<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
OAKLEY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
---------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
---------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
---------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
---------------------------------------------------------------------------
(5) Total fee paid:
---------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
---------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
---------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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<PAGE>
OAKLEY, INC.
ONE ICON
FOOTHILL RANCH, CALIFORNIA 92610
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 19, 1997
------------------------
You are cordially invited to attend the 1997 Annual Meeting of Shareholders
(the "Meeting") of OAKLEY, INC. (the "Company") to be held on Thursday, June 19,
1997, at 10:00 a.m. at the Company's new headquarters in Foothill Ranch,
California, for the following purposes:
1. To elect 6 Directors to serve as such until the next Annual Meeting of
Shareholders and until their successors are elected and qualified;
2. To ratify the selection of Deloitte & Touche LLP to serve as independent
auditors of the Company for the fiscal year ending December 31, 1997; and
3. To transact such other business as may properly come before the Meeting
or any adjournment(s) thereof.
Only shareholders of record at the close of business on April 23, 1997, will
be entitled to notice of, and to vote at, the Meeting or any adjournment(s)
thereof.
WHETHER OR NOT YOU EXPECT TO BE AT THE MEETING, PLEASE SIGN AND DATE THE
ENCLOSED PROXY WHICH IS BEING SOLICITED BY THE BOARD OF DIRECTORS, AND RETURN IT
PROMPTLY IN THE ENCLOSED ENVELOPE. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO
THE EXERCISE THEREOF BY WRITTEN NOTICE TO THE COMPANY, AND SHAREHOLDERS WHO
ATTEND THE MEETING MAY WITHDRAW THEIR PROXIES AND VOTE THEIR SHARES PERSONALLY
IF THEY SO DESIRE.
BY ORDER OF THE BOARD OF DIRECTORS
[SIGNATURE]
Donna Gordon
SECRETARY
Irvine, California
Dated: April 28, 1997
<PAGE>
OAKLEY, INC.
ONE ICON
FOOTHILL RANCH, CALIFORNIA 92610
------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 19, 1997
This Proxy Statement is furnished to shareholders of Oakley, Inc. (the
"Company"), in connection with the solicitation of proxies in the form enclosed
herewith for use at the Annual Meeting of Shareholders of the Company to be held
on Thursday, June 19, 1997, at 10:00 a.m. at the Company's new headquarters in
Foothill Ranch, California, and at any and all adjournments or postponements
thereof (the "Meeting"), for the purposes set forth in the Notice of Meeting.
This Proxy Statement and the enclosed form of proxy are being first mailed to
shareholders on April 28, 1997.
This solicitation is made by mail on behalf of the Board of Directors of the
Company. Costs of the solicitation will be borne by the Company. Further
solicitation of proxies may be made by telephone, telegraph, fax or personal
interview by the Directors, officers and employees of the Company and its
affiliates, who will not receive additional compensation for the solicitation.
The Company will reimburse banks, brokerage firms and other custodians, nominees
and fiduciaries for reasonable expenses incurred by them in sending proxy
materials to shareholders.
Holders of record of the Common Stock, $.01 par value per share, of the
Company (the "Common Stock") as of the close of business on the record date,
April 23, 1997, are entitled to receive notice of, and to vote at, the Meeting.
Each share of Common Stock entitles the holder to one vote. At the close of
business on March 31, 1997, there were 70,656,012 shares of Common Stock issued
and outstanding.
Shares represented by proxies in the form enclosed, if the proxies are
properly executed and returned and not revoked, will be voted as specified.
Where no specification is made on a properly executed and returned proxy, the
shares will be voted FOR the election of all nominees for Director and FOR the
ratification of the selection of Deloitte & Touche LLP to serve as independent
auditors of the Company. To be voted, proxies must be filed with the Secretary
of the Company prior to voting. Proxies may be revoked at any time before voting
by filing a notice of revocation with the Secretary of the Company, by filing a
later dated proxy with the Secretary of the Company or by voting in person at
the Meeting. Shares represented by proxies that reflect abstentions or "broker
non-votes" (i.e., shares held by a broker or nominee which are represented at
the Meeting, but with respect to which such broker or nominee is not empowered
to vote on a particular proposal) will be counted as shares that are present and
entitled to vote for purposes of determining the presence of a quorum.
The Board of Directors knows of no matters to come before the Annual Meeting
other than the matters referred to in this Proxy Statement. If, however, any
matters properly come before the Meeting, it is the intention of each of the
persons named in the accompanying proxy to vote such proxies in accordance with
such person's discretionary authority to act in such person's best judgment.
The principal executive offices of the Company are located at One Icon,
Foothill Ranch, California 92610.
1
<PAGE>
PROPOSAL 1: ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
Pursuant to the Company's Amended and Restated Articles of Incorporation
(the "Articles"), Directors are elected at each Annual Meeting of Shareholders
and hold office until the next Annual Meeting of Shareholders and until their
successors shall have been elected and qualified. If, for any reason, the
Directors are not elected at the annual meeting, they may be elected at a
special meeting of shareholders called for that purpose in the manner provided
by the Company's Bylaws. The Company's Bylaws currently authorize a Board of
Directors consisting of not less than one nor more than nine persons and an
initial Board of Directors consisting of five Directors.
The nominees for election to the six positions on the Board of Directors to
be voted upon at the Meeting are Jim Jannard, Mike Parnell, Link Newcomb, Irene
Miller, Orin Smith and Michael Jordan. Irene Miller, Orin Smith and Michael
Jordan (the "Independent Directors") are not employed by, or affiliated with,
the Company. Unless authority to vote for the election of Directors has been
specifically withheld, the persons named in the accompanying proxy intend to
vote for the election of Jim Jannard, Mike Parnell, Link Newcomb, Irene Miller,
Orin Smith and Michael Jordan to hold office as Directors for a term of one year
and until their successors are elected and qualified at the next Annual Meeting
of Shareholders. All nominees have advised the Board of Directors that they are
able and willing to serve as Directors.
If any nominee becomes unavailable for any reason (which is not
anticipated), the shares represented by the proxies may be voted for such other
person or persons as may be determined by the holders of the proxies (unless a
proxy contains instructions to the contrary). In no event will the proxy be
voted for more than six nominees.
VOTE
Each Director will be elected by a favorable vote of a majority of the votes
cast at the Meeting. Accordingly, abstentions or broker non-votes as to the
election of Directors will not affect the outcome. Unless instructed to the
contrary in the proxy, the shares represented by the proxies will be voted FOR
the election of the six nominees named above as Directors.
PROPOSAL 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(ITEM 2 ON PROXY CARD)
The firm of Deloitte & Touche LLP, the Company's independent auditors for
the year ended December 31, 1996, was selected by the Board of Directors, upon
the recommendation of the Audit Committee, to act in such capacity for the
fiscal year ending December 31, 1997, subject to ratification by the
shareholders. There are no affiliations between the Company and Deloitte &
Touche LLP, its partners, associates or employees, other than as pertain to the
engagement of Deloitte & Touche LLP as independent auditors for the Company in
the previous year. Representatives of Deloitte & Touche LLP are expected to be
present at the Meeting and will be given the opportunity to make a statement if
they so desire and to respond to appropriate questions.
VOTE
The favorable vote of a majority of the votes cast regarding the proposal is
required to ratify the selection of Deloitte & Touche LLP. Accordingly,
abstentions or broker non-votes will not affect the outcome of the vote on the
proposal. Unless instructed to the contrary in the proxy, the shares represented
by the proxies will be voted FOR the proposal to ratify the selection of
Deloitte & Touche LLP to serve as independent auditors for the Company for the
fiscal year ending December 31, 1997.
2
<PAGE>
BOARD OF DIRECTORS AND OFFICERS
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information (as of March 31, 1997)
concerning the directors and executive officers of the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------- --- --------------------------------------------------------------
<S> <C> <C>
Jim Jannard 47 Chairman of the Board, President and Director
Mike Parnell 44 Chief Executive Officer and Director
Link Newcomb 35 Chief Operating Officer and Director
Robert Bruning 32 Chief Financial Officer
Donna Gordon 37 Vice President of Finance and Secretary
Kent Lane 43 Vice President of Manufacturing
Carlos Reyes 30 Vice President of Development
Colin Baden 35 Vice President of Design
Irene Miller 44 Director
Orin Smith 54 Director
Michael Jordan 34 Director
</TABLE>
EXECUTIVE OFFICERS
Mr. Jim Jannard, the founder of the Company, has been Chairman of the Board
and President of Oakley since its inception in 1975.
Mr. Mike Parnell joined Oakley in 1985 and has been Chief Executive Officer
and Director since 1986. From 1974 to 1985, Mr. Parnell was employed in various
positions with OP Sunwear, including Vice President of Marketing from 1981 to
1985.
Mr. Link Newcomb joined Oakley in June of 1994 as its Vice President of
International Sales. Mr. Newcomb served as Executive Vice President from April
1995 until January 1997 and as Chief Financial Officer from July 1995 until
January 1997. In January 1997, Mr. Newcomb was named Chief Operating Officer and
appointed to the Board of Directors. Prior to joining Oakley, Mr. Newcomb was an
attorney for five years at Skadden, Arps, Slate, Meagher & Flom, Los Angeles,
California. Mr. Newcomb has also been a certified public accountant since 1984.
Mr. Robert Bruning joined Oakley in January 1997 as its Chief Financial
Officer. Mr. Bruning joined Oakley after three years experience at Cobra Golf
where he was Chief Accounting Officer from September 1993 to November 1994 and
Chief Financial Officer from November 1994 until May 1996. Previously, Mr.
Bruning had seven years of public accounting experience at Ernst & Young where
he held various positions including Manager of Entrepreneurial Services from
1991 to 1993.
Ms. Donna Gordon joined Oakley in February 1986. Ms. Gordon has held a
number of positions with Oakley, assuming her current position as Vice President
of Finance in October 1995. Ms. Gordon has also been Corporate Secretary since
1993 and Controller since 1990.
Mr. Kent Lane joined Oakley in October 1994 and became Vice President of
Manufacturing in October 1995. Mr. Lane served as Director of Manufacturing from
January 1995 until October 1995. Mr. Lane has 21 years experience in the
manufacturing industry at various companies, including Kaiser Steel for six
years and Water Factory Systems, a manufacturer of water purification equipment,
for eight years.
Mr. Carlos Reyes joined Oakley in July 1989 and became Vice President of
Development in December 1995. Mr. Reyes has held various positions with Oakley,
beginning as a lens coating assistant in the manufacturing department. Mr. Reyes
was promoted to Lens Coating Manager in 1991 and to a leadership position in
Oakley's design department in 1993.
Mr. Colin Baden joined Oakley in February 1996 as Director of Design and
became Vice President of Design in February 1997. Prior to joining Oakley, Mr.
Baden was a partner at Lewis Architects of Seattle, Washington for six years and
began advising Oakley on company image issues in 1993.
3
<PAGE>
BOARD OF DIRECTORS
Ms. Irene Miller is the Vice Chairman and Chief Financial Officer of Barnes
& Noble, Inc. and has been an Oakley director since shortly after the Company's
initial public offering in August 1995. Ms. Miller joined Barnes & Noble in
January 1991 as Senior Vice President, Corporate Finance, became Executive Vice
President and Chief Financial Officer in September 1993 prior to Barnes &
Noble's initial public offering, was appointed to the company's Board of
Directors in May 1995 and became Vice Chairman of the Board in September 1995.
Prior to joining Barnes & Noble, Ms. Miller worked for a decade in the
securities industry at Morgan Stanley & Co. and Rothschild, Inc.
Mr. Orin Smith is the President and Chief Operating Officer of Starbucks
Corporation and has been an Oakley director since shortly after the Company's
initial public offering in August 1995. Mr. Smith joined Starbucks in 1990 as
Chief Financial Officer and Vice President, became Executive Vice President and
Chief Financial Officer in 1993 and was named President and Chief Operating
Officer in 1994. Prior to joining Starbucks, Mr. Smith was Executive Vice
President and Chief Financial and Administrative Officer of Danzas USA, a
subsidiary of Europe's largest transportation company. Mr. Smith is also a
director of Starbucks.
Mr. Michael Jordan has been an Oakley director since shortly after the
Company's initial public offering in August 1995. Mr. Jordan has achieved one of
the most extraordinary records in professional sports during his career with the
Chicago Bulls and is completing his twelfth season with the Bulls this year.
Among other achievements, Mr. Jordan was voted Most Valuable Player of the
National Basketball Association in 1988, 1991, 1992 and 1996. He also captured
the NBA's scoring title in seven consecutive seasons, from 1987 through 1993 and
again in 1996 and 1997. Prior to joining the Chicago Bulls, Mr. Jordan was an
All American player at the University of North Carolina, from which he graduated
in 1986.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board of Directors held six meetings in 1996, including regularly
scheduled and special meetings. Mr. Jordan attended fewer than 75% of the
aggregate number of meetings of the Board of Directors and the Nominating
Committee (of which he was a member). The Board of Directors has established
standing audit, compensation, stock option and nominating committees as set
forth below.
AUDIT COMMITTEE. The Audit Committee currently consists of two Independent
Directors: Ms. Miller and Mr. Smith. The Audit Committee makes recommendations
to the Board of Directors concerning the engagement of independent auditors,
reviews with the independent auditors the plans and results of the audit
engagement, approves professional services provided by the independent auditors,
reviews the independence of the independent public accountants, considers the
range of audit and non-audit fees and reviews the adequacy of the Company's
internal accounting controls. The Audit Committee met four times in 1996.
COMPENSATION COMMITTEE. The Compensation Committee currently consists of
Ms. Miller and Mr. Smith. The Compensation Committee determines, and reports to
the Board of Directors with respect to, compensation for the Company's executive
officers. The Compensation Committee met four times in 1996.
STOCK OPTION COMMITTEE. The Stock Option Committee currently consists of
Mr. Parnell and Ms. Miller. The Stock Option Committee reports to the Board of
Directors regarding, and administers, the Company's 1995 Stock Incentive Plan,
except that the entire Board of Directors administers the 1995 Stock Incentive
Plan with respect to directors and officers subject to Section 16 of the
Exchange Act. The Stock Option Committee, which until late 1996 consisted of Mr.
Jannard and Ms. Miller, met five times in 1996.
NOMINATING COMMITTEE. The Nominating Committee currently consists of
Messrs. Parnell and Jordan. The Nominating Committee is responsible for
selecting a slate of potential Directors to be nominated by the Company's Board
of Directors at each annual meeting of shareholders. The Nominating Committee
met in March 1996 and April 1997 and recommended to the Company's Board of
Directors the six nominees for Director referred to herein.
4
<PAGE>
COMPENSATION OF DIRECTORS
Directors who are employees of the Company receive no compensation for
serving on the Board. Directors who are not employees of the Company receive a
retainer fee of $25,000 per year for their services. All Directors are
reimbursed for expenses incurred in connection with attendance at Board or
committee meetings. Under the 1995 Stock Incentive Plan, each non-employee
Director may irrevocably elect annually to waive the receipt of all or any part
of his or her annual retainer and/or meeting fees (if any) for the year
commencing immediately following each annual shareholders meeting and in lieu
thereof receive a fixed number of non-qualified stock options for such year,
with the number of such options fixed by the Board of Directors, based on the
amount of fees so waived and an independent appraisal of the intrinsic value of
such options. Such options are exercisable in full on March 1 of the year
following the date of grant. The option price per share of Common Stock
purchaseable under such options is 100% of the fair market value of the Common
Stock on the date of grant.
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid by the Company to its
Chief Executive Officer and the four other most highly compensated executive
officers serving as of December 31, 1996 (the "Named Executive Officers") for
the fiscal years ended December 31, 1994, 1995 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------------
--------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS/ SARS(#) COMPENSATION($)
- ----------------------------- --------- --------- ---------------- ---------------- ------------------ -------------------
<S> <C> <C> <C> <C> <C> <C>
Jim Jannard ................. 1996 219,633 --(1) -- -- --
Chairman of the Board and 1995 380,697 9,312,252(2) -- -- --
President 1994 380,670 20,916,223(2) -- -- --
Mike Parnell ................ 1996 185,577 362,000(2) -- 17,500 300(3)
Chief Executive Officer 1995 132,500 1,567,228 -- 86,958 --
1994 65,000 4,708,619(2) -- -- --
Link Newcomb ................ 1996 157,212 362,000 -- (4) 17,500 300(3)
Chief Operating Officer 1995 91,346 236,607 201,860 173,914 --
1994 25,000 157,762(4) -- --
Kent Lane ................... 1996 116,165 65,250 -- 26,674 288(3)
Vice President of 1995 96,900 26,000 -- 21,740 --
Manufacturing 1994 17,850 2,000 -- -- --
Donna Gordon ................ 1996 106,923 45,250 66,743(5) 25,174 300(3)
Vice President of Finance 1995 79,898 67,923 -- 26,088 300(3)
and Secretary 1994 69,760 19,357 -- -- --
</TABLE>
- ------------------------
(1) Mr. Jannard was not entitled to payment of his annual bonus for fiscal 1996.
See "Compensation Committee Report -- Compensation of the Chairman and
President."
(2) Includes bonus payments for 1995 under the Company's Executive Officer
Performance Bonus Plan of $1,096,524 and $657,914, respectively, for Messrs.
Jannard and Parnell. Also includes for 1995 and 1994 bonuses paid with
respect to periods prior to the Company's initial public offering of Common
Stock. Amounts shown are net of approximately $5,979,823 and $3,924,000 for
Mr. Jannard, and $664,425 and $436,000 for Mr. Parnell, which represent in
each case amounts paid by the Company in respect of Federal and state income
taxes on the Company's income during 1995 and 1994, respectively. The
Company was an S corporation for Federal and state income tax purposes
during 1994 and through August 1995.
(3) Represents the Company's matching 401(k) plan contribution.
(4) Represents commissions on sales and $75,505 and $10,000 as reimbursement for
relocation and related expenses in 1995 and 1994, respectively.
(5) Represents payment to Ms. Gordon to conclude a prior agreement regarding an
automobile.
5
<PAGE>
The following table sets forth information concerning grants of stock
options to the Named Executive Officers during the fiscal year ended December
31, 1996.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
- ---------------------------------------------------------------------------------------------- POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED
SECURITIES % OF TOTAL ANNUAL RATES OF STOCK
UNDERLYING OPTIONS/ SARS PRICE APPRECIATION FOR
OPTIONS/SARS GRANTED TO EXERCISE OR OPTION TERM
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5% ($)(2) 10% ($)(2)
- ----------------------------------- ------------- ----------------- ----------- ---------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Jim Jannard........................ 0 0 -- -- -- --
Mike Parnell....................... 17,500 2.1 $ 11.625 12/6/06 127,941 324,227
Link Newcomb....................... 17,500 2.1 $ 11.625 12/6/06 127,941 324,227
Kent Lane.......................... 26,674(3) 3.2 $ 11.625 12/6/06 190,387 479,932
Donna Gordon....................... 25,174(3) 3.0 $ 11.625 12/6/06 179,421 452,141
</TABLE>
- ------------------------
(1) The options identified in this table were granted under the Company's 1995
Stock Incentive Plan and are exercisable in equal 25% installments on each
of the first four anniversaries of the date of grant. In the event of the
termination of a Named Executive Officer's employment within 12 months
following a change in control (as defined in the stock option agreements
evidencing such grants), the options will become immediately vested and
exercisable in full upon such termination of employment. To the extent
permitted under applicable law, the options granted are "incentive stock
options" for purpose of Section 422 of the Internal Revenue Code of 1986, as
amended, and otherwise are nonqualified stock options.
(2) The potential gains shown are net of the option exercise price and do not
include the effect of any taxes associated with exercise. The amounts shown
are for the assumed rates of appreciation only, do not constitute
projections of future stock price performance and may not necessarily be
realized. Actual gains, if any, on stock option exercises depend on the
future performance of the Common Stock, continued employment of the optionee
through the term of the option and other factors.
(3) The option grants shown for Mr. Lane and Ms. Gordon each include 14,174
options that were originally granted on July 29, 1996 at an exercise price
of $15.875 per share and re-priced on December 6, 1996. The vesting schedule
for such options was not changed. See "Re-Pricing Report."
The following table sets forth information concerning the fiscal year-end
value of unexercised stock options held by the Named Executive Officers as of
December 31, 1996. No options were exercised by the Named Executive Officers in
fiscal 1996.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS
FY-END (#) AT FY-END ($)(1)
--------------------- ----------------
SHARES ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------- --------------------- ----------------- --------------------- ----------------
<S> <C> <C> <C> <C>
Jim Jannard.............................. 0 0 0/0 0/0
Mike Parnell............................. 0 0 21,739/82,719 0/0
Link Newcomb............................. 0 0 43,478/147,936 0/0
Kent Lane................................ 0 0 5,435/42,979 0/0
Donna Gordon............................. 0 0 6,522/44,740 0/0
</TABLE>
- ------------------------
(1) Based upon the reported closing price of $11.00 per share of Common Stock on
the New York Stock Exchange on December 31, 1996.
6
<PAGE>
EMPLOYMENT AGREEMENTS
Messrs. Jannard and Parnell entered into employment agreements with the
Company in August 1995, prior to the Company's initial public offering of Common
Stock (the "Offering"). The agreements each have a term of two years and contain
a non-competition provision effective through the term of employment and for an
additional two years from the end of such term. Pursuant to an amendment to his
agreement in 1996, Mr. Jannard receives no base salary from the Company.
However, Mr. Jannard is entitled to receive an annual performance bonus, with
the amount of the bonus being determined pursuant to the Company's Executive
Officer Performance Bonus Plan (the "Performance Bonus Plan"). The target bonus
for Mr. Jannard under the Performance Bonus Plan is required to be an amount not
less than $1,000,000 per year. Pursuant to the agreement with Mr. Parnell, as
amended, the Company pays Mr. Parnell a base salary of $350,000 per year and a
performance bonus, with the amount of the bonus being determined pursuant to the
Performance Bonus Plan. The target bonus for Mr. Parnell under the Performance
Bonus Plan is required to be an amount not less than $200,000 per year.
Commencing on the expiration of the term of the employment agreement, or earlier
should the employment agreement be terminated other than for cause (as defined
in the agreements), the Company and Mr. Jannard or Mr. Parnell, as the case may
be, will enter into a two-year consulting agreement under which such executive
will render certain consulting services for which the Company will pay an annual
consulting fee, the amount of which will be determined at the time the
consulting agreements are entered into. In addition, each executive is entitled
to certain fringe benefits, including access to vehicles and aircraft leased or
owned by the Company and full Company-paid medical insurance for himself and his
immediate family during his lifetime. The Company is currently in discussions
with Mr. Jannard and Mr. Parnell regarding new employment agreements to be
effective upon expiration of their existing agreements in August 1997.
On January 31, 1997, Mr. Newcomb entered into a new employment agreement
with the Company pursuant to which he will serve as the Company's Chief
Operating Officer. Mr. Newcomb's agreement has a term of three years, which will
automatically be extended by one year on each anniversary of the agreement,
unless either party provides written notice that it does not wish to extend the
term. The agreement, as subsequently amended, provides for a base salary of
$300,000 per year and an annual target bonus under the Performance Bonus Plan of
not less than $200,000. In addition, in connection with his promotion to Chief
Operating Officer, Mr. Newcomb received a grant of options to purchase 300,000
shares of the Company's Common Stock at an exercise price equal to the closing
price of the Common Stock on the date of grant. Mr. Newcomb's agreement also
contains a non-competition provision effective through the term of the agreement
and, in the event his employment is terminated by the Company for cause or by
Mr. Newcomb without good reason, for a period of two years thereafter.
On January 16, 1997, Robert Bruning entered into an employment agreement
with the Company whereby he will serve as the Chief Financial Officer of the
Company. Mr. Bruning's agreement has a term of two years, which will
automatically be extended by one year on each anniversary of the agreement,
unless either party provides written notice that it does not wish to extend the
term. The agreement provides for a base salary of $145,000 per year and an
annual target bonus under the Performance Bonus Plan of not less than $60,000.
In addition, pursuant to the terms of the agreement, Mr. Bruning received a
grant of options to purchase 60,000 shares of the Company's Common Stock with an
exercise price equal to the closing price of the Common Stock on his date of
hire. The agreement also provides for reimbursement of certain relocation
expenses incurred by Mr. Bruning. Mr. Bruning's agreement also contains a
non-competition provision effective through the term of the agreement and, in
the event his employment is terminated by the Company for cause or by Mr.
Bruning without good reason, for a period of two years thereafter.
7
<PAGE>
REPRICING REPORT
In December 1996, the Board of Directors re-priced options that had been
granted in July 1996 by the Stock Option Committee to Donna Gordon and Kent Lane
upon their promotion to the offices of Vice President of Finance and Vice
President of Manufacturing, respectively. The options originally had an exercise
price of $15.875 per share, which was equal to the fair market value of the
Common Stock at the time of grant. The exercise price was reduced to $11.625 per
share, equal to the fair market value of the Common Stock at the time of the
re-pricing. The Board believes that stock options serve their purpose as an
effective compensation tool when they provide realistic incentives related to
the Company's performance and align the interests of the optionee with the
interests of the Company's shareholders. This is especially true in the case of
officers whose base salary is relatively low in comparison to industry and
competitive norms and for whom performance-based incentives such as stock
options account for a substantial portion of their compensation. It is the
Board's belief that, by re-pricing the July 1996 grants to Ms. Gordon and Mr.
Lane, the underlying stock options would provide a more realistic incentive
related to the Company's performance and properly align the interests of these
optionees with those of the Company's shareholders. In this regard, Ms. Gordon's
and Mr. Lane's efforts will be of crucial importance in improving the Company's
performance and increasing the stock price. Accordingly, their efforts should be
reflected in the value and pricing of their stock options. In addition, it
should be noted that prior option grants made to Ms. Gordon and Mr. Lane at the
time of the Company's initial public offering in August 1995 have not been
re-priced. The exercise price of such options remains $11.50 per share.
JIM JANNARD
MIKE PARNELL
MICHAEL JORDAN
IRENE MILLER
ORIN SMITH
THE RE-PRICING REPORT WILL NOT BE DEEMED TO BE INCORPORATED BY REFERENCE
INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE EXTENT THAT THE
COMPANY SPECIFICALLY INCORPORATES THE SAME BY REFERENCE.
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES MARKET PRICE OF EXERCISE PRICE LENGTH OF ORIGINAL
UNDERLYING OPTIONS/ STOCK AT TIME OF AT TIME OF NEW OPTION TERM
SARS REPRICED OR REPRICING OR REPRICING OR EXERCISE REMAINING AT DATE OF
NAME DATE AMENDED (#) AMENDMENT ($) AMENDMENT ($) PRICE ($) REPRICING AMENDMENT
- ------------------------- --------- ------------------- ----------------- --------------- --------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Kent Lane................ 12/6/96 14,174 11.625 15.875 11.625 9 years 235 days
Donna Gordon............. 12/6/96 14,174 11.625 15.875 11.625 9 years 235 days
</TABLE>
8
<PAGE>
COMPENSATION COMMITTEE REPORT
The report of the Compensation Committee of the Board of Directors with
respect to compensation in fiscal 1996 is as follows:
COMPENSATION PHILOSOPHY
The overall policy of the Compensation Committee is to provide the Company's
executive officers and other key employees with competitive compensation
opportunities based upon their contribution to the financial success of the
Company and their personal performance. It is the Compensation Committee's
objective to have a substantial portion of each officer's compensation
contingent upon the Company's performance as well as upon the officer's own
level of performance. Accordingly, the compensation package for each executive
officer is comprised of three primary elements: (i) base salary which reflects
individual performance and is designed primarily to be competitive with salary
levels in effect at companies within and outside the industry with which the
Company competes for executive talent, (ii) annual variable performance awards
payable in cash and tied to the Company's achievement of financial performance
targets and (iii) long-term stock-based incentive awards which strengthen the
mutuality of interests between the executive officers and the Company's
shareholders. As an executive officer's level of responsibility increases, it is
the Company's general intent that a greater portion of the executive officer's
total compensation be dependent upon Company performance and stock price
appreciation than upon base salary.
COMPONENTS OF COMPENSATION
The principal components of executive officer compensation are generally as
follows:
-BASE SALARY. With respect to Messrs. Parnell and Newcomb, their base
salary is fixed in accordance with the terms of their respective employment
agreements. See "Employment Agreements." As of July 22, 1996, Mr. Jannard
waived all future payments of base salary pursuant to his employment
agreement, and he now receives no base salary from the Company. With
respect to officers who do not have employment agreements with the Company,
salary is determined on the basis of individual performance and competitive
market practices as reflected in informal information available to the
Company.
-ANNUAL PERFORMANCE BONUS. Annual bonuses are payable to the Company's
executive officers under the Company's Executive Officer Performance Bonus
Plan (the "Performance Bonus Plan") based on the Company's achievement of
certain pre-set corporate financial performance targets established for the
fiscal year. The minimum target bonuses for Messrs. Jannard, Parnell and
Newcomb are set forth in their respective employment agreements. With
respect to officers who do not have employment agreements with the Company,
their target bonuses are determined on the basis of individual performance
and competitive market practices as reflected in informal information
available to the Company. The actual financial performance (measured by
pre-tax income) for fiscal 1996 was approximately 9.5% less than the target
established. Accordingly, the actual bonuses paid with respect to fiscal
1996 were 9.5% less than the executives' target bonuses.
-LONG-TERM INCENTIVE COMPENSATION. Long-term incentives are provided
through stock option grants and other stock-based awards under the
Company's 1995 Stock Incentive Plan. Awards under the 1995 Stock Incentive
Plan are designed to further align the interests of each executive officer
with those of the shareholders and provide each officer with a significant
incentive to manage the Company from the perspective of an owner with an
equity stake in the Company's business. Prior to November 1, 1996, option
grants to the Named Executive Officers were made by Mr. Jannard and Ms.
Miller, who constituted the Stock Option Committee during such period.
However, due to certain changes to Rule 16b-3 under the Exchange Act, since
November 1, 1996 grants to the Named Executive Officers have been made by
the entire Board of Directors. In July 1996, Donna Gordon and Kent Lane
were granted stock options to reflect
9
<PAGE>
their promotion to the offices of Vice President of Finance and Vice
President of Manufacturing, respectively. As described in "Re-pricing
Report," these options were re-priced in December 1996. As part of a
broad-based grant of stock options made to a large group of key employees,
additional grants were made to Ms. Gordon and to Messrs. Parnell, Newcomb
and Lane in December 1996.
COMPENSATION OF THE CHAIRMAN AND PRESIDENT
Until July 22, 1996, pursuant to the terms of his employment agreement, Mr.
Jannard was paid a base salary at the rate of approximately $380,000 per year.
However, as of that date, Mr. Jannard waived all future payments of base salary
pursuant to his employment agreement, and he currently receives no salary from
the Company. Because of delays in bringing the Company's X METALS line to
market, Mr. Jannard was not entitled to any bonus under the Performance Bonus
Plan and accordingly received no bonus for fiscal 1996. Mr. Jannard also did not
receive a grant of stock options in fiscal 1996 under the 1995 Stock Incentive
Plan.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code of 1986, as amended, generally
provides that publicly held companies may not deduct compensation paid to
certain of its top executive officers to the extent such compensation exceeds $1
million per officer in any year. However, pursuant to regulations issued by the
Treasury Department, certain limited exemptions to Section 162(m) apply with
respect to "qualified performance-based compensation" and to compensation paid
in certain circumstances by companies in the first few years following their
initial public offering of stock. The Company has taken steps to provide that
these exemptions will apply to compensation paid to its executive officers, and
the Company will continue to monitor the applicability of Section 162(m) to its
ongoing compensation arrangements. Accordingly, the Company does not expect that
amounts of compensation paid to its executive officers will fail to be
deductible by reason of Section 162(m).
IRENE MILLER
ORIN SMITH
JIM JANNARD*
MICHAEL JORDAN*
MIKE PARNELL*
*With respect to that portion of the report entitled "--Long Term Compensation"
only.
THE COMPENSATION COMMITTEE REPORT WILL NOT BE DEEMED TO BE INCORPORATED BY
REFERENCE INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE
EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THE SAME BY REFERENCE.
10
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total returns for
Oakley, Inc., the Standard & Poor's 500 Composite Index and the Standard &
Poor's Midcap 400 Index, during the period commencing on August 10, 1995, the
date of the Company's initial public offering, and ending on December 31, 1996.
The comparison assumes $100 was invested on August 10, 1995 in each of the
Common Stock, the Standard & Poor's 500 Composite Index and the Standard &
Poor's Midcap 400 Index and assumes the reinvestment of all dividends, if any.
At this time, the Company does not believe it can reasonably identify an
industry peer group, and therefore the Company has instead selected the Standard
& Poor's Midcap 400 Index, which includes companies with similar market
capitalizations to that of the Company, as a comparative index for purposes of
complying with certain requirements of the Securities and Exchange Commission.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
STOCK PRICE PERFORMANCE GRAPH
<S> <C> <C> <C> <C> <C> <C> <C>
8/10/1995 9/30/1995 12/31/1995 3/31/1996 6/30/1996 9/30/1996
Oakley, Inc. $100 $109 $125 $139 $167 $157
S&P 500 Composite Index $100 $105 $111 $117 $122 $126
S&P Midcap 400 $100 $102 $103 $109 $112 $116
<CAPTION>
STOCK PRICE PERFORMANCE GRAPH
<S> <C>
12/31/1996
Oakley, Inc. $81
S&P 500 Composite Index $136
S&P Midcap 400 $123
</TABLE>
<TABLE>
<CAPTION>
8/10/95 9/30/95 12/31/95 3/31/96 6/30/96 9/30/96
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
Oakley, Inc. $ 100 $ 109 $ 125 $ 139 $ 167 $ 157
S&P 500 Composite Index $ 100 $ 105 $ 111 $ 117 $ 122 $ 126
S&P Midcap 400 $ 100 $ 102 $ 103 $ 109 $ 112 $ 116
<CAPTION>
12/31/96
<S> <C>
- ---------------------------------------------
Oakley, Inc. $ 81
S&P 500 Composite Index $ 136
S&P Midcap 400 $ 123
</TABLE>
THE STOCK PRICE PERFORMANCE GRAPH WILL NOT BE DEEMED TO BE INCORPORATED BY
REFERENCE INTO ANY FILING BY THE COMPANY UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO THE
EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THE SAME BY REFERENCE.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Irene Miller and
Orin Smith. However, pursuant to certain requirements of Rule 16b-3 under the
Exchange Act, certain grants of stock options to the Named Executive Officers in
1996 were made by all the then members of the Board of Directors (with Mr.
Parnell abstaining with respect to his own option grant). Messrs. Jannard and
Parnell are officers of the Company. See "Certain Transactions" immediately
below.
11
<PAGE>
CERTAIN TRANSACTIONS
Prior to the Company's relocation in early 1997, the Company leased its
headquarters facility from a partnership of which Mr. Jannard and Mr. Parnell
are the sole partners. Aggregate lease payments under such lease for 1996 were
$283,000. During 1995, the lease was amended to provide for the Company's
ability to terminate the lease without any material payment obligation on the
part of the Company. The lease was terminated by the Company in early 1997 in
connection with its relocation to a new site.
As part of a distribution by the Company to its shareholders (the "S
Corporation Distribution") that included all of its and its predecessor's
previously earned and undistributed taxable S corporation earnings through the
date of the consummation of the Company's initial public offering, the Company
distributed certain aircraft to Mr. Jannard and a trust (the "Parnell Trust")
for the benefit of Mr. Parnell and his immediate family (collectively, the
"Principal Shareholders"). The Company leased back certain of such aircraft from
companies controlled by the Principal Shareholders ("Lessors"). Such leases have
terms of five years with aggregate annual lease payments of $100,000, and are
renewable at the option of the Company and the applicable Lessor. The Company
bears all costs and expenses of operating and maintaining the aircraft while
under lease. During 1996, the Company made aggregate payments under such leases
of $100,000.
In July 1995, the Company entered into a ten-year agreement with Mr. Jordan
for the endorsement of Oakley eyewear. Pursuant to such agreement, Mr. Jordan is
paid an annual retainer of $500,000 and received options to purchase 217,392
shares of Common Stock at an exercise price of $11.50 per share (the fair market
value on the date of grant). The Company paid Mr. Jordan $500,000 during 1996
pursuant to this agreement.
In January 1997, the Company borrowed $3.0 million from Mr. Jannard. This
amount, together with interest at the rate payable by the Company under its bank
credit agreement, was repaid in March 1997. Since the beginning of 1996, Mr.
Jannard has borrowed from the Company various amounts for use by Mr. Jannard in
connection with various matters unrelated to the business of Oakley. All of such
indebtedness was repaid by Mr. Jannard within one month of the date incurred.
The largest amount of such indebtedness outstanding at any time since the
beginning of 1996 was approximately $270,000.
Since early 1996, the Company has been paying the fees of its tax advisors
for certain work involving both the Company and Messrs. Jannard and Parnell.
Messrs. Jannard and Parnell have agreed to reimburse the Company for all of such
fees which, at March 31, 1997, aggregated approximately $275,000.
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information available to the Company,
as of March 31, 1997, with respect to shares of its Common Stock (i) held by
those persons known to the Company to be the beneficial owners (as determined
under the rules of the Securities and Exchange Commission) of more than 5% of
such shares and (ii) held individually and as a group by the Directors and
Executive Officers of the Company.
<TABLE>
<CAPTION>
PERCENTAGE OF
NAME AND ADDRESS SHARES OF COMMON STOCK
OF BENEFICIAL OWNER (1) COMMON STOCK OUTSTANDING
- ------------------------------------------------------------------------------- ---------------- -----------------
<S> <C> <C>
DIRECTORS AND EXECUTIVE OFFICERS
Jim Jannard.................................................................... 35,730,000 50.6%
Mike Parnell(2)................................................................ 3,861,739(3) 5.5%
Link Newcomb................................................................... 46,786(4) *
Robert Bruning................................................................. 1,000 *
Kent Lane...................................................................... 8,043(5) *
Donna Gordon................................................................... 9,566(6) *
Carlos Reyes................................................................... 1,732(7) *
Colin Baden.................................................................... 1,899(8) *
Irene Miller................................................................... 13,714(9) *
Orin Smith..................................................................... 6,700(10) *
Michael Jordan................................................................. 178,724(11) *
Directors and Executive Officers as a group (11 persons)..................... 39,859,903(12) 56.4%
5% OR GREATER HOLDERS:
M. and M. Parnell Revocable Trust.............................................. 3,840,000 5.4%
</TABLE>
- ------------------------
(1) Unless otherwise indicated, the address of the beneficial owner is c/o
Oakley, Inc., One Icon, Foothill Ranch, California 92610.
(2) All of the shares beneficially owned by Mr. Parnell are held through the M.
and M. Parnell Revocable Trust, other than 21,739 shares issuable upon
exercise of stock options.
(3) Includes 21,739 shares issuable upon exercise of stock options.
(4) Includes 43,478 shares issuable upon exercise of stock options.
(5) Includes 5,435 shares issuable upon exercise of stock options.
(6) Includes 6,522 shares issuable upon exercise of stock options.
(7) Includes 1,449 shares issuable upon exercise of stock options.
(8) Includes 1,499 shares issuable upon exercise of stock options.
(9) Includes 9,368 shares issuable upon exercise of stock options.
(10) Includes 3,500 shares issuable upon exercise of stock options.
(11) Includes 30,902 shares issuable upon exercise of stock options.
(12) Includes 123,892 shares issuable upon exercise of stock options.
* Less than one percent.
13
<PAGE>
OTHER MATTERS
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE. Section 16(a) of
the Exchange Act requires the Company's executive officers and Directors, and
persons who own more than ten percent of a registered class of the Company's
equity securities, to file reports (Forms 3, 4 and 5) of stock ownership and
changes in ownership with the Securities and Exchange Commission and the New
York Stock Exchange. Officers, Directors and beneficial owners of more than ten
percent of the Company's stock are required by Securities and Exchange
Commission regulation to furnish the Company with copies of all such forms that
they file.
Based solely on the Company's review of the copies of such forms received by
it, and on written representations from certain reporting persons, the Company
believes that during fiscal 1996, all Section 16(a) filing requirements
applicable to its directors, officers and ten percent stockholders were complied
with, subject to the following exceptions: Michael Jordan, Irene Miller, Kent
Lane and Donna Gordon each inadvertently failed to timely file a Form 4
reporting a transaction in July of 1996. These reports were filed on April 10,
1997. Link Newcomb, Carlos Reyes, Mike Parnell, Donna Gordon and Kent Lane each
inadvertently failed to timely file a Form 4 reporting a transaction in December
of 1996. These reports were filed on April 10, 1997. Robert Bruning
inadvertently failed to timely file a Form 3 reporting a transaction in December
of 1996. The report was filed on March 10, 1997.
SHAREHOLDERS' PROPOSALS. Proposals of shareholders intended to be presented
at the Company's Annual Meeting of Shareholders to be held in 1997 must be
received by the Company, marked to the attention of the Secretary, no later than
December 31, 1996. Proposals must comply with the requirements as to form and
substance established by the Securities and Exchange Commission for proposals in
order to be included in the proxy statement.
THE BOARD OF DIRECTORS
Irvine, California
14
<PAGE>
PROXY
OAKLEY, INC.
COMMON STOCK
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
THE UNDERSIGNED HEREBY APPOINT(S) MIKE PARNELL AND LINK NEWCOMB AS PROXIES
WITH FULL POWER OF SUBSTITUTION, HEREBY AUTHORIZE(S) EACH OF THEM TO
REPRESENT AND TO VOTE, AS DESIGNATED ON THE REVERSE SIDE HEREOF, ALL SHARES
OF COMMON STOCK OF OAKLEY, INC. (THE "COMPANY") HELD OF RECORD BY THE
UNDERSIGNED ON APRIL 23, 1997 AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE
HELD ON JUNE 19, 1997, AT 10:00 A.M., LOCAL TIME, OR ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF, AT THE OAKLEY, INC. HEADQUARTERS AT ONE ICON, FOOTHILL
RANCH, CALIFORNIA 92610 AND HEREBY REVOKE(S) ANY PROXIES HERETOFORE GIVEN.
BY SIGNING AND DATING THE REVERSE OF THIS CARD, THE UNDERSIGNED AUTHORIZE(S)
THE PROXIES TO VOTE EACH PROPOSAL, AS MARKED, OR IF NOT MARKED TO VOTE "FOR"
EACH PROPOSAL. PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENVELOPE
PROVIDED.
THIS PROXY IS REVOCABLE AND THE UNDERSIGNED MAY REVOKE IT AT ANY TIME PRIOR
TO ITS EXERCISE. ATTENDANCE OF THE UNDERSIGNED AT THE ABOVE MEETING OR ANY
ADJOURNED OR POSTPONED SESSION THEREOF WILL NOT BE DEEMED TO REVOKE THIS
PROXY UNLESS THE UNDERSIGNED WILL INDICATE AFFIRMATIVELY THEREAT THE
INTENTION OF THE UNDERSIGNED TO VOTE SAID SHARES IN PERSON.
Check here for / /
address change
NEW ADDRESS:
-------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
- -------------------------------------------------------
(Continued and to be signed and dated on reverse side)
<PAGE>
/ X / Please mark your
votes as in this
example.
THE BOARD OF DIRECTORS OF OAKLEY, INC. RECOMMENDS A VOTE FOR THE NOMINEES SET
FORTH IN PROPOSAL 1 AND FOR PROPOSAL 2.
1. Election of Directors
/ / FOR ALL NOMINEES LISTED TO THE RIGHT
/ / WITHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED TO THE RIGHT
Instructions: To withhold authority to vote for any individual nominee, check
the "FOR ALL NOMINEES" box to the left, and strike a line through that
nominee's name below.
For, except vote withheld from the following nominee(s):
Nominees: Jim Jannard
Mike Parnell
Link Newcomb
Irene Miller
Orin Smith
Michael Jordan
2. Ratification of the selection of Deloitte &Touche LLPas independent
auditors.
/ / FOR / / AGAINST / / ABSTAIN
3. In their discretion, the proxyholders are authorized to vote on such other
matters that may properly come before this Annual Meeting or any adjournment
or postponement thereof.
IMPORTANT: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS ON THIS PROXY. WHEN
SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN PLEASE GIVE FULL TITLE AS SUCH.
WHEN SIGNING IN A REPRESENTATIVE CAPACITY, PLEASE SIGN IN FULL CORPORATE NAME
BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN
THE PARTNERSHIP NAME BY AN AUTHORIZED PERSON.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR
DIRECTOR, FOR THE RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP AS
INDEPENDENT AUDITORS AND, IN THE DISCRETION OF THE PROXY HOLDERS, ON SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF NOTICE OF THE ANNUAL MEETING
OF THE STOCKHOLDERS AND A PROXY STATEMENT FOR THE ANNUAL MEETING PRIOR TO THE
SIGNING OF THIS PROXY.
SIGNATURE DATE 1997
------------------------------------ ----------------------,
(Be sure to date proxy)
SIGNATURE DATE 1997
------------------------------------ ----------------------,
Signature if held jointly (Be sure to date proxy)
PLEASE VOTE, SIGN AND RETURN THIS PROXY AS PROMPTLY AS POSSIBLE USING THE
ENCLOSED ENVELOPE
