DECKERS OUTDOOR CORPORATION (NYSE:DECK) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

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DECKERS OUTDOOR CORPORATION (NYSE:DECK) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

Item 5.02

Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On June 13, 2017, the Compensation Committee (the Compensation
Committee) of the Board of Directors (the Board) of Deckers Outdoor
Corporation (the Company), adopted the following compensation
awards for certain members of the Companys senior management team,
including the Companys named executive officers:
FY 2018 Management Incentive Plan;
FY 2018 Annual Performance-Based RSU Awards;
FY 2018 Annual Time-Based RSU Awards; and
FY 2018 Long-Term Performance Stock Option Awards
(collectively, the FY 2018 Compensation Awards)
Each of the FY 2018 Compensation Awards was granted to the Companys
2015 Stock Incentive Plan (the 2015 Plan). In approving the FY 2018
Compensation Awards, the Compensation Committee worked closely with
its independent compensation consultant, and the Compensation
Committee believes the awards collectively support the Companys
compensation philosophy and objectives, as well as the interests of
the Companys stockholders.
Additional information about each of the FY 2018 Compensation
Awards is set forth under separate headings below.
FY 2018 Management Incentive Plan
The Compensation Committee adopted a management incentive plan (the
FY 2018 Management Incentive Plan) that will be utilized to
calculate the cash incentive compensation that may become payable
with respect to the fiscal year ending March 31, 2018 (the
Performance Period). The FY 2018 Management Incentive Plan is
designed to reflect the Companys pay-for-performance philosophy by
aligning the payment of cash incentive compensation with the
Companys achievement of financial performance criteria that is
closely aligned with the Companys business and strategic
objectives.
Cash incentive compensation may be earned under the FY 2018
Management Incentive Plan based on the Companys achievement with
respect to a number of financial performance targets that have been
established by the Compensation Committee, which, for the named
executive officers, relate to consolidated operating income,
business unit operating income and business unit revenue
(collectively, the Cash Incentive Performance Measures). The
specific Cash Incentive Performance Measures applicable to each
participant, and the relative weighting of each of the Cash
Incentive Performance Measures for each participant, were
established by the Compensation Committee by reference to their
respective titles and responsibilities, as well as the Compensation
Committees assessment of their respective ability to impact the
Companys achievement of the specified Cash Incentive Performance
Measures.
The Compensation Committee has established threshold, target and
maximum amounts for each of the Cash Incentive Performance Measures
as follows:
If the threshold level of a Cash Incentive Performance
Measure is achieved, participants will earn 50% of the target
cash incentive payment that relates to that Cash Incentive
Performance Measure.
If the target level of a Cash Incentive Performance Measure
is achieved, participants will earn 50% of the target cash
incentive payment that relates to that Cash Incentive
Performance Measure.
If the maximum level of a Cash Incentive Performance Measure
is achieved, participants will earn 200% of the target cash
incentive payment that relates to that Cash Incentive
Performance Measure.
To the extent the Companys achievement with respect to a Cash
Incentive Performance Measure is between the threshold amount and
the target amount, or between the target amount and the maximum
amount, the cash incentive compensation will be calculated based on
a pre-established sliding payout scale. No cash incentive
compensation will be payable under the FY 2018 Management Incentive
Plan with respect to a particular Cash Incentive Performance
Measure to the extent the Company fails to achieve the threshold
level of performance for that Cash
Incentive Performance Measure. In addition, regardless of the level
of performance with respect to the other Cash Incentive Performance
Measures (to the extent relevant to a participant), no cash
incentive compensation will be payable to any participant unless
both a minimum consolidated operating income gate and a minimum
consolidated revenue gate are achieved.
The determination of the level of the Companys achievement with
respect to the Cash Incentive Performance Measures will be made by
the Compensation Committee based on the audited financial
statements of the Company relating to the Performance Period,
subject to certain adjustments agreed upon by the Compensation
Committee.
The target cash incentive payment amount for the named executive
officers is set as a percentage of the participants base salary as
determined by the Compensation Committee. The current base salary,
target cash incentive percentage, and resulting target cash
incentive compensation amount for each of the named executive
officers is set forth opposite their respective names in the table
below:
Named Executive Officer
Base Salary
Target Percentage
Target Cash Incentive
David Powers
$950,000
125%
$1,187,500
Thomas A. George
$575,000
75%
$431,250
David E. Lafitte
$620,000
75%
$465,000
Stefano Caroti
$550,000
75%
$412,500

Andrea ODonnell

$500,000

75%

$375,000
The foregoing summary of the terms of the FY 2018 Management
Incentive Plan does not purport to be complete and is qualified in
its entirety by the terms of the Management Incentive Plan, the
form of which was filed as Exhibit 10.1 to the Company’s Quarterly
Report on Form 10-Q for the fiscal quarter ended June 30, 2015.
FY 2018 Restricted Stock Unit Awards
FY 2018 Annual Performance-Based RSU Awards
The Compensation Committee approved the issuance of
performance-based restricted stock unit awards (the FY 2018 Annual
Performance-Based RSUs). The FY 2018 Annual Performance-Based RSUs
are designed to correlate the realization of value from the vesting
of performance-based equity awards with the achievement of
pre-established Company goals that the Compensation Committee
believes are important to the Companys short-term financial
objectives, while also providing a retention component through
additional time-based vesting.
The FY 2018 Annual Performance-Based RSUs shall vest (i) upon
achieving an earnings per share target that has been established by
the Compensation Committee for the fiscal year ending March 31,
2018 (the Performance-Based RSU Measure), and (ii) in three equal
tranches over three consecutive annual periods, with the first
tranche vesting on August 15, 2018 and the last tranche vesting on
August 15, 2020. The specific terms of the FY 2018 Annual
Performance-Based RSUs will be set forth in separate Stock Unit
Award Agreements (the FY 2018 Annual Performance-Based RSU
Agreements) the form of which has been approved by the Compensation
Committee.
The Compensation Committee has established threshold and target
amounts for the Performance-Based RSU Measure as follows:
If the threshold level of the Performance-Based RSU Measure
is achieved, the FY 2018 Annual Performance-Based RSUs may
vest with respect to 50% of the underlying shares.
If the target level of the Performance-Based RSU Measure is
achieved, the FY 2018 Annual Performance-Based RSUs may vest
with respect to 50% of the underlying shares.
To the extent the Companys achievement with respect to the
Performance-Based RSU Measure is between the threshold amount and
the target amount, the number of shares that may vest will be
calculated based on a pre-established sliding vesting scale. No
vesting of any FY 2018 Annual Performance-Based RSUs will occur if
the threshold level for the Performance-Based RSU Measure is not
achieved. If it is determined that the threshold level for the
Performance-Based RSU Measure has been achieved, the FY 2018 Annual
Performance-Based RSUs will
be subject to additional time-based vesting requirements as
described above.
The determination of the Company’s performance relative to the
Performance-Based RSU Measure will be made by the Compensation
Committee based on the audited financial statements of the Company
for the Performance Period, subject to certain adjustments agreed
upon by the Compensation Committee.
FY 2018 Annual Time-Based RSU Awards
The Compensation Committee approved the issuance of time-based
restricted stock unit awards (the FY 2018 Annual Time-Based RSUs,
and together with the FY 2018 Annual Performance-Based RSUs, the
“FY 2018 RSU Awards”). The FY 2018 Annual Time-Based RSUs are
designed to promote the retention of recipients through time-based
vesting, while serving to further align the interests of recipients
with those of the Companys stockholders by providing additional
compensation that is correlated to the value of the Companys common
stock.
The FY 2018 Annual Time-Based RSUs shall vest in three equal
tranches over three consecutive annual periods, with the first
tranche vesting on August 15, 2018 and the last tranche vesting on
August 15, 2020. The specific terms of the FY 2018 Annual
Time-Based RSUs will be set forth in separate Stock Unit Award
Agreements (the FY 2018 Annual Time-Based RSU Agreements, and
together with the FY 2018 Annual Performance-Based RSU Agreements,
the RSU Agreements) the form of which has been approved by the
Compensation Committee.
Terms Applicable to FY 2018 RSU Awards
to each FY 2018 RSU Award, the recipient will receive a specified
maximum number of restricted stock units, each of which will
represent the right to receive one share of the Companys common
stock.
The recipient of a FY 2018 RSU Award must provide Continuous
Service (as defined in the applicable RSU Agreement) through the
applicable vesting date, subject to certain exceptions as described
in the RSU Agreements.
to the “double trigger” vesting provisions set forth in the RSU
Agreements, the vesting of each of the FY 2018 RSU Awards will be
accelerated in full in the event of a Corporate Transaction (as
defined in the 2015 Plan) if the acquiring or successor entity in
the Corporate Transaction provides for the continuance or
assumption of the RSU Agreements, or the substitution for the RSU
Agreements of new agreements of comparable value covering shares of
a successor entity, and the recipient is terminated by the
acquiring entity under specified circumstances following the
Corporate Transaction. In addition, the vesting of the FY 2018 RSU
Awards will be accelerated in full if the acquiring or successor
entity in the Corporate Transaction does not agree to provide for
the continuance or assumption of the RSU Agreements, or the
substitution for the RSU Agreements of new agreements of comparable
value covering shares of the successor entity.
Summary of FY 2018 RSU Awards
The Compensation Committee granted FY 2018 RSU Awards to each of
the following named executive officers, reflecting the number of
restricted stock units and dollar values (calculated based upon the
closing price of the Companys common stock on the grant date) set
forth opposite their respective names in the table below:
Named Executive Officer
FY 2018 Annual Performance-Based RSU Awards
FY 2018 Annual Time-Based RSU Awards
David Powers
8,659 units
$600,000
8,659 units
$600,000
Thomas A. George
2,453 units
$170,000
2,453 units
$170,000
David E. Lafitte
2,598 units
$180,000
2,598 units
$180,000
Stefano Caroti
2,381 units
$165,000
2,381 units
$165,000

Andrea ODonnell

1,804 units
$125,000

1,804 units
$125,000
The foregoing summaries of the terms of the FY 2018 RSU Awards do
not purport to be complete and are qualified in their entirety by
the terms of the RSU Agreements, the forms of which will be filed
as exhibits to the Companys Quarterly Report on Form 10-Q for the
fiscal quarter ending June 30, 2017.
FY 2018 Long-Term Performance Stock Option Awards
The Compensation Committee approved the issuance of
performance-based, non-qualified stock options (the FY 2018
Performance Stock Options). The FY 2018 Performance Stock Options
are designed to correlate the realization of value from the vesting
of performance-based equity awards with the achievement of a
pre-established financial performance metric that the Compensation
Committee believes is important to the Companys long-term growth
and success. They are also intended to further align the value that
may be realized by recipients with stockholder value, since the FY
2018 Performance Stock Options are granted with an exercise price
equal to fair market value on the grant date and only have value to
the recipient to the extent the value of the Companys stock price
goes up over time.
The FY 2018 Performance Stock Options shall vest as to 50% of the
underlying shares upon achieving a pre-tax income target that has
been established by the Compensation Committee for the fiscal year
ending March 31, 2020 (the Option Performance Measure). The
specific terms of the FY 2018 Performance Stock Options will be set
forth in separate FY 2018 Long-Term Performance Stock Option
Agreements (each, a Performance Option Agreement) the form of which
has been approved by the Compensation Committee.
to the FY 2018 Performance Stock Options, each recipient will be
granted an option to purchase a specified number of shares of the
Companys common stock at a fixed exercise price per share,
determined based on the closing price of the Companys common stock
on the grant date.
No vesting of any of the FY 2018 Performance Stock Options will
occur if the target level for the Option Performance Measure is not
achieved.
The determination of the Company’s performance relative to the
Option Performance Measure will be made by the Compensation
Committee based on the audited financial statements of the Company
for the fiscal year ending March 31, 2020, subject to certain
adjustments agreed upon by the Compensation Committee.
>>The FY 2018 Performance Stock Options expire seven years
following the grant date. The recipient of a FY 2018 Performance
Stock Option must provide Continuous Service (as defined in the
Performance Option Agreement) through March 31, 2020, subject to
certain exceptions as described in the Performance Option
Agreement.
to the “double trigger” vesting provisions set forth in the
Performance Option Agreement, the vesting of each FY 2018
Performance Stock Option will be accelerated in full in the event
of a Corporate Transaction if the acquiring or successor entity in
the Corporate Transaction provides for the continuance or
assumption of the Performance Option Agreement, or the substitution
for the Performance Option Agreement of a new agreement of
comparable value covering shares of a successor entity, and the
recipient is terminated by the acquiring entity under specified
circumstances following the Corporate Transaction. In addition, the
vesting of each FY 2018 Performance Stock Option will be
accelerated in full if the acquiring or successor entity in the
Corporate Transaction does not agree to provide for the continuance
or assumption of the Performance Option Agreement, or the
substitution for the Performance Option Agreement of a new
agreement of comparable value covering shares of the successor
entity.
The Compensation Committee granted FY 2018 Performance Stock
Options to each of the following named executive officers,
reflecting the number of underlying shares, exercise price per
share, and performance-based vesting conditions set forth opposite
their respective names in the table below:
Named Executive Officer
Number of Shares
Exercise Price Per Share
Performance-Based Vesting
David Powers
71,914
$69.29
Pre-Tax Income for FY 2020
Thomas A. George
20,376
$69.29
Pre-Tax Income for FY 2020
David E. Lafitte
21,574
$69.29
Pre-Tax Income for FY 2020
Stefano Caroti
19,776
$69.29
Pre-Tax Income for FY 2020

Andrea ODonnell

14,982

$69.29

Pre-Tax Income for FY 2020
The foregoing summary of the terms of the FY 2018 Performance Stock
Options does not purport to be complete and is qualified in its
entirety by the terms of the Performance Option Agreement, the form
of which will be filed as an exhibit to the Companys Quarterly
Report on Form 10-Q for the fiscal quarter ending June 30, 2017.


About DECKERS OUTDOOR CORPORATION (NYSE:DECK)

Deckers Outdoor Corporation is engaged in designing, marketing and distributing footwear, apparel and accessories for both everyday casual lifestyle use and high performance activities. The Company’s segments include operations of its brands, such as UGG, Teva, Sanuk and other brands; wholesale divisions, and Direct-to-Consumer (DTC) business, which includes E-Commerce business and retail store business. The Company sells accessories, such as handbags and loungewear, through domestic and international retailers, international distributors and directly to end user consumers both domestically and internationally, through its Websites, call centers and retail stores. The Company markets its products primarily under three brands: UGG, Teva and Sanuk. The Company’s other brands include Hoka One One (Hoka), Ahnu and Koolaburra by UGG (Koolaburra). It has a total of over 150 retail stores across the world.

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