EXHIBIT 10.1

Duluth Holdings Inc.

170 Countryside Drive

P.O. Box 409

Belleville, WI 53508

May 30, 2017    

Mark DeOrio

170 Countryside Drive

P.O. Box 409

Belleville, WI 53508

Dear Mark:

This letter agreement (the “Letter Agreement”) shall serve to memorialize our
agreements with respect to the terms of your retirement and the terms for the
transition of your current position during calendar year 2017 and as an
amendment of certain specific terms of the August 5, 2015 Employment Agreement
(the “Employment Agreement”) between you and Duluth Holdings Inc. (the
“Company”) (collectively, the “Parties”).    In the event of any conflict
between this Letter Agreement and the Employment Agreement, this Letter
Agreement shall control.

1.    Continuation of Role as CFO. The Parties agree that between the date of
this Letter Agreement and the date that a new Chief Financial Officer (“CFO”) is
appointed by the Board of Directors (such period hereinafter referred to as the
“Notice Period”), which appointment date shall occur between the date of this
Letter Agreement and December 31, 2017, you shall, subject to earlier
termination by you or the Company, continue to be employed in the position of
Senior Vice President and CFO, consistent with the management responsibilities
you had as CFO immediately prior to the date of this Letter Agreement. During
the Notice Period, the Company shall continue to pay you your base salary at the
annual rate of Two Hundred Seventy-Three Thousand Dollars ($273,000.00) (“Base
Salary”), subject to normal deductions for income and employment tax withholding
and other withholding in accordance with the normal payroll practices and
schedule of the Company, and you shall continue to be eligible to participate in
the Company’s benefit programs and shall be entitled to take paid time off and
receive other perquisites that are generally made available to the Company’s
senior vice presidents according to the terms of such programs. The Company
shall continue to reimburse you for all expenses reasonably incurred in the
performance of your duties according to the Company’s policies and procedures
for expense reimbursement in effect from time to time. The Parties acknowledge
and agree that you are eligible for continued participation in the Annual
Incentive Plan for fiscal 2017 during the Notice Period, but you are not
eligible for future long-term equity incentive grants under the 2015 Equity
Incentive Plan after the date of this Letter Agreement; provided, however, that
you will continue to hold and vest in your outstanding restricted stock award
under the Equity Incentive Plans (as hereinafter defined) during the Notice
Period. For the avoidance of doubt, during the Notice Period, the Company may
only terminate your employment for the reasons described

--------------------------------------------------------------------------------

below in Paragraph 5 below regarding an Early Termination (i.e., a material
breach by you of your obligations under this Letter Agreement which is not cured
or a Cause Event).

2.    Transition. Immediately following the Notice Period, the Company will
retain your services as an employee pursuant to the following terms and
conditions:

(a)    Position and Duties. You shall be employed by the Company as an employee
to assist in the transition of the CFO role to the newly appointed CFO
and shall be subject to the authority of, and shall report to the CEO. Subject
to the authority of the CEO, your duties and responsibilities shall include,
among others, (i) transition of CFO responsibilities to the Company’s newly
appointed CFO; and (ii) such other matters as may be assigned from time to time
by the CEO.

(b)    Term. Your continued employment by the Company under this Paragraph 2
shall commence on the first date following the Notice Period and end on
December 31, 2017 or such later date if mutually agreed upon by the Parties,
unless terminated earlier by you and/or the Company (such termination date being
designated the “Separation Date” for purposes of this Letter Agreement). For
purposes of this Letter Agreement, the period between the end of the Notice
Period and the Separation Date shall be designated as the “Transition Period.”

(c)    Transition Schedule. During the Transition Period, you shall devote your
business time, attention and energies exclusively to the interests of the
Company.

(d)    Base Salary. During your employment by the Company during the Transition
Period, the Company shall pay you the Base Salary, subject to normal deductions
for income and employment tax withholding and other withholding in accordance
with the normal payroll practices and schedule of the Company.

(e)    Bonus. To the extent you continue your employment and provide the
services requested during the Transition Period, you will be eligible for
prorated participation in the Annual Incentive Plan for fiscal 2017 through
December 31, 2017.

(f)    PTO. During your employment by the Company during the Transition Period,
you shall be entitled to take paid time off.

(g)    Expenses. The Company shall reimburse you for all reasonable and
necessary expenses incurred in the course of the performance of your duties and
responsibilities pursuant to this Paragraph 2 and consistent with the Company’s
policies with respect to travel, entertainment and miscellaneous expenses, and
the requirements with respect to the reporting of such expenses.

(h)    Equity. During the Transition Period, you will continue to hold and vest
in your outstanding restricted stock award, and such award will continue to be
subject to the terms of the 2015 Equity Incentive Plan and the applicable
agreement governing such awards (the “Equity Incentive Plans”). You shall not be
eligible for long-term equity incentive grants made during the Transition
Period.

 

2

--------------------------------------------------------------------------------

(i)    Group Health Insurance Plan and Other Benefit Plans. During the
Transition Period, you and/or your family will continue to be eligible to
participate in the Company’s group health insurance plan, dental plan, Armada
Care executive benefit plan, applicable qualified retirement plans, practices,
and policies and all applicable welfare benefit plans, practices, policies or
other programs provided by the Company, to the same extent as other senior
executives of the Company, in each case based on the eligibility requirements
under the terms of such plans.

(j)    Taxes. All payments to be made and benefits to be provided under this
Paragraph 2 shall be subject to normal deductions for income and employment tax
withholding and other withholding in accordance with the normal payroll
practices and schedule of the Company.

(k)    No Other Benefits or Perquisites. Except as specified in this Letter
Agreement, during the Transition Period, you shall not be entitled to any other
benefits or perquisites offered by the Company, its subsidiaries or affiliates.

3.    Severance. As a result of the termination of your employment at the
Separation Date, the Company will pay you severance benefits consistent with the
Employment Agreement in accordance with the terms and conditions of Section
3.2(c) of the Employment Agreement.    In exchange for the severance benefits
provided to you at the completion of and following the Transition Period, which
you acknowledge are greater in their totality than those which you would receive
absent your Employment Agreement, you agree to sign and return the Complete and
Permanent Release (“Release”) which is attached hereto as Exhibit A; provided,
however, that you may not sign the Release until after the last day of the
Transition Period, and the signed Release must be delivered to the Company on or
before the twenty-one (21st) day following the last day of the Transition
Period. You acknowledge and agree that upon your failure to sign and return the
Release to the Company in a timely manner or your revocation of the Release as
specified in Exhibit A, the Company’s obligation to furnish the severance
benefits provided to you under your Employment Agreement at the completion of
and following the Transition Period, will automatically be terminated.

4.    Continuation of Restrictive Covenants. Your obligations under Articles
IV-X of the Employment Agreement shall remain in full force and effect following
the date of this Letter Agreement and following the Separation Date, and you
agree to continue to abide by such obligations following the Separation Date.

5.    Early Termination. Notwithstanding any other provision of this Letter
Agreement, the Company may terminate your employment during the Notice Period or
Transition Period which will result in the termination of all of the Company’s
obligations under this Letter Agreement (i) upon a material breach by you of any
of your obligations under this Letter Agreement which breach remains uncured to
the reasonable satisfaction of the CEO for ten (10) business days after
receiving written notice thereof from the CEO or (ii) upon a Cause Event
(defined below); provided, however, that your obligations under this Letter
Agreement shall remain in full force and effect. A “Cause Event” means any of
the following: (a) your repeated failure to perform work reasonably assigned to
you in a competent, diligent and satisfactory manner which failure remains
uncured, if subject to cure, to the reasonable

 

3

--------------------------------------------------------------------------------

satisfaction of the CEO for ten (10) business days after receiving written
notice thereof from the CEO, (b) dishonest or fraudulent conduct that results or
is intended to result in gain to you or your personal enrichment at the expense
of the Company (c) any material violation by you of a Company policy or rule,
(d) except where an absence is approved, chronic absence (i.e. 5 days or more)
from work other than by reason of a serious health condition, (e) commission of
a crime the circumstances of which substantially relate to your employment
duties with the Company, or (f) conduct which is demonstrably and materially
injurious to the Company. For the avoidance of doubt, a voluntary termination of
employment by you prior to December 31, 2017 without the consent of the Company,
shall constitute a breach by you of your obligations under this Letter Agreement
and none of the payments described in Paragraph 2, above shall continue to be
paid to you in such case.

6.    Release of Claims by You. In exchange for the benefits provided to you
throughout the Notice Period and Transition Period, which you acknowledge are
greater in their totality than those which you would receive absent this Letter
Agreement, you agree, on behalf of yourself, your heirs, successors and assigns,
to release the Company, its parents, subsidiaries, affiliates, and related
entities and their respective past and present officers, directors,
shareholders, managers, members, partners, agents, and employees (“Released
Parties”), from any and all claims arising on or before the date you sign this
Letter Agreement. This release includes, but is not limited to, giving up any
claims related in any way to your employment by the Company, your termination
and transition of employment with Company and wages and other remuneration,
including, but not limited to, any current or former severance, bonus or other
incentive plans or programs offered by Company, except as explicitly provided
for in this Letter Agreement. This release of claims includes any claims,
whether they are presently known or unknown, or anticipated or unanticipated by
you, and includes, but is not limited to, all matters in law, in equity, in
contract, or in tort, or pursuant to statute, including damages, attorneys’
fees, costs, and expenses, and, without limiting the generality of the
foregoing, all claims arising under Title VII of the Civil Rights Act, the
Americans with Disabilities Act, the Age Discrimination in Employment Act, the
Family and Medical Leave Act, the Worker Adjustment and Retraining Notification
Act, the Equal Pay Act, the Employee Retirement Income Security Act (with
respect to unvested benefits), the Civil Rights Act of 1991, the Wisconsin Fair
Employment Act, the Wisconsin Wage Claim and Payment Law, the Wisconsin
Cessation of Health Care Benefits Law, the Wisconsin Family and Medical Leave
Law, the Wisconsin Personnel Records Statute, the Wisconsin Employment Peace
Act, all as amended, or any other federal, state or local law, statute or
ordinance affecting your employment with or transition from employment with
Company.

However, this release of claims does not apply to any claims that may arise
after the date you execute this Letter Agreement or that may arise under this
Letter Agreement, nor does this release of claims apply to or affect any claim
that controlling law clearly states may not be released, including by
settlement. This general release does not apply to any vested rights that you
may have in any employee benefit plan of the Company including, without
limitation, the Company’s 401(k) plan.    Likewise, this release shall not
prevent, restrict or in any way limit your right to file a charge or complaint
with a government agency (including, without limitation, the Equal Employment
Opportunity Commission or the Securities and Exchange Commission) or participate
in an investigation or proceeding initiated or conducted by a government agency;
provided, however, this release of claims does prevent you from making any
personal recovery against Company or the Released Parties, including the
recovery of money damages, as a result of filing a charge or complaint with a
government agency against Company and/or any of the Released Parties.

 

4

--------------------------------------------------------------------------------

7.    Release of Claims by Company. The Company hereby releases you from any and
all claims it may now have against you. This Paragraph 7 however, does not apply
to or adversely affect any claims against you which allege or involve the
following: (a) your willful failure to deal fairly with the Company in
connection with a matter in which you have or had a material conflict of
interest; (b) a violation of criminal law, unless you had reasonable cause to
believe that your conduct was lawful or no reasonable cause to believe that your
conduct was unlawful; (c) a transaction from which you derived an improper
personal profit; (d) your willful misconduct; or (e) your material breach of any
of Articles IV-X of the Employment Agreement.

As an inducement for the Company to release you under this Paragraph 7, you
represent that, as of the date of this Agreement, you are not aware of any
information that would give rise to claims by the Company against you or claims
by a third party against you or the Company as a result of your acts or
omissions during the course of your employment. You further acknowledge and
agree that your representation herein is a material term of this Letter
Agreement and the Company’s release in this Paragraph 7 is contingent on your
representation herein such that any breach of your representation shall nullify
the Company’s release in this Paragraph 7.

However, this release of claims does not apply to any claims that may arise
after the date you execute this Letter Agreement.

8.    Non-Disparagement. You acknowledge and agree that you are subject to the
terms of Article X of your Employment Agreement regarding nondisparagement. In
addition, the Company agrees that none of the group made up of the Company’s
(i) Board of Directors, (ii) CEO, and (iii) Vice President of Human Resources
shall make disparaging remarks regarding you or your services or abilities,
except as required by law, rule or regulation. For purposes of the Company’s
obligation in this Paragraph 8, a disparaging statement or reference is any
communication which would cause or tend to cause the recipient of the
communication to question the integrity, competence, good will, fairness or good
character of the person to whom the communication relates.

10.    Binding Effect. This Letter Agreement shall be binding upon and inure to
the benefit of the Parties hereto, their respective legal representatives and
assigns and to any Successor (defined below) to the Company; provided, however,
that you may not assign your performance hereunder. As used herein, the term
“Successor” shall include any person, firm, corporation or other business entity
which at any time, by any form of business transaction, acquires all or
substantially all of the business or assets of the Company.

11.    Entire Agreement; Modification; Waiver. This Letter Agreement, together
with the Employment Agreement, constitutes the entire agreement of the Parties
concerning your employment, and supersedes all prior agreements and
understandings between the Parties concerning its subject matter. No provision
of this Letter Agreement may be altered, modified, changed or discharged, except
in a writing signed by both parties. Waiver by any party hereto of any breach or
default by the other party of any term or provision of this Letter Agreement
shall not operate as a waiver of any other breach or default.

 

5

--------------------------------------------------------------------------------

12.    Severability. In the event that any one or more of the provisions of this
Letter Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remainder of this Letter Agreement
shall not in any way be affected or impaired thereby.

13.    Governing Law. This Letter Agreement shall be governed by and construed
in accordance with the laws of the State of Wisconsin applicable to agreements
made and to be performed in that state.

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

Please confirm your agreement with the foregoing by signing and returning to the
Company a copy of this letter.

DULUTH HOLDINGS INC.

By:   /s/ Stephanie Pugliese                            

      /s/ Mark DeOrio                                        

Mark DeOrio

      5/30/2017                             

Date

 

6

--------------------------------------------------------------------------------

EXHIBIT A

COMPLETE AND PERMANENT RELEASE

* NOT VALID IF EXECUTED BEFORE COMPLETION OF TRANSITION PERIOD *

Duluth Holdings Inc. (the “Company”) and Mark DeOrio (“Executive”) are party to
a Letter Agreement, dated May 30, 2017 (“Letter Agreement”) and an Employment
Agreement dated August 5, 2015 (the “Employment Agreement”). The Letter
Agreement provides, in relevant part, that in consideration for the Company’s
provision of severance benefits under the Employment Agreement to Executive at
and after the end of the Transition Period (as defined in the Letter Agreement),
Executive will execute this Complete and Permanent Release (“Release”). In
exchange for this consideration, the sufficiency of which Executive
acknowledges, Executive, on behalf of himself, his heirs, successors and
assigns, agrees as follows:

1.    Executive, on behalf of himself, his heirs, successors, and assigns,
releases the Company, its parents, subsidiaries, affiliates, and related
entities and their respective past and present officers, directors,
shareholders, managers, members, partners, agents, and employees (“Released
Parties”) from any and all claims Executive may have against the Released
Parties arising out of or relating to any act, omission, matter, cause or event
occurring prior to the date hereof.

2.    The claims released include, but are not limited to, those arising out of
or relating in any way to Executive’s employment with the Company, the
Transition Period (as that term is defined in the Letter Agreement), the
conclusion of Executive’s employment, or any actions or inactions of the Company
relating to Executive in any way, including but not limited to, all matters in
law, in equity, in contract, or in tort, or pursuant to statute, including
damages, attorneys’ fees, costs, and expenses, and, without limiting the
generality of the foregoing, all claims arising under Title VII of the Civil
Rights Act, the Americans with Disabilities Act, the Family and Medical Leave
Act, the Worker Adjustment and Retraining Notification Act, the Equal Pay Act,
the Employee Retirement Income Security Act (with respect to unvested benefits),
the Civil Rights Act of 1991, the Wisconsin Fair Employment Act, the Wisconsin
Wage Claim and Payment Law, the Wisconsin Cessation of Health Care Benefits Law,
the Wisconsin Family and Medical Leave Law, the Wisconsin Personnel Records
Statute, the Wisconsin Employment Peace Act, all as amended, or any other
federal, state or local law, statute or ordinance affecting your employment with
or transition from employment with Company. Executive’s acceptance of this
Release also will release any and all claims under the federal Age
Discrimination in Employment Act (“ADEA”).

3.    This Release applies both to claims that are now known or are later
discovered. However, this Release does not apply to any claims that may arise
after the date Executive executes this Release, nor does this Release apply to
any claims that may not be released under applicable law. Likewise, this Release
does not apply to or affect claims for benefits under applicable worker’s
compensation laws, or any claim that controlling law clearly states may not be
released, including by settlement. This Release does not apply to any vested
rights that Executive may have in the Company’s qualified retirement plan or
benefits specifically provided for in the Letter Agreement. This Release shall
not limit or restrict Executive’s right under the

 

7

--------------------------------------------------------------------------------

ADEA to challenge the validity of this Release in a court of law and such
challenge shall not be considered a breach of this Release. By signing below,
Executive acknowledges and agrees that, as of the date Executive signs this
Release, there are no pending complaints, charges, or lawsuits filed by
Executive against the Company or any of the Released Parties, and further
acknowledges that Executive is the sole and lawful owner of all rights, title,
and interest in and to all matters released under this Release and that
Executive has not assigned or transferred (or purported to assign or transfer)
any of such released matters to any person or entity.

4.    Executive acknowledges that this Release shall not prevent, restrict or in
any way limit Executive’s right to file a charge or complaint with a government
agency (including, without limitation, the Equal Employment Opportunity
Commission or the Securities and Exchange Commission (“SEC”)) or participate in
an investigation or proceeding initiated or conducted by a government agency;
provided, however, this Release shall preclude Executive from making any
personal recovery against the Released Parties, including the recovery of money
damages, as a result of filing a charge or complaint with a government agency
against any of the Released Parties. Notwithstanding this Paragraph 4, nothing
contained in this Release shall impede Executive’s ability to report possible
federal securities law violations to the SEC and other governmental agencies.

5.    As used in this Release, the term “claims” shall be construed broadly and
shall be read to include, for example, the terms “rights,” “causes of action
(whether arising in law or equity),” “damages,” “demands,” “obligations,”
“grievances,” and “liabilities” of any kind or character. Similarly, the term
“release” shall be construed broadly and shall be read to include, for example,
the terms “discharge” and “waive.”

6.    The Company wishes to ensure that Executive voluntarily agrees to the
terms contained in this Release and does so only after Executive fully
understands them. Accordingly, the following provisions shall apply:

(A)    Executive has been advised, and is hereby advised, to consult with an
attorney of Executive’s choosing before signing this Release;

(B)    Executive acknowledges and agrees that Executive has read this Release,
understands its contents, and may accept its terms by signing and dating it
(which date shall be no earlier than the first day after the end of the
Transition Period), and returning the signed and dated Release, via mail, hand
delivery, or overnight delivery so that it is received by the Vice President of
Human Resources, Duluth Holdings Inc., 170 Countryside Drive, P.O. Box 409,
Belleville, WI 53508 on or before 5:00 p.m. Central Time on the 21st calendar
day following the end of the Transition Period;

(C)    Executive understands that this Release includes a final general release,
including a release of all claims under the ADEA;

(D)    Executive understands that Executive has seven (7) calendar days after
signing this Release to revoke Executive’s acceptance of it (“Revocation
Period”). Such revocation will not be effective unless written notice of the
revocation is received, via mail, hand delivery, or overnight delivery so that
it is received by the Vice President of

 

8

--------------------------------------------------------------------------------

Human Resources, Duluth Holdings Inc., 170 Countryside Drive, P.O. Box 409,
Belleville, WI 53508, on or before 5:00 p.m. Central Time on the first workday
following the end of the Revocation Period; and

(E)    If Executive gives timely notice of revocation of this Release, it shall
become null and void, and all rights and claims of the parties which would have
existed, but for the acceptance of this Release’s terms, shall be restored.

7.    This Release shall be binding on the successors of the Company and
Executive, is not assignable by Executive, and is governed by Wisconsin law
without regard to its principles of conflict of laws.

This Release and Executive’s entitlement to additional benefits under the Letter
Agreement and Employment Agreement will not be effective until Executive has
signed and delivered this Release, as provided in Paragraph 6(B), above, and
Executive has declined to exercise Executive’s revocation rights within the
Revocation Period.

I agree with and accept the terms contained in this

Release and agree to be bound by them.

Dated this _____ day of __________, 20__.

Time: ______________________________

____________________________________

Mark DeOrio

[Signature Page to Mark DeOrio Release]

 

9