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EXHIBIT 10.31

                                SECOND AMENDMENT

                               TO CREDIT AGREEMENT

This SECOND AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is dated as of
October 16, 2000 and entered into by and among OAKLEY, INC., a Washington
corporation ("COMPANY"), the financial institutions listed on the signature
pages hereof (the "LENDERS"), and BANK OF AMERICA, N.A. (formerly known as Bank
of America National Trust and Savings Association), as the agent for the Lenders
(in such capacity the "AGENT") and is made with reference to that certain Second
Amended and Restated Credit Agreement dated as of August 25, 1998, as amended
(the "CREDIT AGREEMENT"), by and among Company, the lending institutions
identified therein and the Agent. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
                                     RECITAL

WHEREAS, Company and the Lenders desire to amend the Credit Agreement as set
forth below;

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, the parties hereto agree as follows:

         1.       AMENDMENT TO THE CREDIT AGREEMENT

                  1.1      AMENDMENTS TO SECTION 7

                  (A) Subsection 7.1 (vi) is hereby amended by deleting it in
its entirety and by replacing it with the following:

                  "(vi) Company and its Subsidiaries may become and remain
                  liable with respect to other Indebtedness in an outstanding
                  principal amount that at no time exceeds $20,000,000 in the
                  aggregate; provided that such other Indebtedness of Company
                  and its Domestic Subsidiaries shall at no time exceed
                  $5,000,000 in the aggregate;"
                  (B) Subsection 7.4 (vii) is hereby amended by deleting the
amount "$5,000,000" set forth therein and substituting in lieu thereof the
amount "$20,000,000."

         2.       COMPANY'S REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders to enter into this Amendment, to amend the Credit
Agreement in the manner provided herein and to implement the waiver provided
herein, Company represents and warrants to each Lender that the following
statements are true, correct and complete:


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                  (A) CORPORATE POWER AND AUTHORITY. Company has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "AMENDED AGREEMENT").

                  (B) AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of Company.

                  (C) BINDING OBLIGATION. This Amendment and the Amended
Agreement are the legal, valid and binding obligation of Company, enforceable
against it in accordance with their terms, and any instrument or agreement
required hereunder or by the Amended Agreement, when executed and delivered,
will be similarly valid, binding and enforceable.

                  (D) INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM
CREDIT AGREEMENT. The representations and warranties contained in Section 5 of
the Credit Agreement are true, correct and complete in all material respects,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case they were true, correct and complete in all
material respects on and as of such earlier date.

                  (E) ABSENCE OF DEFAULT. No event has occurred and is
continuing or will result from the consummation of this Amendment that would
constitute an Event of Default or a Default.

         3.       MISCELLANEOUS

                  (A) REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS.

                  (i) On and after the effectiveness of this Amendment, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and each
reference in the other documents entered pursuant to the Credit Agreement to the
"Credit Agreement", "thereunder", "thereof" or words of like import referring to
the Credit Agreement shall mean and be a reference to the Amended Agreement.

                  (ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other documents entered pursuant to the Credit
Agreement shall remain in full force and effect and are hereby ratified and
confirmed.

                  (iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy of the
Agent or any Lender under, the Credit Agreement or any of the other Loan
Documents.

                  (B) HEADINGS. Section and subsection headings in this
Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose or be given any
substantive effect.


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                  (C) CALIFORNIA LAW. This Agreement shall be governed by, and
shall be construed and enforced in accordance with, the internal laws of the
State of California, without regard to conflicts of laws principles.

                  (D) COUNTERPARTS; EFFECTIVENESS. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective upon the execution of a counterpart hereof by Company and the
Requisite Lenders and receipt by Company and the Agent of written or telephonic
notification of such execution and authorization of delivery thereof.

                  [Remainder of page intentionally left blank]


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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.


                               OAKLEY, INC.


                               By:  /s/ THOMAS GEORGE
                                  --------------------------------------------
                               Name:  Thomas A. George
                               Title:  Chief Financial Officer




                               BANK OF AMERICA, N.A., AS AGENT


                               By: /s/ KEN PURO
                                  --------------------------------------------
                               Name: Ken Puro
                               Title: Vice President


                         LENDERS: BANK OF AMERICA, N.A.


                                By: /s/ DEAN GLASSBERG
                                  --------------------------------------------
                                Name: Dean Glassberg
                                Title: Vice President


                                UNION BANK OF CALIFORNIA, N.A.


                                By: /s/ MARGARET FURBANK
                                   -------------------------------------------
                                Name: Margaret Furbank
                                Title: Vice President


                                THE CHASE MANHATTAN BANK


                                By: /s/ PAUL J. O'NEILL
                                   -------------------------------------------
                                Name: Paul J. O'Neill
                                Title: Vice President


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