 1,185 (1994) ......................... 1,758 1,833
Goodwill, less accumulated amortization of $2,049
(1995) and $1,899 (1994) ................. 15,912 16,209
Other assets ...................................... 1,600 1,565
------- -------
$95,719 $80,470
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Lines of credit .......................... $14,827 $10,100
Accounts payable ......................... 6,257 5,157
Accrued liabilities ...................... 6,959 5,024
Current portion of notes payable ......... 225 390
Income taxes payable ..................... 1,931 2,412
------- -------
Total current liabilities .............. 30,199 23,083
Notes payable ..................................... 3,420 2,449
------- -------
Total liabilities ...................... 33,619 25,532
Stockholders' equity
Preferred stock, $.01 par value, authorized
shares 5,000,000; issued and outstanding
shares - none .......................... -- --
Common stock, $.01 par value, authorized
shares 10,000,000; issued and outstanding
shares 6,684,889 (1995) and 6,521,422 (1994) 67 65
Additional paid-in-capital ............... 13,170 11,551
Retained earnings ........................ 47,883 42,727
Cumulative foreign currency translation
gain ............................... 980 595
------- --------
Total stockholders' equity ............. 62,100 54,938
------- --------
$95,719 $80,470
======= ========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 4
QUIKSILVER, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended April 30,
--------------------------------
(Amounts in thousands except share data) 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
Net sales ................................ $ 47,311 $ 36,468
Cost of goods sold ....................... 28,485 22,222
---------- ----------
Gross profit .......................... 18,826 14,246
---------- ----------
Operating expenses:
Selling, general and
administrative expenses .............. 12,110 9,555
Royalty income ......................... (247) (162)
Royalty expense......................... 615 63
---------- ----------
Total operating expenses.............. 12,478 9,456
---------- ----------
Operating income.......................... 6,348 4,790
Interest income........................... (1) --
Interest expense.......................... 398 213
Gain on foreign currency exchange......... (120) (85)
Loss on foreign currency exchange......... 90 28
Other expense............................. 19 42
---------- ----------
Income before provision for
income taxes........................... 5,962 4,592
Provision for income taxes - Note 4....... 2,339 1,832
---------- ----------
Net income ............................... $ 3,623 $ 2,760
========== ==========
Net income per common share............... $ .52 $ .42
========== ==========
Weighted average common shares
and equivalents outstanding - Note 2 ... 6,996,000 6,605,000
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 5
QUIKSILVER, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Six months ended April 30,
--------------------------------
(Amounts in thousands except share data) 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
Net sales ................................ $ 80,969 $ 60,762
Cost of goods sold ....................... 49,254 37,665
---------- ----------
Gross profit .......................... 31,715 23,097
---------- ----------
Operating expenses:
Selling, general and
administrative expenses .............. 22,075 16,740
Royalty income ......................... (455) (421)
Royalty expense......................... 1,037 328
---------- ----------
Total operating expenses.............. 22,657 16,647
---------- ----------
Operating income.......................... 9,058 6,450
Interest income........................... (7) (1)
Interest expense.......................... 568 309
Gain on foreign currency exchange......... (355) (118)
Loss on foreign currency exchange......... 228 98
Other expense............................. 97 80
---------- ----------
Income before provision for
income taxes and cumulative effect
of change in accounting for income taxes 8,527 6,082
Provision for income taxes - Note 4....... 3,373 2,414
---------- ----------
Income before cumulative effect
of change in accounting for income taxes 5,154 3,668
Cumulative effect of change in accounting
for income taxes........................ -- 600
---------- ----------
Net income ............................... $ 5,154 $ 4,268
========== ==========
Income per common share before
cumulative effect of change in
accounting for income taxes............. $ .74 $ .56
Cumulative effect of change in accounting
for income taxes........................ -- .09
---------- ----------
Net income per common share............... $ .74 $ .65
========== ==========
Weighted average common shares
and equivalents outstanding - Note 2 ... 6,974,000 6,587,000
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 6
QUIKSILVER, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months ended April 30,
------------------------------
(Amounts in thousands) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income ........................................ $ 5,154 $ 4,268
Items in income not affecting cash:
Depreciation and amortization .................. 1,099 990
Provision for losses on accounts receivable .... 246 453
Net loss on sale of fixed assets................ 25 49
Change in operating assets and liabilities:
Trade accounts receivable ...................... (9,134) (13,966)
Other receivables .............................. (128) (1,117)
Inventories .................................... (3,668) (1,298)
Prepaid expenses ............................... (39) 116
Other assets ................................... (35) 28
Accounts payable ............................... 1,100 1,812
Accrued liabilities ............................ 1,935 751
Income taxes payable ........................... (481) 178
------- -------
Net cash used in operating activities................. (3,926) (7,736)
Cash flows from investing activities:
Proceeds from sales of fixed assets................. (25) (20)
Capital expenditures................................ (1,566) (1,740)
Goodwill............................................ (4) (3,791)
-------- --------
Net cash used in financing activities ................ (1,595) (5,551)
Cash flows from financing activities:
Borrowings on lines of credit...................... 23,522 16,954
Payments on lines of credit........................ (18,795) (7,534)
Borrowings on notes payable........................ 1,029 242
Payments on notes payable.......................... (223) (166)
Proceeds from stock issued in connection with
exercise of stock options ....................... 1,623 742
------- -------
Net cash provided by financing activities............. 7,156 10,238
Effect of exchange rate changes on cash............... 385 471
------- -------
Net increase (decrease) in cash....................... 2,020 (2,578)
Cash at beginning of period .......................... 682 3,386
------- -------
Cash at end of period ................................ $ 2,702 $ 808
======= =======
Supplementary Cash Flow Information:
Cash paid during the period for:
Interest ....................................... $ 627 $ 365
Income taxes ................................... 2,900 1,885
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 7
QUIKSILVER, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statement
presentation.
The consolidated financial statements include the accounts of the
parent company and subsidiaries, which are wholly- owned.
The Company, in its opinion, has included all adjustments (consisting
only of normal recurring accruals) necessary for a fair presentation
of the results of operations for the quarters ended April 30, 1995 and
1994. The financial statements and notes thereto should be read in
conjunction with the audited financial statements and notes for the
years ended October 31, 1994 and 1993. Interim results are not
necessarily indicative of results for the full year due to seasonality
and other factors.
For foreign operations, local currencies are considered the functional
currency. Assets and liabilities are translated using the exchange
rates in effect at the balance sheet date. Results of operations are
translated using the average exchange rates prevailing throughout the
period. Translation effects are accumulated as part of the cumulative
foreign currency translation gain section in stockholders' equity.
Gains and losses from foreign currency transactions are included in
operating results.
2. Net income per common share was computed based on the weighted average
number of shares actually outstanding plus the shares that would be
outstanding, using the treasury stock method, assuming the exercise of
all outstanding options and warrants which were considered to be
common stock equivalents.
3. Inventories consist of the following:
<TABLE>
<CAPTION>
April 30, October 31,
1995 1994
------------ -----------
<S> <C> <C>
Raw Materials $10,207,000 $ 9,452,000
Work-In-Process 3,454,000 3,467,000
Finished Goods 11,616,000 8,690,000
----------- -----------
$25,277,000 $21,609,000
=========== ===========
</TABLE>
Inventories are valued at the lower of cost (first in, first out) or
market.
4. Effective November 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). This Statement changed the Company's method of accounting for
income taxes from the deferred method to an asset and liability
method.
The cumulative effect at November 1, 1993 of adopting this new
statement was the recording of a net deferred asset and an increase to
net income of $600,000 for the three months ended April 30, 1994.
6
<PAGE> 8
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS - Three Months Ended April 30, 1995 as Compared to Three
Months Ended April 30, 1994
Consolidated net sales for the second quarter increased 29.7% to $47,311,000
as compared to $36,468,000 in the same period of the prior year. Fiscal 1995
second quarter net sales, excluding Quiksilver Europe, increased 27.4% to
$31,187,000 as compared to $24,482,000 in the same period of the prior year.
This increase was primarily due to a greater acceptance of the Company's
product lines. Fiscal 1995 second quarter net sales for Quiksilver Europe
increased 34.5% to $16,124,000 as compared to $11,986,000 in the same period of
the prior year. This increase was a result of a greater acceptance of the
Company's product lines in Europe and a decrease in the French franc exchange
rate.
Consolidated gross profit margin for the second quarter increased to 39.8% as
compared to 39.1% in the same period of the prior year. Fiscal 1995 second
quarter gross profit margin, excluding Quiksilver Europe, increased to 36.4% as
compared to 35.9% in the same period of the prior year. This increase was
primarily due to cost reduction measures and improved product forecasting
resulting in a reduction in closing out selected finished goods inventory at
below wholesale prices. Fiscal 1995 second quarter gross profit margin for
Quiksilver Europe increased to 46.3% as compared to 45.5% in the same period of
the prior year. This increase was primarily due to better sourcing, lower
levels of markdowns and selling directly to more accounts in selected countries
as opposed to using distributors.
Consolidated selling, general and administrative expense ("SG&A") for the
second quarter increased 26.7% to $12,110,000 as compared to $9,555,000 in the
same period of the prior year. Fiscal 1995 second quarter SG&A, excluding
Quiksilver Europe, increased 19.8% to $7,798,000 as compared to $6,508,000 in
the same period of the prior year. This increase was primarily due to
increased sales volume. Fiscal 1995 second quarter SG&A expense for Quiksilver
Europe increased 41.5% to $4,312,000 as compared to $3,047,000 in the same
period of the prior year. This increase was primarily due to increased sales
volume, direct selling and shipping into countries that were previously sold to
by distributors and a decrease in the French franc exchange rate.
Consolidated royalty income for the second quarter increased to $247,000 as
compared to $162,000 in the same period of the prior year. This increase was
due to increased sales of domestically licensed products. The Company receives
royalty income from its Mexico, wetsuit, watch, sunglass, and outlet store
licensees as well as Raisins international licensees.
Consolidated royalty expense for the second quarter increased to $615,000 as
compared to $63,000 in the same period of the prior year. This increase was
due to increased sales by Quiksilver Europe, which, as a licensee of Quiksilver
International, pay royalties pursuant to a license agreement, and to an
agreement with Quiksilver International, whereby Quiksilver International
provided Quiksilver Europe with a one-time reduction in royalties in the second
quarter of fiscal 1994 due to the increase in sales volume and expenses from
directly selling and shipping into countries which were previously sold to by
distributors.
Consolidated interest expense increased to $398,000 as compared to $213,000 in
the same period of the prior year. This change was primarily due to a decrease
in cash available for investment.
Consolidated net income for the second quarter increased 31.3% to $3,623,000 or
$0.52 per common share as compared to $2,760,000 or $0.42 per common share in
the same period of the prior year. This increase was primarily due to
increased sales and gross profit margin, partially offset by increased SG&A,
royalty and interest expense.
7
<PAGE> 9
RESULTS OF OPERATIONS - Six Months Ended April 30, 1995 as Compared to Six
Months Ended April 30, 1994
Consolidated net sales for the six months increased 33.3% to $80,969,000 as
compared to $60,762,000 in the same period of the prior year. Fiscal 1995 six
month net sales, excluding Quiksilver Europe, increased 31.2% to $53,425,000 as
compared to $40,730,000 in the same period of the prior year. This increase
was primarily due to a greater acceptance of the Company's product lines.
Fiscal 1995 six month net sales for Quiksilver Europe increased 37.5% to
$27,544,000 as compared to $20,032,000 in the same period of the prior year.
This increase was a result of a greater acceptance of the Company's product
lines in Europe and a decrease in the French franc exchange rate.
Consolidated gross profit margin for the six months increased to 39.2% as
compared to 38.0% in the same period of the prior year. Fiscal 1995 six month
gross profit margin, excluding Quiksilver Europe, increased to 36.0% as
compared to 34.3% in the same period of the prior year. This increase was
primarily due to cost reduction measures and improved product forecasting
resulting in a reduction in closing out selected finished goods inventory at
below wholesale prices. Fiscal 1995 six month gross profit margin for
Quiksilver Europe decreased to 45.3% as compared to 45.6% in the same quarter
of the prior year. This decrease was primarily due to higher levels of
markdowns and a different mix of sales.
Consolidated SG&A for the six months increased 31.9% to $22,075,000 as compared
to $16,740,000 in the same period of the prior year. Fiscal 1995 six month SG&A,
excluding Quiksilver Europe, increased 25.2% to $14,118,000 as compared to
$11,279,000 in the same period of the prior year. This increase was primarily
due to increased sales volume. Fiscal 1995 six month SG&A for Quiksilver Europe
increased 45.7% to $7,957,000 as compared to $5,461,000 in the same period of
the prior year. This increase was primarily a result of increased sales volume
and direct selling and shipping into countries that were previously sold to by
distributors and a decrease in the French franc exchange rate.
Consolidated royalty income for the six months increased to $455,000 as
compared to $421,000 in the same period of the prior year. This increase was
due to increased sales of domestically licensed products.
Consolidated royalty expense for the six months increased to $1,037,000 as
compared to $328,000 in the same period of the prior year. This increase was
due to increased sales by Quiksilver Europe, and to an agreement with
Quiksilver International, whereby Quiksilver International provided Quiksilver
Europe with a one-time reduction in royalties in the second quarter of fiscal
1994 due to the increase in sale volume and expenses from directly selling and
shipping into countries which were previously sold to by distributors.
Consolidated interest expense increased to $568,000 as compared to $309,000 in
the same period of the prior year. This change was primarily due to a decrease
in cash available for investment.
Consolidated income before cumulative effect of change in accounting for income
taxes for the six months increased 40.5% to $5,154,000 or $0.74 per common
share as compared to $3,668,000 or $0.56 per common share in the same period of
the prior year. This increase in income was primarily due to increased sales
and gross profit margin, partially offset by increased SG&A, royalty and
interest expense.
8
<PAGE> 10
FINANCIAL POSITION, CAPITAL RESOURCES AND LIQUIDITY
The Company finances its capital investments and seasonal working capital
requirements from funds generated by its operations and bank revolving lines of
credit.
Working capital increased to $39,274,000 at April 30, 1995 as compared to
$31,647,000 at October 31, 1994. The increase is primarily due to increased
operating income.
Consolidated trade accounts receivable as of April 30, 1995 increased 29.7% to
$38,862,000 from $29,974,000 at October 31, 1994. Trade accounts receivable,
excluding Quiksilver Europe, increased 22.1% to $23,521,000 as compared to
$19,270,000 at October 31, 1994. Quiksilver Europe's trade accounts receivable
increased 43.3% to $15,341,000 from $10,704,000 at October 31, 1994. These
increases are in line when compared to the same period of the prior year and to
the 29.7% increase in sales for the quarter over last year.
Consolidated inventories as of April 30, 1995 increased 17.0% to $25,277,000
from $21,609,000 at October 31, 1994. Inventories, excluding Quiksilver
Europe, increased 19.6% to $22,265,000 from $18,619,000 at October 31, 1994.
Quiksilver Europe's inventories increased .7% to $3,012,000 from $2,990,000 at
October 31, 1994. These increases are primarily due to increased bookings for
its lines, seasonal factors and the increase in new divisions and reorder
business.
As the Company uses independent contractors for cutting, sewing and all other
manufacturing of the Company's products domestically, and intends to continue
to use independent contractors in the future, the Company has avoided
significant capital expenditures. Although Quiksilver Europe cuts a
significant amount of their production garments, the majority of all other
manufacturing is performed by independent contractors, which allows Quiksilver
Europe to also avoid significant capital expenditures. Fiscal 1995 six month
capital expenditures were $1,566,000 as compared to $897,000 for the same
period of the prior year.
Goodwill on the Company's balance sheets as of April 30, 1995 and October 31,
1994 consists primarily of the costs in excess over net assets acquired in the
Quiksilver Europe and Raisins acquisitions.
To finance the Company's domestic seasonal working capital needs, the Company
has available a revolving line of credit with a U.S. bank which is unsecured
and which provides for a maximum financing of $20,000,000. The line of credit
bears interest at 0.5% below the bank's reference rate for the first
$16,000,000 drawn and at the bank's reference rate on all amounts drawn over
$16,000,000. The line of credit expires April 29, 1996. The European
operation also has available lines of credit, both secured and unsecured, with
banks which provide for maximum financing of approximately $13,000,000. The
lines of credit bear interest at 0.8% to 1.5% above the banks reference rates.
The Company believes its current cash balance and current lines of credit are
adequate to cover its seasonal working capital requirements for the foreseeable
future.
Effective, November 1, 1994, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS 109"). This
Statement changed the Company's method of accounting for income taxes from the
deferred method to an asset and liability method. The effect of initially
adopting SFAS 109 was accounted for as a cumulative effect of an accounting
change and resulted in an increase in earnings for the first quarter of fiscal
1994 of $600,000.
In recent years, certain customers of the Company have experienced financial
difficulties, including the filing of reorganization proceedings under
bankruptcy laws. The Company has not incurred significant losses outside the
normal course of business as a result of the financial difficulties of these
customers. While management believes that allowances for doubtful accounts at
April 30, 1995 are adequate, the Company continually monitors developments
regarding its major customers. Additional material financial difficulties
encountered by these or other significant customers could have an adverse
impact on the Company's financial position or results of operations. However,
in management's opinion, there are adequate alternative retail customers such
that the loss of any customer known to have financial difficulties will not
have a significant long-term negative impact on the Company's future
operations.
9
<PAGE> 11
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
The Company's Annual Meeting of Stockholders was held on March 24, 1995. At
the Annual Meeting, the following directors were elected to serve on the
Company's Board of Directors until the next Annual Meeting and until their
respective successors are elected and qualified:
<TABLE>
<CAPTION>
Votes Votes Broker
For Against Abstentions No Votes
--- ------- ----------- --------
<S> <C> <C> <C> <C>
Robert B. McKnight, Jr. 5,364,371 146,126 0 0
Randall L. Herrel, Sr. 5,364,971 146,126 0 0
William M. Barnum, Jr. 5,464,371 46,726 0 0
Charles E. Crowe 5,364,671 146,426 0 0
Michael H. Gray 5,466,771 44,326 0 0
Robert G. Kirby 5,466,671 44,426 0 0
Tom Roach 5,464,334 46,763 0 0
</TABLE>
The Company's stockholders also approved a proposal to amend the Company's
Stock Option Plan to increase the maximum aggregate number of shares of Common
Stock available for issuance granted pursuant to the Plan from 1,100,000 shares
to 1,420,000 shares. With respect to the proposal to amend the Company's Stock
Option Plan, there were 5,115,800 votes cast for the proposal, 385,386 votes
cast against the proposal, 9,911 abstentions and no broker no-votes.
No other matters were voted on at the Annual Meeting.
Item 6 Exhibits and Reports on Form 8K
(a) Exhibits
10.1 Quiksilver Stock Option Plan, as amended March 24, 1995
10.2 Indemnity Agreement between William M. Barnum, Jr. and
Registrant dated May 1, 1995
10.3 Indemnity Agreement between Michael H. Gray and
Registrant dated May 1, 1995
10.4 Indemnity Agreement between Tom Roach and Registrant
dated May 1, 1995
27.0 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter.
10
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
QUIKSILVER, INC., a Delaware Corporation
June 12, 1995 Randall L. Herrel, Sr.
-----------------------------------------
Randall L. Herrel, Sr.
President,
Chief Operating Officer
and Secretary
June 12, 1995 Bert G. Fenenga
-----------------------------------------
Bert G. Fenenga
Senior Vice President,
Chief Financial Officer
and Treasurer
11
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered
- ------- ----------- --------
<S> <C>
10.1 Quiksilver, Inc. Stock, Option Plan, as amended March 24, 1995
10.2 Indemnity Agreement between William M. Barnum, Jr. and Registrant
dated May 1, 1995
10.3 Indemnity Agreement between Michael H. Gray and Registrant
dated May 1, 1995
10.4 Indemnity Agreement between Tom Roach and Registrant dated
May 1, 1995
27.0 Financial Data Schedule
</TABLE>
12
<PAGE> 1
EXHIBIT 10.1
QUIKSILVER, INC.
STOCK OPTION PLAN
(AS AMENDED THROUGH MARCH 24, 1995)
Quiksilver, Inc., a corporation organized under the laws of
the State of Delaware (the "Company"), hereby adopts this Quiksilver, Inc.
Stock Option Plan (the "Plan"). The purposes of this Plan are as follows:
(1) To further the growth, development and financial
success of the Company by providing additional incentives to certain of its
Directors and Employees who have been or will be given responsibility for the
management or administration of the Company's business affairs, by assisting
them to become owners of capital stock of the Company and thus to benefit
directly from its growth, development and financial success.
(2) To enable the Company to obtain and retain the
services of the type of professional, technical and managerial employees
considered essential to the long-range success of the Company by providing and
offering them an opportunity to become owners of capital stock of the Company
under options, including options that are intended to qualify as "incentive
stock options" under Section 422 of the Internal Revenue Code of 1986, as
amended.
ARTICLE I
DEFINITIONS
Whenever the following terms are used in this Plan, they shall
have the meaning specified below unless the context clearly indicates to the
contrary. The masculine pronoun shall include the feminine and neuter and the
singular shall include the plural, where the context so indicates.
Section 1.1 - Board
"Board" shall mean the Board of Directors of the Company.
Section 1.2 - Code
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
Section 1.3 - Committee
"Committee" shall mean the Compensation Committee of the
Board, appointed as provided in Section 6.1.
<PAGE> 2
Section 1.4 - Company
"Company" shall mean Quiksilver, Inc., a Delaware corporation.
In addition, "Company" shall mean any corporation assuming, or issuing new
employee stock options in substitution for, Incentive Stock Options outstanding
under the Plan in a transaction to which Section 424(a) of the Code applies.
Section 1.5 - Director
"Director" shall mean a member of the Board.
Section 1.6 - Employee
"Employee" shall mean any employee (as defined in accordance
with the Regulations and Revenue Rulings then applicable under Section 3401(c)
of the Code) of the Company, or of any corporation which is then a Parent
Corporation or Subsidiary, whether such employee is so employed at the time
this Plan is adopted or becomes so employed subsequent to the adoption of this
Plan.
Section 1.7 - Incentive Stock Option
"Incentive Stock Option" shall mean an Option which qualifies
as an "incentive stock option" under Section 422 of the Code and which is
designated as an Incentive Stock Option by the Committee.
Section 1.8 - Non-Qualified Option
"Non-Qualified Option" shall mean an Option which is not an
Incentive Stock Option and which is designated as a Non-Qualified Option by the
Committee.
Section 1.9 - Officer
"Officer" shall mean an officer of the Company, any Parent
Corporation or any Subsidiary.
Section 1.10 - Option
"Option" shall mean an option to purchase capital stock of the
Company granted under the Plan. "Options" includes both Incentive Stock
Options and Non-Qualified Options.
Section 1.11 - Optionee
"Optionee" shall mean a Director or Employee to whom an Option
is granted under the Plan.
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Section 1.12 - Parent Corporation
"Parent Corporation" shall mean any corporation in an unbroken
chain of corporations ending with the Company if each of the corporations other
than the Company then owns stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in such
chain.
Section 1.13 - Plan
"Plan" shall mean this Quiksilver, Inc. Stock Option Plan.
Section 1.14 - Secretary
"Secretary" shall mean the Secretary of the Company.
Section 1.15 - Securities Act
"Securities Act" shall mean the Securities Act of 1933, as
amended.
Section 1.16 - Subsidiary
"Subsidiary" shall mean any corporation in an unbroken chain
of corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain then owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
Section 1.17 - Termination of Employment
"Termination of Employment" shall mean the time when the
employee-employer relationship between the Optionee and the Company, a Parent
Corporation or a Subsidiary is terminated for any reason, or the time when the
service of a Director (who is not an Employee) as a member of the Board is
terminated, in each case with or without cause, including, but not by way of
limitation, a termination by resignation, discharge, removal, death or
retirement, but excluding terminations where there is a simultaneous
reemployment of the Employee by the Company, a Parent Corporation or a
Subsidiary. The Committee, in its absolute discretion, shall determine the
effect of all other matters and questions relating to Termination of
Employment, including, but not by way of limitation, the question of whether a
Termination of Employment resulted from a discharge for good cause, and all
questions of whether particular leaves of absence constitute Terminations of
Employment; provided, however, that, with respect to Incentive Stock Options, a
leave of absence shall constitute a Termination of Employment if, and to the
extent that, such leave of absence interrupts employment for the purposes of
Section 422(a)(2) of the Code and the then applicable Regulations and Revenue
Rulings under said Section.
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ARTICLE II
SHARES SUBJECT TO PLAN
Section 2.1 - Shares Subject to Plan
The shares of stock subject to Options shall be shares of the
Company's $.01 par value Common Stock. The aggregate number of such shares
which may be issued upon exercise of Options shall not exceed 1,420,000.
Section 2.2 - Unexercised Options
If any Option expires or is cancelled without having been
fully exercised, the number of shares subject to such Option but as to which
such Option was not exercised prior to its expiration or cancellation may again
be subject to Options granted hereunder, subject to the limitations of Section
2.1.
Section 2.3 - Changes in Company's Shares
In the event that the outstanding shares of stock subject to
Options to be granted hereunder are hereafter changed into or exchanged for a
different number or kind of shares or other securities of the Company, or of
another corporation, by reason of reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, stock dividend or
combination of shares, appropriate adjustments shall be made by the Committee
in the number and kind of shares for the purchase of which Options may be
granted, including adjustments of the limitations in Section 2.1 on the maximum
number and kind of shares which may be issued on exercise of Options.
ARTICLE III
GRANTING OF OPTIONS
Section 3.1 - Eligibility
Except as provided in Section 3.2, any Employee of the Company
(including any Employee of the Company who is also a Director) or of any
corporation which is then a Parent Corporation or a Subsidiary shall be
eligible to be granted Options, and any Director who is not an Employee shall
be eligible to receive Non-Qualified Options.
Section 3.2 - Qualification of Incentive Stock Options
No Incentive Stock Option shall be granted unless such Option,
when granted, qualifies as an "incentive stock option" under Section 422 of the
Code.
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Section 3.3 - Granting of Options
(a) The Committee shall from time to time, in its
absolute discretion:
(i) Select from among the Employees and Directors
(including those to whom Options have been previously granted under
the Plan) such of them as shall be granted Options; and
(ii) Determine the number of shares to be subject
to such Options granted to such Employees or Directors, and, in the
case of Employees, determine whether such Options are to be Incentive
Stock Options or Non-Qualified Options; and
(iii) Determine the terms and conditions of such
Options, consistent with the Plan.
(b) Upon the selection of a Director or Employee to be
granted an Option, the Committee shall instruct the Secretary to issue such
Option and may impose such conditions on the grant of such Option as it deems
appropriate. Without limiting the generality of the preceding sentence, the
Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition on the grant of an Option to a Director or Employee,
that the Director or Employee surrender for cancellation some or all of any
unexercised Options which have been previously granted to the Director or
Employee. An Option the grant of which is conditioned upon such surrender may
have an option price lower (or higher) than the option price of the surrendered
Option, may cover the same (or a lesser or greater) number of shares as the
surrendered Option, may contain such other terms as the Committee deems
appropriate and shall be exercisable in accordance with its terms, without
regard to the number of shares, price, option period or any other term or
condition of the surrendered Option.
ARTICLE IV
TERMS OF OPTIONS
Section 4.1 - Option Agreement
Each Option shall be evidenced by a written Stock Option
Agreement, which shall be executed by the Optionee and an authorized officer of
the Company and which shall contain such terms and conditions as the Committee
shall determine, consistent with the Plan. Stock Option Agreements evidencing
Incentive Stock Options shall contain such terms and conditions as may be
necessary to qualify such Options as "incentive stock options" under Section
422 of the Code.
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Section 4.2 - Option Price
(a) The price of the shares subject to each Option shall
be set by the Committee; provided, however, that the price per share shall be
not less than 100% of the fair market value of such shares on the date such
Option is granted; and provided further, that in the case of an Incentive Stock
Option, the price per share shall not be less than 110% of the fair market
value of such shares on the date such Option is granted in the event such
Option is granted to an individual then owning (within the meaning of Section
424(d) of the Code) more than 10% of the total combined voting power of all
classes of stock of the Company, any Subsidiary or any Parent Corporation.
(b) For purposes of the Plan, the fair market value of a
share of the Company's stock as of a given date shall be: (i) the closing
price of a share of the Company's stock on the principal exchange on which
shares of the Company's stock are then trading, if any, on the day previous to
such date, or, if shares were not traded on the day previous to such date, then
on the next preceding trading day during which a sale occurred; or (ii) if such
stock is not traded on an exchange but is quoted on NASDAQ or a successor
quotation system, (1) the last sales price (if the stock is then listed as a
National Market Issue under the NASD National Market System) or (2) the mean
between the closing representative bid and asked prices (in all other cases)
for the stock on the day previous to such date as reported by NASDAQ or such
successor quotation system; or (iii) if such stock is not publicly traded on an
exchange and not quoted on NASDAQ or a successor quotation system, the mean
between the closing bid and asked prices for the stock, on the day previous to
such date, as determined in good faith by the Committee; or (iv) if the
Company's stock is not publicly traded, the fair market value established by
the Committee acting in good faith.
Section 4.3 - Commencement of Exercisability
(a) Except as the Committee may otherwise provide, no
Option may be exercised in whole or in part during the first year after such
Option is granted.
(b) Subject to the provisions of Sections 4.3(a), 4.3(c),
4.3(d) and 7.3, Options shall become exercisable at such times and in such
installments (which may be cumulative) as the Committee shall provide in the
terms of each individual Option; provided, however, that by a resolution
adopted after an Option is granted the Committee may, on such terms and
conditions as it may determine to be appropriate and subject to Sections
4.3(a), 4.3(c), 4.3(d) and 7.3, accelerate the time at which such Option or any
portion thereof may be exercised.
(c) No portion of an Option which is unexercisable at an
Employee's or Director's Termination of Employment shall thereafter become
exercisable.
(d) Notwithstanding any other provision of this Plan, in
the case of an Incentive Stock Option, the aggregate fair market value
(determined at the time the Incentive Stock Option is granted) of the shares of
the Company's stock with respect to which "incentive
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<PAGE> 7
stock options" (within the meaning of Section 422 of the Code) are exercisable
for the first time by the Optionee during any calendar year (under the Plan and
all other incentive stock option plans of the Company, any Subsidiary and any
Parent Corporation) shall not exceed $100,000.
Section 4.4 - Expiration of Options
(a) No Incentive Stock Option may be exercised to any
extent by anyone after the first to occur of the following events:
(i) The expiration of ten years from the date the
Option was granted; or
(ii) In the case of an Optionee owning (within the
meaning of Section 424(d) of the Code), at the time the Option was
granted, more than 10% of the total combined voting power of all
classes of stock of the Company, any Subsidiary or any Parent
Corporation, the expiration of five years from the date the Option was
granted; or
(iii) Except in the case of any Optionee who is
disabled (within the meaning of Section 22(e)(3) of the Code), the
expiration of three months from the date of the Optionee's Termination
of Employment for any reason other than such Optionee's death unless
the Optionee dies within said three-month period; or
(iv) In the case of an Optionee who is disabled
(within the meaning of Section 22(e)(3) of the Code), the expiration
of one year from the date of the Optionee's Termination of Employment
for any reason other than such Optionee's death unless the Optionee
dies within said one-year period; or
(v) The expiration of one year from the date of
the Optionee's death.
No Non-Qualified Option may be exercised to any extent by
anyone after the expiration of ten years and one day from the date the Option
was granted.
(b) Subject to the provisions of Section 4.4(a), the
Committee shall provide, in the terms of each individual Option, when such
Option expires and becomes unexercisable; and (without limiting the generality
of the foregoing) the Committee may provide in the terms of individual Options
that said Options expire immediately upon a Termination of Employment for any
reason.
Section 4.5 - Consideration
In consideration of the granting of the Option, the Optionee
shall agree, in the written Stock Option Agreement, (a) if the Optionee is an
Employee, to remain in the employ of the Company, a Parent Corporation or a
Subsidiary for a period of at least one year after the
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<PAGE> 8
Option is granted, or (b) if the Optionee is a Director who is not also an
Employee, to remain as a Director of the Company for a period of at least one
year after the Option is granted, unless the shareholders of the Company fail
to reelect the Director upon expiration of the Director's term of office prior
to the expiration of the one year period. Nothing in this Plan or in any Stock
Option Agreement hereunder shall confer upon any Optionee any right to continue
in the employ of the Company, any Parent Corporation or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company, its Parent
Corporations and its Subsidiaries, which are hereby expressly reserved, to
discharge any Optionee at any time for any reason whatsoever, with or without
cause.
Section 4.6 - Adjustments in Outstanding Options
In the event that the outstanding shares of the stock subject
to Options are changed into or exchanged for a different number or kind of
shares or other securities of the Company, or of another corporation, by reason
of reorganization, merger, consolidation, recapitalization, reclassification,
stock split-up, stock dividend or combination of shares, the Committee shall
make an appropriate and equitable adjustment in the number and kind of shares
as to which all outstanding Options, or portions thereof then unexercised,
shall be exercisable, to the end that after such event the Optionee's
proportionate interest shall be maintained as before the occurrence of such
event. Such adjustment in an outstanding Option shall be made without change
in the total price applicable to the Option or the unexercised portion of the
Option (except for any change in the aggregate price resulting from
rounding-off of share quantities or prices) and with any necessary
corresponding adjustment in Option price per share; provided, however, that, in
the case of Incentive Stock Options, each such adjustment shall be made in such
manner as not to constitute a "modification" within the meaning of Section
424(h)(3) of the Code. Any such adjustment made by the Committee shall be
final and binding upon all Optionees, the Company and all other interested
persons.
Section 4.7 - Merger, Consolidation, Acquisition, Liquidation or Dissolution
In its absolute discretion, and on such terms and conditions
as it deems appropriate, the Committee may provide by the terms of any Option
that such Option cannot be exercised after the merger or consolidation of the
Company with or into another corporation, the acquisition by another
corporation or person of all or substantially all of the Company's assets or
80% or more of the Company's then outstanding voting stock or the liquidation
or dissolution of the Company; and if the Committee so provides, it may, in its
absolute discretion and on such terms and conditions as it deems appropriate,
also provide, either by the terms of such Option or by a resolution adopted
prior to the occurrence of such merger, consolidation, acquisition, liquidation
or dissolution, that, for some period of time prior to such event, such Option
shall be exercisable as to all shares covered thereby, notwithstanding anything
to the contrary in Section 4.3(a), Section 4.3(b) or any installment provisions
of such Option, but subject to Section 4.3(d).
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ARTICLE V
EXERCISE OF OPTIONS
Section 5.1 - Person Eligible to Exercise
During the lifetime of the Optionee, only he may exercise an
Option granted to him, or any portion thereof. After the death of the
Optionee, any exercisable portion of an Option may, prior to the time when such
portion becomes unexercisable under Section 4.4 or Section 4.7, be exercised by
the Optionee's personal representative or by any person empowered to do so
under the deceased Optionee's will or under the then applicable laws of descent
and distribution.
Section 5.2 - Partial Exercise
At any time and from time to time prior to the time when any
exercisable Option or exercisable portion thereof becomes unexercisable under
Section 4.4 or Section 4.7, such exercisable Option or portion thereof may be
exercised in whole or in part; provided, however, that the Company shall not be
required to issue fractional shares and the Committee may, by the terms of the
Option, require any partial exercise to be with respect to a specified minimum
number of shares.
Section 5.3 - Manner of Exercise
An exercisable Option, or any exercisable portion thereof, may
be exercised solely by delivery to the Secretary or the Secretary's office of
all of the following prior to the time when such exercisable Option or portion
thereof becomes unexercisable under Section 4.4 or Section 4.7:
(a) Notice in writing signed by the Optionee or
other person then entitled to exercise such Option or portion, stating
that such Option or portion is exercised, such notice complying with
all applicable rules established by the Committee; and
(b) (i) Full payment (in cash or by check)
for the shares with respect to which such Option or portion is thereby
exercised; or
(ii) With the consent of the Committee,
shares of the Company's Common Stock owned by the Optionee,
duly endorsed for transfer to the Company, with a fair market
value (as determinable under Section 4.2(b)) on the date of
delivery equal to the aggregate purchase price of the shares
with respect to which such Option or portion is thereby
exercised; or
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(iii) With the consent of the Committee, a
full recourse promissory note bearing interest (at at least
such rate as shall then preclude the imputation of interest
under the Code) and payable upon such terms as may be
prescribed by the Committee. The Committee may also prescribe
the form of such note and the security to be given for such
note. No Option may, however, be exercised by delivery of a
promissory note or by a loan from the Company when or where
such loan or other extension of credit is prohibited by law;
or
(iv) Any combination of the consideration
provided in the foregoing subsections (i), (ii) and (iii); and
(c) Such representations and documents as the
Committee, in its absolute discretion, deems necessary or advisable to
effect compliance with all applicable provisions of the Securities Act
and any other federal or state securities laws or regulations. The
Committee may, in its absolute discretion, also take whatever
additional actions it deems appropriate to effect such compliance
including, without limitation, placing legends on share certificates
and issuing stop-transfer orders to transfer agents and registrars;
and
(d) In the event that the Option or portion
thereof shall be exercised pursuant to Section 5.1 by any person or
persons other than the Optionee, appropriate proof of the right of
such person or persons to exercise the Option or portion thereof.
Section 5.4 - Conditions to Issuance of Stock Certificates
The shares of stock issuable and deliverable upon the exercise
of an Option, or any portion thereof, may be either previously authorized but
unissued shares or issued shares which have then been reacquired by the
Company. The Company shall not be required to issue or deliver any certificate
or certificates for shares of stock purchased upon the exercise of any Option
or portion thereof prior to fulfillment of all of the following conditions:
(a) The admission of such shares to listing on
all stock exchanges, if any, on which such class of stock is then
listed; and
(b) The completion of any registration or other
qualification of such shares under any state or federal law or under
the rulings or regulations of the Securities and Exchange Commission
or any other governmental regulatory body, which the Committee shall,
in its absolute discretion, deem necessary or advisable; and
(c) The obtaining of any approval or other
clearance from any state or federal governmental agency which the
Committee shall, in its absolute discretion, determine to be necessary
or advisable; and
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(d) The payment to the Company of all amounts
which it is required to withhold under federal, state or local law in
connection with the exercise of the Option; and
(e) The lapse of such reasonable period of time
following the exercise of the Option as the Committee may establish
from time to time for reasons of administrative convenience.
Section 5.5 - Rights of Shareholders
The holder of an Option or Options shall not be, nor shall
such holder have any of the rights or privileges of, a shareholder of the
Company in respect of any shares purchasable upon the exercise of any part of
the Option or Options unless and until a certificate or certificates
representing such shares have been issued by the Company to such holder.
Section 5.6 - Transfer Restrictions
The Committee, in its absolute discretion, may impose such
restrictions on the transferability of the shares purchasable upon the exercise
of an Option as it deems appropriate. Any such restriction shall be set forth
in the respective Stock Option Agreement and may be referred to on the
certificates evidencing such shares. The Committee may require the Employee or
Director to give the Company prompt notice of any disposition of shares of
stock acquired by exercise of an Incentive Stock Option within two years from
the date of grant of such Option or one year after the issuance of such shares
to such Employee or Director. The Committee may direct that the certificates
evidencing shares acquired upon exercise of an Incentive Stock Option refer to
such requirement to give prompt notice of disposition.
ARTICLE VI
ADMINISTRATION
Section 6.1 - Compensation Committee
The Compensation Committee shall consist of at least two
Directors appointed by and holding office at the pleasure of the Board.
Appointment of Committee members shall be effective upon acceptance of
appointment. Committee members may resign at any time by delivering written
notice of resignation to the Board. Vacancies in the Committee shall be filled
by the Board.
Section 6.2 - Duties and Powers of Committee
It shall be the duty of the Committee to conduct the general
administration of the Plan in accordance with its provisions. The Committee
shall have the power to interpret the Plan and the Options and to adopt such
rules for the administration, interpretation and
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application of the Plan as are consistent therewith and to interpret, amend or
revoke any such rules. Any such interpretations and rules in regard to
Incentive Stock Options shall be consistent with the basic purpose of the Plan
to grant "incentive stock options" within the meaning of Section 422 of the
Code. In its absolute discretion, the Board may at any time and from time to
time exercise any and all rights and duties of the Committee under the Plan.
Section 6.3 - Majority Rule
The Committee shall act by a majority of its members in
office. The Committee may act either by vote at a meeting or by a memorandum
or other written instrument signed by a majority of the Committee.
Section 6.4 - Compensation; Professional Assistance; Good Faith Actions
Members of the Committee shall receive such compensation for
their services as members as may be determined by the Board. All expenses and
liabilities incurred by members of the Committee in connection with the
administration of the Plan shall be borne by the Company. The Committee may,
with the approval of the Board, employ attorneys, consultants, accountants,
appraisers, brokers or other persons. The Committee, the Company and its
Officers and Directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon all Optionees, the Company and all other interested persons. No member of
the Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan or the Options, and
all members of the Committee shall be fully protected by the Company in respect
to any such action, determination or interpretation.
ARTICLE VII
OTHER PROVISIONS
Section 7.1 - Options Not Transferable
No Option or interest or right therein or part thereof shall
be subject to or liable for the debts, contracts or engagements of the Optionee
or his successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law, by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect; provided, however, that nothing in this
Section 7.1 shall prevent transfers by will or by the applicable laws of
descent and distribution.
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Section 7.2 - Amendment, Suspension or Termination of the Plan
The Plan may be wholly or partially amended or otherwise
modified, suspended or terminated at any time or from time to time by the Board
or the Committee. To the extent necessary or desirable to comply with Rule
16b-3, the Code or any other applicable law or regulation, the Company shall
obtain shareholder approval of any amendment to the Plan in such a manner and
to such a degree as required. Neither the amendment, suspension nor
termination of the Plan shall, without the consent of the holder of the Option,
alter or impair any rights or obligations under any Option theretofore granted.
No Option may be granted during any period of suspension nor after termination
of the Plan, and in no event may any Option be granted under this Plan after
the first to occur of the following events:
(a) The expiration of ten years from the date the
Plan is adopted by the Board; or
(b) The expiration of ten years from the date the
Plan is approved by the Company's shareholders under Section 7.3.
Section 7.3 - Approval of Plan by Shareholders
This Plan will be submitted for the approval of the Company's
shareholders within 12 months after the date of the Board's initial adoption of
the Plan. Options may be granted prior to such shareholder approval; provided,
however, that such Options shall not be exercisable prior to the time when the
Plan is approved by the shareholders; and provided further, that if such
approval has not been obtained at the end of said 12-month period, all
Incentive Stock Options previously granted under the Plan shall thereupon
become Non-Qualified Options.
Section 7.4 - Effect of Plan Upon Other Option and Compensation Plans
The adoption of this Plan shall not affect any other
compensation or incentive plans in effect for the Company, any Parent
Corporation or any Subsidiary. Nothing in this Plan shall be construed to
limit the right of the Company, any Parent Corporation or any Subsidiary (a) to
establish any other forms of incentives or compensation for employees of the
Company, any Parent Corporation or any Subsidiary or (b) to grant or assume
options otherwise than under this Plan in connection with any proper corporate
purpose, including, but not by way of limitation, the grant or assumption of
options in connection with the acquisition by purchase, lease, merger,
consolidation or otherwise, of the business, stock or assets of any
corporation, firm or association.
Section 7.5 - Titles
Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Plan.
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IN WITNESS WHEREOF, pursuant to the due authorization and
adoption of the Plan by the Board on July 17, 1987, amended effective April 4,
1991, March 26, 1993, March 18, 1994 and March 24, 1995, the Company has caused
this Plan to be duly executed by its duly authorized officers.
QUIKSILVER, INC.
By:
------------------------------------
Robert B. McKnight, Jr.
Chairman of the Board and Chief
Executive Officer
Date Plan approved by Stockholders: March 29, 1988
Date Plan amendments approved by Stockholders: April 4, 1991, March 26, 1993,
March 18, 1994 and March 24, 1995
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EXHIBIT 10.2
QUIKSILVER, INC.
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (the "Agreement") is made as of this
1st day of May 1995, by and between QUIKSILVER, INC., a Delaware corporation
(the "Company"), and WILLIAM M. BARNUM, JR. (the "Indemnitee"), a director of
the Company.
A. The Indemnitee is currently serving as a director of
the Company and in such capacity renders valuable services to the Company.
B. The Company has investigated whether additional
protective measures are warranted to protect adequately its directors and
officers against various legal risks and potential liabilities to which such
individuals are subject due to their position with the Company and has
concluded that additional protective measures are warranted.
C. In order to induce and encourage highly experienced
and capable persons such as the Indemnitee to continue to serve as officers and
directors, the Board of Directors has determined, after due consideration, that
this Agreement is not only reasonable and prudent, but necessary to promote and
ensure the best interests of the Company and its stockholders.
NOW, THEREFORE, in consideration of the continued services of
the Indemnitee and as an inducement to the Indemnitee to continue to serve as a
director of the Company, the Company and the Indemnitee do hereby agree as
follows:
<PAGE> 2
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings set forth below:
(a) "Proceeding" shall mean any threatened,
pending or completed action, suit or proceeding, whether brought in the name of
the Company or otherwise and whether of a civil, criminal, administrative or
investigative nature, by reason of the fact that the Indemnitee is or was an
officer and/or a director of the Company, or is or was serving at the request
of the Company as director, officer, employee or agent of another enterprise,
whether or not he is serving in such capacity at the time any liability or
Expense is incurred for which indemnification or advancement of Expenses is to
be provided under this Agreement.
(b) "Expenses" means, all costs, charges and
expenses incurred in connection with a Proceeding, including, without
limitation, attorneys' fees, disbursements and retainers, accounting and
witness fees, travel and deposition costs, expenses of investigations, judicial
or administrative proceedings or appeals, and any expenses of establishing a
right to indemnification pursuant to this Agreement or otherwise, including
reasonable compensation for time spent by the Indemnitee in connection with the
investigation, defense or appeal of a Proceeding or action for indemnification
for which he is not otherwise compensated by the Company or any third party;
provided, however, that the term "Expenses" includes only those costs, charges
and expenses incurred with the Company's consent, which consent shall not be
unreasonably withheld; and provided further, that the term "Expenses" does not
include the amount of damages, judgments, amounts paid in settlement, fines,
penalties or excise taxes under the Employee Retirement Income
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<PAGE> 3
Security Act of 1974, as amended ("ERISA"), actually levied against the
Indemnitee or paid by or on behalf of the Indemnitee.
2. AGREEMENT TO SERVE. The Indemnitee agrees to
continue to serve as an officer of the Company at the will of the Company for
so long as Indemnitee is duly elected or appointed or until such time as
Indemnitee tenders a resignation in writing or is terminated, as an officer by
the Company. Nothing in this Agreement shall be construed to create any right
in Indemnitee to continued service as an officer of the Company.
3. INDEMNIFICATION IN THIRD PARTY ACTIONS. The Company
shall indemnify the Indemnitee in accordance with the provisions of this
Section 3 if the Indemnitee is a party to or threatened to be made a party to
or otherwise involved in any Proceeding (other than a Proceeding by or in the
right of the Company to procure a judgment in its favor), by reason of the fact
that the Indemnitee is or was an officer and/or a director of the Company or is
or was serving at the request of the Company as a director, officer, employee
or agent of another enterprise, against all Expenses, damages, judgments,
amounts paid in settlement, fines, penalties and ERISA excise taxes actually
and reasonably incurred by the Indemnitee in connection with the defense or
settlement of such Proceeding, to the fullest extent permitted by Delaware law;
provided that any settlement shall be approved in writing by the Company.
4. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE RIGHT OF
THE COMPANY. The Company shall indemnify the Indemnitee in accordance with the
provisions of this Section 4 if the Indemnitee is a party to or threatened to
be made a party to or otherwise involved in any Proceeding by or in the right
of the Company to procure a judgment in its favor by reason of the fact that
the Indemnitee is or was an officer and/or a director of the
3
<PAGE> 4
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another enterprise, against all Expenses actually
and reasonably incurred by Indemnitee in connection with the defense or
settlement of such Proceeding, to the fullest extent permitted by Delaware law.
5. CONCLUSIVE PRESUMPTION REGARDING STANDARD OF CONDUCT.
The Indemnitee shall be conclusively presumed to have met the relevant
standards of conduct required by Delaware law for indemnification pursuant to
this Agreement, unless a determination is made that the Indemnitee has not met
such standards by (i) the Board of Directors of the Company by a majority vote
of a quorum thereof consisting of directors who were not parties to such
Proceeding, (ii) the stockholders of the Company by majority vote, or (iii) in
a written opinion of independent legal counsel, the selection of whom has been
approved by the Indemnitee in writing.
6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding any other provision of this Agreement, to the extent that the
Indemnitee has been successful on the merits or otherwise in defense of any
Proceeding or in defense of any claim, issue or matter therein, including the
dismissal of a Proceeding without prejudice, the Indemnitee shall be
indemnified against all Expenses incurred in connection therewith to the
fullest extent permitted by Delaware law.
7. ADVANCES OF EXPENSES. The Expenses incurred by the
Indemnitee in any Proceeding shall be paid promptly by the Company in advance
of the final disposition of the Proceeding at the written request of the
Indemnitee to the fullest extent permitted by Delaware law; provided that the
Indemnitee shall undertake in writing to repay such amount
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to the extent that it is ultimately determined that the Indemnitee is not
entitled to indemnification by the Company.
8. PARTIAL INDEMNIFICATION. If the Indemnitee is
entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of the Expenses, damages, judgments, amounts paid
in settlement, fines, penalties or ERISA excise taxes actually and reasonably
incurred by Indemnitee in the investigation, defense, appeal or settlement of
any Proceeding but not, however, for the total amount thereof, the Company
shall nevertheless indemnify the Indemnitee for the portion of such Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes to which the Indemnitee is entitled.
9. INDEMNIFICATION PROCEDURE; DETERMINATION OF RIGHT TO
INDEMNIFICATION.
(a) Promptly after receipt by the Indemnitee of
notice of the commencement of any Proceeding with respect to which the
Indemnitee intends to claim indemnification pursuant to this Agreement, the
Indemnitee will notify the Company of the commencement thereof. The omission
to so notify the Company will not relieve the Company from any liability which
it may have to the Indemnitee under this Agreement or otherwise.
(b) If a claim under this Agreement is not paid
by or on behalf of the Company within 30 days of receipt of written notice
thereof, Indemnitee may at any time thereafter bring suit in any court of
competent jurisdiction against the Company to enforce the right to
indemnification provided by this Agreement. It shall be a defense to any such
action (other than an action brought to enforce a claim for Expenses incurred
in defending
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any Proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Company) that the
Indemnitee has failed to meet the standard of conduct that makes it permissible
under Delaware law for the Company to indemnify the Indemnitee for the amount
claimed. The burden of proving by clear and convincing evidence that
indemnification or advancement of Expenses are not appropriate shall be on the
Company. The failure of the directors or stockholders of the Company or
independent legal counsel to have made a determination prior to the
commencement of such Proceeding that indemnification or advancement of Expenses
are proper in the circumstances because the Indemnitee has met the applicable
standard of conduct shall not be a defense to the action or create a
presumption that the Indemnitee has not met the applicable standard of conduct.
(c) The Indemnitee's Expenses incurred in
connection with any action concerning Indemnitee's right to indemnification or
advancement of Expenses in whole or in part pursuant to this Agreement shall
also be indemnified by the Company regardless of the outcome of such action,
unless a court of competent jurisdiction determines that each of the material
claims made by the Indemnitee in such action was not made in good faith or was
frivolous.
(d) With respect to any Proceeding for which
indemnification is requested, the Company will be entitled to participate
therein at its own expense and, except as otherwise provided below, to the
extent that it may wish, the Company may assume the defense thereof, with
counsel satisfactory to the Indemnitee. After notice from the Company to the
Indemnitee of its election to assume the defense of a Proceeding, the Company
will not be liable to the Indemnitee under this Agreement for any Expenses
subsequently incurred by
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the Indemnitee in connection with the defense thereof, other than reasonable
costs of investigation or as otherwise provided below. The Company shall not
settle any Proceeding in any manner which would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written consent. The
Indemnitee shall have the right to employ counsel in any Proceeding, but the
Expenses of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of the Indemnitee,
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Company, (ii) the Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Company and the Indemnitee in the conduct
of the defense of a Proceeding, or (iii) the Company shall not in fact have
employed counsel to assume the defense of a Proceeding, in each of which cases
the Expenses of the Indemnitee's counsel shall be at the expense of the
Company. The Company shall not be entitled to assume the defense of any
Proceeding brought by or on behalf of the Company or as to which the Indemnitee
has concluded that there may be a conflict of interest between the Company and
the Indemnitee.
10. LIMITATIONS ON INDEMNIFICATION. No payments pursuant
to this Agreement shall be made by the Company:
(a) to indemnify or advance Expenses to the
Indemnitee with respect to actions initiated or brought voluntarily by the
Indemnitee and not by way of defense except with respect to actions brought to
establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Delaware law, but such
indemnification or advancement of Expenses may be provided by the Company in
specific cases if approved by the Board of Directors by a majority vote of a
quorum thereof consisting of directors who are not parties to such action;
7
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(b) to indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes for which payment is actually made to the Indemnitee under a valid
and collectible insurance policy, except in respect of any excess beyond the
amount paid under such insurance;
(c) to indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes for which the Indemnitee has been or is indemnified by the Company
otherwise than pursuant to this Agreement;
(d) indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines or penalties sustained in
any Proceeding for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Company pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder or similar provisions of any federal, state
or local statutory law;
(e) to indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes resulting from Indemnitee's conduct which is finally adjudicated
by a court of competent jurisdiction (i) to have been knowingly fraudulent, a
knowing violation of law, deliberately dishonest or in violation of
Indemnitee's duty of loyalty to the Company or (ii) to have involved willful
misconduct on the part of the Indemnitee; or
(f) if a court of competent jurisdiction shall
enter a final order, decree or judgment to the effect that such indemnification
or advancement of Expenses hereunder is unlawful under the circumstances.
8
<PAGE> 9
11. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The
indemnification and advancement of Expenses provided by this Agreement shall
not be deemed to limit or preclude any other rights to which the Indemnitee may
be entitled under the Certificate of Incorporation, the Bylaws, any agreement,
any vote of stockholders or disinterested directors, Delaware law, or
otherwise, both as to action in Indemnitee's official capacity and as to action
in any other capacity on behalf of the Company while holding such office.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon, and shall inure to the benefit of (i) the Indemnitee and
Indemnitee's heirs, personal representatives, executors, administrators and
assigns and (ii) the Company and its successors and assigns, including any
transferee of all or substantially all of the Company's assets and any
successor or assign of the Company by merger or by operation of law.
13. SEPARABILITY. Each provision of this Agreement is a
separate and distinct agreement and independent of the other, so that if any
provision hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof. To the extent required, any
provision of this Agreement may be modified by a court of competent
jurisdiction to preserve its validity and to provide the Indemnitee with the
broadest possible indemnification and advancement of Expenses permitted under
Delaware law. If this Agreement or any portion thereof is invalidated on any
ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee as to Expenses, damages, judgments, amounts
paid in settlement, fines, penalties or ERISA excise taxes with respect to any
Proceeding to the full extent permitted by any applicable portion of this
Agreement that shall
9
<PAGE> 10
not have been invalidated or by any applicable provision of Delaware law or the
law of any other jurisdiction.
14. HEADINGS. The Headings used herein are for
convenience only and shall not be used in construing or interpreting any
provision of the Agreement.
15. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware.
16. AMENDMENTS AND WAIVERS. No amendment, waiver,
modification, termination or cancellation of this Agreement shall be effective
unless in writing and signed by the party against whom enforcement is sought.
The indemnification rights afforded to the Indemnitee hereby are contract
rights and may not be diminished, eliminated or otherwise affected by
amendments to the Company's Certificate of Incorporation, Bylaws or agreements,
including any directors' and officers' liability insurance policies, whether
the alleged actions or conduct giving rise to indemnification hereunder arose
before or after any such amendment. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof, whether or not similar, nor shall any waiver constitute a continuing
waiver.
17. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each party and delivered to the other.
18. NOTICES. All notices and communications shall be in
writing and shall be deemed duly given on the date of delivery if personally
delivered or the date of receipt or refusal indicated on the return receipt if
sent by first class mail, postage prepaid, registered
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or certified, return receipt requested, to the following addresses, unless
notice of a change of address in duly given by one party to the other, in which
case notices shall be sent to such changed address:
If to the Company:
Quiksilver, Inc.
1740 Monrovia
Costa Mesa, CA 92627
Attention: Secretary
If to Indemnitee:
Mr. William M. Barnum, Jr.
c/o Brentwood Associates
11150 Santa Monica Boulevard, #1200
Los Angeles, CA 90025
19. SUBROGATION. In the event of any payment under this
Agreement to or on behalf of the Indemnitee, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of the Indemnitee
against any person, firm, corporation or other entity (other than the Company)
and the Indemnitee shall execute all papers requested by the Company and shall
do any and all things that may be necessary or desirable to secure such rights
for the Company, including the execution of such documents necessary or
desirable to enable the Company to effectively bring suit to enforce such
rights.
20. SUBJECT MATTER AND PARTIES. The intended purpose of
this Agreement is to provide for indemnification and advancement of Expenses,
and this Agreement is not intended to affect any other aspect of any
relationship between the Indemnitee and the Company and is not intended to and
shall not create any rights in any person as a third party beneficiary
hereunder.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
"INDEMNITEE"
---------------------------------------
WILLIAM M. BARNUM, JR.
"COMPANY"
QUIKSILVER, INC., a Delaware corporation
By:
-----------------------------------
Its:
-----------------------------------
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<PAGE> 1
EXHIBIT 10.3
QUIKSILVER, INC.
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (the "Agreement") is made as of this
1st day of May 1995, by and between QUIKSILVER, INC., a Delaware corporation
(the "Company"), and MICHAEL H. GRAY (the "Indemnitee"), a director of the
Company.
A. The Indemnitee is currently serving as a director of
the Company and in such capacity renders valuable services to the Company.
B. The Company has investigated whether additional
protective measures are warranted to protect adequately its directors and
officers against various legal risks and potential liabilities to which such
individuals are subject due to their position with the Company and has
concluded that additional protective measures are warranted.
C. In order to induce and encourage highly experienced
and capable persons such as the Indemnitee to continue to serve as officers and
directors, the Board of Directors has determined, after due consideration, that
this Agreement is not only reasonable and prudent, but necessary to promote and
ensure the best interests of the Company and its stockholders.
NOW, THEREFORE, in consideration of the continued services of
the Indemnitee and as an inducement to the Indemnitee to continue to serve as a
director of the Company, the Company and the Indemnitee do hereby agree as
follows:
<PAGE> 2
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings set forth below:
(a) "Proceeding" shall mean any threatened,
pending or completed action, suit or proceeding, whether brought in the name of
the Company or otherwise and whether of a civil, criminal, administrative or
investigative nature, by reason of the fact that the Indemnitee is or was an
officer and/or a director of the Company, or is or was serving at the request
of the Company as director, officer, employee or agent of another enterprise,
whether or not he is serving in such capacity at the time any liability or
Expense is incurred for which indemnification or advancement of Expenses is to
be provided under this Agreement.
(b) "Expenses" means, all costs, charges and
expenses incurred in connection with a Proceeding, including, without
limitation, attorneys' fees, disbursements and retainers, accounting and
witness fees, travel and deposition costs, expenses of investigations, judicial
or administrative proceedings or appeals, and any expenses of establishing a
right to indemnification pursuant to this Agreement or otherwise, including
reasonable compensation for time spent by the Indemnitee in connection with the
investigation, defense or appeal of a Proceeding or action for indemnification
for which he is not otherwise compensated by the Company or any third party;
provided, however, that the term "Expenses" includes only those costs, charges
and expenses incurred with the Company's consent, which consent shall not be
unreasonably withheld; and provided further, that the term "Expenses" does not
include the amount of damages, judgments, amounts paid in settlement, fines,
penalties or excise taxes under the Employee Retirement Income
2<PAGE> 3
Security Act of 1974, as amended ("ERISA"), actually levied against the
Indemnitee or paid by or on behalf of the Indemnitee.
2. AGREEMENT TO SERVE. The Indemnitee agrees to
continue to serve as an officer of the Company at the will of the Company for
so long as Indemnitee is duly elected or appointed or until such time as
Indemnitee tenders a resignation in writing or is terminated, as an officer by
the Company. Nothing in this Agreement shall be construed to create any right
in Indemnitee to continued service as an officer of the Company.
3. INDEMNIFICATION IN THIRD PARTY ACTIONS. The Company
shall indemnify the Indemnitee in accordance with the provisions of this
Section 3 if the Indemnitee is a party to or threatened to be made a party to
or otherwise involved in any Proceeding (other than a Proceeding by or in the
right of the Company to procure a judgment in its favor), by reason of the fact
that the Indemnitee is or was an officer and/or a director of the Company or is
or was serving at the request of the Company as a director, officer, employee
or agent of another enterprise, against all Expenses, damages, judgments,
amounts paid in settlement, fines, penalties and ERISA excise taxes actually
and reasonably incurred by the Indemnitee in connection with the defense or
settlement of such Proceeding, to the fullest extent permitted by Delaware law;
provided that any settlement shall be approved in writing by the Company.
4. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE RIGHT OF
THE COMPANY. The Company shall indemnify the Indemnitee in accordance with the
provisions of this Section 4 if the Indemnitee is a party to or threatened to
be made a party to or otherwise involved in any Proceeding by or in the right
of the Company to procure a judgment in its favor by reason of the fact that
the Indemnitee is or was an officer and/or a director of the
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<PAGE> 4
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another enterprise, against all Expenses actually
and reasonably incurred by Indemnitee in connection with the defense or
settlement of such Proceeding, to the fullest extent permitted by Delaware law.
5. CONCLUSIVE PRESUMPTION REGARDING STANDARD OF CONDUCT.
The Indemnitee shall be conclusively presumed to have met the relevant
standards of conduct required by Delaware law for indemnification pursuant to
this Agreement, unless a determination is made that the Indemnitee has not met
such standards by (i) the Board of Directors of the Company by a majority vote
of a quorum thereof consisting of directors who were not parties to such
Proceeding, (ii) the stockholders of the Company by majority vote, or (iii) in
a written opinion of independent legal counsel, the selection of whom has been
approved by the Indemnitee in writing.
6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding any other provision of this Agreement, to the extent that the
Indemnitee has been successful on the merits or otherwise in defense of any
Proceeding or in defense of any claim, issue or matter therein, including the
dismissal of a Proceeding without prejudice, the Indemnitee shall be
indemnified against all Expenses incurred in connection therewith to the
fullest extent permitted by Delaware law.
7. ADVANCES OF EXPENSES. The Expenses incurred by the
Indemnitee in any Proceeding shall be paid promptly by the Company in advance
of the final disposition of the Proceeding at the written request of the
Indemnitee to the fullest extent permitted by Delaware law; provided that the
Indemnitee shall undertake in writing to repay such amount
4
<PAGE> 5
to the extent that it is ultimately determined that the Indemnitee is not
entitled to indemnification by the Company.
8. PARTIAL INDEMNIFICATION. If the Indemnitee is
entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of the Expenses, damages, judgments, amounts paid
in settlement, fines, penalties or ERISA excise taxes actually and reasonably
incurred by Indemnitee in the investigation, defense, appeal or settlement of
any Proceeding but not, however, for the total amount thereof, the Company
shall nevertheless indemnify the Indemnitee for the portion of such Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes to which the Indemnitee is entitled.
9. INDEMNIFICATION PROCEDURE; DETERMINATION OF RIGHT TO
INDEMNIFICATION.
(a) Promptly after receipt by the Indemnitee of
notice of the commencement of any Proceeding with respect to which the
Indemnitee intends to claim indemnification pursuant to this Agreement, the
Indemnitee will notify the Company of the commencement thereof. The omission
to so notify the Company will not relieve the Company from any liability which
it may have to the Indemnitee under this Agreement or otherwise.
(b) If a claim under this Agreement is not paid
by or on behalf of the Company within 30 days of receipt of written notice
thereof, Indemnitee may at any time thereafter bring suit in any court of
competent jurisdiction against the Company to enforce the right to
indemnification provided by this Agreement. It shall be a defense to any such
action (other than an action brought to enforce a claim for Expenses incurred
in defending
5
<PAGE> 6
any Proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Company) that the
Indemnitee has failed to meet the standard of conduct that makes it permissible
under Delaware law for the Company to indemnify the Indemnitee for the amount
claimed. The burden of proving by clear and convincing evidence that
indemnification or advancement of Expenses are not appropriate shall be on the
Company. The failure of the directors or stockholders of the Company or
independent legal counsel to have made a determination prior to the
commencement of such Proceeding that indemnification or advancement of Expenses
are proper in the circumstances because the Indemnitee has met the applicable
standard of conduct shall not be a defense to the action or create a
presumption that the Indemnitee has not met the applicable standard of conduct.
(c) The Indemnitee's Expenses incurred in
connection with any action concerning Indemnitee's right to indemnification or
advancement of Expenses in whole or in part pursuant to this Agreement shall
also be indemnified by the Company regardless of the outcome of such action,
unless a court of competent jurisdiction determines that each of the material
claims made by the Indemnitee in such action was not made in good faith or was
frivolous.
(d) With respect to any Proceeding for which
indemnification is requested, the Company will be entitled to participate
therein at its own expense and, except as otherwise provided below, to the
extent that it may wish, the Company may assume the defense thereof, with
counsel satisfactory to the Indemnitee. After notice from the Company to the
Indemnitee of its election to assume the defense of a Proceeding, the Company
will not be liable to the Indemnitee under this Agreement for any Expenses
subsequently incurred by
6
<PAGE> 7
the Indemnitee in connection with the defense thereof, other than reasonable
costs of investigation or as otherwise provided below. The Company shall not
settle any Proceeding in any manner which would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written consent. The
Indemnitee shall have the right to employ counsel in any Proceeding, but the
Expenses of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of the Indemnitee,
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Company, (ii) the Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Company and the Indemnitee in the conduct
of the defense of a Proceeding, or (iii) the Company shall not in fact have
employed counsel to assume the defense of a Proceeding, in each of which cases
the Expenses of the Indemnitee's counsel shall be at the expense of the
Company. The Company shall not be entitled to assume the defense of any
Proceeding brought by or on behalf of the Company or as to which the Indemnitee
has concluded that there may be a conflict of interest between the Company and
the Indemnitee.
10. LIMITATIONS ON INDEMNIFICATION. No payments pursuant
to this Agreement shall be made by the Company:
(a) to indemnify or advance Expenses to the
Indemnitee with respect to actions initiated or brought voluntarily by the
Indemnitee and not by way of defense except with respect to actions brought to
establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Delaware law, but such
indemnification or advancement of Expenses may be provided by the Company in
specific cases if approved by the Board of Directors by a majority vote of a
quorum thereof consisting of directors who are not parties to such action;
7
<PAGE> 8
(b) to indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes for which payment is actually made to the Indemnitee under a valid
and collectible insurance policy, except in respect of any excess beyond the
amount paid under such insurance;
(c) to indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes for which the Indemnitee has been or is indemnified by the Company
otherwise than pursuant to this Agreement;
(d) indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines or penalties sustained in
any Proceeding for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Company pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder or similar provisions of any federal, state
or local statutory law;
(e) to indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes resulting from Indemnitee's conduct which is finally adjudicated
by a court of competent jurisdiction (i) to have been knowingly fraudulent, a
knowing violation of law, deliberately dishonest or in violation of
Indemnitee's duty of loyalty to the Company or (ii) to have involved willful
misconduct on the part of the Indemnitee; or
(f) if a court of competent jurisdiction shall
enter a final order, decree or judgment to the effect that such indemnification
or advancement of Expenses hereunder is unlawful under the circumstances.
8
<PAGE> 9
11. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The
indemnification and advancement of Expenses provided by this Agreement shall
not be deemed to limit or preclude any other rights to which the Indemnitee may
be entitled under the Certificate of Incorporation, the Bylaws, any agreement,
any vote of stockholders or disinterested directors, Delaware law, or
otherwise, both as to action in Indemnitee's official capacity and as to action
in any other capacity on behalf of the Company while holding such office.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon, and shall inure to the benefit of (i) the Indemnitee and
Indemnitee's heirs, personal representatives, executors, administrators and
assigns and (ii) the Company and its successors and assigns, including any
transferee of all or substantially all of the Company's assets and any
successor or assign of the Company by merger or by operation of law.
13. SEPARABILITY. Each provision of this Agreement is a
separate and distinct agreement and independent of the other, so that if any
provision hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof. To the extent required, any
provision of this Agreement may be modified by a court of competent
jurisdiction to preserve its validity and to provide the Indemnitee with the
broadest possible indemnification and advancement of Expenses permitted under
Delaware law. If this Agreement or any portion thereof is invalidated on any
ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee as to Expenses, damages, judgments, amounts
paid in settlement, fines, penalties or ERISA excise taxes with respect to any
Proceeding to the full extent permitted by any applicable portion of this
Agreement that shall
9
<PAGE> 10
not have been invalidated or by any applicable provision of Delaware law or the
law of any other jurisdiction.
14. HEADINGS. The Headings used herein are for
convenience only and shall not be used in construing or interpreting any
provision of the Agreement.
15. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware.
16. AMENDMENTS AND WAIVERS. No amendment, waiver,
modification, termination or cancellation of this Agreement shall be effective
unless in writing and signed by the party against whom enforcement is sought.
The indemnification rights afforded to the Indemnitee hereby are contract
rights and may not be diminished, eliminated or otherwise affected by
amendments to the Company's Certificate of Incorporation, Bylaws or agreements,
including any directors' and officers' liability insurance policies, whether
the alleged actions or conduct giving rise to indemnification hereunder arose
before or after any such amendment. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof, whether or not similar, nor shall any waiver constitute a continuing
waiver.
17. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each party and delivered to the other.
18. NOTICES. All notices and communications shall be in
writing and shall be deemed duly given on the date of delivery if personally
delivered or the date of receipt or refusal indicated on the return receipt if
sent by first class mail, postage prepaid, registered
10
<PAGE> 11
or certified, return receipt requested, to the following addresses, unless
notice of a change of address in duly given by one party to the other, in which
case notices shall be sent to such changed address:
If to the Company:
Quiksilver, Inc.
1740 Monrovia
Costa Mesa, CA 92627
Attention: Secretary
If to Indemnitee:
Mr. Michael H. Gray
c/o The Sweet Life
17711 Mitchell North, Suite B
Irvine, CA 92714
19. SUBROGATION. In the event of any payment under this
Agreement to or on behalf of the Indemnitee, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of the Indemnitee
against any person, firm, corporation or other entity (other than the Company)
and the Indemnitee shall execute all papers requested by the Company and shall
do any and all things that may be necessary or desirable to secure such rights
for the Company, including the execution of such documents necessary or
desirable to enable the Company to effectively bring suit to enforce such
rights.
20. SUBJECT MATTER AND PARTIES. The intended purpose of
this Agreement is to provide for indemnification and advancement of Expenses,
and this Agreement is not intended to affect any other aspect of any
relationship between the Indemnitee and the Company and is not intended to and
shall not create any rights in any person as a third party beneficiary
hereunder.
11
<PAGE> 12
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
"INDEMNITEE"
---------------------------------------
MICHAEL H. GRAY
"COMPANY"
QUIKSILVER, INC., a Delaware corporation
By:
----------------------------------
Its:
----------------------------------
12
<PAGE> 1
EXHIBIT 10.4
QUIKSILVER, INC.
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT (the "Agreement") is made as of this
1st day of May 1995, by and between QUIKSILVER, INC., a Delaware corporation
(the "Company"), and TOM ROACH (the "Indemnitee"), a director of the Company.
A. The Indemnitee is currently serving as a director of
the Company and in such capacity renders valuable services to the Company.
B. The Company has investigated whether additional
protective measures are warranted to protect adequately its directors and
officers against various legal risks and potential liabilities to which such
individuals are subject due to their position with the Company and has
concluded that additional protective measures are warranted.
C. In order to induce and encourage highly experienced
and capable persons such as the Indemnitee to continue to serve as officers and
directors, the Board of Directors has determined, after due consideration, that
this Agreement is not only reasonable and prudent, but necessary to promote and
ensure the best interests of the Company and its stockholders.
NOW, THEREFORE, in consideration of the continued services of
the Indemnitee and as an inducement to the Indemnitee to continue to serve as a
director of the Company, the Company and the Indemnitee do hereby agree as
follows:
<PAGE> 2
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the meanings set forth below:
(a) "Proceeding" shall mean any threatened,
pending or completed action, suit or proceeding, whether brought in the name of
the Company or otherwise and whether of a civil, criminal, administrative or
investigative nature, by reason of the fact that the Indemnitee is or was an
officer and/or a director of the Company, or is or was serving at the request
of the Company as director, officer, employee or agent of another enterprise,
whether or not he is serving in such capacity at the time any liability or
Expense is incurred for which indemnification or advancement of Expenses is to
be provided under this Agreement.
(b) "Expenses" means, all costs, charges and
expenses incurred in connection with a Proceeding, including, without
limitation, attorneys' fees, disbursements and retainers, accounting and
witness fees, travel and deposition costs, expenses of investigations, judicial
or administrative proceedings or appeals, and any expenses of establishing a
right to indemnification pursuant to this Agreement or otherwise, including
reasonable compensation for time spent by the Indemnitee in connection with the
investigation, defense or appeal of a Proceeding or action for indemnification
for which he is not otherwise compensated by the Company or any third party;
provided, however, that the term "Expenses" includes only those costs, charges
and expenses incurred with the Company's consent, which consent shall not be
unreasonably withheld; and provided further, that the term "Expenses" does not
include the amount of damages, judgments, amounts paid in settlement, fines,
penalties or excise taxes under the Employee Retirement Income
2<PAGE> 3
Security Act of 1974, as amended ("ERISA"), actually levied against the
Indemnitee or paid by or on behalf of the Indemnitee.
2. AGREEMENT TO SERVE. The Indemnitee agrees to
continue to serve as an officer of the Company at the will of the Company for
so long as Indemnitee is duly elected or appointed or until such time as
Indemnitee tenders a resignation in writing or is terminated, as an officer by
the Company. Nothing in this Agreement shall be construed to create any right
in Indemnitee to continued service as an officer of the Company.
3. INDEMNIFICATION IN THIRD PARTY ACTIONS. The Company
shall indemnify the Indemnitee in accordance with the provisions of this
Section 3 if the Indemnitee is a party to or threatened to be made a party to
or otherwise involved in any Proceeding (other than a Proceeding by or in the
right of the Company to procure a judgment in its favor), by reason of the fact
that the Indemnitee is or was an officer and/or a director of the Company or is
or was serving at the request of the Company as a director, officer, employee
or agent of another enterprise, against all Expenses, damages, judgments,
amounts paid in settlement, fines, penalties and ERISA excise taxes actually
and reasonably incurred by the Indemnitee in connection with the defense or
settlement of such Proceeding, to the fullest extent permitted by Delaware law;
provided that any settlement shall be approved in writing by the Company.
4. INDEMNIFICATION IN PROCEEDINGS BY OR IN THE RIGHT OF
THE COMPANY. The Company shall indemnify the Indemnitee in accordance with the
provisions of this Section 4 if the Indemnitee is a party to or threatened to
be made a party to or otherwise involved in any Proceeding by or in the right
of the Company to procure a judgment in its favor by reason of the fact that
the Indemnitee is or was an officer and/or a director of the
3
<PAGE> 4
Company, or is or was serving at the request of the Company as a director,
officer, employee or agent of another enterprise, against all Expenses actually
and reasonably incurred by Indemnitee in connection with the defense or
settlement of such Proceeding, to the fullest extent permitted by Delaware law.
5. CONCLUSIVE PRESUMPTION REGARDING STANDARD OF CONDUCT.
The Indemnitee shall be conclusively presumed to have met the relevant
standards of conduct required by Delaware law for indemnification pursuant to
this Agreement, unless a determination is made that the Indemnitee has not met
such standards by (i) the Board of Directors of the Company by a majority vote
of a quorum thereof consisting of directors who were not parties to such
Proceeding, (ii) the stockholders of the Company by majority vote, or (iii) in
a written opinion of independent legal counsel, the selection of whom has been
approved by the Indemnitee in writing.
6. INDEMNIFICATION OF EXPENSES OF SUCCESSFUL PARTY.
Notwithstanding any other provision of this Agreement, to the extent that the
Indemnitee has been successful on the merits or otherwise in defense of any
Proceeding or in defense of any claim, issue or matter therein, including the
dismissal of a Proceeding without prejudice, the Indemnitee shall be
indemnified against all Expenses incurred in connection therewith to the
fullest extent permitted by Delaware law.
7. ADVANCES OF EXPENSES. The Expenses incurred by the
Indemnitee in any Proceeding shall be paid promptly by the Company in advance
of the final disposition of the Proceeding at the written request of the
Indemnitee to the fullest extent permitted by Delaware law; provided that the
Indemnitee shall undertake in writing to repay such amount
4
<PAGE> 5
to the extent that it is ultimately determined that the Indemnitee is not
entitled to indemnification by the Company.
8. PARTIAL INDEMNIFICATION. If the Indemnitee is
entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of the Expenses, damages, judgments, amounts paid
in settlement, fines, penalties or ERISA excise taxes actually and reasonably
incurred by Indemnitee in the investigation, defense, appeal or settlement of
any Proceeding but not, however, for the total amount thereof, the Company
shall nevertheless indemnify the Indemnitee for the portion of such Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes to which the Indemnitee is entitled.
9. INDEMNIFICATION PROCEDURE; DETERMINATION OF RIGHT TO
INDEMNIFICATION.
(a) Promptly after receipt by the Indemnitee of
notice of the commencement of any Proceeding with respect to which the
Indemnitee intends to claim indemnification pursuant to this Agreement, the
Indemnitee will notify the Company of the commencement thereof. The omission
to so notify the Company will not relieve the Company from any liability which
it may have to the Indemnitee under this Agreement or otherwise.
(b) If a claim under this Agreement is not paid
by or on behalf of the Company within 30 days of receipt of written notice
thereof, Indemnitee may at any time thereafter bring suit in any court of
competent jurisdiction against the Company to enforce the right to
indemnification provided by this Agreement. It shall be a defense to any such
action (other than an action brought to enforce a claim for Expenses incurred
in defending
5
<PAGE> 6
any Proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Company) that the
Indemnitee has failed to meet the standard of conduct that makes it permissible
under Delaware law for the Company to indemnify the Indemnitee for the amount
claimed. The burden of proving by clear and convincing evidence that
indemnification or advancement of Expenses are not appropriate shall be on the
Company. The failure of the directors or stockholders of the Company or
independent legal counsel to have made a determination prior to the
commencement of such Proceeding that indemnification or advancement of Expenses
are proper in the circumstances because the Indemnitee has met the applicable
standard of conduct shall not be a defense to the action or create a
presumption that the Indemnitee has not met the applicable standard of conduct.
(c) The Indemnitee's Expenses incurred in
connection with any action concerning Indemnitee's right to indemnification or
advancement of Expenses in whole or in part pursuant to this Agreement shall
also be indemnified by the Company regardless of the outcome of such action,
unless a court of competent jurisdiction determines that each of the material
claims made by the Indemnitee in such action was not made in good faith or was
frivolous.
(d) With respect to any Proceeding for which
indemnification is requested, the Company will be entitled to participate
therein at its own expense and, except as otherwise provided below, to the
extent that it may wish, the Company may assume the defense thereof, with
counsel satisfactory to the Indemnitee. After notice from the Company to the
Indemnitee of its election to assume the defense of a Proceeding, the Company
will not be liable to the Indemnitee under this Agreement for any Expenses
subsequently incurred by
6
<PAGE> 7
the Indemnitee in connection with the defense thereof, other than reasonable
costs of investigation or as otherwise provided below. The Company shall not
settle any Proceeding in any manner which would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written consent. The
Indemnitee shall have the right to employ counsel in any Proceeding, but the
Expenses of such counsel incurred after notice from the Company of its
assumption of the defense thereof shall be at the expense of the Indemnitee,
unless (i) the employment of counsel by the Indemnitee has been authorized by
the Company, (ii) the Indemnitee shall have reasonably concluded that there may
be a conflict of interest between the Company and the Indemnitee in the conduct
of the defense of a Proceeding, or (iii) the Company shall not in fact have
employed counsel to assume the defense of a Proceeding, in each of which cases
the Expenses of the Indemnitee's counsel shall be at the expense of the
Company. The Company shall not be entitled to assume the defense of any
Proceeding brought by or on behalf of the Company or as to which the Indemnitee
has concluded that there may be a conflict of interest between the Company and
the Indemnitee.
10. LIMITATIONS ON INDEMNIFICATION. No payments pursuant
to this Agreement shall be made by the Company:
(a) to indemnify or advance Expenses to the
Indemnitee with respect to actions initiated or brought voluntarily by the
Indemnitee and not by way of defense except with respect to actions brought to
establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Delaware law, but such
indemnification or advancement of Expenses may be provided by the Company in
specific cases if approved by the Board of Directors by a majority vote of a
quorum thereof consisting of directors who are not parties to such action;
7
<PAGE> 8
(b) to indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes for which payment is actually made to the Indemnitee under a valid
and collectible insurance policy, except in respect of any excess beyond the
amount paid under such insurance;
(c) to indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes for which the Indemnitee has been or is indemnified by the Company
otherwise than pursuant to this Agreement;
(d) indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines or penalties sustained in
any Proceeding for an accounting of profits made from the purchase or sale by
Indemnitee of securities of the Company pursuant to the provisions of Section
16(b) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder or similar provisions of any federal, state
or local statutory law;
(e) to indemnify the Indemnitee for any Expenses,
damages, judgments, amounts paid in settlement, fines, penalties or ERISA
excise taxes resulting from Indemnitee's conduct which is finally adjudicated
by a court of competent jurisdiction (i) to have been knowingly fraudulent, a
knowing violation of law, deliberately dishonest or in violation of
Indemnitee's duty of loyalty to the Company or (ii) to have involved willful
misconduct on the part of the Indemnitee; or
(f) if a court of competent jurisdiction shall
enter a final order, decree or judgment to the effect that such indemnification
or advancement of Expenses hereunder is unlawful under the circumstances.
8
<PAGE> 9
11. INDEMNIFICATION HEREUNDER NOT EXCLUSIVE. The
indemnification and advancement of Expenses provided by this Agreement shall
not be deemed to limit or preclude any other rights to which the Indemnitee may
be entitled under the Certificate of Incorporation, the Bylaws, any agreement,
any vote of stockholders or disinterested directors, Delaware law, or
otherwise, both as to action in Indemnitee's official capacity and as to action
in any other capacity on behalf of the Company while holding such office.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon, and shall inure to the benefit of (i) the Indemnitee and
Indemnitee's heirs, personal representatives, executors, administrators and
assigns and (ii) the Company and its successors and assigns, including any
transferee of all or substantially all of the Company's assets and any
successor or assign of the Company by merger or by operation of law.
13. SEPARABILITY. Each provision of this Agreement is a
separate and distinct agreement and independent of the other, so that if any
provision hereof shall be held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not affect the validity or
enforceability of the other provisions hereof. To the extent required, any
provision of this Agreement may be modified by a court of competent
jurisdiction to preserve its validity and to provide the Indemnitee with the
broadest possible indemnification and advancement of Expenses permitted under
Delaware law. If this Agreement or any portion thereof is invalidated on any
ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee as to Expenses, damages, judgments, amounts
paid in settlement, fines, penalties or ERISA excise taxes with respect to any
Proceeding to the full extent permitted by any applicable portion of this
Agreement that shall
9
<PAGE> 10
not have been invalidated or by any applicable provision of Delaware law or the
law of any other jurisdiction.
14. HEADINGS. The Headings used herein are for
convenience only and shall not be used in construing or interpreting any
provision of the Agreement.
15. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware.
16. AMENDMENTS AND WAIVERS. No amendment, waiver,
modification, termination or cancellation of this Agreement shall be effective
unless in writing and signed by the party against whom enforcement is sought.
The indemnification rights afforded to the Indemnitee hereby are contract
rights and may not be diminished, eliminated or otherwise affected by
amendments to the Company's Certificate of Incorporation, Bylaws or agreements,
including any directors' and officers' liability insurance policies, whether
the alleged actions or conduct giving rise to indemnification hereunder arose
before or after any such amendment. No waiver of any provision of this
Agreement shall be deemed or shall constitute a waiver of any other provision
hereof, whether or not similar, nor shall any waiver constitute a continuing
waiver.
17. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each party and delivered to the other.
18. NOTICES. All notices and communications shall be in
writing and shall be deemed duly given on the date of delivery if personally
delivered or the date of receipt or refusal indicated on the return receipt if
sent by first class mail, postage prepaid, registered
10
<PAGE> 11
or certified, return receipt requested, to the following addresses, unless
notice of a change of address in duly given by one party to the other, in which
case notices shall be sent to such changed address:
If to the Company:
Quiksilver, Inc.
1740 Monrovia
Costa Mesa, CA 92627
Attention: Secretary
If to Indemnitee:
Mr. Tom Roach
c/o Palm Springs Harley Davidson
19465 N. Indian Avenue
P.O. Box 915
Palm Springs, CA 92258
19. SUBROGATION. In the event of any payment under this
Agreement to or on behalf of the Indemnitee, the Company shall be subrogated to
the extent of such payment to all of the rights of recovery of the Indemnitee
against any person, firm, corporation or other entity (other than the Company)
and the Indemnitee shall execute all papers requested by the Company and shall
do any and all things that may be necessary or desirable to secure such rights
for the Company, including the execution of such documents necessary or
desirable to enable the Company to effectively bring suit to enforce such
rights.
20. SUBJECT MATTER AND PARTIES. The intended purpose of
this Agreement is to provide for indemnification and advancement of Expenses,
and this Agreement is not intended to affect any other aspect of any
relationship between the Indemnitee and the Company and is not intended to and
shall not create any rights in any person as a third party beneficiary
hereunder.
11
<PAGE> 12
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
"INDEMNITEE"
---------------------------------------
TOM ROACH
"COMPANY"
QUIKSILVER, INC., a Delaware corporation
By:
----------------------------------
Its:
----------------------------------
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
QUIKSILVER, INC'S APRIL 30, 1995 FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-Q
</LEGEND>
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<PERIOD-END> APR-30-1995
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<PP&E> 6,976,000
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<TOTAL-ASSETS> 95,719,000
<CURRENT-LIABILITIES> 30,199,000
<BONDS> 3,420,000
<COMMON> 67,000
0
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<TOTAL-LIABILITY-AND-EQUITY> 95,719,000
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