Document:

exv10w1

 

EXHIBIT 10.1

Ixia

2007 Executive Officer Bonus Plan

Ixia (“Ixia” or the “Company”) believes that a portion of each executive officer’s annual
compensation should be directly related to the Company’s financial performance and such officer’s
achievement of individual objectives. The 2007 Executive Officer Bonus Plan (“2007 Bonus Plan” or
“this Plan”) is designed to motivate Ixia’s officers and to reward them for their continuing
contributions to the Company’s business if, in 2007, the Company achieves certain financial results
and such officers achieve their individual objectives. The Company believes that the achievement
of these results and objectives is essential for the Company’s success. The effective date of the
2007 Bonus Plan is July 25, 2007 (the “Effective Date”).

2007 Bonus Plan

Each Eligible Officer (as defined below), by virtue of his or her continuing employment with Ixia,
will be eligible to receive:

	(i)	 	Annual Bonus: a bonus based on the Company’s financial performance as measured by
the degree to which the Company achieves two pre-set financial targets for 2007 approved by
the Compensation Committee of the Board of Directors (the “Compensation Committee”); and

	(ii)	 	Discretionary Bonus: a bonus based on his/her achievement in 2007 of individual
business or strategic objectives approved by the Compensation Committee (upon the
recommendation of the Company’s Chief Executive Officer in the case of all Eligible Officers
other than the Chief Executive Officer).

The Annual Bonus and the Discretionary Bonus payable to an Eligible Officer will be calculated, in
part, as a percentage of such Officer’s annual base salary of record in effect at December 31,
2007. In determining an Eligible Officer’s annual base salary of record, certain compensation and
payments (e.g., reimbursement for moving expenses, bonus payments received under this Plan or
otherwise, stock option or other equity incentive compensation, discretionary bonuses, disability
benefits, sign-on bonuses, 401(k) Plan matching contributions, vacation cash outs, on call pay, and
similar payments) will be excluded.

If an executive officer commences his/her employment as an Eligible Officer prior to October 1,
2007, then for purposes of determining the amount payable as an Annual Bonus or a Discretionary
Bonus, an Officer’s annual base salary will be prorated based on the ratio of (i) the number of
days that he/she serves as an Eligible Officer during 2007 to (ii) 360. An executive officer who
commences his/her employment during the fourth calendar quarter of 2007 will not be eligible to
receive either an Annual Bonus or a Discretionary Bonus.

Eligible Officers

The following executive officers have been designated by the Compensation Committee as Eligible
Officers for purposes of the 2007 Bonus Plan and will be eligible to participate in the 2007 Bonus
Plan (all titles are positions with Ixia unless otherwise specified):

President and Chief Executive Officer

Chief Financial Officer

Executive Vice President, Operations

Senior Vice President, Corporate Affairs and General Counsel

Senior Vice President, Engineering

Vice President, Engineering Operations

 

 

A person appointed as an executive officer after the Effective Date shall be eligible to
participate in the 2007 Bonus Plan if he/she is expressly designated as an Eligible Officer under
the 2007 Bonus Plan pursuant to a duly adopted Compensation Committee resolution.

An Eligible Officer whose title changes after the Effective Date shall be entitled to continue to
participate in the 2007 Bonus Plan on the same terms and conditions as applied immediately prior to
such title change unless either (i) the terms of such Eligible Officer’s participation in the 2007
Bonus Plan are changed pursuant to a duly adopted Compensation Committee resolution; or (ii) the
Compensation Committee amends this Plan to add the new title as an Eligible Officer in the Eligible
Officer table above in which case such Officer shall participate at the bonus participation level
corresponding to such new title.

In order to earn and be eligible to receive bonuses payable under the 2007 Bonus Plan, an Eligible
Officer must be employed by Ixia or one of its subsidiaries as an Eligible Officer on the date on
which such bonuses are paid, unless such requirement is waived by the Compensation Committee or
pursuant to a duly adopted Compensation Committee resolution. An Eligible Officer who is on an
approved leave of absence from the Company at any time during 2007 will, for purposes of
determining eligibility under the 2007 Bonus Plan, be treated as being employed by the Company
during such leave of absence.

Annual Bonuses

The Company’s consolidated revenues for 2007 and its Operating Income (as defined herein) will be
the financial measures for calculating the amount of Annual Bonuses payable under the 2007 Bonus
Plan. For purposes of this 2007 Bonus Plan, “Operating Income” means the Company’s operating
income from continuing operations calculated on a consolidated basis for the year ending December
31, 2007 before any bonuses payable under the 2007 Bonus Plan and the Company’s 2007 employee bonus
plan (as adjusted to exclude the effects of equity incentive compensation expense, restructuring
charges, impairment charges, acquisition-related amortization and other M&A-related charges or
income, and similar charges or income). If any of the Company’s existing business units becomes a
discontinued operation prior to January 1, 2008, then the revenue and/or Operating Income targets
under the Plan may be amended by the Compensation Committee in its sole discretion.

The amount of an Eligible Officer’s Annual Bonus will be calculated by multiplying (i) the product
of such Eligible Officer’s annual base salary of record at December 31, 2007 and the applicable
Annual Bonus Percentage listed opposite such Eligible Officer’s title in the Bonus Participation
Table below by (ii) the applicable Bonus Factor (as defined herein). The Bonus Factor will be
equal to the average of the Revenue Bonus Factor and the Operating Income Bonus Factor as
determined in accordance with Schedule A. Stated mathematically, the amount of an Annual
Bonus payable to an Eligible Officer equals ((AxB)xC), where A = an Eligible Officer’s annual base
salary of record at the end of 2007; B = the applicable Annual Bonus Percentage for such Eligible
Officer; and C = the applicable Bonus Factor.

The amount of the Company’s 2007 consolidated revenues and Operating Income will determine the
applicable Bonus Factor. The Compensation Committee has supplementally approved levels of revenues
and Operating Income for purposes of Schedule A. As indicated on Schedule A, the
Company’s achievement of the minimum revenue target will result in a Revenue Bonus Factor of 50%,
while higher revenues will result in higher Revenue Bonus Factors as set forth in Schedule
A, up to a maximum Revenue Bonus Factor of 130%. The Revenue Bonus Factor will be 0% if the
Company’s 2007 revenues are below the minimum revenue target. As also indicated on Schedule
A, the Company’s achievement of the minimum Operating Income target will result in an Operating
Income Bonus Factor of 50%, while higher Operating Income will result in higher Operating Income
Bonus Factors as set forth in Schedule A, up to a maximum Operating Income Bonus Factor of
160%. The Operating Income Bonus Factor will be 0% if the Company’s 2007 Operating Income is below
the

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minimum Operating Income target. There will be a linear increase in the percentage amount of the
Revenue Bonus Factor and the Operating Income Bonus Factor if the amount of 2007 revenues and/or
2007 Operating Income falls between any two amounts.

Except as otherwise provided herein, an Annual Bonus will be payable in one lump sum (subject to
applicable withholding taxes and other deductions) within 30 days after the Company’s consolidated
financial results for 2007 are publicly announced. An Eligible Officer who is on an approved leave
of absence from the Company on the date on which Annual Bonuses are paid by the Company and
thereafter returns to active status as an Eligible Officer upon the end of such leave of absence,
will be paid his/her Annual Bonus to which he/she is otherwise entitled within 30 days following
his/her return to active status as an Eligible Officer. An Eligible Officer who is on an approved
leave of absence from the Company on the date on which the Annual Bonuses are paid by the Company
and thereafter fails to return to active status as an Eligible Officer upon the end of such leave
of absence, will not be eligible to receive an Annual Bonus.

Discretionary Bonuses

The percentage degree (0% to 100%) to which an Eligible Officer achieves his/her objectives for
2007 will be the measure for his/her 2007 Discretionary Bonus. The determination of the percentage
degree to which an Eligible Officer achieves his/her objectives will be made by the Compensation
Committee not later than February 15, 2008.

The amount of a bonus payable as a Discretionary Bonus will be calculated by multiplying (i) the
product of an Eligible Officer’s annual base salary of record at December 31, 2007 and the
Discretionary Bonus Percentage listed opposite such Officer’s title in the Bonus Participation
Table below by (ii) the percentage degree to which it is determined that such Eligible Officer has
achieved his/her objectives for 2007.

Except as otherwise provided herein, a Discretionary Bonus will be payable in one lump sum (subject
to applicable withholding taxes and other deductions) within 30 days of the determination of the
percentage degree to which the Eligible Officer has achieved his/her objectives. An Eligible
Officer who is on an approved leave of absence from the Company on the date on which Discretionary
Bonuses are paid by the Company and thereafter returns to active status as an Eligible Officer upon
the end of such leave of absence, will be paid his/her Discretionary Bonus to which he/she is
otherwise entitled within 30 days following his/her return to active status as an Eligible Officer.
An Eligible Officer who is on an approved leave of absence from the Company on the date on which
Discretionary Bonuses are paid by the Company and thereafter fails to return to active status as an
Eligible Officer upon the end of such leave of absence, will forfeit his/her right to any
Discretionary Bonus to which he/she may otherwise be entitled for 2007.

Bonus Participation Levels

For purposes of determining an Eligible Officer’s Annual Bonus or Discretionary Bonus under the
2007 Bonus Plan, the 2007 Bonus Opportunity, Annual Bonus Percentage, and Discretionary Bonus
Percentage for each of the Eligible Officers identified below will be as follows:

3

 

Bonus Participation Table

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	2007	 	Annual	 	Discretionary
	 	 	Bonus	 	Bonus	 	Bonus
	Title	 	Opportunity	 	Percentage	 	Percentage
	President and Chief Executive Officer
	 	 	100	%	 	 	75 	%	 	 	25	%
	Chief Financial Officer
	 	 	50	 	 	 	37.5	 	 	 	12.5	 
	Executive Vice President, Operations
	 	 	50	 	 	 	37.5	 	 	 	12.5	 
	Senior Vice President, Corporate Affairs
and General Counsel
	 	 	50	 	 	 	37.5	 	 	 	12.5	 
	Senior Vice President, Engineering
	 	 	50	 	 	 	37.5	 	 	 	12.5	 
	Vice President, Engineering Operations
	 	 	50	 	 	 	37.5	 	 	 	12.5	 

Additional Bonuses:

In
addition to bonuses payable under the 2007 Bonus Plan, additional bonuses may also be paid by
the Company, but only upon the express approval of the independent members of the Board of
Directors in their sole discretion.

* * * *

4

 

Schedule A  

2007 Revenue Bonus Factor Matrix

	 	 	 	 	 	 	 	 	 
	 	 	Revenue Targets(1)	 	Revenue
	 	 	(in thousands)	 	Bonus Factor(1)
	Maximum
	 	$	(2)	 	 	 	130	%
	 
	 	 	(2)	 	 	 	120	 
	 
	 	 	(2)	 	 	 	110	 
	 
	 	 	(2)	 	 	 	100	 
	Minimum
	 	 	(2)	 	 	 	50	 

2007 Operating Income Bonus Factor Matrix

	 	 	 	 	 	 	 	 	 
	 	 	Operating Income Targets(1)	 	Operating Income
	 	 	(in thousands)	 	Bonus Factor(1)
	Maximum
	 	$	(2)	 	 	 	160	%
	 
	 	 	(2)	 	 	 	140	 
	 
	 	 	(2)	 	 	 	120	 
	 
	 	 	(2)	 	 	 	100	 
	Minimum
	 	 	(2)	 	 	 	50	 

 

			
	(1)	 	For performance between two Revenue or Operating Income targets, the
Revenue Bonus Factor and the Operating Income Bonus Factor shall be interpolated linearly.
	 
	(2)	 	The Compensation Committee has supplementally established levels of Revenue
and Operating Income for purposes of this Schedule A.

5EX-10.1

 

Exhibit 10.1

ROCKY BRANDS, INC.

EMPLOYMENT AGREEMENT

     This Agreement is made this 20th day of July, 2007, to be effective as of June
25, 2007, by and between THOMAS R. MORRISON and ROCKY BRANDS, INC., an Ohio corporation with its
principal office at 39 East Canal Street, Nelsonville, Ohio 45764, its subsidiaries, successors and
assigns (the “Company”).

Recitals

     A. The Company and its subsidiaries (collectively, the “Company”) are engaged in the business
of designing, manufacturing and marketing high quality men’s and women’s footwear, apparel, and
accessories, and, in connection with its business, the Company develops and uses valuable technical
and nontechnical trade secrets and other confidential information which it desires to protect.

     B. You are employed as an officer of the Company.

     C. The Company considers your continued services to be in the best interest of the Company and
desires, through this Agreement, to assure your continued services on behalf of the Company on an
objective and impartial basis and without distraction or conflict of interest in the event of an
attempt to obtain control of the Company.

     D. You are willing to remain in the employ of the Company on the terms set forth in this
agreement.

Agreement

     NOW, THEREFORE, the parties agree as follows:

     1. Consideration. As consideration for your entering into this Agreement and your
willingness to remain bound by its terms, the Company shall continue to employ you and provide you
with access to certain Confidential Information as defined in this Agreement and other valuable
consideration as provided for throughout this Agreement, including in Sections 3 and 4 of this
Agreement.

     2. Employment.

             (a) Position. You will be employed as the Senior Vice President of Sales – Western
Group of the Company, reporting to the President and Chief Operating Officer of the Company. You
shall perform the duties, undertake the responsibilities and exercise the authority customarily
performed, undertaken and exercised by persons employed in similar executive capacities. Your
office and place of employment shall be located at the Company’s call center in Franklin,
Tennessee.

 

 

     (b) Restricted Employment. While employed by the Company, you shall devote your
best efforts to the business of the Company and shall not engage in any outside employment or
consulting work without first securing the approval of the Company’s Chief Executive Officer or
President and Chief Operating Officer. Furthermore, so long as you are employed under this
Agreement, you agree to devote your full time and efforts exclusively on behalf of the Company and
to competently, diligently, and effectively discharge your duties hereunder. You shall not be
prohibited from engaging in such personal, charitable, or other nonemployment activities that do
not interfere with your full time employment hereunder and which do not violate the other
provisions of this Agreement. You further agree to comply fully with all policies and practices of
the Company as are from time to time in effect.

     3. Compensation.

          (a) Your compensation will be at an annual base rate of $220,000 through December 31, 2007
(“Basic Salary”), payable in accordance with the normal payroll practices of the Company. Your
Basic Salary will be reviewed annually and may be increased subject to the approval of the Board of
Directors of the Company.

          (b) You will also be eligible for a cash bonus under a bonus plan which is determined annually
by the Board of Directors of the Company. Your proposed bonus payouts at the “Target” and “Goal”
levels (as referenced in the 2007 Bonus Plan) under any year’s bonus plan will be set at not less
than 30% and 60%, respectively, of your Basic Salary. In the event that in any year, you
transition to a “Consulting Employee” under Section 8(e) of this Agreement, you will be paid a
pro-rated portion of any annual bonus that is earned in that year calculated as of the date you
transition to a “Consulting Employee.”

          (c) You will be eligible to receive stock awards pursuant to the terms of plans adopted by the
Board of Directors of the Company from time to time.

          (d) Subject to applicable Company policies, you will be reimbursed for necessary and
reasonable business expenses incurred in connection with the performance of your duties hereunder
or for promoting, pursuing or otherwise furthering the business or interests of the Company.

     4. Moving Expenses.

          (a) The Company shall promptly pay directly, or reimburse you for, reasonable moving expenses
associated with your relocation from Lancaster, Ohio to Clarksville, Tennessee.

          (b) The Company shall promptly pay directly, or reimburse you for, the rent payments due
through July 31, 2007, which is the remainder of the current lease term for your apartment
residence in Lancaster, Ohio.

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     4. Fringe Benefits. You will be entitled to receive employee benefits and participate
in any employee benefit plans, in accordance with their terms as from time to time amended, that
the Company maintains during your employment and which are made generally available to all other
management employees in like positions. This includes a 401(k) and profit sharing plan. It is
agreed that the Company will pay any necessary COBRA payments on your behalf due to any break in
medical coverage for any reason, including pre-existing conditions.

     5. Confidential Information.

          (a) As used throughout this Agreement, the term “Confidential Information” means any
information you acquire during employment by the Company (including information you conceive,
discover or develop) which is not readily available to the general public and which relates to the
business, including research and development projects, of the Company, its subsidiaries or its
affiliated companies.

          (b) Confidential Information includes, without limitation, information of a technical
nature (such as trade secrets, inventions, discoveries, product requirements, designs, software
codes and manufacturing methods), matters of a business nature (such as customer lists, the
identities of customer contacts, information about customer requirements and preferences, the terms
of the Company’s contracts with its customers and suppliers, and the Company’s costs and prices),
personnel information (such as the identities, duties, customer contacts, and skills of the
Company’s employees) and other financial information relating to the Company and its customers
(including credit terms, methods of conducting business, computer systems, computer software,
personnel data, and strategic marketing, sales or other business plans). Confidential Information
may or may not be patentable.

          (c) Confidential Information does not include information which you learned prior to
employment with the Company from sources other than the Company, information you develop after
employment from sources other than the Company’s Confidential Information or information which is
readily available to persons with equivalent skills, training and experience in the same fields or
fields of endeavor as you. You must presume that all information that is disclosed or made
accessible to you during employment by the Company is Confidential Information if you have a
reasonable basis to believe the information is Confidential Information or if you have notice that
the Company treats the information as Confidential Information.

          (d) Except in conducting the Company’s business, you shall not at any time, either during or
following your employment with the Company, make use of, or disclose to any other person or entity,
any Confidential Information unless (i) the specific information becomes public from a source other
than you or another person or entity that owes a duty of confidentiality to the Company and
(ii) twelve months have passed since the specific information became public. However, you may
discuss Confidential Information with employees of the Company when necessary to perform your
duties to the Company. Notwithstanding the
foregoing, if you are ordered by a court of competent jurisdiction to disclose Confidential
Information, you will officially advise the Court that you are under a duty of confidentiality to
the Company hereunder, take reasonable steps to delay disclosure until the Company may be heard by
the Court, give the Company prompt notice of such Court order, and if ordered to

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disclose such
Confidential Information you shall seek to do so under seal or in camera or in such other manner as
reasonably designed to restrict the public disclosure and maintain the maximum confidentiality of
such Confidential Information.

          (e) Upon Employment Separation, you shall deliver to the Company all originals, copies, notes,
documents, computer data bases, disks, and CDs, or records of any kind that reflect or relate to
any Confidential Information. As used herein, the term “notes” means written or printed words,
symbols, pictures, numbers or formulae. As used throughout this Agreement, the term “Employment
Separation” means the separation from and/or termination of your employment with the Company,
including termination of your position as a “Consulting Employee” under Section 8(e), regardless of
the time, manner or cause of such separation or termination.

     6. Inventions.

          (a) As used throughout this Agreement, the term “Inventions” means any inventions,
improvements, designs, plans, discoveries or innovations of a technical or business nature, whether
patentable or not, relating in any way to the Company’s business or contemplated business if the
Invention is conceived or reduced to practice by you during your employment by the Company.
Inventions includes all data, records, physical embodiments and intellectual property pertaining
thereto. Inventions reduced to practice within one year following Employment Separation shall be
presumed to have been conceived during employment.

          (b) Inventions are the Company’s exclusive property and shall be promptly disclosed and
assigned to the Company without additional compensation of any kind. If requested by the Company,
you, your heirs, your executors, your administrators or legal representative will provide any
information, documents, testimony or other assistance needed for the Company to acquire, maintain,
perfect or exercise any form of legal protection that the Company desires in connection with an
Invention.

          (c) Upon Employment Separation, you shall deliver to the Company all copies of and all notes
with respect to all documents or records of any kind that relate to any Inventions.

     7. Noncompetition and Nonsolicitation.

          (a) By entering into this Agreement, you acknowledge that the Confidential Information has
been and will be developed and acquired by the Company by means of substantial expense and effort,
that the Confidential Information is a valuable asset of the Company’s business, that the
disclosure of the Confidential Information to any of the Company’s competitors would cause
substantial and irreparable injury to the Company’s business, and that any customers of the Company
developed by you or others during your employment are developed on behalf of the Company. You
further acknowledge that you have been provided with access to Confidential Information, including
Confidential Information concerning the Company’s major customers, and its technical, marketing and
business plans, disclosure or misuse of which would irreparably injure the Company.

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          (b) In exchange for the consideration specified in Section 1 of this Agreement — the adequacy
of which you expressly acknowledge — you agree that during your employment by the Company and,
except as otherwise provided in Section 8(e) hereof, for a period of six (6) months following
Employment Separation, you shall not, directly or indirectly, as an owner, shareholder, officer,
employee, manager, consultant, independent contractor, or otherwise:

          (i) Attempt to recruit or hire, interfere with or harm, or attempt to interfere with or
harm, the relationship of the Company, its subsidiaries or affiliates, with any person who
is an employee, customer or supplier of the Company, it subsidiaries or affiliates;

          (ii) Contact any employee of the Company for the purpose of discussing or suggesting
that such employee resign from employment with the Company for the purpose of becoming
employed elsewhere or provide information about individual employees of the Company or
personnel policies or procedures of the Company to any person or entity, including any
individual, agency or company engaged in the business of recruiting employees, executives or
officers; or

          (iii) Own, manage, operate, join, control, be employed by, consult with or participate
in the ownership, management, operation or control of, or be connected with (as a
stockholder, partner, or otherwise), any business, individual, partner, firm, corporation,
or other entity that competes or plans to compete, directly or indirectly, with the Company,
its products, or any division, subsidiary or affiliate of the Company; provided, however,
that your “beneficial ownership,” either individually or as a member of a “group” as such
terms are used in Rule 13d of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), of not more than two percent (2%) of
the voting stock of any publicly held corporation, shall not be a violation of this
Agreement.

     8. Termination of Employment.

          (a) Termination Upon Death or Disability. Your employment will terminate automatically upon
your death. The Company will be entitled to terminate your employment because of your disability
upon 30 days written notice. “Disability” will mean “total disability” as defined in the Company’s
long term disability plan or any successor thereto. In the event of a termination under this
Section 8(a), the Company will pay you only the earned but unpaid portion of your Basic Salary
through the termination date.

          (b) Termination by Company for Cause. An Employment Separation for Cause, will occur upon a
determination by the Company that “Cause” exists for your termination and the Company serves you
written notice of such termination. As used in this Agreement, the term “Cause” shall refer only
to any one or more of the following grounds:

          (i) Commission of an act of dishonesty involving the Company, its business or property,
including, but not limited to, misappropriation of funds or any property of the Company;

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          (ii) Engagement in activities or conduct clearly injurious to the best interests or
reputation of the Company;

          (iii) Willful and continued failure substantially to perform your duties under this
Agreement (other than as a result of physical or mental illness or injury), after the Board
of Directors of the Company delivers to you a written demand for substantial performance
that specifically identifies the manner in which the Board believes that you have not
substantially performed your duties;

          (iv) Illegal conduct or gross misconduct that is willful and results in material and
demonstrable damage to the business or reputation of the Company;

          (v) The clear violation of any of the material terms and conditions of this Agreement
or any other written agreement or agreements you may from time to time have with the
Company;

          (vi) The clear violation of the Company’s code of business conduct or the clear
violation of any other rules of behavior as may be provided in any employee handbook which
would be grounds for dismissal of any employee of the Company; or

          (vii) Commission of a crime which is a felony, a misdemeanor involving an act of moral
turpitude, or a misdemeanor committed in connection with your employment by the Company
which causes the Company a substantial detriment.

          No act or failure to act shall be considered “willful” unless it is done, or omitted to be
done, by you in bad faith or without reasonable belief that your action or omission was in the best
interests of the Company. Any act or failure to act that is based upon authority given pursuant to
a resolution duly adopted by the Board of Directors, or the advice of counsel for the Company,
shall be conclusively presumed to be done, or omitted to be done, by you in good faith and in the
best interests of the Company.

          In the event of a termination under this Section 8(b), the Company will pay you only the
earned but unpaid portion of your Basic Salary through the termination date.

          Following a termination for Cause by the Company, if you desire to contest such determination,
your sole remedy will be to submit the Company’s determination of Cause to arbitration in Columbus,
Ohio before a single arbitrator under the commercial arbitration rules of the American Arbitration
Association. If the arbitrator determines that the termination was other than for Cause, the
Company’s sole liability to you will be the amount that would be payable to you under Section 8(d)
of this Agreement for a termination of your employment by the Company without Cause. Each party
will bear his or its own expenses of the arbitration.

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          (c) Termination by You. In the event of an Employment Separation as a result of a termination
by you for any reason, you must provide the Company with at least 14 days advance written notice
and continue working for the Company during the 14-day notice period, but only if the Company so
desires to continue your employment and to compensate you during such period.

          In the event of such termination under this Section, the Company will pay you the earned but
unpaid portion of your Basic Salary through the termination date.

          (d) Termination by Company Without Cause. In the event of an Employment Separation as a
result of termination by the Company without Cause, the Company will pay you the earned but unpaid
portion of your Basic Salary through the termination date and will continue to pay you your Basic
Salary for an additional six (6) months; provided, however, any such payments will immediately end
if (i) you are in violation of any of your obligations under this Agreement, including Sections 5,
6 and/or 7; or (ii) the Company, after your termination, learns of any facts about your job
performance or conduct that would have given the Company Cause, as defined in Section 8(b), to
terminate your employment.

          (e) Change of Status to a Consulting Employee; Consulting and Noncompetition Consideration.
As additional compensation for your agreement to provide services under this Agreement, you agree
to resign your position as an officer of the Company and change your status to a consulting
employee (“Consulting Employee”) not earlier than June 25, 2009 and not later than August 25, 2012.
You will be compensated as a Consulting Employee according to the terms set forth below:

          (i) Extension of Noncompetition Period. The noncompetition and nonsolicitation period
described in Section 7(b) above shall be extended to a period of five years following the
date you become a Consulting Employee (the “Consulting Noncompetition Period”). After the
Consulting Noncompetition Period ends, you will no longer be bound by the noncompetition and
nonsolicitation provisions of Section 7(b).

          (ii) Consulting Employee Payment. In consideration of your agreement to consult to
the Company as reasonably requested during the Consulting Noncompetition Period, $252,000
shall be payable in accordance with the normal payroll practices of the Company (the
“Consulting Employee Payment”), except as otherwise provided, according to the following
schedule:

     - $102,000 during your first year as a Consulting Employee, provided that (a)
you will receive no payments during the first six months following the date on which
you become a Consulting Employee; (b) an initial payment of $52,000 will occur six
months and one day after the date on which you become a Consulting Employee and (c)
the remaining $50,000 will be paid in accordance with the normal payroll practices
of the Company;

     - $75,000 during your second year as a Consulting Employee; and

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     - $25,000 during your third, fourth and fifth years as a Consulting Employee.

          (iii) Stock Options. As a Consulting Employee, any of your restricted stock and stock
options shall continue to vest and be exercisable according to the terms of the applicable
plan.

          (iv) Benefits. For purposes of the employee benefits that you were receiving from the
Company immediately prior to your becoming a Consulting Employee, you will retain “employee”
status and will be entitled to receive such benefits and participate in any employee benefit
plans, in accordance with their terms as from time to time amended, that the Company
maintains during the Consulting Noncompetition Period and which are made generally available
to all other management employees in like positions, provided that your continued
participation is possible under the general terms and provisions of such plans. In the
event that your participation in any such plan is barred, the Company shall arrange to
provide you, on an after-tax basis, with benefits substantially similar to those which you
were otherwise entitled to receive under such plans for such period.

          (v) Termination for Cause; Material Breach of Non-Competition Agreement.
Notwithstanding the foregoing, in the event that you are terminated for Cause by the Company
during the Consulting Noncompetition Period, as “Cause” is defined above in Section 8(b), or
you have materially breached the non-competition agreement set forth in Section 7(b) of this
Agreement, such termination or material breach shall cause and constitute a forfeiture of
any remaining unpaid installments of the Consulting Employee Payment effective as of the
first date of such breach.

          (vi) Death or Disability. Notwithstanding the provisions of subsection (ii) hereof,
but subject to subsection (v) hereof, in the event of your death or Disability during the
Consulting Noncompetition Period, the Company shall pay to your estate or heirs, within 90
days after your death, the Consulting Employee Payment less any installments already paid to
you thereon under subsection (b) hereof.

          (f) The noncompetition periods described in Section 8 of this Agreement shall be suspended
while you engage in any activities in breach of this Agreement. In the event that a court grants
injunctive relief to the Company for your failure to comply with Section 8, the noncompetition
period shall begin again on the date such injunctive relief is granted.

          (g) Nothing contained in this Section 8 shall be construed as limiting your obligations under
Sections 5, 6 or 7 of this Agreement concerning Confidential Information, Inventions, or
Noncompetition and Nonsolicitation.

          (h) Code Section 409A. If any provision of this Agreement (or of any award of compensation,
including equity compensation or benefits) would cause you to incur any additional tax or interest
under Internal Revenue Code Section 409A or any guidance promulgated thereunder (“Code Section
409A”), the Company shall, after consulting with you and receiving your approval (which shall not
be unreasonably withheld), reform such provision

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in such a manner as shall not cause you to incur
any such tax or interest, for example, by providing that any payments upon Employment Separation
shall not be made until the earlier of (i) the date which is six months after Employment
Separation, (ii) the date of your death, or (iii) any earlier date that does not result in such
additional tax or interest under Code Section 409A.

     9. Remedies; Venue; Process.

          (a) You hereby acknowledge and agree that the Confidential Information disclosed to you prior
to and during the term of this Agreement is of a special, unique and extraordinary character, and
that any breach of this Agreement will cause the Company irreparable injury and damage, and
consequently the Company shall be entitled, in addition to all other legal and equitable remedies
available to it, to injunctive and any other equitable relief to prevent or cease a breach of
Sections 5, 6 or 7 of this Agreement without further proof of harm and entitlement; that the terms
of this Agreement, if enforced by the Company, will not unduly impair your ability to earn a living
or pursue your vocation; and further, that the Company may cease paying any compensation and
benefits under Section 8 if you fail to comply with this Agreement, without restricting the Company
from other legal and equitable remedies. The parties agree that the prevailing party in litigation
concerning a breach of this Agreement shall be entitled to all costs and expenses (including
reasonable legal fees and expenses) which it incurs in successfully enforcing this Agreement and in
prosecuting or defending any litigation (including appellate proceedings) concerning a breach of
this Agreement.

          (b) Except for actions brought under Section 8(b) of this Agreement, the parties agree that
jurisdiction and venue in any action brought pursuant to this Agreement to enforce its terms or
otherwise with respect to the relationships between the parties shall properly lie in the Court of
Common Pleas of Athens County, Ohio. Such jurisdiction and venue is exclusive, except that the
Company may bring suit in any jurisdiction and venue where jurisdiction and venue would otherwise
be proper if you may have breached Sections 5, 6 or 7 of this Agreement. The parties further agree
that the mailing by certified or registered mail, return receipt requested, of any process required
by any such court shall constitute valid and lawful service of process against them, without the
necessity for service by any other means provided by statute or rule of court.

     10. Exit Interview. Prior to Employment Separation, you shall attend an exit
interview if desired by the Company and shall, in any event, inform the Company at the earliest
possible time of the identity of your future employer and of the nature of your future employment.

     11. No Waiver. Any failure by the Company to enforce any provision of this Agreement
shall not in any way affect the Company’s right to enforce such provision or any other provision at
a later time.

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     12. Saving. If any provision of this Agreement is later found to be completely or
partially unenforceable, the remaining part of that provision of any other provision of this
Agreement shall still be valid and shall not in any way be affected by the finding. Moreover, if
any provision is for any reason held to be unreasonably broad as to time, duration, geographical
scope, activity or subject, such provision shall be interpreted and enforced by limiting and
reducing it to preserve enforceability to the maximum extent permitted by law.

     13. No Limitation. You acknowledge that your employment by the Company may be
terminated at any time by the Company or by you with or without cause in accordance with the terms
of this Agreement. This Agreement is in addition to and not in place of other obligations of
trust, confidence and ethical duty imposed on you by law.

     14. Governing Law. This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Ohio without reference to its choice of law rules.

     15. Final Agreement. This Agreement replaces any existing agreement between you and
the Company relating to the same subject matter and may be modified only by an agreement in writing
signed by both you and a duly authorized representative of the Company.

     16. Further Acknowledgments. YOU ACKNOWLEDGE THAT YOU HAVE RECEIVED A COPY OF THIS
AGREEMENT, THAT YOU HAVE READ AND UNDERSTOOD THIS AGREEMENT, THAT YOU UNDERSTAND THIS AGREEMENT
AFFECTS YOUR RIGHTS, AND THAT YOU HAVE ENTERED INTO THIS AGREEMENT VOLUNTARILY.

	 	 	 	 	 
	 	ROCKY BRANDS, INC.

 	 
	 	By:  	     /s/ Mike Brooks
 	 
	 	 	Mike Brooks 	 
	 	 	Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	EXECUTIVE:

 	 
	 	          /s/ Thomas R. Morrison
 	 
	 	Thomas R. Morrison 	 
	 	 	 
	 

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