Document:

Exhibit 10.17

 

Deckers Outdoor Corporation Deferred Compensation Plan

 

Effective February 1, 2010

 

As Amended and Restated Effective January 1, 2011

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE 1
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE 2
    	
SELECTION, ENROLLMENT, ELIGIBILITY
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE 3
    	
DEFERRAL ELECTIONS
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE 4
    	
IN-SERVICE DISTRIBUTIONS AND UNFORESEEABLE EMERGENCIES
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE 5
    	
BENEFITS
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE 6
    	
BENEFICIARY DESIGNATION
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE 7
    	
LEAVE OF ABSENCE
    	
16
    
	
 
    	
 
    	
 
    
	
ARTICLE 8
    	
TERMINATION, AMENDMENT OR MODIFICATION
    	
17
    
	
 
    	
 
    	
 
    
	
ARTICLE 9
    	
ADMINISTRATION
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE 10
    	
OTHER BENEFITS AND AGREEMENTS
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE 11
    	
CLAIMS PROCEDURES
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE 12
    	
TRUST
    	
19
    
	
 
    	
 
    	
 
    
	
ARTICLE 13
    	
MISCELLANEOUS
    	
19
    

 

i

 

Deckers Outdoor Corporation Deferred Compensation Plan

Effective February 1, 2010

As Amended and Restated Effective January 1, 2011

 

Purpose

 

The purpose of this Deckers Outdoor Corporation Deferred Compensation Plan (the “Plan”) is to provide specified benefits to a select group of management and highly compensated Employees who contribute materially to the continued growth, development, and future business success of Deckers Outdoor Corporation.  The Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

 

The Plan is intended to comply with the requirements of Internal Revenue Code Section 409A and final Treasury Regulations thereunder (collectively referred to herein as “Code Section 409A”).

 

ARTICLE 1
 Definitions

 

For purposes of the Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

 

1.1                               “Account Balance” shall mean, with respect to a Participant, a credit on the records of the Company equal to the sum across all Class Years of (i) the Retirement Account balances and (ii) the In-Service Account balances for such Class Years.  Base Salary deferrals and Bonus deferrals, plus investment return as outlined in Section 3.5, shall be directed to distinct Retirement Accounts and In-Service Accounts as indicated on each Class Year’s Election Form.  Any Company Contribution Amount for a Plan Year will be credited to the Base Salary Retirement Account for that Class Year, even if the Participant does not direct any Deferral Amounts into the Base Salary Retirement Account for that Class Year. The Account Balance shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her Beneficiary, pursuant to the Plan.

 

1.2                               “Affiliated Group” shall mean (i) the Company and (ii) all entities with which the Company would be considered a single employer under Code Sections 414(b) and 414(c), provided that in applying Code Sections 1563(a)(1), (2) and (3) for purposes of determining whether a controlled group of corporations exists under Code Section 414(b), the language “at least fifty percent (50%)” shall be used instead of “at least eighty percent (80%)” each place it appears in Code Sections 1563(a)(1), (2) and (3), and in applying Treasury Regulation Section 1.414(c)-2 for purposes of determining whether trades or businesses (whether or not incorporated) are under common control for purposes of Code Section 414(c), the language “at least fifty percent (50%)” shall be used instead of “at least eighty percent (80%)” each place it appears in Treasury Regulation Section 1.414(c)-2.  The term “Affiliated Group” shall be interpreted in a manner consistent with the definition of “service recipient” contained in Code Section 409A.

 

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1.3                               “Annual Installment Method” shall mean an annual installment payment over the number of years selected by the Participant in accordance with the Plan, calculated as follows:  (i) for the first annual installment, the vested Account Balance of the Participant shall be calculated as of the date of payment in accordance with Articles 4 and 5, and (ii) for remaining annual installments, the vested Account Balance of the Participant shall be calculated on every applicable anniversary of the first annual installment. Each annual installment shall be calculated by multiplying this balance by a fraction, the numerator of which is one and the denominator of which is the remaining number of annual payments due the Participant.  By way of example, if the Participant elects a ten (10) year Annual Installment Method, the first payment shall be one tenth (1/10) of the vested Account Balance, calculated as described in this definition.  The following year, the payment shall be one ninth (1/9) of the vested Account Balance, calculated as described in this definition.

 

For purposes of Section 409A each annual installment payment shall be considered as a “separate payment” within the meaning of Treasury Regulation Section 1.409A-2(b)(2)(iii).

 

1.4                               “Base Salary” shall mean the annual base rate of cash compensation plus any bonus which does not qualify as “performance based compensation” under Treasury Regulation Section 1.409A-1(e)(1) payable by an Employer during a calendar year, excluding commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, fees, automobile and other allowances, and prior to reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plan of the Employer under Code Section 125, 402(e)(3), 402(h) or 403(b).  Base Salary payable after the last day of a calendar year solely for services performed during the final payroll period described in Code Section 3401(b) containing December 31 of such year shall be treated as earned during the subsequent calendar year.

 

1.5                               “Beneficiary” shall mean the person or persons, designated in accordance with Article 6, who are entitled to receive benefits under the Plan upon the death of a Participant.

 

1.6                               “Beneficiary Designation Form” shall mean the form established from time to time by the Board that a Participant completes, signs and returns to the Board to designate one or more Beneficiaries.

 

1.7                               “Board” shall mean the board of directors of the Company, or a delegate of the Board acting under the authority of the Board in respect the Plan.

 

1.8                               “Bonus” shall mean (i) any compensation relating to services performed during any fiscal year running from January 1 to December 31 payable to a Participant as an Employee under an Employer’s written bonus or cash compensation incentive plans, excluding stock options and restricted stock and (ii) which qualifies as “performance-based compensation” under Treasury Regulation Section 1.409A-1(e)(1).

 

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1.9                               “Change in Control” shall mean, with respect to that portion of a Participant’s Account Balance attributable to the 2010 and 2011 Class Years, the occurrence of a “change in the ownership,” a “change in the effective control,” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of, and determined in accordance with, Treasury Regulation Section 1.409A-3(i)(5).  With respect to that portion of a Participant’s Account Balance attributable to the 2012 and later Class Years, a Change in Control shall mean the occurrence of a “change in the ownership,” a “change in the effective control,” or a “change in the ownership of a substantial portion of the assets” of the Participant’s Employer within the meaning of, and determined in accordance with, Treasury Regulation Section 1.409A-3(i)(5).

 

1.10                        “Class Year” shall mean the designation of the Account Balance by the year in which the Deferral Amounts are credited under the Plan.

 

1.11                        “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time.

 

1.12                        “Company” shall mean Deckers Outdoor Corporation and any successor to all or substantially all of the Company’s assets or business.

 

1.13                        “Company Contribution Amount” shall mean, for any one Plan Year, the amount determined in accordance with Section 3.3.  Company Contribution Amounts shall be credited with investment return as outlined in Section 3.5(c).  All Company Contribution Amounts with respect to a Class Year shall be credited to the Base Salary Retirement Account for that Class Year, even if the Participant does not direct any Deferral Amounts into the Base Salary Retirement Account for that Class Year.

 

1.14                        “Death Benefit” shall mean the benefit set forth in Sections 5.3 and 5.4.

 

1.15                        “Deferral Account” shall mean a Participant’s In-Service Account and Retirement Account.

 

1.16                        “Deferral Amount” shall mean that portion of a Participant’s Base Salary and Bonus that a Participant elects to have deferred in accordance with Article 3, for any one Plan Year.  In the event of a Participant’s Disability, death or a Termination of Employment prior to the end of a Plan Year, such year’s Deferral Amount shall be the actual amount withheld pursuant to the Participant’s Deferral Election from the Participant’s Base Salary and Bonus prior to such event.

 

1.17                        “Deferral Election” shall mean a Participant’s election on an Election Form to defer a portion of his Base Salary or Bonus, in accordance with the provisions of Article 3.

 

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1.18                        “Disability” shall have the same meaning as outlined in the Deckers Outdoor Corporation 401(k) Plan (or successor to such plan), which is the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months.  The permanence and degree of such impairment must be supported by medical evidence.  The term “Disability” shall be interpreted in a manner consistent with the definition of “disability” contained in Treasury Regulation Section 1.409A-3(i)(4).

 

1.19                        “Disability Benefit” shall mean the benefit set forth in Section 5.5.

 

1.20                        “Election Form” shall mean the form established from time to time by the Plan Administrator that a Participant completes, signs and returns to the Plan Administrator to make a Deferral Election under the Plan.

 

1.21                        “Employee” shall mean a person who is classified as an employee on the payroll records of the Company or, effective as of February 1, 2010, any of its U.S. subsidiaries.

 

1.22                        “Employer” shall mean any member of the Affiliated Group that has one or more Employees or former Employees that are Participants in the Plan.

 

1.23                        “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.

 

1.24                        “In-Service Account” shall mean the sum of (i) that portion of a Participant’s Deferral Amount that a Participant elects to have distributed while in the service of the Company in accordance with Article 4, plus (ii) all other amounts credited to the In-Service Account in accordance with the applicable crediting provisions of the Plan, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to the Plan that relate to his or her In-Service Account.

 

1.25                        “In-Service Benefit” shall mean the benefit set forth in Section 4.1.

 

1.26                        “Participant” shall mean any Employee (i) who is selected to participate in the Plan, (ii) who elects to participate in the Plan, (iii) who signs an Election Form and a Beneficiary Designation Form, (iv) whose signed Election Form and Beneficiary Designation Form are accepted by the Plan Administrator, (v) who commences participation in the Plan, and (vi) whose participation in the Plan has not terminated.  A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an Account Balance under the Plan, even if he or she has an interest in the Participant’s benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.

 

1.27                        “Plan” shall mean the Deckers Outdoor Corporation Deferred Compensation Plan, as amended from time to time.

 

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1.28                        “Plan Administrator” shall mean the person(s) appointed by the Board to administer the Plan.  In the absence of formal action by the Board to appoint a Plan Administrator, the Plan Administrator shall be the Company.

 

1.29                        “Plan Year” shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.

 

1.30                        “Retirement”, “Retire(s)” or “Retired” shall mean a Termination of Employment on or after the attainment of age sixty-five (65) for any reason other than a leave of absence, death or Disability.

 

1.31                        “Retirement Account” shall mean the sum of (i) that portion of a Participant’s Deferral Amount that a Participant elects to have distributed upon Termination of Employment in accordance with Article 5, plus (ii) all other amounts credited to the Retirement Account in accordance with the applicable crediting provisions of the Plan, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to the Plan that relate to his or her Retirement Account.

 

1.32                        “Retirement Benefit” shall mean the benefit set forth in Section 5.1.

 

1.33                        “Termination Benefit” shall mean the benefit set forth in Section 5.2.

 

1.34                        “Termination of Employment” shall mean a termination of employment with all members of the Affiliated Group in such a manner as to constitute a “separation from service” as defined under, and determined in accordance with, Treasury Regulation Section 1.409A-1(h), voluntarily or involuntarily, for any reason other than Disability, or death.  For this purpose, the employment relationship is treated as continuing while a Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months or, if longer, so long as the individual retains a right to reemployment with any member of the Affiliated Group under an applicable statute or by contract.  A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for a member of the Affiliated Group.  If the period of leave exceeds six months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first day immediately following such six (6)-month period.  A Termination of Employment will occur if there is a reasonable expectation that the level of services by the Participant for all members of the Affiliated Group will permanently decrease to twenty percent (20%) or less of the average level of services during the previous thirty-six (36) months (or, if shorter, the actual period of services).

 

1.35                        “Trust” shall mean one or more rabbi trusts established by the Company in accordance with Article 12 of the Plan, as amended from time to time.

 

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1.36                        “Unforeseeable Emergency” shall mean a severe financial hardship to the Participant resulting from (i) an illness or accident of the Participant or Beneficiary or his spouse or dependent (as defined in Code Section 152(a) without regard to Code Sections 152(b)(1), 152(b)(2), and 152(d)(1)(B)), (ii) loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to the home not otherwise covered by insurance), or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.  The term “Unforeseeable Emergency” shall be interpreted in a manner consistent with the definition of “unforeseeable emergency” contained in Treasury Regulation Section 1.409A-3(i)(3).

 

ARTICLE 2
 Selection, Enrollment, Eligibility

 

2.1                               Eligibility; Selection by Board.  Participation in the Plan shall be limited to those Employees who are determined by the Company to be members of a select group of management or highly compensated employees and who are selected by the Company to be participate in the Plan.

 

2.2                               Initial Enrollment Requirements.  As a condition to participation, each selected Employee shall complete, execute and return to the Plan Administrator an Election Form and a Beneficiary Designation Form, all within thirty (30) days (or such shorter time as the Plan Administrator may determine) after he or she is initially selected to participate in the Plan.  In addition, the Plan Administrator shall establish from time to time such other enrollment requirements as it determines in are necessary.

 

2.3                               Commencement of Participation.  Provided an Employee selected to participate in the Plan has met all enrollment requirements set forth in the Plan and required by the Plan Administrator, including returning all required documents to the Plan Administrator within thirty (30) days (or such shorter time as the Plan Administrator may determine) after he or she is initially selected to participate in the Plan, that Employee shall commence participation in the Plan on the first day of the pay period following the date on which the Employee completes all enrollment requirements.  However, for the initial enrollment coinciding with the establishment of the Plan, an Employee shall commence participation in the Plan on the first day of the pay period coinciding with or next following the date on which the Employee completes all enrollment requirements.  If an Employee fails to meet all such requirements within the period required, that Employee shall not be eligible to participate in the Plan until the first day of the Plan Year following the delivery to and acceptance by the Plan Administrator of the required enrollment documents.

 

2.4                               Termination of Deferrals.  If the Company determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Participant’s entitlement to defer Base Salary and Bonus shall cease with respect to calendar years following the calendar year in which such determination is made, although the Participant shall remain subject to all terms and conditions of the Plan for as long as he remains a Participant.

 

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ARTICLE 3
 Deferral Elections

 

3.1                                 Elections to Defer Base Salary or Bonus.

 

(a)                                  Deferral Election.

 

(i)                                     New Participant.  In connection with a Participant’s commencement of participation in the Plan, a Participant may elect to defer Base Salary or Bonus, by filing with the Plan Administrator an Election Form that conforms to the requirements of Article 2 within the time period specified in Section 2.3, and the Deferral Election shall become irrevocable at the end of such time period.  The Deferral Election for the first Plan Year of participation shall apply only to that portion of the Base Salary and Bonus earned after the Deferral Election becomes irrevocable.  If a Participant does not make a deferral election with respect to the first Plan Year with respect to which the Participant is first selected to participate in the Plan, the Participant may elect to defer Base Salary or Bonus for any subsequent Plan Year by filing with the Board an Election Form that conforms with the requirements of Article 2 before the start of that Plan Year.

 

(ii)                                  Annual Deferral Election.  Unless Section 3.1(a)(i) applies, each Participant may elect to defer Base Salary or Bonus for a Plan Year by filing a Deferral Election with the Plan Administrator within the timeframes specified by the Plan Administrator for the Plan Year for which such Base Salary or Bonus is earned.  However, the Deferral Election shall become irrevocable (A) with respect to Base Salary, as of December 31 of the calendar year immediately preceding the Plan Year during which the Base Salary covered by the Deferral Election is earned and (B) with respect to a Bonus, as of the date six (6) months prior to the end of the performance period of the Bonus, or such earlier dates as specified by the Plan Administrator.

 

(b)                                 Amount of Deferral.  A Participant shall designate on the Deferral Election form the amount of Base Salary and/or Bonus that is to be deferred in accordance with this Article 3.  The Deferral Amount, in whole percentages or a specific dollar amount, shall not exceed fifty percent (50%) of the Participant’s Base Salary and ninety-five percent (95%) of the Participant’s Bonus; provided that the total amount deferred by a Participant shall be limited in any calendar year, if necessary, to satisfy FICA, income tax, and employee benefit plan withholding requirements as determined by the Plan Administrator.

 

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(c)                                  Allocation of Deferral Amount.  A Participant shall further designate on the Deferral Election form for each Plan Year the percentage of such Plan Year’s Base Salary and Bonus deferral that will be allocated to the Retirement Account and In-Service Account for the Class Year corresponding to such Plan Year.  The allocation of each Plan Year’s Deferral Amount into the Class Year Retirement Account or In-Service Account shall be in whole percentages only.  Participant is not obligated to apply the same percentage allocation to the Base Salary and Bonus deferrals.  As an example, a Participant can allocate fifty percent (50%) of the Base Salary deferral into the Retirement Account and fifty percent (50%) into the In-Service Account for a Class Year while allocating one hundred percent (100%) of the Bonus into the Retirement Account for the same Class Year.

 

(d)                                 Duration of Deferral Election.  A Participant’s Deferral Election shall apply only to Base Salary and Bonus earned during the Plan Year to which the Deferral Election relates.  A Participant must indicate a new Deferral Election for any subsequent Plan Year by filing a new Election Form with the Board prior to the beginning of such Plan Year or at such time as the Board may require, which Deferral Election shall be effective on the first day of the next following Plan Year.  If a Participant fails to complete a new Election Form for any subsequent Plan Year the Deferral Amount for that subsequent Plan Year will be deemed to be zero (0).

 

(e)                                  Class Year Elections.  Each Plan Year’s Deferral Amount will be maintained in separate and distinct Retirement and In Service Accounts for each Class Year in which the Deferral Amounts are credited.  Separate distribution elections shall apply with respect to each Class Year.  Any Company Contribution Amount with respect to a Class Year shall be allocated and credited to that Class Year’s Base Salary Retirement Account.

 

3.2                     Withholding of Deferral Amounts.  For each Plan Year, the Base Salary portion of the Deferral Amount shall be withheld from each regularly scheduled Base Salary payroll in substantially equal amounts, as adjusted from time to time for increases and decreases in Base Salary.  The Bonus portion of the Deferral Amount shall be withheld at the time the Bonus is or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year.

 

3.3                     Annual Company Contribution Amount.  For each Plan Year, the Board may, but is not required to, credit any amount it desires to the Base Salary Retirement Account of any Participant under the Plan, which amount shall equal the annual Company Contribution Amount for that Participant for that Plan Year.  The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero (0), even though one or more other Participants receive an annual Company Contribution Amount for that Plan Year.

 

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3.4                                 Vesting.  A Participant shall at all times be 100% vested in his or her Deferral Account, including any Company Contribution Amount credited to the Participant’s Base Salary Retirement Account.

 

3.5                                 In-Service Accounts and Retirement Accounts.  The Company shall establish accounts for Base Salary Deferral Amounts and Bonus Deferral Amounts and further sub-divide such accounts into In-Service Accounts and Retirement Accounts for each Participant under the Plan.  Each of those subaccounts will be maintained by Class Year.  Each Participant’s Deferral Account shall be further divided into separate subaccounts (“investment fund subaccounts”), each of which corresponds to an investment fund elected by the Participant.  A Participant’s Deferral Account shall be credited as follows:

 

(a)                                  After amounts are withheld and deferred from a Participant’s Base Salary or Bonus, the Company shall credit the investment fund subaccounts of the Participant’s Deferral Account with an amount equal to the amount of Base Salary or Bonus, or both, deferred by the Participant as of the date that the Base Salary or Bonus would have been paid to the Participant absent the Deferral Election, and the portion of the Participant’s deferred Base Salary or Bonus that the Participant has deemed to be invested in a certain type of investment fund shall be credited to the investment fund subaccount corresponding to that investment fund.

 

(b)                                 The Company shall credit the Participant with an amount equal to the annual Company Contribution Amount, if any, for that Participant, on the date or dates to be determined by the Board and the portion of the Participant’s annual Company Contribution Amount that the Participant has deemed to be invested in a certain type of investment fund shall be credited to the investment fund subaccount corresponding to that investment fund.

 

(c)                                  As of the end of each business day, each of the Participant’s investment fund subaccounts shall be credited with earnings (gains or losses) in an amount equal to that determined by multiplying the balance credited to such investment fund subaccount as of the prior day plus amounts allocated to the investment fund subaccount that day by the rate of net gain or loss for the corresponding investment fund for that day.

 

(d)                                 Each of the Participant’s investment fund subaccounts shall be reduced pro rata by the amount of any distributions made to the Participant, as of the date of the distribution.

 

3.6                                 Investment Elections.

 

(a)                                  The Company shall select, from time to time, commercially available investment funds to be used to determine the amount of earnings (gains or losses) to be credited to the Participant’s Deferral Account under Section 3.5.

 

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(b)                                 At the time of making a Deferral Election, a Participant shall designate, on the Deferral Election form, the investment fund or funds in which the Participant’s Deferral Account attributable to deferrals of Base Salary or Bonus will be deemed to be invested for purposes of determining the amount of earnings (gains or losses) to be allocated to the Deferral Account.  The Participant may specify the deemed investment, in whole percentage increments, in one or more of the investment funds as communicated from time to time by the Plan Administrator.  At least quarterly, a Participant may change this investment designation (prospectively only) by filing a change of election and making a new designation as designated by the Plan Administrator.

 

(c)                                  Notwithstanding any other provision of the Plan that may be interpreted to the contrary, the investment funds selected by the Company or designation of investment funds by a Participant shall not be considered or construed in any manner as an actual investment of the Participant’s Account Balance in any such investment fund.  In the event that the Company or the trustee of the Trust shall invest funds in any or all of the selected investment funds, no Participant shall have any rights in or to such investments.  Without limiting the foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company, the Participant’s Employer or the Trust; the Participant shall remain at all times an unsecured creditor of the Company.

 

3.7                     FICA and Other Taxes.

 

(a)                                  Deferral Amounts.  For each Plan Year in which a Deferral Amount is being withheld from a Participant, the Employer shall withhold from that portion of the Participant’s Base Salary or Bonus that is not being deferred, in a manner determined by the Employer, the Participant’s share of FICA and other employment taxes on such Deferral Amount.  If necessary, the Plan Administrator may reduce the Deferral Amount in order to comply with this Section 3.7(a).

 

(b)                                 Company Contribution Amounts.  Upon contribution of a Company Contribution Amount, the Employer shall withhold from the Participant’s Base Salary and/or Bonus that is not deferred, in a manner determined by the Employer, the Participant’s share of FICA and other employment taxes.  If necessary, the Plan Administrator may reduce either or both of the Participant’s Company Contribution Amount or Deferral Amount in order to comply with this Section 3.7(b).

 

(c)                                  Distributions.  The Company, or the trustee of the Trust, shall withhold from any payments made to a Participant under the Plan all federal, state and local income, employment and other taxes required to be withheld by the Company, or the trustee of the Trust, in connection with such payments, in amounts and in a manner to be determined by the Company and the trustee of the Trust.

 

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ARTICLE 4
 In-Service Distributions and Unforeseeable Emergencies

 

4.1                                 In-Service Distributions.  A Participant, in connection with his or her initial commencement of participation in the Plan and each subsequent annual enrollment, may elect on an Election Form the month and year of distribution of the Deferral Amount allocated to that Class Year’s In-Service Account.  The Participant must make the same distribution election for the Base Salary and Bonus Deferral Elections made on the Deferral Election form for that Class Year.  The Participant may elect to receive payment in the form of a lump sum or pursuant to an Annual Installment Method not to exceed ten (10) years.  If a Participant elects to direct a percentage of the particular Class Year’s Deferral Amount to the In-Service Account but does not indicate the year in which the payment is to be made, then it will be assumed that no In-Service Account election was made for that Class Year and all such Deferral Amounts for that Class Year will be allocated to the Participant’s Retirement Account.  In addition, if a Participant makes an election to allocate Deferral Amounts to an In-Service Account and specifies a distribution date but fails to elect a form of payment, the distribution election will be assumed to be a lump sum payment.  The lump sum payment shall be made or the installments shall commence as soon as possible after the date elected on the Deferral Election form, but in no event later than the later of (i) the end of the calendar year that includes the elected payment date and (ii) the fifteen (15th) day of the third month following the elected payment date, provided that the Participant may not directly or indirectly designate the taxable year of payment.

 

If Termination of Employment for any reason, other than death, occurs prior to the year selected for the In-Service Distribution or prior to the complete payment of an In-Service Account in the process of being distributed in the form of an Annual Installment Method, then any remaining amount in the In-Service Account shall be paid to the Participant in accordance with the election made for the Retirement Account for that Class Year.  If no Retirement Account election is in effect for that Class Year, i.e., the Participant elected to have one hundred percent (100%) of that Class Year’s Deferral Amount directed to the In-Service Account, then payment will be made in the form of a lump sum as soon as practicable following Termination of Employment but in no event later than the later of (i) the end of the calendar year that includes the date of the Termination of Employment and (ii) the fifteenth (15th) day of the third month following the date of the Termination of Employment, provided that the Participant may not directly or indirectly designate the taxable year of payment.  If Termination of Employment occurs as a result of death, payment will be made in accordance with either Section 5.3 or 5.4.

 

In no event will any Company Contribution Amount be available for an In-Service distribution.

 

4.2                                 Change in Time or Form of Payment for In-Service Distribution.  Notwithstanding the methods of payment elected for each Class Year’s In-Service Account, the Participant may elect to change the time of such payment under a subsequent election that meets the following requirements:

 

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(a)                                  The subsequent election may not take effect until at least twelve (12) months after the date on which the subsequent election is made.

 

(b)                                 The subsequent election is made not less than twelve (12) months prior to the date of the scheduled payment.

 

(c)                                  The payment with respect to which the subsequent election is made must be deferred for an additional period of not less than five (5) years from the date such payment would otherwise have been made.

 

(d)                                 The subsequent election may not accelerate the time of any payment.

 

4.3                                 Payout/Suspensions for Unforeseeable Emergencies.  If the Participant experiences an Unforeseeable Emergency, the Participant may petition the Plan Administrator to receive a partial or full payout of the portion of the Participant’s Account Balance attributable to Deferral Amounts.  Company Contribution Amounts are not available for distribution on account of Unforeseeable Emergencies.  Any distribution on account of Unforeseeable Emergencies will be made starting with Deferral Amounts attributable to the most recently completed Class Year’s In-Service Account, if any, and progressing to each preceding Class Year as necessary.  The Retirement Accounts will be used only upon exhausting all completed prior Class Year In-Service Accounts.

 

By way of example, if a request for an Unforeseeable Emergency is made in 2012 and 2010 was the initial Class Year for the Participant; payment will come from the 2011 Class Year’s In-Service Account.  To the extent the 2011 Class Year’s In-Service Account is insufficient, additional amounts will come from the 2010 Class Year’s In-Service Account.  If the previously completed Class Year’s In-Service Accounts are insufficient or if none exist, then the distribution or any remaining amount needed shall come from the 2011 Class Year’s Retirement Account and then from the 2010 Class Year’s Retirement Account.  Only when all prior Class Years have been exhausted will the distribution be made from the 2012 Class Year Deferral Amounts, beginning with that Class Year’s In-Service Account.

 

Any distribution on account of Unforeseeable Emergencies shall not exceed the lesser of the Participant’s Account Balance, calculated as if such Participant were receiving a Termination Benefit, and the amount reasonably needed to satisfy the Unforeseeable Emergency, plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such Unforeseeable Emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant’s assets (to the extent such liquidation would not itself cause severe financial hardship).

 

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If the Participant experiences an Unforeseeable Emergency, the Participant may request a suspension of the Participant’s Deferral Election.  In that case, the suspension will apply for the entire Plan Year in which the request is made and deferrals to be made for the remainder of the Plan Year will be canceled.

 

If the Plan Administrator approves the petition for a suspension and/or distribution, then the suspension shall take effect upon the date of approval and any distribution shall be made within sixty (60) days of the date of approval provided that the Participant may not directly or indirectly designate the taxable year of payment.

 

4.4                                 Change in Control.  Upon a Change in Control, a Participant’s Account Balance will be paid in a lump sum as soon as possible following the effective date of the Change in Control, but in no event later than the later of (i) the end of the calendar year that includes the effective date of the Change in Control and (ii) the fifteen (15th) day of the third (3rd) month following the effective date of the Change in Control, provided that the Participant may not directly or indirectly designate the taxable year of payment.

 

ARTICLE 5
 Benefits

 

5.1                                 Retirement Benefit.  A Participant who Retires shall receive, as a Retirement Benefit, his or her Account Balance.  A Participant, in connection with his or her commencement of participation in the Plan and each subsequent Plan Year shall elect on the Deferral Election form the form of payment with respect to that Class Year’s Deferral Amount.  The Participant may elect to receive payment in the form of a lump sum or pursuant to an Annual Installment Method not to exceed ten (10) years.  Thus, separate Retirement Benefit distribution elections may apply to each Class Year, but the Participant must make the same Distribution Election for the Base Salary and Bonus Deferral Election made on the Deferral Election form.  Any Company Contribution Amount credited to the Participant’s Base Salary Retirement Account for that Class Year shall be paid in the same manner as elected by the Participant for that Class Year’s Base Salary Retirement Account.  If a Participant does not make any election with respect to the payment of the Retirement Benefit or if the Participant does not elect to allocate a Deferral Amount into the Retirement Account for that Class Year but is credited with a Company Contribution Amount for that Class Year, then such Retirement Benefit shall be payable in a lump sum.  The lump sum payment shall be made, or installment payments shall commence, within sixty (60) days after Retirement, provided that the Participant may not directly or indirectly designate the taxable year of payment.

 

5.2                                 Termination Benefit.  A Participant who experiences a Termination of Employment prior to Retirement shall receive as a Termination Benefit his or her Account Balance in accordance with the same election made under Section 5.1.  The lump sum payment shall be made, or installment payments shall commence, within sixty (60) days of Termination of Employment, provided that the Participant may not directly or indirectly designate the taxable year of payment.

 

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5.3                                 Death Prior to Retirement or Termination of Employment.  The Beneficiary of a Participant who dies prior to Retirement or Termination of Employment shall receive a Death Benefit in the form of a lump sum payment equal to the Participant’s then-remaining Account Balance, including any installment payment that have yet to be distributed.  The payment shall be made as soon as practicable after certification of death but in no event later than the later of (i) the end of the calendar year that includes the date of death and (ii) the fifteenth (15th) day of the third month following the date of death, provided that the Beneficiary may not directly or indirectly designate the taxable year of payment.

 

5.4                                 Death after Retirement or Termination of Employment.   If a Participant dies after Retirement or Termination of Employment but before the Account Balance is paid in full, the Participant’s unpaid Account Balance shall be paid to the Beneficiary in a lump sum payment as soon as practicable after certification of death but in no event later than the later of (i) the end of the calendar year that includes the date of death and (ii) the fifteenth (15th) day of the third month following the date of death, provided that the Beneficiary may not directly or indirectly designate the taxable year of payment.

 

5.5                                 Disability Benefit.  A Participant who incurs a Disability shall, for benefit purposes under the Plan, be deemed to have experienced a Termination of Employment as of the date the Disability is incurred.  The Disability Benefit shall be paid in the same form as elected in accordance with Section 5.1.  The lump sum payment shall be made, or installment payments shall commence within sixty (60) days after the date the Participant incurs the Disability, provided that the Participant may not directly or indirectly designate the taxable year of payment.

 

5.6                                 Change in Time or Form of Payment for Termination Benefit.  Notwithstanding the method of payment elected by a Participant with respect to the Base Salary or Bonus Deferral Amounts for a Class Year, the Participant may elect to change the method of such payment under a subsequent election that meets the following requirements:

 

(a)                                  The subsequent election may not take effect until at least twelve (12) months after the date on which the subsequent election is made.

 

(b)                                 The subsequent election is made not less than twelve (12) months prior to the date of the scheduled payment.

 

(c)                                  The first payment with respect to which the subsequent election is made must be deferred for a period of not less than five (5) years from the date such payment would otherwise have been made.  This five (5)-year deferral shall not apply to any change in the Death Benefit or upon the occurrence of a Disability.

 

(d)                                 The subsequent election may not accelerate the time of any payment.

 

The form of payment elected in a subsequent election must be a lump sum or an Annual Installment Method of between two (2) and ten (10) years.  In accordance with section 1.3, each installment payment may be individually changed provided that the above requirements are met with respect to each such payment that is changed.

 

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5.7                                 Limitation on Key Employees.  Notwithstanding any other provision of the Plan to the contrary, the payment of a Retirement Benefit or Termination Benefit with respect to a “specified employee,” as defined in, and determined in accordance with, Treasury Regulation Section 1.409A-1(i), of the Affiliated Group shall not be made (or, in the case of payments to be made under an Annual Installment Method, shall not commence) until the six month anniversary of the Participant’s Retirement or Termination of Employment, or, if earlier, the date of the Participant’s death, if at that time any stock of the Company is publicly traded on an established securities market or otherwise.  Any installment payments that are delayed pursuant to this provision shall be accumulated and paid on the delayed payment date.

 

5.8                                 Involuntary Cash Out Limit.  If a Participant’s total Account Balance under this Plan and all other such arrangements required to be aggregated with the Plan under Code Section 409A is less than or equal to the deferral limit in effect under Code Section 402(g) for the calendar year in which the Participant experiences a Retirement or Termination of Employment, then, despite the election made by the Participant, the Company may pay the Account Balance in a lump sum as soon as practicable following such Retirement or Termination of Employment.  In addition, if the present value of any remaining installments due a Participant who has experienced a Termination of Employment and elected an Annual Installment Method falls below the deferral limit in effect under Code Section 402(g) for the calendar year in which the Participant experienced a Termination of Employment, then the Company may pay the remaining Account Balance in a lump sum as soon as practicable thereafter.

 

ARTICLE 6
 Beneficiary Designation

 

6.1                                 Beneficiary.  Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan upon the death of a Participant.  The Beneficiary designated under the Plan may be the same as or different from the Beneficiary designation under any other Company or Employer plan in which the Participant participates.

 

6.2                                 Beneficiary Designation Change.  A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Plan Administrator.  A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Plan Administrator’s rules and procedures, as in effect from time to time.  Upon the acceptance by the Plan Administrator of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled.  The Plan Administrator shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Plan Administrator prior to his or her death.  If a Participant is married, the designation of a Beneficiary other than the Participant’s spouse shall only be permitted upon written consent of the Participant’s spouse.

 

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6.3                               Acknowledgment.  No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Plan Administrator.

 

6.4                               No Beneficiary Designation.  If a Participant fails to designate a Beneficiary as provided in Sections 6.1, 6.2 and 6.3 above or, if all Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, then the Participant’s Beneficiary shall be deemed to be his or her surviving spouse.  If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the Participant’s estate.

 

6.5                               Doubt as to Beneficiary.  If the Plan Administrator has any doubt as to the proper Beneficiary to receive payments pursuant to the Plan, the Plan Administrator shall have the right to cause the Company to withhold such payments until this matter is resolved to the Plan Administrator’s satisfaction.

 

6.6                               Discharge of Obligations.  The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge the Employer, the Company, the Plan Administrator and the Board from all further obligations under the Plan with respect to the Participant, and that Participant’s participation in the Plan shall terminate upon such full payment of benefits.

 

ARTICLE 7
 Leave of Absence

 

7.1                               Paid Leave of Absence.  If a Participant is authorized by the Employer for any reason to take a paid leave of absence from the employment of the Employer, the Participant shall continue to be considered employed by the Employer and the Deferral Amount shall continue to be withheld during such paid leave of absence in accordance with Section 3.1.

 

7.2                               Unpaid Leave of Absence.  If a Participant is authorized by the Employer for any reason to take an unpaid leave of absence from the employment of the Employer, the Participant shall continue to be considered employed by the Employer and the Participant shall be excused from making deferrals until the Participant returns to a paid employment status.  Upon such return, deferrals shall resume for the remaining portion of the Plan Year in which the return occurs, based on the Deferral Election, if any, made for that Plan Year.  If no Deferral Election was made for that Plan Year, no deferral shall be withheld.

 

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ARTICLE 8
 Termination, Amendment or Modification

 

8.1                               Termination.  Although the Company anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company will continue the Plan or will not terminate the Plan at any time in the future.  Accordingly, the Company reserves the right to terminate the Plan at any time with respect to any or all Participants, by action of the [Board].  Upon the termination of the Plan, further deferrals under the Plan shall terminate but all Account Balances shall remain subject to the terms of the Plan and the distribution elections made in the applicable Deferral Election forms.

 

Notwithstanding the previous paragraph, upon termination of the Plan, the Company may distribute Account Balances in a consistent manner to all Participants in compliance with Treasury Regulation Section 1.409A-3(j)(4)(ix)(C), specifically:

 

(a)                     The termination and liquidation does not occur as a result of downturn in the financial health of the Company;

 

(b)                     The Company terminates and liquidates all similar arrangements sponsored by a member of the Affiliated Group that would be aggregated with any other arrangements under Treasury Regulation Section1.409A-1(c) if the Participants had deferrals of compensation under all of the arrangements that are terminated;

 

(c)                      No payments under the Plan are made within twelve (12) months of the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan other than payments that would be payable under the terms of the Plan if the action to terminate and liquidate the plan had not occurred;

 

(d)                     All payments are made within twenty-four (24) months of the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan; and

 

(e)                      No member of the Affiliated Group adopts a new plan that would be aggregated with any terminated and liquidated plan under Treasury Regulation Section 1.409A-1(c) if the same Participant participated in both plans, at any time within three years following the date the Company takes all necessary action to irrevocably terminate and liquidate the Plan.

 

8.2                               Amendment.  The Company may, at any time, amend or modify the Plan in whole or in part by the action of the Board or its authorized delegate; provided, however, that: (i) no amendment or modification shall be effective to decrease or restrict the value of a Participant’s Account Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Termination of Employment as of the effective date of the amendment or modification, and (ii) no amendment or modification of this Section 8.2 of the Plan shall be effective.  The amendment or modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification.  Notwithstanding the foregoing, the Company specifically reserves the right to amend the Plan to conform the provisions of the Plan to the guidance issued by the Secretary of the Treasury with respect to Code Section 409A, in accordance with such guidance.

 

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8.3                               Effect of Payment.  The full payment of the applicable benefit under Article 4 or 5 of the Plan shall completely discharge all obligations to a Participant and his or her Beneficiaries under the Plan and the Participant’s participation in the Plan shall thereupon terminate.

 

ARTICLE 9
 Administration

 

9.1                                               Administrative Duties.  To the extent that ERISA applies to the Plan, the Plan Administrator shall be the “named fiduciary” of the Plan and the “administrator” of the Plan, within the meaning of ERISA.  The Plan Administrator shall be responsible for the general administration of the Plan.  The Plan Administrator will, subject to the terms of the Plan, have the authority to:  (i) adopt, alter, and repeal administrative rules and practices governing the Plan, (ii) interpret the terms and provisions of the Plan, and (iii) otherwise supervise the administration of the Plan.  All decisions by the Plan Administrator will be made with the approval of not less than a majority of its members.  The Plan Administrator may delegate any of its authority to any other person or persons that it deems appropriate.

 

9.2                                               Agents.  In the administration of the Plan, the Plan Administrator may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to the Company.

 

9.3                                               Binding Effect of Decisions.  All decisions by the Plan Administrator, and by any other person or persons to whom the Plan Administrator has delegated authority, shall be final and conclusive and binding upon all persons having any interest in the Plan.

 

9.4                                               Indemnity of Board and Plan Administrator.  The Company shall indemnify and hold harmless the members of the Board, the Plan Administrator and any Employee to whom the duties of the Board or Plan Administrator may be delegated, against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to the Plan, except in the case of willful misconduct by the Board, any of its members, the Plan Administrator or any such Employee.

 

9.5                                               Information.  To enable the Plan Administrator to perform its functions, the Company shall supply full and timely information to the Plan Administrator on all matters relating to the compensation of its Participants, the date and circumstances of the Disability, death, Retirement or Termination of Employment of its Participants, and such other pertinent information as the Plan Administrator may reasonably require.

 

ARTICLE 10
 Other Benefits and Agreements

 

10.1                        Coordination with Other Benefits.  The benefits provided to a Participant and such Participant’s Beneficiary under the Plan are in addition to any other benefits available to such Participant and Beneficiary under any other plan or program for Employees of the Affiliated Group.  The Plan shall supplement and shall not supersede, modify or amend any other such plan or program, except as may otherwise be expressly provided.

 

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ARTICLE 11
 Claims Procedures

 

11.1                        Procedures for Handling Claims.  In accordance with the provisions of Section 503 of ERISA, the Company shall provide a procedure for handling claims for benefits under the Plan.  The procedure shall be in accordance with the regulations issued by the Secretary of Labor and provide adequate written notice within a reasonable period of time with respect to a claim denial.  The procedure shall also provide for a reasonable opportunity for a full and fair review by the Company of any claim denial.

 

ARTICLE 12
 Trust

 

12.1                        Establishment of the Trust.  The Company may establish one or more Trusts to which the Company may transfer such assets as the Company determines to assist in meeting its obligations under the Plan.

 

12.2                        Interrelationship of the Plan and the Trust.  The provisions of the Plan and a Participant’s Deferral Election forms shall govern the rights of a Participant to receive distributions pursuant to the Plan.  The provisions of the Trust shall govern the rights of the Company, Participants and the creditors of the Company to the assets transferred to the Trust.

 

12.3                        Distributions from the Trust.  The Company’s obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Company’s obligations under the Plan.

 

ARTICLE 13
 Miscellaneous

 

13.1                        Status of Plan.  The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that “is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.  The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent.

 

13.2                        Unsecured General Creditor.  Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Company or any other member of the Affiliated Group.  For purposes of the payment of benefits under the Plan, any and all of the Company’s assets shall be, and remain, the general, unpledged unrestricted assets of the Company.  The Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future.

 

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13.3                        Company’s Liability.  The Company’s liability for the payment of benefits shall be defined only by the Plan and the Participants’ Deferral Election forms.  The Company shall have no obligation to a Participant under the Plan, except as expressly provided in the Plan and his or her Deferral Election forms.

 

13.4                        Nonassignability.  Neither a Participant, nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable.  No part of the amount payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.

 

13.5                        Not a Contract of Employment.  The terms and conditions of the Plan shall not be deemed to constitute a contract of employment between an Employer and the Participant, either expressed or implied.  Such employment is hereby acknowledged to be an “at will” employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement.  Nothing in the Plan shall be deemed to give a Participant the right to be retained in the service of the Employer, or to interfere with the right of the Employer to discipline or discharge the Participant at any time for an reason.

 

13.6                        Furnishing Information.  A Participant or his or her Beneficiary will cooperate with the Plan Administrator by furnishing any and all information requested by the Plan Administrator and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Plan Administrator may deem necessary.

 

13.7                        Terms.  Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.

 

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13.8                        Captions.  The captions of the articles, sections and paragraphs of the Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.

 

13.9                        Governing Law.  Subject to ERISA, the provisions of the Plan shall be construed and interpreted according to the internal laws of the State of California without regard to its conflicts of laws principles.

 

13.10                 Notice.  Any notice or filing required or permitted to be given to the Board under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the address below:

 

Deckers Outdoor Corporation

495-A South Fairview Avenue

Goleta, CA 93117

 

Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

 

Any notice or filing required or permitted to be given to a Participant under the Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.

 

13.11                 Successors.  The provisions of the Plan shall bind and inure to the benefit of the Company and its successors and assigns and the Participant and the Participant’s Beneficiaries.

 

13.12                 Spouse’s Interest.  The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse’s will, nor shall such interest pass under the laws of intestate succession.

 

13.13                 Validity.  In case any provision of the Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but the Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein.

 

13.14                 Incompetent.  If the Plan Administrator determines that a benefit under the Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person’s property, the Plan Administrator may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person.  The Plan Administrator may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit.  Any payment of a benefit shall be a payment for the account of the Participant and the Participant’s Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount.

 

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13.15                 Court Order.  The Company is authorized to make any payments directed by court order in any action in which the Plan, Company, Employer, Plan Administrator or the Board has been named as a party.  In addition, if a court determines that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan in connection with a property settlement or otherwise, the Company shall have the right, notwithstanding any election made by a Participant, to immediately distribute the spouse’s or former spouse’s interest in the Participant’s benefits under the Plan to that spouse or former spouse.

 

13.16                 Insurance.  The Company, on its own behalf or on behalf of the trustee of the Trust, may apply for and procure insurance on the life of the Participant, in such amounts and in such forms as the Company or trustee of the Trust may choose.  The Company or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance.  The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Company shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Company has applied for insurance.

 

13.17                 No Acceleration of Benefits.  The acceleration of the time or schedule of any payment under the Plan is not permitted, except as provided in regulations promulgated by the Secretary of the Treasury.

 

13.18                 Compliance with Code Section 409A.  The Plan is intended to provide for the deferral of compensation in accordance with the applicable requirements of Code Section 409A for compensation earned, vested, or deferred after December 31, 2004, and shall be interpreted and administered accordingly.  Notwithstanding any provisions of the Plan or any Deferral Election form to the contrary, no otherwise permissible election under the Plan shall be given effect that would result in the immediate inclusion in income of any amount under Code Section 409A.

 

13.19                 Discretion of the Board, Plan Administrator, Trustee and Company and Interpretation.  To the fullest extent permitted by law, the Board, Plan Administrator, Company and Trustee shall each, in its sole and absolute discretion, construe and interpret the terms and provisions of the Plan and to do all things necessary or appropriate to effect the intent and purpose thereof whether or not such powers are specifically set forth in the Plan and Trust Agreement, including any issue arising out of, relating to, or resulting from the administration and operation of the Plan.  Such construction and/or interpretation shall be final, conclusive and binding on all persons, entities and parties, including, without limitation, the Participants and Beneficiaries, or successors or assigns thereto, and shall be given the maximum possible deference allowed by law.

 

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IN WITNESS WHEREOF, the Company has signed this Plan as of this 22nd day of December, 2011.

 

 

	
 
    	
DECKERS   OUTDOOR CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Thomas A. George
    
	
 
    	
Name:
    	
Thomas   A. George
    
	
 
    	
Title:
    	
CFO
    

 

23Exhibit 10.23

 

FOURTH AMENDMENT TO LEASE DATED OCTOBER 31, 2007 (“LEASE”) BETWEEN 450 N. BALDWIN PARK ASSOCIATES, LLC (“LESSOR”) AND DECKERS OUTDOOR CORPORATION (“LESSEE”) FOR 3175 MISSION OAKS BOULEVARD, CAMARILLO, CA 93012 (“PREMISES”).

 

1.              For reference purposes this Fourth Amendment shall be dated September 1, 2011.

 

2.              Pursuant to the terms of the Lease, Lessee has leased the Premises consisting of 423,106 square feet.  Pursuant to the terms of the First Amendment to Lease dated on or about August 9, 2010, the Second Amendment to Lease dated on or about July 21, 2011, and the Third Amendment to Lease dated on or about August 31, 2011, Lessee has temporarily leased from Lessor on a short-term basis various portions of that certain building known as 3233 E. Mission Oaks Boulevard, Camarillo, CA 93012 (collectively, the “Short Term Temporary Premises”).  Notwithstanding the scheduled expiration dates for the Short Term Temporary Premises, the Lease for the Premises is set to expire on November 30, 2012 as set forth in Paragraph 1.3 of the Lease.

 

3.              Lessor and Lessee hereby acknowledge and agree that the Term for the Premises as set forth in Paragraph 1.2(a) of the Lease is hereby extended so that the new termination date for the Lease shall become November 30, 2018 (“Revised Lease Extension Term”). Lessor and Lessee further acknowledge and agree that the scheduled expiration dates for the Short Term Temporary Premises remain unmodified by this Fourth Amendment. Effective as of and retroactive to June 1, 2011 (the “Effective Date”), Lessee’s Base Rent during the Revised Lease Extension Term shall be as follows:

 

	
June 1, 2011 — November 30, 2015
    	
 
    	
$xxx,xxx.xx/month NNN
    
	
December 1, 2015 — November 30, 2016
    	
 
    	
$xxx,xxx.xx/month NNN
    
	
December 1, 2016 — November 30, 2017
    	
 
    	
$xxx,xxx.xx/month NNN
    
	
December 1, 2017 — November 30, 2018
    	
 
    	
$xxx,xxx.xx/month NNN
    

 

Notwithstanding anything to the contrary contained in this Fourth Amendment and in the Lease, Lessor and Lessee acknowledge that this Fourth Amendment will be executed by Lessor and Lessee after the Effective Date, and that Lessee has paid Base Rent pursuant to Paragraph 52 of the Lease for the months of June, July, August and September 2011 in the total amount of $x,xxx,xxx.xx (the “Existing Lease Base Rent”). Furthermore, Lessor and Lessee acknowledge that the Base Rent for the months of June, July, August and September 2011 under this Fourth Amendment totals $xxx,xxx.xx (the “Revised Lease Base Rent”). The difference between the Existing Lease Base Rent and the Revised Lease Base Rent equals $xxx,xxx.xx (the “Excess Base Rent Payment”). The Excess Base Rent Payment shall be credited, until exhausted, towards the Base Rent due for November 2011 and December 2011 pursuant to the above rent schedule for the Revised Lease Extension Term.

 

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4.              Lessee shall have one (1) five (5) year option (“Option to Renew”) to extend the term of the Lease for the Premises under the same terms and conditions in the Lease, except as set forth herein. The Option Term would be from December 1, 2018 through November 30, 2023. In order to exercise the Option to Renew, Lessee must provide Lessor with no less than six (6) months prior written notice (“Option Notice”). Lessee shall have no right or ability to exercise the Option to Renew if Lessee is in default of the Lease beyond all applicable notice and cure periods either (i) at the time of giving the Option Notice or (ii) at any time during the period between the giving of the Option Notice and the Option to Renew Effective Date (December 1, 2018).

 

The Base Rent shall be increased during the initial year of the Option Term and each anniversary thereafter, by taking the Base Rent as existing immediately prior thereto and increasing it by a percentage equal to the percentage increase in the CPI (as defined below) from (x) the month which is fifteen (15) months prior to the then existing month to (y) the month which is three (3) months prior to the then existing month; provided, however, that none of such annual increases shall be less than three percent (3%) or greater than six percent (6%) (of the then existing Base Rent).

 

As used in this Amendment, the “CPI” shall mean the Consumer Price Index for All Urban Consumers, Los Angeles-Anaheim-Orange County, All Items (1982/1984 = 100) as published by the United State Department of Labor Bureau of Labor Statistics. Should said Bureau discontinue the publication of the CPI, then Lessor shall designate a generally recognized, comparable substitute index, reasonably acceptable to Lessee, to be used as the new CPI in the computation of the increase in Base Rent. If Lessor and Lessee cannot agree on a substitute index, then a substitute index shall, on application by either party, be selected by the senior officer in the closest office of the Bureau of Labor Statistics or successor department or agency.

 

5.              Lessee shall continue to have the Termination Option as set forth in Paragraph 56 of the Lease.

 

6.              Lessee shall be provided with a total Tenant Improvement Allowance not to exceed $xxx,xxx.xx (the “Allowance”) for real property improvements to be made in the Premises and/or for real property improvements to be made in the premises located at the adjacent building at 3001 Mission Oaks Boulevard, Camarillo, CA (the “Adjacent Building”)For example, if Lessee completes real property improvements in the Premises for an amount of $xxx,xxx.xx, and completes real property improvements in the Adjacent Building for an amount of $xxx,xxx.xx, Lessee, pursuant to this Lease, shall only be reimbursed by Lessor $xxx,xxx.xx from the TI Allowance, and Lessee shall seek reimbursement for the $xxx,xxx.xx pursuant to the terms of Lessee’s lease for the Adjacent Building. Furthermore, if for example entire Lessee completes real property improvements in the Premises for an amount totaling the Allowance, Lessee shall not have any remaining funds from the Allowance that can be applied towards improvements in the Premises or the Adjacent Building.

 

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In order for Lessee to be reimbursed from the Allowance, Lessee must provide Lessor with (i) copies of paid invoices by Lessee for the real property improvements work completed in the Premises, and (ii) copies of lien releases for said work. Within thirty (30) days after delivery of such items to Lessor, Lessor shall deliver to Lessee each requested reimbursement payment until the full amount of the Allowance has been paid (less any portion of the Allowance paid to Lessee in connection with the Adjacent Building).  In the event Lessor fails to deliver to Lessee any such reimbursement payment within such thirty (30) day period, Lessee may offset such amounts from Rent to be paid to Lessor.

 

7.              Lessee shall continue to have a Right of First Offer as set forth in the Lease, including Paragraph 59, with the two (2) following modifications:

 

a)             Currently the Lease provides Lessor with the obligation to provide notice to Lessee if at any time Lessor is interested in leasing vacant space equal to 100,000 square feet or greater at the 3233 Mission Oaks building.

 

Lessor and Lessee hereby agree that Lessor shall be obligated to provide Lessee with notice no matter the size of the vacant space Lessor is interested in leasing. There will be no minimum size requirement for said notice.

 

b)             Currently the Lease provides that after Lessor provides Lessee with notice, and if Lessee decides to not lease the space set forth in the notice, if the economic terms agreed to between Lessor and a prospective tenant for the notice space are fifteen percent (15%) or more lower than the economic terms provided to Lessee in the notice, then Lessor has to re-offer the notice space to Lessee based upon the new business terms agreed to between Lessor and the prospective tenant.

 

Lessor and Lessee hereby agree that the fifteen percent (15%) economic term re-notice threshold shall be changed to a ten percent (10%) economic term re-notice threshold.

 

8.              The validity of this Fourth Amendment to Lease is contingent on Lessee and the owner for the Adjacent Building (“Mission Oaks Associates, LLC”) fully executing and delivering on or before ten (10) days following the last date set forth in the signature blocks below on which Lessor and Lessee executed this Fourth Amendment, a seventh amendment to the existing ease for the Adjacent Building by and between Lessee and Mission Oaks Associates, LLC in which Lessee extends its existing lease at the Adjacent Building through November 30, 2018.

 

9.              Concurrently with the execution of this Amendment, Lessor shall provide Lessee with a Non-Disturbance and Subordination agreement from any existing mortgages, ground lessors or other financing entities in a commercially reasonable form which recognizes all of Tenant’s rights under the Lease, including rent abatement, concessions, tenant improvement allowances, offset and self help rights and pursuant to which the encumbrancer agrees to honor all of Lessor’s obligations under the Lease, including to fund the Allowance.

 

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10.       Lessor hereby agrees to use commercially reasonable efforts to perform the following repair and maintenance items at the Premises within sixty (60) days following the date of this Amendment, subject to reimbursement by Lessee if such items are subject to reimbursement under the Lease:

 

a.              Paint pergolas on west side of building;

b.              Trim/remove trees;

c.               Clear mezzanine drain lines that get clogged;

d.              Replace missing exhaust fan on southwest end of building;

e.               Cover openings at main entrance to prevent birds from nesting; and

f.                Perform preventive maintenance on main power panel

 

11.       All other terms and conditions of the Lease (inclusive of all prior Amendments) shall remain in full force and effect. To the extent that there are any discrepancies between this Fourth Amendment and the original Lease, the terms of this Fourth Amendment shall prevail.

 

	
LESSOR:
    	
 
    	
LESSEE:
    
	
 
    	
 
    	
 
    
	
450   N. BALDWIN PARK
    	
 
    	
 
    
	
ASSOCIATES,   LLC
    	
 
    	
DECKERS   OUTDOOR CORPORATION.
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Managing Member
    	
 
    	
By:
    	
Zohar   Ziv
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Its:
    	
Managing   Member
    	
 
    	
Its:
    	
COO
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
9/29/11
    	
 
    	
Date:
    	
9/28/11
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Thomas   A. George
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Its:
    	
CFO
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
9/28/11
    

 

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