Exhibit 10.38
 
  PERSONAL
AND CONFIDENTIAL
 
 Re:
    
    Employment at Quiksilver, Inc.
   1.
    
    Position; Exclusivity. The Company hereby agrees to
employ you as its [], currently reporting to the [].
During your employment with Quiksilver, you will devote your full professional
and business time, interest, abilities and energies to the Company and will not
render any services to any other person or entity, whether for compensation or
otherwise, or engage in any business activities competitive with or adverse to
the Companys business or welfare, whether alone, as an employee, as a partner,
as a member, or as a shareholder, officer or director of any other corporation,
or as a trustee, fiduciary or in any other similar representative capacity of
any other entity.2.
    
    Base Salary. Your base salary will be $___per month
($___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 (but
not below $___per month) at the Companys discretion in light of the
Companys performance, your performance, market conditions and other factors
deemed relevant by the Company.3.
    
    Bonus. For the fiscal year ending October [ ] and
each fiscal year thereafter, you shall be eligible to receive a discretionary
bonus under the terms approved by the Board of Directors for such bonus. Any
such bonus shall be paid within thirty (30) days following the date the Company
publicly releases its annual audited financial statements (the Bonus Payment
Date). In the event that your employment with the Company terminates prior to
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the end of the applicable fiscal year, your eligibility to
receive a pro rata portion of the bonus is governed by Paragraph 9 below.
Any bonus payments shall be less applicable withholdings and deductions.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 and Disability 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.
You will also be covered by the long-term disability plan for senior
executives on the same terms and conditions applicable to comparable employees.
The Company reserves the right to change, modify, or eliminate such coverages
in its discretion.6.
    
    Clothing Allowance. You will be provided a clothing
allowance of $4,000 per year at the Companys wholesale prices.7.
    
    Stock Options. You shall continue to be a participant
in Quiksilvers Stock Incentive Plan, or any successor equity plan. The amount
and terms of any restricted stock, stock options, stock appreciation rights or
other interests to be granted to you will be determined by the Board of
Directors in its discretion and covered in separate agreements, but shall be
substantially similar to those granted to other senior executives of Quiksilver
of equivalent level. Stock options granted to you after the date hereof
through the termination of your employment shall provide that if you are
terminated by the Company without Cause (as hereinafter defined), as a result
of your death or permanent disability, or you terminate your employment for
Good Reason (as hereinafter defined), any such options outstanding will
automatically vest in full on an accelerated basis so that the options will
immediately prior to such termination become exercisable for all option shares
and remain exercisable until the earlier to occur of (i) the first anniversary
of such termination, (ii) the end of the option term, or (iii) termination
pursuant to other provisions of the applicable option plan or agreement
(e.g., a corporate transaction).8.
    
    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 $2,000,000. 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 $5,000 annually.9.
    
    Unspecified Term; At Will Employment; Termination.(a) Notwithstanding anything to the contrary in this Agreement or in your
prior employment relationship with the Company, express or implied, your
employment is for an unspecified term and either you or Quiksilver may
terminate your employment at will and with or without Cause (as defined
below) or notice at any time for any reason; provided, however,
that you
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agree to provide the Company with thirty (30) days advance written
notice of your resignation (during which time the Company may elect, in its
discretion, to relieve you of all duties and responsibilities). This
at-will aspect of your employment relationship can only be changed by an
individualized written agreement signed by both you and an authorized
officer of the Company.(b) The Company may also terminate your employment immediately, without
notice, 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) commission of a felony or violation of law involving moral turpitude or
dishonesty, (v) self-dealing, (vi) willful breach of duty, (vii) habitual
neglect of duty, or (viii) a material breach by you of your obligations
under this Agreement. If the Company terminates your employment for Cause,
or you terminate your employment other than for Good Reason (as defined
below), you (or your estate or beneficiaries in the case of your death)
shall receive your base salary and other benefits earned and accrued prior
to the termination of your employment and, in the case of a termination
pursuant to subparagraphs (i) or (ii) only, a pro rata portion of your
bonus, if any, as provided in Paragraph 3 for the fiscal year in which such
termination occurs, less applicable withholdings and deductions, and you
shall have no further rights to any other compensation or benefits hereunder
on or after the termination of your employment.(c) If Quiksilver elects to terminate your employment without Cause, or if
you terminate your employment with the Company for Good Reason within six
(6) months of the action constituting Good Reason, the Company will
(i) continue to pay your base salary (but not any employment benefits) on
its regular payroll dates for a period of eighteen (18) months, (ii) pay you
a pro rata portion of a bonus adopted pursuant to Paragraph 3, if any, for
the fiscal year in which such termination occurs, less applicable
withholdings and deductions, and (iii) pay you an amount equal to two times
the average annual bonus earned by you pursuant to Paragraph 3 during the
two (2) most recently completed fiscal years of the Company, payable over an
eighteen (18) month period following termination in equal installments on
the Companys regular payroll dates, less applicable withholdings and
deductions. In order for you to be eligible to receive the payments
specified in this Paragraph 9(c), you must execute a general release of
claims in a form reasonably acceptable to the Company. You shall have no
further rights to any other compensation or benefits hereunder on or after
the termination of your employment. You shall not have a duty to seek
substitute employment, and the Company shall not have the right to offset
any compensation due you against any compensation or income received by you
after the date of such termination.
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Good Reason for you to terminate employment means a voluntary termination
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
diminution of your authority without your consent, (iii) a material breach
by the Company of its obligations under this Agreement, (iv) a failure by
the Company to obtain from any successor, before the succession takes place,
an agreement to assume and perform the obligations contained in this
Agreement, or (v) the Company requiring you to be based (other than
temporarily) at any office or location outside of the Southern California
area without your consent. Notwithstanding the foregoing, Good Reason shall
not exist unless you provide the Company notice of termination on account
thereof and, if such event or condition is curable, the Company fails to
cure such event or condition within thirty (30) days of such notice.(d) In the event that any payment or benefit received or to be received by
you (collectively, the Payments) would constitute a parachute payment
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended (the Code), then the following limitation shall apply:The aggregate present value of those Payments shall be limited in amount to
the greater of the following dollar amounts (the Benefit Limit):(i) 2.99 times your Average Compensation (as defined below), or
(ii) the amount which yields you the greatest after-tax amount of Payments
under this Agreement after taking into account any excise tax imposed under
Code Section 4999 on those Payments.The present value of the Payments will be measured as of the date of the
change in control and determined in accordance with the provisions of Code
Section 280G(d)(4).Average Compensation means the average of your W-2 wages from the Company
for the five (5) calendar years completed immediately prior to the calendar
year in which the change in control is effected. Any W-2 wages for a
partial year of employment will be annualized, in accordance with the
frequency which such wages are paid during such partial year, before
inclusion in Average Compensation.(e) Notwithstanding the foregoing, to the extent the Company reasonably
determines that any payment or benefit under this Agreement is subject to
Section 409A of the Code, such payment or benefit shall be made at such
times and in such forms as the Company reasonably determines are required to
comply with Code Section 409A (including, without limitation, in the case of
a specified employee within the meaning of Code Section 409A, any payments
that would otherwise be made during the six-month period following
separation of service will be paid in a lump sum after the end of the
six-month period) and the Treasury Regulations and the transitional relief
thereunder; provided, however, that in no event will the Company be required to provide you
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with
any additional payment or benefit in the event that any of your payments or
benefits trigger additional income tax under Code Section 409A or in the
event that the Company changes the time or form of your payments or benefits
in accordance with this paragraph.10.
    
    Trade Secrets; Confidential and/or Proprietary
Information. 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 Quiksilver, 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.11.
    
    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.12.
    
    Compliance With Business Policies. You will devote
your full business time and attention to Quiksilver and will not be involved in
other business ventures without written authorization from 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.13.
    
    Entire Agreement. This Agreement, its addenda, 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 unless set forth in writing and
signed by both you and an authorized officer of the Company.14.
    
    Arbitration as Exclusive Remedy. To the fullest extent
allowed by law, any controversy, claim or dispute between you and the Company
(and/or any of its affiliates, owners, shareholders, directors, officers,
employees, volunteers or agents) relating to or arising out of your employment
or the cessation of that employment will be submitted to final and binding
arbitration in Orange County, California, for determination in accordance with
the American Arbitration Associations (AAA) National Rules for the
Resolution of Employment Disputes, as the exclusive remedy for such
controversy, claim or dispute. In any such arbitration, the parties may
conduct discovery to the same extent as would be permitted in a court of
law. The arbitrator shall issue a written decision, and shall have full
authority to award all remedies
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which would be available in court. The
Company shall pay the arbitrators fees and any AAA administrative expenses.
Any judgment upon the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof. Possible disputes covered by the
above include (but are not limited to) unpaid wages, breach of contract,
torts, violation of public policy, discrimination, harassment, or any other
employment-related claims under laws including but not limited to, Title VII
of the Civil Rights Act of 1964, the Americans With Disabilities Act, the
Age Discrimination in Employment Act, the California Fair Employment and
Housing Act, the California Labor Code and any other statutes or laws
relating to an employees relationship with his/her employer, regardless of
whether such dispute is initiated by the employee or the Company. Thus,
this bilateral arbitration agreement fully applies to any and all claims
that the Company may have against you, including (but not limited to) claims
for misappropriation of Company property, disclosure of proprietary
information or trade secrets, interference with contract, trade libel, gross
negligence, or any other claim for alleged wrongful conduct or breach of the
duty of loyalty. Nevertheless, claims for workers compensation benefits or
unemployment insurance, those arising under the National Labor Relations
Act, and any other claims where mandatory arbitration is prohibited by law,
are not covered by this arbitration agreement, and such claims may be
presented by either the Company or you to the appropriate court or
government agency. BY AGREEING TO THIS BINDING ARBITRATION PROVISION, BOTH
YOU AND THE COMPANY GIVE UP ALL RIGHTS TO TRIAL BY JURY. This mutual
arbitration agreement is to be construed as broadly as is permissible under
applicable law.15.
    
    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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