[DECKERS OUTDOOR CORPORATION LOGO]
August 10, 2005 Exhibit 10.1
Carlo Lingiardi
45 Pout Pond Lane
Lyme, NH 03786
Dear Carlo:
We are pleased to offer you a full-time position as Teva Brand President
reporting to Angel Martinez, President & CEO. Your scheduled start date will be
no later than September 1, 2005.
You will receive compensation as follows:
o Base Salary: $185,000 ($7,115.38 bi-weekly) Exempt position
o Bonus information: For fiscal 2006, pending approval by the Board of
Directors, you will be eligible to receive a minimum potential bonus
of 50% of your base salary, subject to the achievement of targets for
overall performance of the Company as well as the achievement of
Management Business Objectives set by the CEO. Details of the bonus
program for Fiscal 2006 will be provided to you upon approval of the
2006 business plan by the Board of Directors.
o Restricted Stock Units: For fiscal 2005, you will be eligible to
receive a potential grant of 1,500 Restricted Stock Units. These RSU's
will vest 25% per quarter beginning on March 31, 2009 and the number
of units vested will be dependent upon the Company reaching the
budgeted fiscal 2006 Earnings Per Share goal. You will be eligible to
participate in the Company's RSU Program in the future at a level
commensurate with other executives at your level. The Company's Board
of Directors will determine each year the number of RSU's granted for
those employees eligible to participate in this program.
o Sign-on Bonus: You will be eligible to receive a sign-on bonus of
$35,000 after all applicable taxes have been withheld, payable to you
within thirty days of your date of hire.
o Relocation benefits: The Company will pay for relocating your
household goods and up to two automobiles, which will include moving
costs of your personal belongings. You will need to submit three bids
to the Company for the cost of such moving for the Company's prior
written approval. The Company will provide you with a temporary
housing allowance of $6,000 payable to you after your date of hire.
For house hunting purposes, the Company will pay for the actual and
reasonable expenses for airfare, meals, lodging, and car rental, for
the employee and immediate family members, at a location of the
Company's choosing for a period of up to (4) days and (3) nights. For
the purpose of relocating to the Santa Barbara area, the Company will
pay for one-way airfare for the employee and family. Please note that
if you were to leave the Company within your first twelve months of
employment, you will be required to reimburse the Company for all
relocation expenses. Should the Company terminate the employment
relationship without cause, you will not be required to reimburse the
Company for relocation expenses.
o Monthly Housing Allowance: The Company does understand that there is a
difference in the cost of housing from New Hampshire to the Santa
Barbara area. The Company will provide you with a housing allowance of
$2,000 per month gross for a period of two years, assuming continued
employment by the Company.
o COBRA Reimbursement: The Company will reimburse you for your COBRA
costs until you are eligible to participate in the Company's benefits
plan.
o Benefits: You will be eligible for medical, dental and life insurance
effective the first of the month, three months from your date of hire.
The company pays approximately 80% of the employee's premium and a
portion of the premium for spouse and/or family coverage (this will be
detailed in orientation). The employee's and spouse/family portion is
paid through the Section 125 Flexible Spending Plan, which lowers the
actual cost of the plan up to 28-35% due to pre-tax deduction through
payroll. Dental insurance is offered at little cost to employees and
Deckers provides a life insurance policy which gives all full-time
employees coverage of two times their annual salary. In addition, you
will have the opportunity to enroll in the 125 plan that allows
employees to pay for insurance premiums, any medical out-of-pocket
costs and day care costs on a pre-taxed basis from your total
compensation.
You will also be eligible for Deckers' 401(k) Retirement Plan. This
plan will allow you to voluntarily invest pre-tax dollars (Federal and
State Taxes) towards a retirement plan. You may join this plan the
first of the month, three months from your date of hire. Deckers will
pay for administrative charges and quarterly reports for each and
every eligible employee. There is a Company contribution of 50% of the
first 6% contributed by each employee on a bi-weekly basis, up to
$1,200 per year. This match is vested at 100%.
As is the case with all employees of the Company, your employment with us will
not be for any specified term and is "at-will". Accordingly, while we have every
hope that our employment relationship will be a mutually beneficial and
rewarding one, you remain free to resign from your position at any time, with or
without cause, and the Company similarly may end its employment relationship
with you or modify the terms and conditions of employment at any time, with or
without cause. Any change in this aspect of our relationship must be set forth
in writing and be signed by the CEO of the Company.
Should the Company terminate your employment without cause or notice or should
there be a change of control and termination by the Company without cause, the
Company will provide you with a severance. Details of the severance can be found
in Exhibit A attached to this offer letter.
You will be asked to sign our Proprietary Inventions Agreement, the Arbitration
and Mediation Agreement, the Confidentiality Agreement, as well as the Employee
Handbook Acknowledgement receipt found on the back page of the manual.
We are very excited about having you join our organization. I am sure you bring
a wealth of knowledge, skills and positive attitude with you. I look forward to
personally having you on our team here at Deckers Outdoor Corporation.
Please sign and date the bottom of this letter as acknowledgment of receipt and
understanding and fax it back to me at (805) 967-0961. If you have any questions
or if I can help you in any way, please feel free to contact me. I can be
reached at (805) 967-7611, ext. 120 or via e-mail at natec@deckers.com.
Sincerely,
/s/Nate Christensen
- -------------------
Nate Christensen
Director of Human Resources
Acknowledge receipt and understanding:
/s/Carlo Lingiardi 8/10/05
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Carlo Lingiardi Date
Exhibit A: Executive Severance Information
1. Upon Termination by Company for Cause or by Executive Without Good
Reason. If the Company terminates the Executive's employment 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;
b. pay the Executive the Accrued Vacation Payment;
c. 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 Bonus;
f. the Executive will have the right to exercise vested stock options or
vested Restricted Stock Units (RSU's).
2. Upon Termination by the Company Without Cause or by Executive for Good
Reason. If the Executive's employment is terminated 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. 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 Bonus;
f. pay the Executive severance, commencing on the thirtieth (30th) day
following the termination date, of six (6) 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. 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 six (6) months following termination. The severance payment
required under this subsection shall be conditioned upon the Executive
executing a general release of claims; and
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 three (3)
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, 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;
h. the Executive will have the right to exercise vested stock options or
vested Restricted Stock Units (RSU's).
3. Upon Change of Control and Termination by the Company Without Cause or
by Executive for Good Reason. If the Executive's employment is terminated within
one (1) year 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. 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 Bonus;
f. pay the Executive severance of one and one-half (1.5) times
Executive's Annual Base Salary in effect immediately prior to the time
such termination occurs. The severance payment required under this
subsection shall be conditioned upon the Executive executing a general
release of claims; and
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)
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, 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;
h. any payments will be grossed up for Internal Revenue Code Section 280G
excise tax penalty on "excess parachute payments;" and
i. the Executive will have the right to exercise vested stock options or
vested Restricted Stock Units (RSU's).
4. Definitions:
Accrued Base Salary: any Base Salary that has accrued but was not paid as
of the termination date.
Accrued Vacation Payment: 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 240.
Accrued Reimbursable Expenses: expenses incurred by Executive prior to the
date of termination that are subject to reimbursement.
Accrued Benefits: accrued and vested benefits required to be provided by the
terms of any Company-sponsored benefit plans or programs, together with any
benefits required to be paid or provided in the event of the Executive's death
or Total Disability under applicable law.
Accrued Bonus: bonus with respect to a prior fiscal year that has accrued
but has not been paid.
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.
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 (other than
Douglas B. Otto) acquires or obtains the right to acquire, 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).
Good Reason: will mean the occurrence of material breach of this Agreement by
the Company, which breach is not cured within fifteen (15) calendar days after
written notice thereof is received by the Company, or in the event of a Change
of Control, a reduction of total compensation, benefits, and perquisites,
relocation greater than 50 miles, or material change in position or duties.