Document:

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                                                                   Exhibit 10.39

                           SECOND AMENDED AND RESTATED
                              EMPLOYMENT AGREEMENT

               This SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
("Agreement"), effective as of the 1st day of January, 2000 (the "Effective
Date"), is entered into by and between Thomas A. George ("Employee") and Oakley,
Inc., a Washington corporation (the "Company").

               WHEREAS, Employee and the Company have previously entered into
that certain employment agreement dated October 6, 1997, which agreement was
amended and restated effective May 12, 1998 (collectively, the "Old Employment
Agreement"); and

               WHEREAS, Employee and the Company desire to amend and restate in
its entirety the Old Employment Agreement.

               NOW, THEREFORE, in consideration of the mutual agreements
hereinafter set forth, Employee and the Company have agreed and do hereby agree
as follows:

               1. Employment. The Company does hereby employ, engage and hire
Employee as Chief Financial Officer of the Company, and Employee does hereby
accept and agree to such hiring, engagement and employment. In such capacity,
Employee shall have such executive and managerial powers and duties with respect
to the Company as may be from time to time reasonably assigned to him by the
Board of Directors of the Company (the "Board") or the President, Chief
Executive Officer or Chief Operating Officer of the Company, including without
limitation responsibility for the accounting, finance and investor relations
functions of the Company. Except for sick leave, reasonable vacations and
excused leaves of absence, Employee shall, throughout his period of employment,
devote substantially all his working time, attention, knowledge and skills,
diligently and to the best of his ability, to the performance of such duties in
furtherance of the business of the Company.

               2. Term of Agreement. The term ("Term") of this Agreement shall
commence on the Effective Date and shall continue for a period of two (2) years;
provided, however, that on each anniversary of the Effective Date at which time
the remaining term of the Agreement is one year, the Term of the Agreement shall
automatically be extended for one additional year unless, not less than three
months prior to any such anniversary, either party shall have given written
notice to the other that it does not wish to extend the Term of the Agreement.

               3. Compensation.

                      (a) Base Salary. The Company shall pay Employee an annual
base salary no less than at the rate of $230,000 per year, payable in equal
biweekly installments or at such other times as Employee and the Company shall
agree. Employee's base salary may be increased as determined by the Board in its
sole discretion.

                      (b) Bonus. Employee shall be eligible to participate in
the Company's Performance Bonus Plan. Employee's annual target bonus under the
Performance Bonus Plan shall not be less than $80,000.

                      (c) Housing Allowance. During the Term, until such time as
Employee no longer reasonably requires a second residence in San Diego County,
California, the Company shall pay Employee a housing allowance in the amount of
$1,500 per month. It is expressly understood that Employee's requirement of a
San Diego residence relates solely to his desire to

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permit his existing children to complete their primary education in San Diego
County, and that the housing allowance provided for herein shall terminate at
such time as none of such children is attending junior or senior high school in
San Diego County. Employee agrees to provide the Company timely notice of any
change in circumstances relating to his requirement of a San Diego residence.

                      (d) Fringe Benefits. Employee shall be entitled to
participate in any fringe and other benefit programs adopted from time to time
by the Company for the benefit of its senior executives. In addition Employee
shall be entitled to accrue vacation benefits at the rate of no less than three
weeks per each twelve-month period.

               4. Termination of Employment.

                      (a) Death. If Employee dies while employed by the Company,
his employment shall immediately terminate and the Company's obligation to pay
Employee's base salary shall cease as of the date of death. Within ten (10) days
following such death, the Company shall pay to Employee's estate an amount equal
to Employee's then current target bonus under the Performance Bonus Plan,
prorated through the date of Employee's death. Employee's beneficiaries or his
estate shall receive benefits in accordance with any Company plans then in
effect.

                      (b) Disability. If as a result of Employee's incapacity
due to physical or mental illness ("Disability"), Employee shall have been
absent from the full-time performance of his duties with the Company for six
consecutive months, the Company may, upon 30 days' notice to Employee, terminate
Employee's employment. Within ten (10) days following such termination for
Disability, the Company shall pay Employee an amount equal to one year's base
salary plus an amount equal to Employee's target bonus under the Performance
Bonus Plan, prorated through the date of such termination. Such payment shall
not affect Employee's rights under any Company disability plan in which Employee
may then be a participant.

                      (c) Termination for Cause. The Company shall have the
right to terminate Employee's employment for Cause by giving Employee written
notice of the effective date of such termination. For purposes of this
Agreement, "Cause" shall mean (i) fraud, misappropriation, embezzlement or other
act of material misconduct against the Company, or (ii) substantial or willful
failure to perform specific and lawful directives of the Board or the President,
Chief Executive Officer or Chief Operating Officer of the Company consistent
with Employee's employment or (iii) other material breach of this Agreement by
Employee. If the Company terminates Employee's employment for Cause, the Company
shall have no further obligation under this Agreement from and after the date of
termination.

                      (d) Voluntary Termination by Employee. In the event that
Employee's employment with the Company is voluntarily terminated by Employee
other than for Good Reason (as defined below), the Company shall have no further
obligation under this Agreement from and after the date of termination. For
purposes of this Agreement, "Good Reason" shall mean any material breach by the
Company of any provision of this Agreement.

                      (e) Other Termination. If Employee's employment is
terminated (i) by the Company for any reason other than Employee's death or
disability or for Cause or (ii) by Employee for Good Reason, the Company shall
pay Employee (x) his base salary for a period equal to the greater of eighteen
(18) months or the remaining Term of this Agreement (the "Severance Period"), in
either case as if Employee had remained in the Company's employ at an annual
rate of compensation equal to his base salary as of the date of termination, and
(y) an amount equal to the product of (A) Employee's annual target bonus under
the Performance Bonus Plan as in effect at the time of such termination and (B)
a fraction, the numerator of which is the number of full months in the Severance
Period, and the denominator of which is 12.

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               5. Assignment of Intellectual Property Rights.

                      (a) Definition of "Inventions". As used herein, the term
"Inventions" shall mean all inventions, discoveries, improvements, trade
secrets, formulas, techniques, data, programs, systems, specifications,
documentation, algorithms, flow charts, logic diagrams, source codes, processes,
and other information, including works-in-progress, whether or not subject to
patent, trademark, copyright, trade secret, or mask work protection, and whether
or not reduced to practice, which are made, created, authored, conceived, or
reduced to practice by Employee, either alone or jointly with others, during the
period of employment with the Company (including, without limitation, all
periods of employment with the Company prior to the Effective Date) which (A)
relate to the actual or anticipated business, activities, research, or
investigations of the Company or (B) result from or is suggested by work
performed by Employee for the Company (whether or not made or conceived during
normal working hours or on the premises of the Company), or (C) which result, to
any extent, from use of the Company's premises or property, unless, in the case
of clause (C) only, (i) Employee has reimbursed the Company in an amount equal
to the value of the use of such premises or property (as determined by the
Company based upon the Company's all in cost, which shall include without
limitation compensation and overhead expense) and (ii) the Company approved the
use of its premises or property prior to the use thereof by Employee.

                      (b) Work for Hire. Employee expressly acknowledges that
all copyrightable aspects of the Inventions are to be considered "works made for
hire" within the meaning of the Copyright Act of 1976, as amended (the "Act"),
and that the Company is to be the "author" within the meaning of such Act for
all purposes. All such copyrightable works, as well as all copies of such works
in whatever medium fixed or embodied, shall be owned exclusively by the Company
as of its creation, and Employee hereby expressly disclaims any and all interest
in any of such copyrightable works and waives any right of droit morale or
similar rights.

                      (c) Assignment. Employee acknowledges and agrees that all
Inventions constitute trade secrets of the Company and shall be the sole
property of the Company or any other entity designated by the Company. In the
event that title to any or all of the Inventions, or any part or element
thereof, may not, by operation of law, vest in the Company, or such Inventions
may be found as a matter of law not to be "works made for hire" within the
meaning of the Act, Employee hereby conveys and irrevocably assigns to the
Company, without further consideration, all his right, title and interest,
throughout the universe and in perpetuity, in all Inventions and all copies of
them, in whatever medium fixed or embodied, and in all written records,
graphics, diagrams, notes, or reports relating thereto in Employee's possession
or under his control, including, with respect to any of the foregoing, all
rights of copyright, patent, trademark, trade secret, mask work, and any and all
other proprietary rights therein, the right to modify and create derivative
works, the right to invoke the benefit of any priority under any international
convention, and all rights to register and renew same. Employee understands that
Inventions do not include, and the obligations set forth above in this Section
5(c) do not apply to, subject matter that qualifies fully under the provisions
of Section 2870 of the California Labor Code.

                      (d) Proprietary Notices; No Filings; Waiver of Moral
Rights. Employee acknowledges that all Inventions shall, at the sole option of
the Company, bear the Company's patent, copyright, trademark, trade secret, and
mask work notices.

                      Employee agrees not to file any patent, copyright, or
trademark applications relating to any Invention, except with prior written
consent of an authorized representative of the Company (other than Employee).

                      Employee hereby expressly disclaims any and all interest
in any Inventions and waives any right of droit morale or similar rights, such
as rights of integrity or the right to be attributed as the creator of the
Invention.

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                      (e) Further Assurances. Employee agrees to assist the
Company, or any party designated by the Company, promptly on the Company's
request, whether before or after the termination of employment, however such
termination may occur, in perfecting, registering, maintaining, and enforcing,
in any jurisdiction, the Company's rights in the Inventions by performing all
acts and executing all documents and instruments deemed necessary or convenient
by the Company, including, by way of illustration and not limitation:

                             i) Executing assignments, applications, and other
        documents and instruments in connection with (A) obtaining patents,
        copyrights, trademarks, mask works, or other proprietary protections for
        the Inventions and (B) confirming the assignment to the Company of all
        right, title, and interest in the Inventions or otherwise establishing
        the Company's exclusive ownership rights therein.

                             ii) Cooperating in the prosecution of patent,
        copyright, trademark and mask work applications, as well as in the
        enforcement of the Company's rights in the Inventions, including, but
        not limited to, testifying in court or before any patent, copyright,
        trademark or mask work registry office or any other administrative body.

                      Employee shall be reimbursed for all out-of-pocket costs
incurred in connection with the foregoing, if such assistance is requested by
the Company after the termination of Employee's employment. In addition, to the
extent that, after the termination of employment for whatever reason, Employee's
technical expertise shall be required in connection with the fulfillment of the
aforementioned obligations, the Company shall compensate Employee at a
reasonable rate for the time actually spent by Employee at the Company's request
rendering such assistance.

                      (f) Power of Attorney. Employee hereby irrevocably
appoints the Company to be his Attorney-In-Fact to execute any document and to
take any action in his name and on his behalf and to generally use his name for
the purpose of giving to the Company the full benefit of the assignment
provisions set forth above.

                      (g) Disclosure of Inventions. Employee shall make full and
prompt disclosure to the Company of all Inventions subject to assignment to the
Company, and all information relating thereto in Employee's possession or under
his control as to possible applications and use thereof.

               6. No Violation of Third-Party Rights. Employee represents,
warrants, and covenants that he:

                      (a) will not, in the course of employment, infringe upon
or violate any proprietary rights of any third party (including, without
limitation, any third party confidential relationships, patents, copyrights,
mask works, trade secrets, or other proprietary rights);

                      (b) is not a party to any conflicting agreements with
third parties which will prevent him from fulfilling the terms of employment and
the obligations of this Agreement;

                      (c) does not have in his possession any confidential or
proprietary information or documents belonging to others and will not disclose
to the Company, use, or induce the Company to use, any confidential or
proprietary information or documents of others; and

                      (d) agrees to respect any and all valid obligations which
he may now have to prior employers or to others relating to confidential
information, inventions, or discoveries which are the property of those prior
employers or others, as the case may be.

                      Employee has supplied or shall promptly supply to the
Company a copy of each written agreement to which Employee is subject (other
than any agreement to which the

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Company is a party) which includes any obligation of confidentiality, assignment
of Inventions, or non-competition.

                       Employee agrees to indemnify and save harmless the
Company from any loss, claim, damage, cost or expense of any kind (including
without limitation, reasonable attorney fees) to which the Company may be
subjected by virtue of a breach by Employee of the foregoing representations,
warranties, and covenants.

               7.  Confidential Information and Non-Competition.

                      (a) Confidentiality. Employee acknowledges that in his
employment hereunder he will occupy a position of trust and confidence. Employee
shall not, except as may be required in the normal course of business to perform
his duties hereunder or as required by applicable law, without limitation in
time or until such information shall have become public other than by Employee's
unauthorized disclosure, disclose to others or use, whether directly or
indirectly, any Confidential Information regarding the Company, its subsidiaries
and affiliates. "Confidential Information" shall mean information about the
Company, its subsidiaries and affiliates, and their respective clients and
customers that is not disclosed by the Company for financial reporting purposes
and that was learned by Employee in the course of his employment by the Company,
its subsidiaries and affiliates, including (without limitation) any proprietary
knowledge, trade secrets, data, formulae, information and client and customer
lists and all papers, resumes, and records (including computer records) of the
documents containing such Confidential Information. Employee acknowledges that
such Confidential Information is specialized, unique in nature and of great
value to the Company, its subsidiaries and affiliates, and that such information
gives the Company a competitive advantage. Employee agrees to (i) deliver or
return to the Company, at the Company's request at any time or upon termination
or expiration of his employment or as soon thereafter as possible, (A) all
documents, computer tapes and disks, records, lists, data, drawings, prints,
notes and written information (and all copies thereof) furnished by the Company,
its subsidiaries and affiliates, or prepared by Employee during the term of his
employment by the Company, its subsidiaries and affiliates, and (B) all
notebooks and other data relating to research or experiments or other work
conducted by Employee in the scope of employment or any Inventions made,
created, authored, conceived, or reduced to practice by Employee, either alone
or jointly with others, and (ii) make full disclosure relating to any
Inventions.

                      If Employee would like to keep certain property, such as
material relating to professional societies or other non-confidential material,
upon the termination of employment with the Company, he agrees to discuss such
issues with the Company. Where such a request does not put Confidential
Information of the Company at risk, the Company will customarily grant the
request.

                      (b) Non-Competition. During the Term of this Agreement and
for a period of two (2) years thereafter, Employee shall not, directly or
indirectly, without the prior written consent of the Company, provide
consultative services or otherwise provide services to (whether as an employee
or a consultant, with or without pay), own, manage, operate, join, control,
participate in, or be connected with (as a stockholder, partner, or otherwise),
any business, individual, partner, firm, corporation, or other entity that is
then a competitor of the Company, its subsidiaries and affiliates, including
without limitation any entity engaged in the design, manufacture and/or
distribution of eyewear (each such competitor a "Competitor of the Company");
provided, however, that the "beneficial ownership" by Employee, either
individually or as a member of a "group," as such terms are used in Rule 13d of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), of not more than five percent (5%) of the voting
stock of any publicly held corporation shall not alone constitute a violation of
this Agreement; provided, however, that if Employee's employment is terminated
(i) by the Company without Cause, (ii) by Employee for Good Reason or (iii) by
reason of the expiration of the Term of this Agreement, the non-competition
agreement provided for in this subparagraph (b) shall terminate as of the date
of such termination of employment. Employee and the Company acknowledge and
agree that the busin-

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ess of the Company is global in nature, and that the terms
of the non-competition agreement set forth herein shall apply on a worldwide
basis.

                      (c) Non-Solicitation of Customers and Suppliers. During
the Term of this Agreement and for a period of two (2) years thereafter,
Employee shall not, directly or indirectly, influence or attempt to influence
customers or suppliers of the Company or any of its subsidiaries or affiliates,
to divert their business to any Competitor of the Company; provided, however,
that if Employee's employment is terminated (i) by the Company without Cause,
(ii) by Employee for Good Reason or (iii) by reason of the expiration of the
Term of this Agreement, the non-solicitation agreement provided for in this
subparagraph (c) shall terminate as of the date of such termination of
employment.

                      (d) Non-Solicitation of Employees. Employee recognizes
that he possesses and will possess confidential information about other
employees of the Company, its subsidiaries and affiliates, relating to their
education, experience, skills, abilities, compensation and benefits, and
inter-personal relationships with customers of the Company, its subsidiaries and
affiliates. Employee recognizes that the information he possesses and will
possess about these other employees is not generally known, is of substantial
value to the Company, its subsidiaries and affiliates in developing their
business and in securing and retaining customers, and has been and will be
acquired by him because of his business position with the Company, its
subsidiaries and affiliates. Employee agrees that, during the Term of this
Agreement and for a period of two (2) years thereafter, he will not, directly or
indirectly, solicit or recruit any employee of the Company, its subsidiaries and
affiliates (i) for the purpose of being employed by him or by any Competitor of
the Company on whose behalf he is acting as an agent, representative or employee
and that he shall not convey any such confidential information or trade secrets
about other employees of the Company, its subsidiaries and affiliates to any
other person or (ii) for any other purpose or no purpose.

                      (e) Injunctive Relief. It is expressly agreed that the
Company will or would suffer irreparable injury if Employee were to compete with
the Company or any subsidiary or affiliate of the Company in violation of any of
the provisions of this Section 7 and that the Company would by reason of such
competition be entitled to injunctive relief in a court of appropriate
jurisdiction, and Employee further consents and stipulates to the entry of such
injunctive relief in such a court prohibiting Employee from so competing with
the Company or any subsidiary or affiliate of the Company in violation of this
Agreement.

                      (f) Survival of Provisions. The obligations contained in
this Section 7 shall survive the termination or expiration of Employee's
employment with the Company and shall be fully enforceable thereafter. If it is
determined by a court of competent jurisdiction in any state that any
restriction in this Section 7 is excessive in duration or scope or is
unreasonable or unenforceable under the laws of that state, it is the intention
of the parties that such restriction may be modified or amended by the court to
render it enforceable to the maximum extent permitted by the law of that state.

               8. Notices. All notices and other communications under this
Agreement shall be in writing and shall be given by fax or first class mail,
certified or registered with return receipt requested, and shall be deemed to
have been duly given three (3) days after mailing or twenty-four (24) hours
after transmission of a fax to the respective persons named below:

        If to Company:       Oakley, Inc.
                             One Icon
                             Foothill Ranch, California 92610

        If to Employee:      Thomas A. George
                             [Address]
                             [City]

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Either party may change such party's address for notices by notice duly given
pursuant hereto.

               9. Indemnification. The Company shall indemnify and hold Employee
harmless to the maximum extent permitted under applicable law.

               10. No Mitigation; No Offset. Employee shall not be required in
any way to mitigate the amount of any payment provided for in this Agreement,
and such payments shall not be subject to offset against compensation earned as
the result of employment with another employer.

               11. Attorneys' Fees. In the event judicial determination is
necessary of any dispute arising as to the parties' rights and obligations
hereunder, each party shall have the right, in addition to any other available
relief, to attorneys' fees based on a determination by the court of the extent
to which each party has prevailed as to the material issues raised in
determination of the dispute.

               12. Assignment; Successors. This Agreement is personal in nature
and neither of the parties hereto shall, without the consent of the other,
assign or transfer this Agreement or any rights or obligations hereunder;
provided, that in the event of the merger, consolidation, transfer or sale of
all or substantially all of the assets of the Company with or to any other
individual or entity, this Agreement shall be binding upon and inure to the
benefit of such successor, and such successor shall discharge and perform all
the promises, covenants, duties and obligations of the Company hereunder.

               13. Governing Law. This Agreement and the legal relations thus
created between the parties hereto shall be governed by and construed under and
in accordance with the laws of the State of California.

               14. Waiver; Modification. Failure to insist upon strict
compliance with any of the terms, covenants, or conditions hereof shall not be
deemed a waiver of such term, covenant, or condition, nor shall any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right
or power hereunder at any one or more times be deemed a waiver or relinquishment
of such right or power at any other time or times. This Agreement shall not be
modified in any respect except by a writing executed by each party hereto.

               15. Severability. In the event that a court of competent
jurisdiction determines that any portion of this Agreement is in violation of
any statute or public policy, only the portions of this Agreement that violate
such statute or public policy shall be stricken. All portions of this Agreement
that do not violate any statute or public policy shall continue in full force
and effect. Further, any court order striking any portion of this Agreement
shall modify the stricken terms as narrowly as possible to give as much effect
as possible to the intentions of the parties under this Agreement.

               16. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

               17. Termination of Old Employment Agreement. The Old Employment
Agreement is hereby amended, restated and superseded in its entirety as of the
date hereof. Employee acknowledges and agrees that no rights or benefits that
Employee may have accrued in connection with a termination for Good Reason (as
such term was defined in the Old Employment Agreement) prior to the Amendment
Date shall have any force or effect following the Amendment Date.

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               IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Employee has hereunto signed this
Agreement, as of the date referred to above.

                                            OAKLEY, INC.

                                            /s/ Link Newcomb
                                            -----------------------------------
                                            By:    R. Link Newcomb
                                            Its:   Chief Operating Officer

                                            /s/ Thomas A. George
                                            ------------------------------------
                                            THOMAS A. GEORGE

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                                                                   EXHIBIT 10.53

                              EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into effective as of
the 26th day of November, 1999 (the "Effective Date") between ALPHA
MICROSYSTEMS, a California corporation (the "Company") and Robert O. Riiska (the
"Employee").

                                    RECITALS

        WHEREAS, the Company and Employee desire to enter into a contract for
the employment of Employee by the Company which shall provide compensation to
Employee in return for Employee's services to the Company;

        WHEREAS, the Company further desires to provide certain compensation for
Employee in the event of his actual or constructive termination by the Company
as a result of a takeover or similar business reorganization or change in
control in order to encourage Employee to remain in the service of the Company
now and in the future when a takeover might be threatened or likely;

        NOW, THEREFORE, in consideration of the mutual covenants and
representations contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:

                                    ARTICLE I

                                BASIC EMPLOYMENT

        1.1 Employment. The Company agrees to employ Employee and Employee
hereby agrees to be employed by the Company to perform the duties described
below for the compensation specified in this Agreement, as it may be amended
from time to time, subject to and upon all the terms and conditions set forth
herein. During Employee's employment hereunder, Employee hereby agrees to use
his best efforts and to devote his full professional time, energy and ability in
order to assure the proper and efficient performance of his work for the
Company. At all times during Employee's employment hereunder, Employee shall not
render services of a business, professional or commercial nature to any other
person or firm, whether for compensation or otherwise, without the prior written
express authorization of the Board of Directors of the Company (the "Board"),
which authorization shall describe the nature and duration of such services and
shall name the person or firm to whom such services may be rendered.

        1.2 Term. Employee's employment under this Agreement shall commence on
November 26, 1999, and shall be for an unspecified term until terminated by
Employee or Company pursuant to Article III below (the "Employment period").

        1.3 Duties. Employee shall devote his full time, energy and talents to
serving as the Chief Financial Officer of the Company, and shall have such
duties as are typically expected of such officer, subject to the direction of
the President of the Company. The Employee will have

<PAGE>   2

such authority, power, responsibilities and duties as are inherent to his
position and necessary to carry out his responsibilities and the duties required
of him hereunder.

        1.4 Basic Compensation. The Company hereby agrees to pay Employee a base
salary (the "Base Salary") at the weekly rate of Three Thousand Seventy Seven
Dollars ($3,077), which rate may be amended from time to time in accordance with
the provisions of this paragraph, payable with such frequency as is the custom
and practice of the Company, covering employment during the immediately
preceding period for all services rendered by Employee. The Company shall deduct
from any payment such social security insurance, federal, state and other taxes,
state disability insurance and other withholdings as may be required by law.

        1.5 Bonus Compensation.

            (a) In addition to Base Salary, Employee shall receive bonuses in
the form of cash, stock options, stock grants or other non-cash compensation
("Bonus Compensation") in accordance with the terms of this Section 1.5. The
Company shall deduct from any payment of Bonus Compensation social security
insurance, federal, state and other taxes, state disability insurance and other
withholdings as may be required by law.

            (b) Provided that Employee commences his duties on or before
November 29, 1999 and continues in the employ of the Company through December
31, 1999, Employee shall receive a signing bonus in the amount of Fifty Thousand
Dollars ($50,000), to be delivered on or before December 31, 1999.

            (c) For each fiscal year, Employee shall be eligible to receive a
discretionary bonus of up to thirty percent (30%) of the Base Salary if one
hundred percent (100%) of the plan achievement for fiscal year 2000 has been
met. The measurement factors and basis for payment for such bonus shall be
determined by the Compensation Committee of the Company's Board of Directors.

        1.6 Vacation and Illness. Employee shall be entitled to paid vacation
and sick leave in accordance with the policies established from time to time by
the Company.

        1.7 Benefits. During the Employment Period, Employee will be eligible to
participate in all retirement, stock option or other benefit plans available to
officers and employees of the Company. Employee shall also receive employee
group medical, dental and life insurance benefits in accordance with the
policies established from time to time by the Company. Employee will also be
eligible to participate in the following benefit plans, as they may be in effect
from time to time:

            (a) Company's Executive Deferred Compensation Program;

            (b) Company's Profit Sharing 401(k) Plan, beginning July 1, 2000;
and

            (c) Company's Employee Stock Purchase Plan for the semi-annual
period beginning January 1, 2000.

        1.8 Expenses. Employee shall be entitled to reimbursement for all
approved reasonable travel and other business expenses incurred by Employee in
connection with his

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services to the Company pursuant to the terms of this Agreement. All business
expenses for which Employee seeks reimbursement from the Company shall be
adequately documented by Employee in accordance with the Company's procedures
covering expense reimbursement and in compliance with the regulations of the
Internal Revenue Service.

                                   ARTICLE II

                             PROPRIETARY INFORMATION

        2.1 Non-Disclosure of Proprietary Information. Employee agrees that,
during and after his employment with the Company, Employee will regard and
preserve as confidential all trade secrets pertaining to the Company's business
that have been or may be obtained by Employee by reason of his employment, and
Employee will not directly or indirectly disclose to any third person or use for
the benefit of anyone other than the Company or use for his own benefit or
purposes, any inventions, designs, improvements, processes, techniques, methods,
ideas, discoveries, developments, formulae, compounds, specifications,
specialized knowledge, data, records, trade secrets, confidential information,
customer lists, customer data, sales data, sales programs, development programs,
acquisition programs, computer code or other secrets or proprietary information
of the Company which he has encountered or originated in the course of or
arising out of his employment with the Company. The parties hereto acknowledge
and agree that the subject matter of the provisions of this Section 2.1 is of a
unique and special nature such that such provisions may be specifically enforced
by a court of equity in addition to whatever other remedies the Company may have
at law.

        2.2 Return of Documents and Materials. Employee agrees that any and all
documents and materials, including, without limitation, reports, drawings,
designs, tools, equipment, plans, proposals, marketing or sales plans,
specifications or materials made or prepared, in whole or in part, by Employee
or that may come into Employee's possession by reason of his employment are the
property of the Company and shall not be used by Employee in any way adverse or
competitive to the Company's interests. Employee acknowledges that Employee will
not deliver, reproduce or in any way allow such documents and materials to be
delivered or used by any third party without the specific written direction or
consent of the Company. The parties hereto acknowledge and agree that the
subject matter of the provisions of this Section 2.2 is of a unique and special
nature such that such provisions may be specifically enforced by a court of
equity in addition to other remedies the Company may have at law.

        2.3 Ownership of Inventions. Employee agrees that all inventions,
discoveries, improvements, and innovations, whether patentable or not
(hereinafter collectively referred to as "Inventions" or "Invention" as may be
appropriate), conceived or made by Employee, either solely or in concert with
others, during the period of employment with the Company, whether or not made or
conceived during working hours, which (a) relate in any manner to the existing
or contemplated business or research activities of the Company, or (b) are
suggested by or result from Employee's work for the Company, or (c) result from
the use of the Company's time, materials or facilities, shall be the exclusive
property of the Company.

        2.4 Assignment of Rights. Employee further agrees:

                                      -3-
<PAGE>   4

            (a) That Employee will promptly disclose in writing to the Company
all Inventions conceived or made by Employee, either solely or in concert with
others, during the period of employment by the Company; and

            (b) That Employee hereby assigns to the Company Employee's entire
right, title and interest in all Inventions which are the property of the
Company pursuant to Section 2.3 and will, on request, execute specific
assignments to any of such Inventions; and that Employee will execute,
acknowledge and deliver such documents and take such further action considered
necessary by the Company at any time on its request during or subsequent to the
period of employment with the Company at the Company's expense, but without
charge by Employee to the Company, to obtain and defend letters patent and/or
copyrights in any and all countries and to vest title in such Inventions in the
Company or its assigns.

        2.5 Statutory Right. Notwithstanding anything to the contrary herein
contained, in accordance with Section 2872 of the California Labor Code,
Employee hereby acknowledges that the provisions of this Agreement which relate
to the ownership of, and the assignment by Employee of Employee's right, title
and interest to, any Invention, will not be applicable to an Invention which is
proved to fully qualify under Section 2870 of the California Labor Code, a copy
of which Employee has read and is attached hereto as Exhibit A.

        2.6 Non-Competition; Non-Solicitation. During the term of this
Agreement, (a) the Employee shall not directly or indirectly be employed or
retained by, or render any services for, or be financially interested in any
manner, in any person, firm or corporation engaged in any business which is
competitive in any way with any business in which the Company or any of its
affiliates is engaged (including any program of development or research), (b)
the Employee shall not divert or attempt to divert any business from the Company
or any affiliate, (c) the Employee shall not disturb or attempt to disturb any
business or employment relationships of the Company or any affiliate and (d)
Employee shall not make any derogatory and/or untruthful statements about the
Company or any of its affiliates. Notwithstanding the foregoing provisions of
this Section 2.6, the Employee shall be permitted to (i) invest in mutual funds
which are diversified, open-end management companies (as those terms are defined
in Section 5 of the Investment Company Act of 1940) that are registered under
such Act; (ii) invest in the outstanding stock of any corporation listed on the
New York Stock Exchange or American Stock Exchange or included in the National
Association of Securities Dealers Automated Quotation System (but only to the
extent that the Employee's interest in the stock of any such corporation does
not exceed 5% of the voting power of the outstanding stock of such corporation);
and (iii) purchase and hold any other investment to the extent the Board
consents in writing to such investment; and any investment described in clauses
(i), (ii) or (iii) next above shall not be considered to violate the
requirements of this Section 2.6.

        2.7 Specific Performance. The parties hereto agree that the Company
would be damaged irreparably in the event any of the foregoing provisions of
this Article II were not performed by the Employee in accordance with their
respective terms or were otherwise breached and that money damages would be an
inadequate remedy for any such nonperformance or breach. Therefore, the Company
or its successors or assigns shall be entitled, in addition to any other rights
and remedies existing in their favor, to an injunction or injunctions to prevent
any breach or threatened breach of any such provisions and to enforce such
provisions specifically (without posting a bond or other security).

                                      -4-
<PAGE>   5

                                   ARTICLE III

                                   TERMINATION

        3.1 Termination of Employment. Notwithstanding anything in this
Agreement to the contrary, express or implied, this Agreement (and Employee's
employment) shall terminate immediately upon the occurrence of any of the
following: (a) written notice given at any time by Employee; (b) the death or
permanent disability (as defined below) of Employee; (c) written notice given at
any time by the Company. For purposes of this Agreement, the term "disability"
shall mean the inability of the Employee to continue to perform his duties under
this Agreement on a full-time basis as a result of mental or physical illness,
sickness or injury for a period of 90 days within any 12 month period, as
determined in the sole and absolute discretion of the Board. EMPLOYEE HEREBY
ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, AND HIS EMPLOYMENT HEREUNDER, IS
TERMINABLE AT-WILL (i.e., WITH OR WITHOUT CAUSE) AT ANY TIME BY EITHER PARTY.

        3.2 Rights and Payments Upon Termination. The Employee's right to
benefits and payments, if any, for periods after the date on which his
employment with the Company terminates for any reason (his "Termination Date")
shall be as follows:

               (a) the Employee's earned but unpaid Base Salary for the period
        ending on his Termination Date; and

               (b) the Employee's accrued but unpaid vacation pay for the period
        ending with his Termination Date, as determined in accordance with the
        Company's policy as in effect from time to time.

Except as may be otherwise expressly provided to the contrary in this Agreement,
nothing in this Agreement shall be construed as requiring the Employee to be
treated as employed by the Company following his Termination Date for purposes
of any employee benefit plan or arrangement in which he may participate at such
time.

        3.3    Termination Upon Change-In-Control.

               (a) Definition of Change-In-Control. For the purposes of this
        Article III, each of the following shall be deemed to be a
        "Change-In-Control":

                   (i) merger or consolidation of the Company in which the
               Company is not the surviving entity.

                   (ii) sale of all or substantially all of the assets of the
               Company.

                   (iii) the purchase by any person or entity of more than fifty
               percent (50%) of the outstanding common stock of the Company.

               (b) Termination. Employee shall be entitled to the severance
        payments and other severance benefits set forth in Sections 3.3(c)
        hereof if Employee is terminated under either of the following
        circumstances:

                                      -5-
<PAGE>   6

                   (i) if Employee delivers to the Company written notice of
               resignation on or before the effective date of a
               Change-In-Control (as defined in Section 3.3(a) hereinabove) that
               Employee disapproves of the proposed Change-In-Control, which
               resignation shall be effective upon the date of
               Change-In-Control. Employee shall not be compelled to set forth
               any reason or basis for Employee's resignation.

                   (ii) if Employee does not resign upon a Change-In-Control and
               if within 180 days following a Change-In-Control, Employee is
               either involuntarily terminated for a reason other than neglect
               of duties or misconduct or Employee's responsibilities, duties,
               or title as an employee of the Company are substantially changed
               without Employee's consent, and as a result thereof, Employee
               terminates his employment with the Company.

               (c) Calculation of Severance Payment. Upon termination pursuant
        to Section 3.3(b), the Employee shall be entitled to receive an amount
        equal to his Base Salary for the Company's immediately preceding fiscal
        year , payable in equal installments over a twelve-month period
        beginning as soon as practicable after the Termination Date.

               (d) Stock Option, Stock and Profit Sharing Plans. Upon
        termination pursuant to Section 3.3(a), unless prohibited by the terms
        of the applicable plan or applicable law, all of Employee's stock
        options shall become fully vested.

               3.4 Reduction for Withholding Taxes. With respect to any payment
        made to the Employee under Article III, the Company shall deduct from
        any such payment such social security insurance, state disability
        insurance, and federal, state and other taxes and other withholdings as
        may be required by law.

                                   ARTICLE IV

                                  MISCELLANEOUS

        4.1 Miscellaneous. All notices provided for under this Agreement shall
be deemed to have been duly given if delivered by hand or, in the alternative,
if sent by registered or certified mail, with return receipt requested,
first-class postage prepaid, if to the Company, to Alpha Microsystems, 2722
South Fairview Street, Santa Ana, CA 92704; Attention: President; if to
Employee, to Robert O. Riiska, 380 Olmstead Hill Road, Wilton, CT 06897, or to
such other address with respect to each party as such party shall notify the
other in writing. Delivery of any such communications so made by mail shall be
deemed to be complete on the date of delivery as shown by the addressee's
registry or certification receipt.

        4.2 Assignability. The Company may assign its interest in this
Agreement in connection with a merger or sale of all or substantially all of the
assets of the Company and the provisions of this Agreement shall inure to the
benefit of the successors and assigns of the Company. Employee may not assign or
transfer this Agreement, it being deemed personal to Employee only; provided,
however, that upon Employee's death, Employee's heirs, executors and/or
administrators may seek collection of any sums that may have been due Employee
as of Employee's death (it being hereby acknowledged and agreed that no further
payments pursuant to Section 3.3(c)shall be due after Employee's death). Subject
to the above, this Agreement shall

                                      -6-
<PAGE>   7

be binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns. The provisions
of this Section 4.2 shall survive the termination of this Agreement.

        4.3 Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter herein and
supersedes all prior agreements, representations and understandings of the
parties including that offer letter dated November 9, 1999. No modification or
amendment to this Agreement shall be effective unless in a writing executed by
both parties.

        4.4 Captions. Any captions to or headings of the articles, sections,
subsections, paragraphs or subparagraphs of this Agreement are solely for the
convenience of the parties, are not a part of this Agreement and shall not be
used for the interpretation of determination of the validity of this Agreement
or any provisions hereof.

        4.5 Severability. In the event that any one or more provisions, clauses,
paragraphs, subclauses or subparagraphs contained in this Agreement shall for
any reason be held to be invalid, illegal, void or unenforceable, the same shall
not affect any other provision, paragraph, clause, subparagraph or subclause of
this Agreement, but this Agreement shall be construed as if such invalid,
illegal, void or unenforceable provision, clause, paragraph, subparagraph or
subclause had never been contained herein.

        4.6 Waiver. The waiver by the Company or the Employee of any breach of
any term or condition of this Agreement shall not be deemed to constitute the
waiver of any other breach of the same or any other term or condition hereof.

        4.7 Costs of Disputes. Each party shall bear his/its own costs in
connection with any controversy or dispute arising out of or relating to this
Agreement (or the breach thereof).

        4.8 Survival of Agreement. Except as otherwise expressly provided in
this Agreement, the rights and obligations of the parties to this Agreement
shall survive the termination of the Employee's employment with the Company.

        4.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

        4.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.

        4.11 Arbitration. To the fullest extent allowed by law, any controversy,
claim or dispute between the Employee and the Company (and/or any of its
directors, officers, employees or agents) relating to or arising out of the
Employee's employment or the cessation of the Employee's employment will be
submitted to final and binding arbitration in Orange County, California, for
determination in accordance with the National Rules for the Resolution of
Employment Disputes of the American Arbitration Association as the exclusive
remedy for such controversy, claim or dispute. This means that both the Employee
and the Company give up all rights to a trial by jury. Possible disputes covered
by the above include (but are not limited to) wage, contract, tort,
discrimination, or other employment-related claims under laws known as

                                      -7-
<PAGE>   8

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 (or any other claims where mandatory arbitration is
prohibited by law) are not covered by this arbitration agreement, and such
claims may be presented by the Employee or the Company to the appropriate court
or state agency as provided by California law. Judgment on any award issued by
the arbitrator may be entered in any court having jurisdiction thereof.

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement to
be effective as of the Effective Date first above written.

        "Company"                               ALPHA MICROSYSTEMS,
                                                a California corporation

                                                By:___________________________
                                                Name:_________________________
                                                Title:________________________

        "Employee"                              ______________________________
                                                Robert O. Riiska

                                      -8-

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