-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vm6S0s4tOYPEXkMlNvGRxRbqfb0t4J22RgkmWh23kgM8rFb/WQnaKEEcWuaeRgqw EuILy+JLJPY6Ymi/9ktPQw== 0001157523-09-008711.txt : 20091222 0001157523-09-008711.hdr.sgml : 20091222 20091221180048 ACCESSION NUMBER: 0001157523-09-008711 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20091221 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20091222 DATE AS OF CHANGE: 20091221 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DECKERS OUTDOOR CORP CENTRAL INDEX KEY: 0000910521 STANDARD INDUSTRIAL CLASSIFICATION: RUBBER & PLASTICS FOOTWEAR [3021] IRS NUMBER: 953015862 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22446 FILM NUMBER: 091253220 BUSINESS ADDRESS: STREET 1: 495A SOUTH FAIRVIEW AVENUE CITY: GOLETA STATE: CA ZIP: 93117 BUSINESS PHONE: 8059677611 MAIL ADDRESS: STREET 1: 495-A S FAIRVIEW AVE CITY: GOLETA STATE: CA ZIP: 93117 FORMER COMPANY: FORMER CONFORMED NAME: DECKERS FOOTWEAR CORP DATE OF NAME CHANGE: 19930811 8-K 1 a6125588.txt DECKERS OUTDOOR CORP. 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): December 21, 2009 DECKERS OUTDOOR CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware - -------------------------------------------------------------------------------- (State or other jurisdiction of incorporation) 0-22446 95-3015862 - -------------------------------------------------------------------------------- (Commission File Number) (IRS Employer Identification No.) 495A South Fairview Avenue, Goleta, California 93117 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (805) 967-7611 ---------------------------- - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. New Change of Control and Severance Agreements - ---------------------------------------------- On December 16, 2009, the Compensation and Management Development Committee of the Board of Directors (the "Compensation Committee") of Deckers Outdoor Corporation (the "Company") approved Change of Control and Severance Agreements (the "Severance Agreement") with each of the following executive officers of the Company: Angel Martinez, Zohar Ziv, Thomas George, Constance Rishwain and Colin Clark (collectively, the "Executives"). The Severance Agreements will replace all previously entered into employment agreements with each of the Executives which expire pursuant to their terms on December 31, 2009. The purpose of the Severance Agreements is to reward, retain and incentivize the Executives. The Severance Agreements will be effective January 1, 2010. Each Executive's employment with the Company is "at will" and the term of the Severance Agreements shall continue, unless sooner terminated. All Executives, except Mr. Martinez, report to the Company's President and Chief Executive Officer. Mr. Martinez will report to the Company's Board of Directors. The Severance Agreements include the annual base salary to which the Executives will be entitled and such annual base salary may be increased, if at all, only after review. The Executives will also be eligible to receive a targeted annual bonus based on performance criteria established annually by the Compensation Committee. The Executives may also be granted options to purchase shares of Company Common Stock or restricted stock units and such grants must be approved by the Compensation Committee. The following table sets forth the name, title and base salary for each of the Executives entering into a Severance Agreement.
------------------------------------------------------------------------------------------------- Base Salary Effective January 1, Name Title 2010 ------------------------------------------------------------------------------------------------- Angel Martinez President & Chief Executive Officer $950,000 ------------------------------------------------------------------------------------------------- Zohar Ziv Chief Operating Officer $500,000 ------------------------------------------------------------------------------------------------- Thomas George Chief Financial Officer $350,000 ------------------------------------------------------------------------------------------------- Constance Rishwain President of the UGG and Simple Divisions $400,000 ------------------------------------------------------------------------------------------------- Colin Clark Senior Vice President, International $275,000 -------------------------------------------------------------------------------------------------
Mr. Martinez, Mr. Ziv and Mr. George will also be insured under the Company's directors and officers insurance and will be provided the Company's standard indemnification agreement. The Executives will also receive the normal fringe benefits available to other senior executives and will be entitled to severance pay under the circumstances described below. If the Executive is terminated by the Company for Cause, or if the Executive terminates his or her employment other than for Good Reason, the Executive will be entitled to payment of the Executive's accrued base salary, payment for the Executive's accrued vacation, reimbursement for certain expenses, receipt of accrued and vested benefits under the Company's plans or programs and other benefits required to be paid by law, payment of any accrued but unpaid incentive bonus for the prior fiscal year (excluding any incentive bonus for the year of termination) and the right to exercise all vested unexercised stock options and warrants outstanding as of the termination date. If the Executive is terminated by the Company due to the Executive's death or total disability, then in addition to those rights described in the first sentence of this paragraph, such Executive shall be entitled to payment of the unpaid pro-rated portion of the Executive's incentive bonus for the current fiscal year based on actual length of service during the year of termination. If the Executive is terminated by the Company without Cause or the Executive terminates his or her employment for Good Reason, then in addition to those rights described in the first two sentences of this paragraph, then, subject to such Executive signing a release, the Executive will be entitled to payment of the Executive's base salary for twelve months following the Executive's termination, plus receipt of health benefits for a period of twelve months following the Executive's termination or the Executive's attainment of alternative employment that provides health benefits, whichever is earlier. If within two years of a Change of Control of the Company either Mr. George, Ms. Rishwain or Mr. Clark is terminated without Cause or if such Executive terminates for Good Reason, then in addition to those rights described in the first two sentences of this paragraph and subject to signing a release, such Executives will be entitled to (i) one and one-half times the Executive's annual base salary, (ii) the greater of one and one-half times the targeted incentive bonus immediately prior to the termination or one and one-half times the average actual incentive bonus for the previous three years, and (iii) continued health benefits for a period of eighteen months following the Executive's termination or the Executive's attainment of alternative employment that provides health benefits, whichever is earlier. If within two years of a Change of Control of the Company either Mr. Martinez or Mr. Ziv is terminated without Cause or if he terminates for Good Reason, then in addition to those rights described in the first two sentences of this paragraph and subject to signing a release, such Executives will be entitled to (i) two times his annual base salary, and (ii) the greater of two times the targeted incentive bonus immediately prior to the termination or two times the average actual incentive bonus for the previous three years. In addition, Mr. Martinez will receive continued health benefits for a period of twenty-four months following his termination or his attainment of alternative employment that provides health benefits, whichever is earlier and Mr. Ziv will receive continued health benefits for a period of twelve months following his termination or his attainment of alternative employment that provides health benefits, whichever is earlier. As used in the Severance Agreements, (1) "Cause" means (i) any willful breach of duty by the Executive in the course of the Executive's employment or continued violation of written Company employment policies after written notice of such violation, (ii) violation of the Company's insider trading policies, (iii) conviction of a felony or any crime involving fraud, theft, embezzlement, dishonesty or moral turpitude, (iv) engaging in activities which materially defame the Company, or engaging in conduct which is materially injurious to the Company or its affiliates, or any of their respective customer or supplier relationships, financially or otherwise, or (v) the Executive's gross negligence or continued failure to perform the Executive's duties or the Executive's continued incapacity to perform such duties, (2) "Good Reason" means, without the consent of the Executive, the occurrence of a material breach of the Severance Agreement by the Company, or, if within two years of a Change of Control, there is a material reduction of the Executive's total compensation, benefits, and perquisites, the Company's relocation is greater than 50 miles from the location where the Executive performs services, or a material change in the Executive's position or duties; provided, however, no such event shall constitute "Good Reason" unless the Executive shall have given written notice to the Company of his or her intent to resign for "Good Reason" within 30 days after the Executive first becomes aware of the occurrence of any such event and such event shall not have been cured within 30 days of the Company's receipt of such notice, and (3) "Change of Control" means if there is a merger, consolidation, sale of all or a major portion of the assets of the Company (or a successor organization) or similar transaction or circumstance where any person or group acquires, in one or more transactions, beneficial ownership of more than 50% of the outstanding shares of any class of voting stock of the Company (or a successor organization). The description of the Severance Agreements set forth above is qualified in its entirety by reference to the actual terms of the Severance Agreements. Each Severance Agreement is identical in form except for the name and position of the Executive, the person each Executive reports to, the annual base salary amount, provision of directors and officers insurance, and the severance amounts upon a Change of Control of the Company and either the Executive is terminated without Cause or the Executive terminates for Good Reason, all as described above. The form of Severance Agreement is filed as Exhibit 10.1 hereto and is incorporated herein by reference. Deferred Compensation Plan - -------------------------- On December 16, 2009, the Compensation Committee adopted and approved the Deckers Outdoor Corporation Deferred Compensation Plan (the "Plan"). The Plan is an unfunded, nonqualified deferred compensation program sponsored by the Company to provide certain of its management or highly compensated employees designated by the Company's Board of Directors (or a committee appointed by the Board to administer the Plan) the opportunity to defer compensation into the Plan. The effective date for the Plan for the first year will be February 1, 2010, and thereafter the plan year will be from January 1 to December 31. Participants may defer up to 50% of their annual base salary and up to 95% of any performance bonus to the Plan. In the discretion of the Board of Directors (or a committee appointed by the Board to administer the Plan), the Company may make additional contributions to be credited to the account of any or all participants in the Plan. Such contributions by the Company will be determined annually in the fourth quarter of each fiscal year. All contributions by the Company and the participant are immediately fully vested. Under the terms of the Plan, the Company may establish a trust as a reserve for the benefits payable under the Plan. Distributions from the Plan are governed by the Internal Revenue Code and the Plan. The foregoing description of the Plan does not purport to be complete and is qualified in its entirety by reference to the agreement, a copy of which is filed as Exhibit 10.2, and incorporated by reference. Item 9.01. Financial Statements and Exhibits. (d) Exhibits. Exhibit No. Description -------------- -------------------------------------------------- 10.1 Form of Change of Control and Severance Agreement with Deckers Outdoor Corporation -------------- -------------------------------------------------- 10.2 Deckers Outdoor Corporation Nonqualified Deferred Compensation Plan -------------- -------------------------------------------------- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Deckers Outdoor Corporation Date: December 21, 2009 /s/ Thomas George ----------------- Thomas George Chief Financial Officer EX-10.1 2 a6125588ex10_1.txt EXHIBIT 10.1 Exhibit 10.1 CHANGE OF CONTROL AND SEVERANCE AGREEMENT ----------------------------------------- THIS CHANGE OF CONTROL AND SEVERANCE AGREEMENT (the "Agreement") is made as of __________, by and between DECKERS OUTDOOR CORPORATION, a Delaware corporation (the "Company"), and __________________________ (the "Executive") and is effective as of January 1, 2010 (the "Effective Date"). ARTICLE I DUTIES AND TERM 1.1 EMPLOYMENT. In consideration of their mutual covenants and other good and valuable consideration, the receipt, adequacy, and sufficiency of which is hereby acknowledged, the Company agrees to enter into this Agreement with the Executive, on an "at will" basis, and the Executive agrees to enter into this Agreement upon the terms and conditions herein provided and in accordance with all applicable employment rules of the Company. 1.2 POSITION AND RESPONSIBILITIES. The Executive will serve as _____________________ and shall report to the Company's [President and Chief Executive Officer][Board of Directors]. 1.3 TERM. The term of this Agreement will commence on the Effective Date of this Agreement and will continue, unless sooner terminated. Employment of the Executive is at will and will continue until such time as written notice of termination is given by the Company or written notice is given by the Executive. 1.4 AT-WILL EMPLOYMENT. Executive will continue to be employed as an at-will employee of the Company. Subject to the provisions of Articles III and IV, as an at-will employee, Executive is free to terminate his/her employment with the Company at any time, for any reason, and the Company has the similar right to terminate Executive's employment at any time, for any reason. Although the Company may choose to terminate Executive's employment for cause, Executive's employment is at-will and cause is not required. ARTICLE II COMPENSATION For all services rendered by the Executive in any capacity during the Executive's employment under this Agreement, the Company will compensate the Executive as follows: 2.1 BASE SALARY. Effective as of January 1, 2010, the Company will pay to the Executive an annual base salary of ______________________________ Dollars ($___________) to be paid in equal installments in accordance with the Company's general payment policies in effect during the term hereof (the "Base Salary"). Executive's annual base salary may be reviewed prior to December 31, 2010 and appropriate increases to salary implemented. If Executive's annual base salary is not revised effective December 31, 2010, then Executive's then existing salary will continue on a monthly basis until changed. This provision does not alter the at-will nature of Executive's employment or the provisions of Articles III and IV below. 1 2.2 INCENTIVE BONUS. The Executive shall be eligible to receive a targeted annual bonus based on performance criteria established annually by the Compensation Committee (the "Incentive Bonus"). 2.3 STOCK COMPENSATION. The Executive may be granted options to purchase shares of Company Common Stock or Restricted Stock Units to purchase shares of Company Common Stock in accordance with the Company's Stock Option Plan. Any grants must be approved by the Compensation Committee. 2.4 ADDITIONAL BENEFITS. The Executive will be entitled to participate in all benefit and welfare programs, plans, and arrangements that are from time to time made available to the Company's like-level executive employees. 2.5 [DIRECTORS AND OFFICERS INSURANCE; INDEMNIFICATION AGREEMENT. The Executive will be insured under the Company's Directors and Officers insurance and will be provided the Company's standard indemnification agreement.] ARTICLE III TERMINATION OF EMPLOYMENT 3.1 GENERAL. While Executive is an at-will employee as provided at Section 1.4 above, the follow conditions for termination of employment are set forth in order to determine the nature of Executive compensation entitlement upon termination of employment as discussed in Article IV below. Neither the provisions of Article III or Article IV of this Agreement shall alter the at-will nature of Executive's employment with the Company. Upon termination of Executive's employment, Executive shall be deemed to have automatically resigned as a director or officer of any of the Company's affiliates or subsidiaries in which Executive serves in any such capacity and during and after Executive's employment, Executive will assist Company in every proper way to evidence such resignation. 3.2 DEATH OR RETIREMENT OF EXECUTIVE. The Executive's employment under this Agreement will automatically terminate upon the death or Retirement (as defined in Section 6.1) of the Executive. 3.3 BY EXECUTIVE. The Executive may terminate the Executive's employment under this Agreement by giving Notice of Termination (as defined in Section 6.1 hereof) to the Company: (a) for Good Reason (as defined in Section 6.1 hereof); and (b) at any time without Good Reason. 3.4 BY COMPANY. The Company may terminate the Executive's employment under this Agreement by giving Notice of Termination to the Executive: (a) in the event of Executive's Total Disability (as defined in Section 6.1 hereof); (b) for Cause (as defined in Section 6.1 hereof); and 2 (c) at any time without Cause. ARTICLE IV COMPENSATION UPON TERMINATION OF EMPLOYMENT If the Executive's employment hereunder is terminated, in accordance with the provisions of Article III hereof, and except for any other rights or benefits specifically provided for herein to be effective following the Executive's period of employment, the Company will provide compensation and benefits to the Executive only as follows: 4.1 UPON TERMINATION FOR DEATH OR DISABILITY. If the Executive's employment hereunder is terminated by reason of the Executive's death or Total Disability, the Company will: (a) pay the Executive (or the Executive's estate) or beneficiaries any Base Salary that has accrued but was not paid as of the termination date (the "Accrued Base Salary"); (b) pay the Executive (or the Executive's estate) or beneficiaries for unused vacation days accrued as of the termination date in an amount equal to the Executive's Base Salary multiplied by a fraction the numerator of which is the number of accrued unused vacation days and the denominator of which is 260 (the "Accrued Vacation Payment"); (c) subject to Section 4.6 hereof, reimburse the Executive (or the Executive's estate) or beneficiaries for expenses incurred by him prior to the date of termination that are subject to reimbursement pursuant to this Agreement (the "Accrued Reimbursable Expenses"); (d) provide to the Executive (or the Executive's estate) or beneficiaries any accrued and vested benefits required to be provided by the terms of any Company-sponsored benefit plans or programs (the "Accrued Benefits"), together with any benefits required to be paid or provided in the event of the Executive's death or Total Disability under applicable law; (e) pay the Executive (or the Executive's estate) or beneficiaries any Incentive Bonus with respect to a fiscal year prior to the year of termination that has been earned and accrued but has not been paid (the "Accrued Incentive Bonus"); plus a pro-rated portion of the Incentive Bonus based on the actual length of service during the year of termination paid within sixty (60) days after the Executive's date of termination; and (f) the Executive (or the Executive's estate) or beneficiaries shall have the right to exercise all vested unexercised stock options and warrants outstanding at the termination date in accordance with terms of the plans and agreements pursuant to which such options or warrants were issued. 4.2 UPON TERMINATION BY COMPANY FOR CAUSE OR BY EXECUTIVE WITHOUT GOOD REASON. If the Executive's employment is terminated by the Company for Cause, or if the Executive terminates the Executive's employment with the Company other than (x) upon the Executive's death or Total Disability or (y) for Good Reason, the Company will: (a) pay the Executive the Accrued Base Salary; 3 (b) pay the Executive the Accrued Vacation Payment; (c) subject to Section 4.6 hereof, pay the Executive the Accrued Reimbursable Expenses; (d) pay the Executive the Accrued Benefits, together with any benefits required to be paid or provided under applicable law; (e) pay the Executive any Accrued Incentive Bonus, and excluding any Incentive Bonus for the year of termination; and (f) the Executive will have the right to exercise vested options and warrants in accordance with Section 4.1(f) hereof. 4.3 UPON TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON. In the event the Executive has incurred a Separation from Service (within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the "Code"), and Treasury Regulation Section 1.409A-1(h)) ("Separation from Service") by reason of a termination of the Executive's employment by the Company without Cause or by the Executive for Good Reason, the Company will: (a) pay the Executive the Accrued Base Salary; (b) pay the Executive the Accrued Vacation Payment; (c) subject to Section 4.6 hereof, pay the Executive the Accrued Reimbursable Expenses; (d) pay the Executive the Accrued Benefits, together with any benefits required to be paid or provided under applicable law; (e) pay the Executive any Accrued Incentive Bonus; plus a pro-rated portion of the Incentive Bonus based on the actual length of service during the year of termination, payable in lump sum within sixty (60) days after Executive's date of termination; (f) pay the Executive severance, commencing within sixty (60) days following the termination date, of twelve (12) monthly payments equal to one-twelfth (1/12th) of the Executive's Annual Base Salary in effect immediately prior to the time such termination occurs and paid on the regular monthly payroll dates of the Company in accordance with the Company's payroll practices as in effect on such termination date. Each installment payment made pursuant to this Section 4.3(f) shall be considered a separate payment for purposes of Section 409A of the Code (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)). Severance will be mitigated on a dollar for dollar basis for any income received by Executive for duties performed for Company or any third party during the twelve (12) months following termination; 4 (g) maintain in full force and effect, for the Executive's and the Executive's eligible beneficiaries, until the first to occur of (x) the Executive's attainment of alternative employment if such employment includes health insurance benefits or (y) the twelve (12) month anniversary of termination of employment, the benefits provided pursuant to Company-sponsored benefit plans, programs, or other arrangements in which the Executive was entitled to participate as a full-time employee immediately prior to such termination in accordance with Section 2.4 hereof, subject to the terms and conditions of participation as provided under the general terms and provisions of such plans, programs, and arrangements, or in the alternate, the Company will arrange to provide the Executive with continued benefits substantially similar to those which the Executive would have been entitled to receive under such plans, programs, and arrangements (the "Continued Benefits"); and (h) the Executive shall have the right to exercise vested options and warrants in accordance with Section 4.1(f). 4.4 UPON CHANGE OF CONTROL AND TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON. In the event the Executive has incurred a Separation from Service by reason of a termination of the Executive's employment, within two (2) years of a Change of Control, by the Company without Cause or by the Executive for Good Reason, the Company will: (a) pay the Executive the Accrued Base Salary; (b) pay the Executive the Accrued Vacation Payment; (c) subject to 4.6 hereof, pay the Executive the Accrued Reimbursable Expenses; (d) pay the Executive the Accrued Benefits, together with any benefits required to be paid or provided under applicable law; (e) pay the Executive any Accrued Incentive Bonus; plus a pro-rated portion of the Incentive Bonus based on the actual length of service during the year of termination, payable in lump sum within sixty (60) days after Executive's date of termination; (f) pay the Executive severance of [two (2)]/[one and one-half (1.5)] times Executive's Annual Base Salary in effect immediately prior to the time such termination occurs plus the greater of (x) [two (2)]/[one and one-half (1.5)] times the targeted Incentive Bonus immediately prior to the time such termination occurs or (y) [two (2)]/[one and one-half (1.5)] times the average actual Incentive Bonus for the previous three (3) years, whichever is greater, in lump sum within sixty (60) days after Executive's date of termination; (g) maintain in full force and effect, for the Executive's and the Executive's eligible beneficiaries, until the first to occur of (x) the Executive's attainment of alternative employment if such employment includes health insurance benefits or (y) the [eighteen (18)]/[twelve (12)]/[twenty-four (24)] month anniversary of termination, the benefits provided pursuant to Company-sponsored benefit plans, programs, or other arrangements in which the Executive was entitled to participate as a full-time employee immediately prior to such termination in accordance with Section 2.4 hereof, subject to the terms and conditions of participation as provided under the general terms and provisions of such plans, programs, and arrangements, or in the alternate, the Company will arrange to provide the Executive with Continued Benefits substantially similar to those which the Executive would have been entitled to receive under such plans, programs, and arrangements; and 5 (h) the Executive shall have the right to exercise vested options and warrants in accordance with Section 4.1(f). 4.5 RELEASE. Notwithstanding any provision herein to the contrary, the Company may require that, prior to payment of any amount or provision of any benefit pursuant to subsection (f) or (g) of Sections 4.3 and 4.4, Executive shall have executed, on or prior to the Release Expiration Date, a customary general release in favor of the Company in the form attached hereto as Exhibit A, and any waiting periods contained in such release shall have expired. To the extent that the Company requires execution of such release, the Company shall deliver such release to Executive within five (5) business days following the termination of Executive's employment hereunder. In the event that Executive fails to execute such release on or prior to the Release Expiration Date, Executive shall not be entitled to any payments or benefits pursuant to subsections (f) or (g) of Sections 4.3 and 4.4. 4.6 Accrued Reimbursable Expenses. Without limiting the Company's obligation under Sections 4.1(c), 4.2(c), 4.3(c) and 4.4(c) hereof, the reimbursement of any Accrued Reimbursable Expenses shall be made no later than December 31 of the year following the year in which the expense was incurred. 4.7 Section 409A. (a) Notwithstanding anything herein to the contrary, to the extent (i) any amount or benefit payable to the Executive pursuant to Sections 4.1, 4.2, 4.3 or 4.4 is treated as non-qualified deferred compensation subject to Section 409A of the Code, (ii) the Company's securities are publicly traded on the date of the Executive's termination of employment, (iii) the Executive is determined by the Company to be a "specified employee" for purposes of Section 409A(a)(2)(B)(i) of the Code, and (iv) the Company determines that delayed commencement of any portion of the amounts payable to Executive pursuant to Sections 4.1, 4.2, 4.3 or 4.4 is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code (any such delayed commencement, a "Payment Delay"), then such portion of the Executive's payments and/or benefits described in Sections 4.2, 4.3 or 4.4, as the case may be, shall not be provided to Executive prior to the earlier of (A) the expiration of the six-month period measured from the date of the Executive's date of termination, (B) the date of the Executive's death or (C) such earlier date as is permitted under Section 409A. Upon the expiration of the applicable Code Section 409A(a)(2)(B)(i) deferral period, all payments deferred pursuant to a Payment Delay shall be paid in a lump sum to Executive on the first day following such expiration, and any remaining payments due under Sections 4.1, 4.2, 4.3 or 4.4 shall be paid as otherwise provided herein. (b) Notwithstanding anything in this Section 4.7 to the contrary, to the maximum extent permitted by applicable law, amounts payable to Executive pursuant to Sections 4.2, 4.3 or 4.4, as the case may be, shall be made in reliance upon the Section 409A Safe Harbor Limit (as defined in Article VI) and/or the exception for short-term deferrals (as set forth in Treasury Regulation Section 1.409A-1(b)(4)). 6 ARTICLE V ADDITIONAL AGREEMENTS 5.1 OTHER AGREEMENTS. As further material consideration for the Company entering into this Agreement, the Executive will also execute the Company's standard employee confidentially agreement, inventions assignment agreement, and any other agreements required to be executed by all like level executives of the Company. 5.2 EMPLOYEE'S RESTRICTIVE COVENANTS UPON TERMINATION. If the Executive's employment is terminated for any reason, Executive agrees: (a) To keep all of the Company's Confidential Information confidential in perpetuity in accordance with the Company's policy; and (b) To not hire or solicit for hire or consultation employees of the Company for a period of one and one-half (1 1/2) years after termination of employment. ARTICLE VI MISCELLANEOUS 6.1 DEFINITIONS. For purposes of this Agreement, the following terms will have the following meanings: (a) "Accrued Base Salary" - as defined in Section 4.1(a) hereof. (b) "Accrued Benefits" - as defined in Section 4.1(d) hereof. (c) "Accrued Incentive Bonus" - as defined in Section 4.1(e) hereof. (d) "Accrued Reimbursable Expenses" - as defined in Section 4.1(c) hereof. (e) "Accrued Vacation Payment" - as defined in Section 4.1(b) hereof. (f) "Affiliate" of a Person means a Person that directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the first Person. "Control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or credit arrangement, as trustee or executor, or otherwise. (g) "Incentive Bonus" as defined in Section 2.2 hereof. (h) "Base Salary" as defined in Section 2.1 hereof. (i) "Cause" will mean any willful breach of duty by the Executive in the course of the Executive's employment, continued violation of written Company employment policies after written notice of such violation, violation of the Company's Insider Trading Policies, conviction of a felony or any crime involving fraud, theft, embezzlement, dishonesty or moral turpitude, engaging in activities which materially defame the Company, engaging in conduct which is material injurious to the Company or its Affiliates, or any of their respective customer or supplier relationships, financially or otherwise, or the Executive's gross negligence or continued failure to perform Executive's duties or his/her continued incapacity to perform such duties. 7 (j) "Change of Control" will mean if there is a merger, consolidation, sale of all or a major portion of the assets of the Company (or a successor organization) or similar transaction or circumstance where any person or group acquires, in one or more transactions, beneficial ownership of more than Fifty Percent (50%) of the outstanding shares of any class of voting stock of the Company (or a successor organization). (k) "Compensation Committee" means the Compensation Committee of the Company's Board of Directors. (l) "Continued Benefits" as defined in Section 4.3(g) hereof. (m) "Good Reason" will mean, without the consent of the Executive (1) the occurrence of material breach of this Agreement by the Company, or (2) if within two (2) years of a Change of Control, there is a material reduction of the Executive's total compensation, benefits, and perquisites, the Company's relocation is greater than fifty (50) miles from the location where the Executive performs services, or a material change in the Executive's position or duties; provided, however, no such event shall constitute "Good Reason" hereunder unless the Executive shall have given written notice to the Company of Executive's intent to resign for "Good Reason" within thirty (30) days after the Executive first becomes aware of the occurrence of any such event (specifying the nature and scope of the event) and such event or occurrence shall not have been cured within thirty (30) days of the Company's receipt of such notice. (n) "Notice of Termination" will mean a notice which shall indicate the specific termination provision of this Agreement relied upon and shall generally set forth the basis for termination of the Executive's employment under the provision so indicated. (o) "Person" means any natural person, firm, partnership, association, corporation, company, limited liability company, limited partnership, trust, business trust, governmental authority, or other entity. (p) "Release Expiration Date" shall mean the date which is twenty-one (21) days following the date upon which the Company delivers Executive the release contemplated in Section 4.5 above, or, in the event that such termination of employment is "in connection with an exit incentive or other employment termination program" (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date which is forty-five (45) days following such delivery date. (q) "Retirement" will mean normal retirement at age 65. (r) "Section 409A Safe Harbor Limit" will mean, as determined in accordance with Treasury Regulation ss.1.409A-1(b)(9)(iii), an amount equal to two (2) times the lesser of (i) Executive's annual rate of compensation for the taxable year immediately preceding the taxable year in which Executive's employment is terminated by the Company or (ii) the dollar amount in effect under Section 401(a)(17) of the Code for the taxable year in which Executive's employment is terminated. 8 (s) "Severance" will mean payments after termination of Executive's employment. (t) "Total Disability" will mean the Executive's failure substantially to perform the Executive's duties hereunder on a full-time basis for a period exceeding one hundred eighty (180) consecutive days or for periods aggregating more than one hundred eighty (180) days during any twelve (12) month period as a result of incapacity due to physical or mental illness. If there is a dispute as to whether the Executive is or was physically or mentally unable to perform the Executive's duties under this Agreement, such dispute will be submitted for resolution to a licensed physician agreed upon by the Company and the Executive, or if an agreement cannot be promptly reached, the Company and the Executive will promptly each select a physician, and if these physicians cannot agree, the physicians will promptly select a third physician whose decision will be binding on all parties. If such a dispute arises, the Executive will submit to such examinations and will provide such information as such physician(s) may request, and the determination of the physician(s) as to the Executive's physical or mental condition will be binding and conclusive. Notwithstanding the foregoing, if the Executive participates in any group disability plan provided by the Company, which offers long-term disability benefits, "Total Disability" will mean total disability as defined therein. 6.2 KEY MAN INSURANCE. The Company will have the right, in its sole discretion, to purchase "key man" insurance on the life of the Executive. The Company shall be the owner and beneficiary of any such policy. If the Company elects to purchase such a policy, the Executive will take such physical examinations and supply such information as may be reasonably requested by the insurer. 6.3 SUCCESSORS; BINDING AGREEMENT. This Agreement will be binding upon any successor to the Company and will inure to the benefit of and be enforceable by the Executive's personal or legal representatives, beneficiaries, designees, executors, administrators, heirs, distributees, devisees and legatees. 6.4 MODIFICATION; NO WAIVER. This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto. No term or condition of this Agreement will be deemed to have been waived, nor will there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument by the party charged with such waiver or estoppel. No such written waiver will be deemed a continuing waiver unless specifically stated therein, and each such waiver will operate only as to the specific term or condition waived and will not constitute a waiver of such term or condition for the future or as to any other term or condition. 6.5 SEVERABILITY. The covenants and agreements contained herein are separate and severable and the invalidity or unenforceability of any one or more of such covenants or agreements, if not material to the employment arrangement that is the basis for this Agreement, will not affect the validity or enforceability of any other covenant or agreement contained herein. 9 6.6 FORM OF NOTICE TO PARTIES. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) mailed by first-class, registered or certified mail, return receipt requested, postage prepaid, or (c) sent by next-day or overnight mail or delivery or (d) sent by telecopy or telegram, to the following address: If to the Executive: __________________ -------------------- __________________ __________________ If to the Company: Deckers Outdoor Corporation ------------------ 495-A South Fairview Avenue Goleta, CA 93117 Attn: Angel Martinez Facsimile: 805-967-7862 or, in each case, at such other address as may be specified in writing to the other parties hereto. All such notices, requests, demands, waivers and other communications shall be deemed to have been received (w) if by personal delivery on the day after such delivery, (x) if by certified or registered mail, on the seventh business day after the mailing thereof, (y) if by next-day or overnight mail or delivery, on the day delivered, (z) if by telecopy or telegram, on the next day following the day on which such telecopy or telegram was sent, provided that a copy is also sent by certified or registered mail. 6.7 ASSIGNMENT. This Agreement and any rights hereunder will not be assignable by either party without the prior written consent of the other party except as otherwise specifically provided for herein. 6.8 ENTIRE UNDERSTANDING. This Agreement constitutes the entire understanding between the parties hereto and no agreement, representation, warranty or covenant has been made by either party except as expressly set forth herein. 6.9 EXECUTIVE'S REPRESENTATIONS. The Executive represents and warrants that neither the execution and delivery of this Agreement nor the performance of the Executive's duties hereunder violates the provisions of any other agreement to which he is a party or by which he is bound. 6.10 GOVERNING LAW. This Agreement will be construed in accordance with the laws of the State of California, without regard to the conflict of laws provisions thereof, with venue proper only in the County of Santa Barbara, California. 6.11 ARBITRATION. (a) Except as provided in Section 6.11(c) below, the parties hereto agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the interpretation, validity, construction, performance, breach, or termination thereof, shall be finally settled by binding arbitration, unless otherwise required by law, to be held in Santa Barbara, California under the National Rules for the Resolution of Employment Disputes of the American Arbitration Association as then in effect (the "Rules"). The arbitrator(s) may grant injunctions or other relief in such dispute or controversy. The decision of the arbitrator(s) shall be final, conclusive and binding on the parties to the arbitration, and judgment may be entered on the decision of the arbitrator(s) in any court having jurisdiction. 10 (b) The arbitrator(s) shall apply California law to the merits of any dispute or claim, without reference to rules of conflicts of law. (c) The parties may apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other interim or conservatory relief, as necessary, without breach of this arbitration agreement and without abridgement of the powers of the arbitrator. (d) EMPLOYEE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES ARBITRATION. EMPLOYEE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EMPLOYEE AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, UNLESS OTHERWISE REQUIRED BY LAW, AND THAT THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EMPLOYEE'S RIGHT TO A JURY TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EMPLOYEE'S RELATIONSHIP WITH THE COMPANY, INCLUDING BUT NOT LIMITED TO, CLAIMS OF HARASSMENT, DISCRIMINATION, WRONGFUL TERMINATION AND ANY STATUTORY CLAIMS. [Signature Page Follows] 11 IN WITNESS WHEREOF, the parties hereto have duly executed this Change of Control and Severance Agreement as of the day and year first above written. COMPANY: DECKERS OUTDOOR CORPORATION By: ____________________________________ Angel Martinez Chief Executive Officer EXECUTIVE: _________________________________________ Signature _________________________________________ Name Typed or Printed 12 EXHIBIT A GENERAL RELEASE 1. Employee's employment with Deckers Outdoor Corporation, a Delaware corporation (the "Company") ceased effective _______________. 2. Employee represents and agrees that Employee has received all compensation owed to Employee by the Company through Employee's termination date, including all wages, bonuses, commissions, earned but unused vacation, reimbursable business expenses, and any other payments, benefits, or other compensation of any kind to which Employee was entitled from the Company. 3. Employee represents to the Company that Employee is signing this General Release (this "Agreement") voluntarily and with a full understanding of and agreement with its terms for the purpose of receiving additional pay from the Company as described in the Change of Control and Severance Agreement dated ____________ (the "Agreement"). 4. In reliance on the Employee's promises, representations, and releases in this Agreement, upon the Company's receipt of this executed General Release, the Company will provide Employee with the payments described in the Agreement, less legally required withholding and payroll deductions. 5. In exchange for the consideration provided to Employee as set forth above, Employee agrees to waive and release all claims, known and unknown, which Employee has or might otherwise have had against the Company, including all of its former or current officers, directors, agents, employees and related entities (hereinafter collectively referred to as the "Released Parties"), arising prior to the date Employee executes this Agreement, regarding any aspect of Employee's employment, compensation, the cessation of Employee's employment with the Company, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, Title VII of the Civil Rights Act of 1964, 42 U.S.C. section 1981, the Fair Labor Standards Acts, the California Fair Employment and Housing Act, California Government Code section 12900, et seq., the Unruh Civil Rights Act, California Civil Code section 51, all provisions of the California Labor Code; the Employee Retirement Income Security Act, 29 U.S.C. section 1001, et seq., all as amended, any other federal, state or local law, regulation or ordinance or public policy, contract, tort or property law theory, or any other cause of action whatsoever that arose on or before the date Employee executes this Agreement. 6. It is further understood and agreed that as a condition of this Agreement, all rights under Section 1542 of the Civil Code of the State of California are expressly waived by Employee. Such Section reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." 1 Notwithstanding Section 1542, and for the purpose of implementing a full and complete release and discharge of the Released Parties, Employee expressly acknowledges that this Agreement is intended to include and does include in its effect, without limitation, all claims which Employee does not know or suspect to exist in Employee's favor against the Released Parties at the time of execution hereof, and that this Agreement expressly contemplates the extinguishment of all such claims. 7. The release in this Agreement includes, but is not limited to, claims arising under federal, state or local law for age, race, sex or other forms of employment discrimination and retaliation. In accordance with the Older Workers Benefit Protection Act, Employee hereby knowingly and voluntarily waives and releases all rights and claims, known or unknown, arising under the Age Discrimination in Employment Act of 1967, as amended, which he might otherwise have had against the Released Parties. Employee is hereby advised that he should consult with an attorney before signing this Agreement and that he has 21 days in which to consider and accept this Agreement by signing and returning this Agreement to the Company's President. In addition, Employee has a period of seven days following his execution of this Agreement in which he may revoke the Agreement. If Employee does not advise the Company by a writing received by David Bock within such seven day period of the Employee's intent to revoke the Agreement, the Agreement will become effective and enforceable upon the expiration of the seven days. 8. This Separation Agreement and General Release shall not be construed as an admission by the Company of any improper, wrongful, or unlawful actions, or any other wrongdoing against Employee, and the Company specifically disclaims any liability to or wrongful acts against Employee on the part of itself, its employees and its agent. 9. This Agreement may be modified only by written agreement signed by both parties. Dated: ______________________ EMPLOYEE: _________________________________________ COMPANY: Dated: ______________________ DECKERS OUTDOOR CORPORATION By: _____________________________________ Name: ___________________________________ Its: ____________________________________ 2 EX-10.2 3 a6125588ex10_2.txt EXHIBIT 10.2 Exhibit 10.2 Deckers Outdoor Corporation Deferred Compensation Plan Effective February 1, 2010 TABLE OF CONTENTS Page ---- ARTICLE 1 DEFINITIONS........................................................ 1 ARTICLE 2 SELECTION, ENROLLMENT, ELIGIBILITY................................. 5 ARTICLE 3 DEFERRAL ELECTIONS................................................. 6 ARTICLE 4 IN-SERVICE DISTRIBUTIONS AND UNFORESEEABLE EMERGENCIES............ 10 ARTICLE 5 BENEFITS.......................................................... 11 ARTICLE 6 BENEFICIARY DESIGNATION........................................... 13 ARTICLE 7 LEAVE OF ABSENCE.................................................. 13 ARTICLE 8 TERMINATION, AMENDMENT OR MODIFICATION............................ 14 ARTICLE 9 ADMINISTRATION.................................................... 15 ARTICLE 10 OTHER BENEFITS AND AGREEMENTS.................................... 15 ARTICLE 11 CLAIMS PROCEDURES................................................ 16 ARTICLE 12 TRUST............................................................ 16 ARTICLE 13 MISCELLANEOUS.................................................... 16 i Deckers Outdoor Corporation Deferred Compensation Plan ------------------------------------------------------ Effective February 1, 2010 -------------------------- Purpose ------- The purpose of this Deferred Compensation Plan is to provide specified benefits to a select group of management and highly compensated Employees who contribute materially to the continued growth, development, and future business success of Deckers Outdoor Corporation. The Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA. The Plan is intended to comply with the requirements of Internal Revenue Code Section 409A and final regulations thereunder (collectively referred to herein as "Code Section 409A). Definitions For purposes of the Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings: "Account Balance" shall mean, with respect to a Participant, a credit on the records of the Company equal to the sum of (i) the Retirement Account balance and (ii) the In Service Account balance. Base Salary deferrals and Bonus deferrals, plus investment return as outlined in Section 3.5, shall be directed to distinct Retirement Accounts and In Service Accounts as indicated on each Class Year's Election Form. Any Company Contribution for a Plan Year will be credited to the Base Salary Retirement Account for that Class Year, even if the Participant does not direct any Deferral Amounts into the Base Salary Retirement Account for that Plan Year. The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her Beneficiary, pursuant to the Plan. "Affiliated Group" means (i) the Company and (ii) all entities with which the Company would be considered a single employer under Code Sections 414(b) and 414(c), provided that in applying Code Sections 1563(a)(1), (2) and (3) for purposes of determining whether a controlled group of corporations exists under Code Section 414(b), the language "at least 50 percent" shall be used instead of "at least 80 percent" each place it appears in Code Sections 1563(a)(1), (2) and (3), and in applying Treasury Regulation Section 1.414(c)-2 for purposes of determining whether trades or businesses (whether or not incorporated) are under common control for purposes of Code Section 414(c), the language "at least 50 percent" shall be used instead of "at least 80 percent" each place it appears in Treasury Regulation Section 1.414(c)-2. The term "Affiliated Group" shall be interpreted in a manner consistent with the definition of "service recipient" contained in Code Section 409A. "Annual Installment Method" shall be an annual installment payment over the number of years selected by the Participant in accordance with the Plan, calculated as follows: (i) for the first annual installment, the vested Account Balance of the Participant shall be calculated as of the date of payment in accordance with Articles IV and V, and (ii) for remaining annual installments, the vested Account Balance of the Participant shall be calculated on every applicable anniversary of the first annual installment. Each annual installment shall be calculated by multiplying this balance by a fraction, the numerator of which is one and the denominator of which is the remaining number of annual payments due the Participant. By way of example, if the Participant elects a ten (10) year Annual Installment Method, the first payment shall be 1/10 of the vested Account Balance, calculated as described in this definition. The following year, the payment shall be 1/9 of the vested Account Balance, calculated as described in this definition. 1 For purposes of Section 409A an annual installment payment shall be considered as "individual payments" as defined in IRS regulation 1.409A-2(b)(2)(iii). "Base Salary" shall mean the annual base rate of cash compensation plus any bonus which does not qualify as "performance based compensation" under IRS regulation 1.409A-1(e)(1) payable by the Affiliated Group during a calendar year, excluding commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, fees, automobile and other allowances, and prior to reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of the Affiliated Group under Code Section 125, 402(e)(3), 402(h), or 403(b). Base Salary payable after the last day of a calendar year solely for services performed during the final payroll period described in Code Section 3401(b) containing December 31 of such year shall be treated as earned during the subsequent calendar year. "Beneficiary" shall mean the person or persons, designated in accordance with Article 6, who are entitled to receive benefits under the Plan upon the death of a Participant. "Beneficiary Designation Form" shall mean the form established from time to time by the Board that a Participant completes, signs and returns to the Board to designate one or more Beneficiaries. "Board" shall mean the board of directors of the Company or a committee appointed by the Board to administer the Plan. "Bonus" shall mean (i) any compensation relating to services performed during any fiscal year running from January 1 to December 31 payable to a Participant as an Employee under the Company's written bonus or cash compensation incentive plans, excluding stock options and restricted stock and (ii) which qualifies as "performance-based compensation" under IRS regulation 1.409A-1(e)(1). "Change in Control" shall mean the occurrence of a "change in the ownership," a "change in the effective control," or a "change in the ownership of a substantial portion of the assets" of the Company within the meaning of Code Section 409A. "Class Year" shall mean the designation of the Account Balance by year in which the Deferral Amounts are received by the Plan. "Code" shall mean the Internal Revenue Code of 1986, as it may be amended from time to time. 1.12 "Company" shall mean Deckers Outdoor Corporation and any successor to all or substantially all of the Company's assets or business. 1.13 "Company Contribution Amount" shall mean, for any one Plan Year, the amount determined in accordance with Section 3.3. Company Contribution Amounts shall be credited with investment return as outlined in Section 3.5(c). All Company Contribution Amounts shall be credited to the Base Salary Retirement Account for that Class Year, even if the Participant does not direct any Deferral Amounts into the Base Salary Retirement Account for that Plan Year. 2 1.14 "Death Benefit" shall mean the benefit set forth in Sections 5.3 and 5.4 1.15 "Deferral Amount" shall mean that portion of a Participant's Base Salary and Bonus that a Participant elects to have deferred in accordance with Article 3, for any one Plan Year. In the event of a Participant's Disability, death or a Termination of Employment prior to the end of a Plan Year, such year's Deferral Amount shall be the actual amount withheld prior to such event. 1.16 "Deferral Election" shall mean a Participant's election on an Election Form to defer a portion of his Base Salary or Bonus, in accordance with the provisions of Article 3. 1.17 "Disability" shall have the same meaning as outlined in the Deckers Outdoor Corporation 401(k) Plan which is the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months. The permanence and degree of such impairment must be supported by medical evidence. 3 1.18 "Disability Benefit" shall mean the benefit set forth in Section 5.5. "Election Form" shall mean the form established from time to time by the Board that a Participant completes, signs and returns to the Board to make a Deferral Election under the Plan. "Employee" shall mean a person who is an employee of the Company. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time. "In-Service Account" shall mean (i) the sum of that portion of a Participant's Deferral Amount that a Participant elects to have distributed while in service of the Company in accordance with Article 4, plus (ii) amounts credited in accordance with all the applicable crediting provisions of the Plan, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to the Plan that relate to his or her In-Service Account. "In-Service Benefit" shall mean the benefit set forth in Section 4.1 "Participant" shall mean any Employee (i) who is selected to participate in the Plan, (ii) who elects to participate in the Plan, (iii) who signs an Election Form and a Beneficiary Designation Form, (iv) whose signed Election Form and Beneficiary Designation Form are accepted by the Board, (v) who commences participation in the Plan, and (vi) whose participation in the Plan has not terminated. A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an account balance under the Plan, even if he or she has an interest in the Participant's benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce. "Plan" shall mean the Deckers Outdoor Corporation Deferred Compensation Plan, as amended from time to time. "Plan Year" shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year. "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an Employee, severance from employment from the Company for any reason other than a leave of absence, death or Disability on or after the attainment of age sixty-five (65). "Retirement Account" shall mean (i) that portion of a Participant's Deferral Amount that a Participant elects to have distributed upon termination in accordance with Article 5, plus (ii) amounts credited in accordance with all the applicable crediting provisions of the Plan, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to the Plan that relate to his or her Retirement Account. "Retirement Benefit" shall mean the benefit set forth in Section 5.1. "Termination Benefit" shall mean the benefit set forth in Section 5.2. 4 "Termination of Employment" shall mean a termination of employment with the Affiliated Group in such a manner as to constitute a "separation from service" as defined under Code Section 409A, voluntarily or involuntarily, for any reason other than Disability, or death. For this purpose, the employment relationship is treated as continuing while a Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months or, if longer, so long as the individual retains a right to reemployment with the Affiliated Group under an applicable statute or by contract. A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Affiliated Group. If the period of leave exceeds six months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first day immediately following such six-month period. A Termination of Employment will occur if there is a reasonable expectation that the level of services by the Participant for the Affiliated Group will permanently decrease to 20% or less of the average level of services during the previous 36 months (or, if shorter, the actual period of services). "Trust" shall mean one or more rabbi trusts established by the Company in accordance with Article 12 of the Plan as amended from time to time. "Unforeseeable Emergency" shall mean a severe financial hardship to the Participant resulting from (i) an illness or accident of the Participant or Beneficiary or his spouse or dependent (as defined in Code Section 152(a) without regard to Code Sections 152(b)(1), 152(b)(2), and 152(d)(1)(B)), (ii) loss of the Participant's property due to casualty (including the need to rebuild a home following damage to the home not otherwise covered by insurance), or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The term "Unforeseeable Emergency" shall be interpreted in a manner consistent with the definition of "unforeseeable emergency" contained in Code Section 409A. Selection, Enrollment, Eligibility Selection by Board. Participation in the Plan shall be limited to those Employees who are determined by the Board to be a member of a select group of management or highly compensated employees and who are designated by the Board to be eligible Employees. Enrollment Requirements. As a condition to participation, each selected Employee shall complete, execute and return to the Board an Election Form and a Beneficiary Designation Form, all within 30 days (or such shorter time as the Board may determine) after he or she is selected to participate in the Plan. In addition, the Board shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary. Eligibility; Commencement of Participation. Provided an Employee selected to participate in the Plan has met all enrollment requirements set forth in the Plan and required by the Board, including returning all required documents to the Board within thirty (30) days (or such shorter time as the Board may determine) after he or she is selected to participate in the Plan, that Employee shall commence participation in the Plan on the first day of the pay period following the date on which the Employee completes all enrollment requirements. If an Employee fails to meet all such requirements within the period required, that Employee shall not be eligible to participate in the Plan until the first day of the Plan Year following the delivery to and acceptance by the Board of the required documents. 5 Termination of Deferrals. If the Board determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Participant's entitlement to defer Base Salary and Bonus shall cease with respect to calendar years following the calendar year in which such determination is made, although the Participant shall remain subject to all terms and conditions of the Plan for as long as he remains a Participant. Deferral Elections Elections to Defer Base Salary or Bonus. - ---------------------------------------- Deferral Election. - ------------------ (i) New Participant. In connection with a Participant's commencement of participation in the Plan, a Participant may elect to defer Base Salary or Bonus, by filing with the Board an Election Form that conforms to the requirements of Article 2 within the time period specified in Section 2.3, and the Deferral Election shall become irrevocable at the end of such time period. The Deferral Election shall apply only to Base Salary earned during the first Plan Year beginning with the first payroll period that begins immediately after the date the Participant has completed and returned a complete and signed Election Form. The Deferral Election shall apply only to that portion of the Bonus earned after the Deferral Election becomes irrevocable. If a Participant does not make a deferral election with respect to the first Plan Year with respect to which the Participant is eligible to participate in the Plan, the Participant may elect to defer Base Salary or Bonus for any subsequent Plan Year by filing with the Board an Election Form that conforms with the requirements of Article 2 before the start of that Plan Year. (ii) Annual Deferral Election. Unless Section 3.1(a)(i) applies, each Participant may elect to defer Base Salary or Bonus for a Plan Year by filing a Deferral Election with the Board within the timeframes specified by the Board for the Plan Year for which such Base Salary or Bonus is earned. However, the Deferral Election with respect to Base Salary becomes irrevocable as of such December 31 preceding the Plan Year for which such Base Salary is earned and with respect to a Bonus becomes irrevocable as of the date six months prior to the end of the performance period or such earlier dates as specified by the Board. Amount of Deferral. A Participant shall designate on the Deferral Election form the amount of Base Salary or Bonus that is to be deferred in accordance with this Article 3. The Deferral Amount, in whole percentages, shall not exceed fifty percent (50%) of the Participant's Base Salary and ninety-five percent (95%) of the Participant's Bonus; provided that the total amount deferred by a Participant shall be limited in any calendar year, if necessary, to satisfy FICA, income tax, and employee benefit plan withholding requirements as determined in the sole and absolute discretion of the Board. 6 Allocation of Deferral. A Participant shall further designate the percentage of each Class Year's Base Salary and Bonus deferral that will be allocated to the Class Year's Retirement Account and In-Service Account. The allocation of each Class Year's Deferral Amount into the Retirement Account or In-Service Account shall be in whole percentages only. A Participant is not obligated to apply the same percentage allocation to the Base Salary and Bonus. As an example, an employee can allocate 50% of the Base Salary deferral into the Retirement Account and 50% into the In-Service Account while allocating 100% of the Bonus into the Retirement Account. Duration of Deferral Election. A Participant's Deferral Election shall apply only to Base Salary or Bonus earned during the Plan Year to which the Deferral Election relates. A Participant must indicate a new Deferral Election for any subsequent Plan Year by filing a new Election Form with the Board prior to the beginning of such Plan Year or at such time as the Board may require, which Deferral Election shall be effective on the first day of the next following Plan Year. If a Participant fails to complete a new Election Form for any subsequent Plan Year the deferral election for that subsequent Plan Year will be deemed to be zero. Class Year Elections: Each Plan Year's Deferral Election will be maintained in separate and distinct accounts by Retirement Account and In Service Account and by calendar year in which the contribution is received. Unique distribution elections apply to each Class Year. Any Company Contribution Amount shall be allocated to that Class Year's Base Salary Retirement Account Withholding of Deferral Amounts. For each Plan Year, the Base Salary portion of the Deferral Amount shall be withheld from each regularly scheduled Base Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base Salary. The Bonus portion of the Deferral Amount shall be withheld at the time the Bonus is or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year. Annual Company Contribution Amount. For each Plan Year, the Board, in its sole discretion, may, but is not required to, credit any amount it desires to any Participant under the Plan, which amount shall equal the Annual Company Contribution Amount for that Participant for that Plan Year. The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive an Annual Company Contribution Amount for that Plan Year. 3.4 Vesting. A Participant shall at all times be 100% vested in his or her Deferral Account, including any Company Contribution Amount credited to him. 3.5 In-Service Accounts and Retirement Accounts. The Company shall establish accounts for Base Salary Deferral Amounts and Bonus Deferral Amounts and further sub-divided into In-Service Accounts and Retirement Accounts for each Participant under the Plan. Each of those accounts will be maintained by Class Year. Each Participant's Deferral Account shall be further divided into separate subaccounts ("investment fund subaccounts"), each of which corresponds to an investment fund elected by the Participant. A Participant's Deferral Account shall be credited as follows: 7 After amounts are withheld and deferred from a Participant's Base Salary or Bonus, the Company shall credit the investment fund subaccounts of the Participant's Deferral Account with an amount equal to the amount of Base Salary or Bonus, or both, deferred by the Participant as of the date that the Base Salary or Bonus would have been paid to the Participant, and the portion of the Participant's deferred Base Salary or Bonus that the Participant has deemed to be invested in a certain type of investment fund shall be credited to the investment fund subaccount corresponding to that investment fund. The Company shall credit the Participant with an amount equal to the Annual Company Contribution Amount, if any, for that Participant, on the date or dates to be determined by the Board in its sole discretion, and the portion of the Participant's Annual Company Contribution Amount that the Participant has deemed to be invested in a certain type of investment fund shall be credited to the investment fund subaccount corresponding to that investment fund. Each business day, each of the Participant's investment fund subaccounts shall be credited with earnings or losses in an amount equal to that determined by multiplying the balance credited to such investment fund subaccount as of the prior day plus contributions allocated to the investment fund subaccount that day by the rate of net gain or loss for the corresponding investment fund for that day. Each of the Participant's investment fund subaccounts shall be reduced pro rata by the amount of any distributions made to the Participant, as of the date of the distribution. 3.6 Investment Elections. (a) The Board shall select from time to time, in its sole and absolute discretion, commercially available investment funds to be used to determine the amount of earnings or losses to be credited to the Participant's Accounts under Section 3.5. (b) At the time of making a Deferral Election, a Participant shall designate, on the Election Form, the investment fund or funds in which the Participant's Deferral Account attributable to deferrals of Base Salary or Bonus will be deemed to be invested for purposes of determining the amount of earnings or losses to be allocated to the Deferral Account. The Participant may specify the deemed investment, in whole percentage increments, in one or more of the investment Funds as communicated from time to time by the Board. At least quarterly, a Participant may change this investment designation by filing a change of election and making a new designation as designated by the Board. (c) Notwithstanding any other provision of the Plan that may be interpreted to the contrary, the investment funds selected by the Board or designation of investment funds by a Participant shall not be considered or construed in any manner as an actual investment of the Participant's Account Balance in any such investment fund. In the event that the Company or the Trustee, in its sole and absolute discretion, shall invest funds in any or all of the selected investment funds, no Participant shall have any rights in or to such investments. Without limiting the foregoing, a Participant's Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company or the Trust; the Participant shall remain at all times an unsecured creditor of the Company. 8 1.7 FICA and Other Taxes. Deferral Amounts. For each Plan Year in which a Deferral Amount is being withheld from a Participant, the Company shall withhold from that portion of the Participant's Base Salary or Bonus that is not being deferred, in a manner determined by the Company, the Participant's share of FICA and other employment taxes on such Deferral Amount. If necessary, the Board may reduce the Deferral Amount in order to comply with this Section 3.7(a). Company Contribution Amounts. Upon contribution of a Company Contribution Amount, the Company shall withhold from the Participant's Base Salary and/or Bonus that is not deferred, in a manner determined by the Company, the Participant's share of FICA and other employment taxes. If necessary, the Board may reduce the vested portion of the Participant's Company Contribution Amount in order to comply with this Section 3.7(b). Distributions. The Company, or the trustee of the Trust, shall withhold from any payments made to a Participant under the Plan all federal, state and local income, employment and other taxes required to be withheld by the Company, or the trustee of the Trust, in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Company and the trustee of the Trust. In-Service Distributions and Unforeseeable Emergencies 4.1 In-Service Distributions. A Participant, in connection with his or her initial commencement of participation in the Plan and each subsequent annual enrollment, may elect on an Election Form the month and year of distribution of the Deferral Amount allocated to that Class Year's In-Service Account. The Participant must make the same Distribution Election for the Base Salary and Bonus Deferral Election made on the Enrollment Form. The Participant may elect payment in a lump sum or pursuant to an Annual Installment Method not to exceed 10 years. If a Participant elects to direct a percentage of the particular Plan Year's Deferral Amount to the In-Service Account but does not indicate the year in which the payment is made, then it will be assumed that no In-Service election was made for that Plan Year and all such deferrals will be directed to the Retirement Account. In addition, if a Participant makes an election to allocate deferrals to an In-Service Account and specifies a distribution date but fails to elect a form of payment, the distribution election will be assumed to be a Lump Sum. The lump sum payment shall be made or the installments shall commence as soon as possible after the date elected on the Election Form. If Termination of Employment for any reason, other than death, occurs prior to the year selected for the In-Service Distribution or prior to the complete payment of an In-Service Account in the process of being distributed in the form of an Annual Installment Method, then any remaining amount in the In-Service Account shall be paid to the Participant in accordance with the election made for the Retirement Account for that Class Year. If no Retirement Account election is in effect for that Class Year, i.e., the Participant elected to have 100% of that Class Year's Deferral Amount directed to the In-Service Account, then payment will be made a lump sum as soon as practicable following Termination of Employment. If Termination of Employment occurs as a result of death, payment will be made in accordance with either Section 5.3 or 5.4. 9 In no event will any Company Contribution Amount be available for an In-Service distribution. 4.2 Change in Time or Form of Payment for In-Service Distribution. Notwithstanding the methods of payment for each Class Year's Election pursuant to such Election Form, the Participant may elect to change the time of such payment under a subsequent election that meets the following requirements: The subsequent election may not take effect until at least 12 months after the date on which the subsequent election is made. The subsequent election is made not less than 12 months prior to the date of the scheduled payment. The payment with respect to which the subsequent election is made must be deferred for a period of not less than five years from the date such payment would otherwise have been made. The subsequent election may not accelerate the time of any payment. 4.3 Payout/Suspensions for Unforeseeable Emergencies. If the Participant experiences an Unforeseeable Emergency, the Participant may petition the Board to receive a partial or full payout from the Plan attributable to Deferral Amounts. Company Contribution Amounts are not available for Unforeseeable Emergencies. Any payout will be made starting with the most recently completed Class Year and from that Class Year's In-Service Account, if any, and progressing to each preceding Class Year as necessary. The Retirement Accounts will be used only upon exhausting all completed prior Class Year In-Service Accounts. By way of example, if a request for an Unforeseeable Emergency is made in 2012 and 2010 was the initial Class Year for the Participant; payment will come from the 2011 Class Year's In-Service Account. To the extent the 2011 Class Year's In-Service Account is insufficient, additional amounts will come from the 2010 Class Year's In-Service Account. If the previously completed Class Year's In-Service Accounts are insufficient or if none exist, then the payout or any remaining amount needed shall come from the 2011 Class Year's Retirement Account and then from the 2010 Class Year's Retirement Account. Only when all prior Class Years have been exhausted will the payout tap the 2012 Class Year and then from the In-Service Account first. The payout shall not exceed the lesser of the Participant's Account Balance, calculated as if such Participant were receiving a Termination Benefit, or the amount reasonably needed to satisfy the Unforeseeable Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the payout, after taking into account the extent to which such Unforeseeable Emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant's assets (to the extent such liquidation would not itself cause severe financial hardship). 10 If the Participant experiences an Unforeseeable Emergency, the Participant may request a suspension of Deferral Amounts. In that case, the suspension will apply for the entire Plan Year in which the request is made and deferrals to be made for the remainder of the Plan Year will be canceled. If, subject to the sole discretion of the Board, the petition for a suspension and/or payout is approved, suspension shall take effect upon the date of approval and any payout shall be made within 60 days of the date of approval. 1.4 Change in Control. Upon a Change in Control as defined in IRS regulation 1.409A-3(i)(5), a Participant's Account Balance will be paid in a lump sum. Benefits Retirement Benefit. A Participant who Retires shall receive, as a Retirement Benefit, his or her Account Balance. A Participant, in connection with his or her commencement of participation in the Plan and each subsequent Plan Year shall elect on an Election Form the form of payment with respect to that Class Year's Deferral Amount. The Participant may elect payment in a lump sum or pursuant to an Annual Installment Method not to exceed 10 years. Thus, separate Retirement Benefit elections may apply to each Class Year but the Participant must make the same Distribution Election for the Base Salary and Bonus Deferral Election made on the Enrollment Form. Any Company Contribution Amount credited to the Participant's Base Salary Retirement Account for that Class Year shall be paid in the same manner as elected by the Participant for that Class Year's Base Salary. If a Participant does not make any election with respect to the payment of the Retirement Benefit or if the Participant does not elect to direct a Deferral Amount into the Retirement Account for that Class Year but will receive a Company Contribution Amount for that Class Year, then such benefit shall be payable in a lump sum. The lump sum payment shall be made, or installment payments shall commence, within 60 days after Retirement. Termination Benefit. A Participant who experiences a Termination of Employment prior to Retirement shall receive as a Termination Benefit his or her Account Balance in accordance with the same election made under Section 5.1. The lump sum payment shall be made, or installment payments shall commence, within 60 days of Termination of Employment. Death Prior to Retirement or Termination of Employment. The Beneficiary of a Participant who dies prior to Retirement or Termination of Employment shall receive a Death Benefit in the form of a Lump Sum equal to the then remaining Account Balance, including any Installment Payment currently being distributed. The payment shall be made as soon as practicable after certification of death. Death After Retirement or Termination of Employment. If a Participant dies after Retirement or Termination of Employment but before the Account Balance is paid in full, the Participant's unpaid Account Balance shall be paid to the Beneficiary in a Lump Sum. The payment shall be made as soon as practicable after certification of death. 11 5.5 Disability Benefit. A Participant suffering a Disability shall, for benefit purposes under the Plan, be deemed to have experienced a Termination of Employment. The Disability Benefit shall be paid in the same form as elected in accordance with Section 5.1. The lump sum payment shall be made, or installment payments shall commence within 60 days after Disability. 5.6 Change in Time or Form of Payment for Termination Benefit. Notwithstanding the method of payment elected by a Participant on an Election Form with respect to the Base Salary or Bonus deferred pursuant to such Election Form, the Participant may elect to change the time or form of such payment under a subsequent election that meets the following requirements: The subsequent election may not take effect until at least 12 months after the date on which the subsequent election is made. The first payment with respect to which the subsequent election is made must be deferred for a period of not less than five years from the date such payment would otherwise have been made. This five year deferral shall not apply to any change in the Death Benefit or upon the occurrence of a Disability. The subsequent election may not accelerate the time of any payment. The form of payment elected in a subsequent election must be a lump sum or an Annual Installment Method of between 2 and 10 years. In accordance with section 1.3, each installment payment may be individually changed. Limitation on Key Employees. Notwithstanding any other provision of the Plan to the contrary, the payment of a Termination Benefit with respect to a "key employee" of the Company, within the meaning of Code Section 416(i)(1), if at that time any stock of the Company is publicly traded on an established securities market or otherwise, shall not be made within six months following his separation from service with the Company, except in the event of death. As of the effective date of this plan, this provision does not apply to the Company. 5.8 Involuntary Cash Out Limit. If a Participant's total Account Balance under this plan and all other such arrangements required to be aggregated under Code Section 409A is less than or equal to the deferral limit in effect under section 402(g) of the Code for the calendar year in which the Participant experiences a Retirement or Termination of Employment, then, despite the election made by the Participant, the Company may, at its discretion, pay the Account Balance in a lump sum as soon as practicable. In addition, if the present value of any remaining installments due a Participant who has experienced a Termination of Employment and elected an Annual Installment Method falls below the deferral limit in effect under section 402(g) of the Code for the calendar year in which the Participant experienced a Termination of Employment, then the Company may, at its discretion, pay the remaining Account Balance in a lump sum as soon as practicable. 12 Beneficiary Designation Beneficiary. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan upon the death of a Participant. The Beneficiary designated under the Plan may be the same as or different from the Beneficiary designation under any other plan of the Company in which the Participant participates. Beneficiary Designation Change. A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Board. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Board's rules and procedures, as in effect from time to. Upon the acceptance by the Board of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled. The Board shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Board prior to his or her death. If a Participant is married, the designation of a Beneficiary other than the Participant's spouse shall only be permitted upon written consent of the Participant's spouse. Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Board. No Beneficiary Designation. If a Participant fails to designate a Beneficiary as provided in Sections 6.1, 6.2 and 6.3 above or, if all Beneficiaries predecease the Participant or die prior to complete distribution of the Participant's benefits, then the Participant's Beneficiary shall be deemed to be his or her surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the Participant's estate. Doubt as to Beneficiary. If the Board has any doubt as to the proper Beneficiary to receive payments pursuant to the Plan, the Board shall have the right, exercisable in its discretion, to cause the Company to withhold such payments until this matter is resolved to the Board's satisfaction. Discharge of Obligations. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge the Company and the Board from all further obligations under the Plan with respect to the Participant, and that Participant's participation in the Plan shall terminate upon such full payment of benefits. Leave of Absence Paid Leave of Absence. If a Participant is authorized by the Company for any reason to take a paid leave of absence from the employment of the Company, the Participant shall continue to be considered employed by the Company and the Deferral Amount shall continue to be withheld during such paid leave of absence in accordance with Section 3.1. Unpaid Leave of Absence. If a Participant is authorized by the Company for any reason to take an unpaid leave of absence from the employment of the Company, the Participant shall continue to be considered employed by the Company and the Participant shall be excused from making deferrals until the Participant returns to a paid employment status. Upon such return, deferrals shall resume for the remaining portion of the Plan Year in which the return occurs, based on the deferral election, if any, made for that Plan Year. If no election was made for that Plan Year, no deferral shall be withheld. 13 Termination, Amendment or Modification Termination. Although the Company anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, the Company reserves the right to terminate the Plan at any time with respect to any or all of its participating Employees, by action of the Board. Upon the termination of the Plan, further deferrals under the Plan shall terminate but all Account Balances shall remain subject to the terms of the Plan and the elections made in the applicable Election Forms. Notwithstanding the previous paragraph, upon termination of the plan and at the discretion of the Company, Account Balances may be distributed in a consistent manner to all Participants in compliance with IRS Regulation 1.409A-3(j)(4)(ix)(C), specifically: (a) The termination and liquidation does not occur as a result of downturn in the financial health of the Company; (b) The Company terminates and liquidates all similar arrangements sponsored by the Company that would be aggregated with any other arrangements under ss.1.409A-1(c) if the Participants had deferrals of compensation under all of the arrangements that are terminated; (c) No payments are made within 12 months of the date the Company takes all necessary action to irrevocably terminate and liquidate the plan other than payments that would be payable under the terms of the plan if the action to terminate and liquidate the plan had not occurred; (d) All payments are made within 24 months of the date the Company takes all necessary action to irrevocably terminate and liquidate the plan; and (e) The Company does not adopt a new plan that would be aggregated with any terminated and liquidated plan under ss.1.409A-1(c) if the same Participant participated in both plans, at any time within three years following the date the Company takes all necessary action to irrevocably terminate and liquidate the plan. Amendment. The Company may, at any time, amend or modify the Plan in whole or in part by the action of the Board; provided, however, that: (i) no amendment or modification shall be effective to decrease or restrict the value of a Participant's Account Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Termination of Employment as of the effective date of the amendment or modification, and (ii) no amendment or modification of this Section 8.2 of the Plan shall be effective. The amendment or modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification. The Company specifically reserves the right to amend the Plan to conform the provisions of the Plan to the guidance issued by the Secretary of the Treasury with respect to Code Section 409A, in accordance with such guidance. 14 Effect of Payment. The full payment of the applicable benefit under Articles 4 or 5 of the Plan shall completely discharge all obligations to a Participant and his or her Beneficiaries under the Plan and the Participant's participation in the Plan shall terminate. Administration Administrative Duties. To the extent that ERISA applies to the Plan, the Company shall be the "named fiduciary" of the Plan and the "plan administrator" of the Plan. The Board shall be responsible for the general administration of the Plan. The Board will, subject to the terms of the Plan, have the authority to: (i) approve for participation employees who are recommended for participation by the Chief Executive Officer of the Company, (ii) adopt, alter, and repeal administrative rules and practices governing the Plan, (iii) interpret the terms and provisions of the Plan, and (iv) otherwise supervise the administration of the Plan. All decisions by the Board will be made with the approval of not less than a majority of its members. The Board may delegate any of its authority to any other person or persons that it deems appropriate. Who approves the Board Agents. In the administration of the Plan, the Board may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to the Company. Binding Effect of Decisions. All decisions by the Board, and by any other person or persons to whom the Board has delegated authority, shall be final and conclusive and binding upon all persons having any interest in the Plan. Indemnity of Board. The Company shall indemnify and hold harmless the members of the Board and any Employee to whom the duties of the Board may be delegated against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to the Plan, except in the case of willful misconduct by the Board, any of its members, or any such Employee. Information. To enable the Board to perform its functions, the Company shall supply full and timely information to the Board on all matters relating to the compensation of its Participants, the date and circumstances of the Disability, death or Termination of Employment of its Participants, and such other pertinent information as the Board may reasonably require. Other Benefits and Agreements Coordination with Other Benefits. The benefits provided for a Participant and Participant's Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Company. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided. 15 Claims Procedures Procedures for Handling Claims. In accordance with the provisions of Section 503 of ERISA, the Company shall provide a procedure for handling claims for benefits under the Plan. The procedure shall be in accordance with the regulations issued by the Secretary of Labor and provide adequate written notice within a reasonable period of time with respect to a claim denial. The procedure shall also provide for a reasonable opportunity for a full and fair review by the Company of any claim denial. Trust Establishment of the Trust. The Company may establish one or more Trusts to which the Company may transfer such assets as the Company determines in its sole discretion to assist in meeting its obligations under the Plan. Interrelationship of the Plan and the Trust. The provisions of the Plan and the Participant's Election Forms shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Company, Participants and the creditors of the Company to the assets transferred to the Trust. Distributions From the Trust. The Company's obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Company's obligations under the Plan. Miscellaneous Status of Plan. The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that "is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employee" within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent. Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Company. For purposes of the payment of benefits under the Plan, any and all of the Company's assets shall be, and remain, the general, unpledged unrestricted assets of the Company. The Company's obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future. Company's Liability. The Company's liability for the payment of benefits shall be defined only by the Plan and the Participant's Election Forms. The Company shall have no obligation to a Participant under the Plan except as expressly provided in the Plan and his or her Election Forms. Nonassignability. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise. 16 Not a Contract of Employment. The terms and conditions of the Plan shall not be deemed to constitute a contract of employment between the Company and the Participant, either expressed or implied. Such employment is hereby acknowledged to be an "at will" employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement. Nothing in the Plan shall be deemed to give a Participant the right to be retained in the service of the Company, or to interfere with the right of the Company to discipline or discharge the Participant at any time. Furnishing Information. A Participant or his or her Beneficiary will cooperate with the Board by furnishing any and all information requested by the Board and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Board may deem necessary. Terms. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply. Captions. The captions of the articles, sections and paragraphs of the Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions. Governing Law. Subject to ERISA, the provisions of the Plan shall be construed and interpreted according to the internal laws of the State of California without regard to its conflicts of laws principles. Notice. Any notice or filing required or permitted to be given to the Board under the Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below: Deckers Outdoor Corporation 495 Fairview Ave Ste A Goleta, CA 93117-3681 Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. 17 Any notice or filing required or permitted to be given to a Participant under the Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant. Successors. The provisions of the Plan shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and the Participant's Beneficiaries. Spouse's Interest. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse's will, nor shall such interest pass under the laws of intestate succession. Validity. In case any provision of the Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but the Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein. Incompetent. If the Board determines in its discretion that a benefit under the Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person's property, the Board may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Board may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant's Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount. Court Order. The Board is authorized to make any payments directed by court order in any action in which the Plan or the Board has been named as a party. In addition, if a court determines that a spouse or former spouse of a Participant has an interest in the Participant's benefits under the Plan in connection with a property settlement or otherwise, the Board, in its sole discretion, shall have the right, notwithstanding any election made by a Participant, to immediately distribute the spouse's or former spouse's interest in the Participant's benefits under the Plan to that spouse or former spouse. Insurance. The Company, on its own behalf or on behalf of the trustee of the Trust, and, in its sole discretion, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as the Trust may choose. The Company or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance. The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Company shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Company has applied for insurance. No Acceleration of Benefits. The acceleration of the time or schedule of any payment under the Plan is not permitted, except as provided in regulations by the Secretary of the Treasury. Compliance with Code Section 409A. The Plan is intended to provide for the deferral of compensation in accordance with Code Section 409A for compensation earned, vested, or deferred after December 31, 2004. Notwithstanding any provisions of the Plan or any Election Form to the contrary, no otherwise permissible election under the Plan shall be given effect that would result in the taxation of any amount under Code Section 409A. 18 IN WITNESS WHEREOF, the Company has signed this Plan document on _________________, 2009. DECKERS OUTDOOR CORPORATION By: _________________________________________ Title: _________________________________________ 19 -----END PRIVACY-ENHANCED MESSAGE-----