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                                                                   EXHIBIT 10.16


                                 August 1, 2000

PERSONAL AND CONFIDENTIAL

Charles S. Exon, Esq.
Quiksilver, Inc.
15202 Graham Street
Huntington Beach, CA 92649


               Re:  Employment at Quiksilver, Inc.

Dear Charlie:

               This letter ("Agreement") will confirm our understanding and
agreement regarding your employment with Quiksilver, Inc. ("Quiksilver" or the
"Company"), commencing on August 1, 2000 ("Date of Hire"), and will be effective
as of that date. This Agreement completely supersedes and replaces any
negotiations, discussions, understandings or agreements, express or implied, you
and the Company have had regarding your employment.

               1.     Position; Exclusivity of Employment. Your position will be
                      Executive Vice President, Business and Legal Affairs -
                      International, and you will initially report to me. A
                      current job description for your position is contained on
                      Addendum "A" attached hereto. During your employment with
                      Quiksilver, you will devote your full professional and
                      business time, interest, abilities and energies to the
                      Company and will not engage in any business activities
                      competitive with or adverse to the Company's business or
                      welfare, whether alone, as an employee, as an attorney, as
                      a partner, as a member, or as a shareholder, officer or
                      director of any other corporation or law firm, or as a
                      trustee, fiduciary or in any other similar representative
                      capacity of any other entity. The Company agrees that you
                      will be insured against, indemnified or otherwise covered
                      for legal malpractice or similar claims that may arise out
                      of your carrying out your duties and responsibilities
                      hereunder.

               2.     Base Salary. Your base salary will be $25,000 per month
                      ($300,000 on an annualized basis), less applicable
                      withholdings and deductions, paid on the Company's regular
                      payroll dates. Your salary will be reviewed at the time
                      management salaries are reviewed periodically and may be
                      adjusted (up or

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                      down) at the Company's discretion in light of Quiksilver's
                      performance, your performance, market conditions and other
                      factors deemed relevant by the Company; provided, however,
                      that your base salary will not be reduced below its
                      initial level through July 31, 2003, should your
                      employment continue through that date.

               3.     Bonus. For the Company's fiscal years ending October 31 of
                      2000, 2001, 2002 and 2003, you shall be eligible to
                      receive a bonus or bonuses based on the criteria set forth
                      on Addendum "B" attached hereto, for that portion of the
                      fiscal year during which you are so employed. Any bonus
                      earned pursuant to Addendum "B" shall be paid within ten
                      (10) days following the date the Company publicly releases
                      its annual audited financial statements (the "Bonus
                      Payment Date"), and shall be less applicable withholdings
                      and deductions. In the event that your employment with the
                      Company is terminated prior to the end of the applicable
                      fiscal year (including by reason of termination,
                      resignation, disability or death), you shall be entitled
                      to receive a pro rata portion of the bonus otherwise
                      payable to you based upon the actual number of days which
                      you were employed by the Company during the applicable
                      fiscal year, which shall be paid on the Bonus Payment
                      Date. The Company has made no representations or
                      commitments regarding the existence or components of any
                      bonus program should you remain employed with the Company
                      after October 31, 2003.

               4.     Vacation. Since Quiksilver does not have a vacation policy
                      for executives of your level, no vacation days will be
                      treated as earned or accrued.

               5.     Health Insurance. You (and any eligible dependents you
                      elect) will be covered by the Company's group health
                      insurance programs on the same terms and conditions
                      applicable to comparable employees. The Company reserves
                      the right to change, modify, or eliminate such coverage in
                      its discretion.

               6.     Life Insurance. The Company will pay the premium on a term
                      life insurance policy on your life with a company and
                      policy of our choice, and a beneficiary of your choice, in
                      the face amount determined by the Company of not less than
                      $1,000,000. Our obligation to obtain and maintain this
                      insurance is contingent upon your establishing and
                      maintaining insurability, and we are not required to pay
                      premiums for such a policy in excess of $2,500 annually.

               7.     Stock Options. Pursuant to the terms of the Company's 2000
                      Stock Option Plan, and subject to formal approval by the
                      Board of Directors, the Company will grant you a
                      non-qualified stock option for 30,000 shares of the
                      Company's common stock. None of these options shall vest
                      until such time as you and the Company enter into a
                      written stock option agreement,

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                      which shall provide, among other things, that none of
                      these options shall vest until one year from your Date of
                      Hire, at which time one-third of such options (10,000
                      shares) shall vest, with each remaining one-third (10,000
                      shares each) vesting on the second and third anniversary
                      of your Date of Hire, respectively; provided, however,
                      that all such unvested options shall vest immediately on
                      the effective date of a Change in Control as defined in
                      Addendum "C" attached hereto. All unvested options shall
                      automatically terminate upon your termination of
                      employment.

               8.     At-Will Employment; Termination. Notwithstanding anything
                      to the contrary in this Agreement, express or implied,
                      your employment is for an unspecified term, and either you
                      or the Company may terminate such employment at will and
                      with or without Cause or notice at any time for any
                      reason. This aspect of your employment relationship can
                      only be changed by an individualized written agreement
                      signed by both you and the Chairman of the Board of the
                      Company.

                      The Company may also terminate your employment
                      immediately, without notice, and without further
                      obligation for Cause, which shall include, but not be
                      limited to, (i) your death, (ii) your permanent disability
                      which renders you unable to perform your duties and
                      responsibilities for a period in excess of three
                      consecutive months, (iii) willful misconduct in the
                      performance of your duties, (iv) violation of the Rules of
                      Professional Responsibility of the State Bar of
                      California, including any discipline or suspension, (v)
                      loss of your license to practice law in the State of
                      California, (vi) commission of a felony or any violation
                      of law involving moral turpitude or dishonesty, (vii)
                      self-dealing, (viii) willful breach of duty, (ix) habitual
                      neglect of duty, (x) a material breach by you of your
                      obligations under Paragraphs 1, 10 or 12 of this
                      Agreement, or (xi) sustained unsatisfactory performance
                      following notice to improve.

                      If the Company elects to terminate your employment without
                      Cause, or you terminate your employment for Good Reason
                      (as defined below), the Company will continue to pay your
                      base salary (but not any bonuses, overrides, insurance, or
                      other employment benefits) on its regular payroll dates
                      for a period of twelve (12) months following the date of
                      termination and shall have no further obligation or
                      liability to you.

                      "Good Reason" for you to terminate employment means a
                      voluntary termination within six (6) months following a
                      Change in Control (as defined in Addendum "C") as a result
                      of (i) the assignment to you of duties materially
                      inconsistent with your position as set forth above without
                      your consent, (ii) a material change in your reporting
                      level from that set forth in this Agreement without your
                      consent, (iii) a material diminution of your authority
                      without your consent, (iv) a material breach by the
                      Company of its obligations under this Agreement, or (v) a
                      failure by the Company to

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                      obtain from any successor, before the succession takes
                      place, an agreement to assume and perform the obligations
                      contained in this Agreement.

               9.     Trade Secrets; Confidential and/or Proprietary
                      Information; Attorney-Client Privilege. The Company owns
                      certain trade secrets and other confidential and/or
                      proprietary information which constitute valuable property
                      rights, which it has developed through a substantial
                      expenditure of time and money, which are and will continue
                      to be utilized in the Company's business and which are not
                      generally known in the trade. This proprietary information
                      includes the list of names of the customers and suppliers
                      of the Company, and other particularized information
                      concerning the products, finances, processes, material
                      preferences, fabrics, designs, material sources, pricing
                      information, production schedules, sales and marketing
                      strategies, sales commission formulae, merchandising
                      strategies, order forms and other types of proprietary
                      information relating to our products, customers and
                      suppliers. You agree that you will not disclose and will
                      keep strictly secret and confidential all trade secrets
                      and proprietary information of the Company, including, but
                      not limited to, those items specifically mentioned above.

                      You also agree to preserve in the strictest of confidence
                      all information and documents falling within the
                      attorney-client and/or attorney work product privileges,
                      which privileges survive the termination of your
                      employment relationship with the Company.

               10.    Expense Reimbursement. The Company will reimburse you for
                      documented reasonable and necessary business expenses
                      incurred by you while engaged in business activities for
                      the Company's benefit on such terms and conditions as
                      shall be generally available to other executives of the
                      Company. In your case, this will include annual dues to
                      maintain your active membership in the State Bar of
                      California, including section dues of the Business Law
                      Section.

               11.    Compliance With Business Policies. You will devote your
                      full business time and attention to Quiksilver and will
                      not be involved in other business ventures that would
                      interfere with your duties under Paragraph 1 above without
                      express authorization from me or the Company's Board of
                      Directors. You will be required to observe the Company's
                      personnel and business policies and procedures as they are
                      in effect from time to time. In the event of any
                      conflicts, the terms of this Agreement will control.

               12.    Entire Agreement. This Agreement, its addenda, the 2000
                      Stock Option Plan, and any stock option agreements the
                      Company may enter into with you contain the entire
                      integrated agreement between us regarding these issues,
                      and no modification or amendment to this Agreement will be
                      valid

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                      unless set forth in writing and signed by both you and the
                      Chairman of the Board of the Company.

               13.    Arbitration as Exclusive Remedy. To the fullest extent
                      allowed by law, any dispute, controversy or claim arising
                      out of or relating to this Agreement, the breach thereof,
                      or any aspect of your employment or the cessation thereof
                      must be settled exclusively by final and binding
                      arbitration before a single arbitrator in Orange County,
                      California, under the National Rules for the Resolution of
                      Employment Disputes of the American Arbitration
                      Association ("AAA"), as the exclusive remedy for such
                      dispute, controversy or claim. In any such arbitration,
                      the parties may conduct discovery to the same extent as
                      would be permitted in a court of law. The Company shall
                      pay the arbitrator's fees and any AAA administrative
                      expenses. Possible disputes covered by this agreement to
                      arbitrate include (but are not limited to) wage, contract,
                      discrimination, and other employment-related claims under
                      laws known as Title VII of the Civil Rights Act, the
                      California Fair Employment and Housing Act, the Americans
                      With Disabilities Act, the Age Discrimination in
                      Employment Act, and any other statutes or laws relating to
                      an employee's relationship with his employer. However,
                      claims for workers' compensation benefits and unemployment
                      insurance are not covered by this arbitration agreement,
                      and such claims may be presented by you to the appropriate
                      court or state agency as provided by California law. The
                      arbitrator shall issue a reasoned, written decision, and
                      shall have full authority to award all remedies available
                      in a court of law. Judgment upon the award rendered by the
                      arbitrator may be entered in any court having jurisdiction
                      thereof. BY ENTERING INTO THIS ARBITRATION AGREEMENT, BOTH
                      YOU AND THE COMPANY VOLUNTARILY ARE GIVING UP ANY RIGHTS
                      TO A COURT OR JURY TRIAL.

               14.    Successors and Assigns. This Agreement will be assignable
                      by the Company to any successor or to any other company
                      owned or controlled by the Company, and will be binding
                      upon any successor to the business of the Company, whether
                      direct or indirect, by purchase of securities, merger,
                      consolidation, purchase of all or substantially all of the
                      assets of the Company or otherwise.

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               Please sign, date and return the enclosed copy of this letter to
me for our files to acknowledge your agreement with the above. Charlie, all of
us at Quiksilver very much look forward to you joining our organization and
continuing our professional relationship.

               Best personal regards.

                                           Very truly yours,


                                           Robert B. McKnight, Jr.
                                           Chairman and Chief Executive Officer

Enclosure

ACKNOWLEDGED AND AGREED:


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Charles S. Exon

Dated:
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