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 OfficersItem 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On June 26, 2018, 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 Company’s senior management team, including the Company’s named executive officers:
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 Company’s 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 2019 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 a minimum “consolidated operating income” gate is achieved.
The determination of the level of the Company’s 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 participant’s 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 |
FY 2019 Base Salary |
If the “threshold” level of the Performance-Based RSU Measure is achieved, the FY 2019 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 2019 Annual Performance-Based RSUs may vest with respect to 50% of the underlying shares. |
To the extent the Company’s 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 2019 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 2019 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 2019 Annual Time-Based RSU Awards
The Compensation Committee also approved the issuance of time-based restricted stock unit awards (the “FY 2019 Annual Time-Based RSUs”, and together with the FY 2019 Annual Performance-Based RSUs, the “FY 2019 RSU Awards”). The FY 2019 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 Company’s stockholders by providing additional compensation that is correlated to the value of the Company’s common stock.
The FY 2019 Annual Time-Based RSUs shall vest in three equal tranches over three consecutive annual periods, with the first tranche vesting on August 15, 2019 and the last tranche vesting on August 15, 2021. The specific terms of the FY 2019 Annual Time-Based RSUs will be set forth in separate Stock Unit Award Agreements (the “FY 2019 Annual Time-Based RSU Agreements”, and together with the FY 2019 Annual Performance-Based RSU Agreements, the “RSU Agreements”) the form of which has been approved by the Compensation Committee.
Terms Applicable to FY 2019 RSU Awards
to each FY 2019 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 Company’s common stock.
The recipient of a FY 2019 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 2019 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 2019 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 2019 RSU Awards
The Compensation Committee granted FY 2019 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 Company’s common stock on the grant date) set forth opposite their respective names in the table below:
|
Named Executive Officer |
FY 2019 Annual Performance-Based RSU Awards |
FY 2019 Annual Time-Based RSU Awards |
|
David Powers |
5,055 units $600,000 |
5,055 units $600,000 |
|
David E. Lafitte |
1,518 units $180,000 |
1,518 units $180,000 |
|
Stefano Caroti |
1,389 units $165,000 |
1,389 units $165,000 |
|
Andrea O’Donnell |
1,095 units $130,000 |
1,095 units $130,000 |
|
Steven J. Fasching |
1,011 units $120,000 |
1,011 units $120,000 |
The foregoing summaries of the terms of the FY 2019 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 Company’s Quarterly Report on Form 10-Q for the fiscal quarter ending June 30, 2018.
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.
