Document:

EX-10.1 CHANGE IN CONTROL SEVERANCE PLAN

 

Exhibit 10.1

S1 CORPORATION

CHANGE IN CONTROL

SEVERANCE PAY PLAN

          S1 Corporation (the “Company”), sets forth herein the terms of its Change in Control Severance
Pay Plan (the “Plan”) as follows:

SECTION 1. PURPOSE.

          The Board of Directors of the Company (the “Board”) believes that it is in the best interests
of the Company to encourage the continued employment with and dedication to the Company of certain
of the Company’s and its Affiliate’s officers and employees in the face of potentially distracting
circumstances arising from the possibility of a change in control of the Company, and the Board has
established the Plan for this purpose.

SECTION 2. DEFINITIONS.

          (a) “Accrued Obligations” means, with respect to an Employee, the sum of (1) the Employee’s
Annual Base Salary earned through the Date of Termination, (2) the Employee’s Commissions earned
through the Date of Termination, and (3) any compensation previously deferred by the Employee
(together with any accrued interest or earnings thereon) and any accrued vacation pay, in each
case, to the extent not theretofore paid.

          (b) “Affiliate” means, with respect to the Company, any company or other trade or business
that controls, is controlled by or is under common control with the Company within the meaning of
Rule 405 of Regulation C under the Securities Act of 1933, as now in effect or as hereafter
amended, including, without limitation, any subsidiary.

          (c) “Annual Base Salary” means, with respect to an Employee, the greater of (a) the annual
base salary payable to the Employee by the Company and its Affiliates as of the Date of Termination
or (b) the amount equal to twelve times the highest monthly base salary paid or payable, including
any base salary which has been earned but deferred, to the Employee by the Company and its
Affiliate in respect of the twelve-month period immediately preceding the month in which the Date
of Termination occurs.

          (d) “Board” means the Board of Directors of the Company.

 

 

          (e) “S1 Corporation Service Provider” means any employee or independent contractor of the
Company or any of its Affiliates.

          (f) “Cause” for termination of an Employee’s employment by the Company shall be deemed to
exist if: (a) the Employee is found guilty by a court of having committed fraud or theft against
the Company and such conviction is affirmed on appeal or the time for appeal has expired; (b) the
Employee is found guilty by a court of having committed a crime involving moral turpitude and such
conviction is affirmed on appeal or the time for appeal has expired; (c) in the reasonable judgment
of the Board, the Employee has compromised confidential information, trade secrets or other
valuable proprietary information of the Company; or (d) in the reasonable judgment of the Board,
the Employee has engaged in gross or willful misconduct that causes substantial and material harm
to the business and operations of the Company or any of its Affiliates, the continuation of which
will continue to substantially and materially harm the business and operations of the Company or
any of its Affiliates in the future.

          (g) “Change in Control” means any of the following to occur, provided that only the first such
event to occur shall be a Change in Control for purposes of this Plan:

               (1) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person’)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
more than 50% of either (i) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of directors (the
“Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection
(h), the following acquisitions shall not constitute a Change in Control: (i) any acquisition by
the Company; (ii) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company; and (iii) any acquisition
by any entity pursuant to a transaction which complies with clauses (i), (ii) and (iii) of
subsection (3) of this Section 2(h); or

               (2) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a majority of the

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directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board; or

               (3) Consummation of a reorganization, merger or consolidation or sale or other disposition of
all or substantially all of the assets of the Company (a “Business Combination”), in each case
unless, following such Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the entity resulting from such
Business Combination (including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, and (ii) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 35% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the combined voting power of
the then outstanding voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or

               (4) Approval by the shareholders of the Company of a complete liquidation or dissolution of
the Company.

          (h) “Change in Control Date” means, with respect to a Change in Control Event, the date of
consummation of the Change in Control relating to such Change in Control Event.

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          (i) “Change in Control Event” means the earlier to occur of (i) a Change in Control or (ii)
the execution and delivery by the Company of an agreement providing for a Change in Control.

          (j) “Change in Control Period” means the period commencing upon a Change in Control Event and
ending one year after the Change in Control Date.

          (k) “Commissions” means, with respect to an Employee, the amount earned and payable to the
Employee as commissions payment in accordance with the incentive compensation plan applicable to
such Employee through the Date of Termination.

          (l) “Company” means S1 Corporation or, from and after a Change in Control of the Company, the
successor to the Company in any such Change in Control.

          (m) “Comparable Position” means a job of similar duties as with the Company, and such pay and
benefits at a level that would not give rise to Good Reason under this Plan.

          (n) “Date of Termination” means, with respect to an Employee, the effective date of
termination of the Employee’s employment with the Company or any of its Affiliates.

          (o) “Employee” means an employee of the Company or an Affiliate of the Company, who was an
employee of the Company or its Affiliate immediately prior to the Change in Control Event and who
is not a party to an individual change in control agreement that provides for the same or better
benefits than are provided by this Plan and who is an Executive, Vice President, General Manager,
Director, Manager, Senior Individual Contributor or Individual Contributor.

          (p) “Good Reason” means, with respect to an Employee: (i) any reduction in the Employee’s base
salary, (ii) any reduction in the Employee’s incentive compensation plan in a fiscal year,
provided the Employee continues in the same position, (iii) any reduction in the aggregate employee
benefits provided to such Employee, (iv) that the Employee has his or her responsibilities or areas
of supervision with the Company substantially reduced or modified, or (v) that the Employee is
required to move his or her employment location to a location 35 miles or more from his or her
job-site immediately prior to the Effective Date.

          (q) “Other Benefits” means, with respect to an Employee, any other amounts or benefits
required to be paid or provided or which the Employee is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company and its Affiliates.

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          (r) “Severance Period” means (i) the number of months equivalent to the period on which the
severance benefits payable pursuant to Section 4(a)(i)(B)
are determined for an Employee who is an Executive Officer, Vice President, General Manager or
Director; (ii) three (3) months for an Employee who is a Manager or Senior Individual Contributor;
and (iii) two (2) months for an Employee who is an Individual Contributor.

SECTION 3. TERM.

          This Plan shall be effective for a period commencing on May 3, 2006 and ending on May 31,
2008; provided, however, that, in the event of a Change in Control Event during the term of this
Plan, the term of this Plan shall be automatically extended, if necessary, so that this Plan
remains in full force and effect for the Change in Control Period relating to such Change in
Control Event and until all payments required to be made hereunder have been made. References
herein to the term of this Plan shall include the initial term and any additional period for which
this Plan is extended or renewed.

SECTION 4. SEVERANCE BENEFITS FOLLOWING A CHANGE IN CONTROL.

          (a) Good Reason; Other Than for Cause. If a Change in Control Event occurs during the term of
this Plan and the Company terminates an Employee’s employment other than for Cause or the Employee
terminates employment for Good Reason during the Change in Control Period and the Change in Control
is consummated:

               (i) The Company shall pay to the Employee the following amounts:

                    (A) the Accrued Obligations in a lump sum in cash within 10 business days of the Date of
Termination or the Change in Control Date, if later;

                    (B) the severance benefits provided in Schedules A, B, C, D or E as applicable; provided
further, that the Employee has executed a Waiver and Release substantially in the form set forth in
Schedule F, and the revocation period for such Waiver and Release has passed.

               The Company shall pay the amounts provided in subparagraph (B) in a lump sum in cash within 10
business days of the Employee’s Date of Termination or Change in Control Date, if later; provided
further, that the Company shall provide the Employee with notice of employment termination and with
a copy of the Waiver and Release sufficiently in advance of the Date of

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Termination to satisfy the
21 or 45 day consideration period, as applicable, under the Waiver and Release. All severance
benefits provided to an Employee pursuant to subparagraph (B) of this Section 4(a)(i) shall be
reduced and/or offset by any
notice, payments or benefits to which the Employee may be entitled under the federal Worker
Adjustment and Retraining Notification (WARN) Act, 29 U.S.C. § 2101 et seq., as amended, and any
applicable state plant or facility closing or mass layoff law.

               The mere occurrence of a Change in Control shall not be treated as a termination of an
Employee’s employment under this Plan, nor shall the mere transfer of an Employee’s employment to
an Affiliate of the Company be treated as a termination under this Plan. Further, an Employee
shall not be eligible for any severance benefits provided in subparagraph (B) of this Section
4(a)(i) if, after the Change in Control, the Employee is terminated as a result of an acquisition,
sale, spin-off, outsourcing or other business transaction of the Company or its Affiliate in
connection with which (1) the successor party agrees for the remaining duration of the Change in
Control Period, and agrees to cause its applicable affiliate, to provide severance benefits at
least equal to those provided under this Plan, and (2) the Employee either is offered continued
employment with the successor party or its affiliate in a Comparable Position to the one held by
the Employee immediately prior to his or her Date of Termination or declines an interview for such
a Comparable Position.

               Anything in this Plan to the contrary notwithstanding, if, as a result of termination of an
Employee’s employment with the Company, the Employee would receive any payment that, absent the
application of this paragraph of Section 4(a)(i), would be subject to interest and additional tax
imposed pursuant to Section 409A(a) of the Code as a result of the application of Section
409A(2)(B)(i) of the Code, then no such payment shall be payable prior to the date that is the
earliest of (1) 6 months after the Employee’s Date of Termination, (2) the Employee’s death or (3)
such other date as will cause such payment not to be subject to such interest and additional tax.

               (ii) For the Severance Period after the Date of Termination, or such longer period as may be
provided by the terms of the appropriate plan, program, practice or policy, the Company shall
continue health benefits to the Employee and/or the Employee’s family at least equal to those which
would have been provided to them in accordance with the health benefit plan provided by the Company
and its Affiliates for medical, prescription, and dental benefits to the extent applicable
generally to other peer employees of the Company and its Affiliates, as if the Employee’s
employment had not been terminated and with the same the level of monthly Employee contribution as
applicable prior to termination of employment; provided, however, that if the Employee becomes
reemployed with another employer and is eligible to receive medical or other welfare benefits under

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another employer provided plan, the medical and other welfare benefits described herein shall be
secondary to those provided under such other plan during such applicable period of eligibility.

               (iii) To the extent not theretofore paid or provided, the Company shall timely pay or provide
to the Employee all Other Benefits.

               (iv) Immediately prior to a Change in Control, all equity compensation grants made to an
Employee by the Company that are outstanding at the time of such Change in Control shall be
accelerated and shall fully vest. This Plan is intended to amend all equity compensation grants
previously awarded to Employees to accelerate vesting as described above to the extent vesting
would not otherwise be accelerated under the terms of such equity compensation grants.

          (b) Cause; Other Than for Good Reason. If the Employee’s employment is terminated for Cause
during the Change in Control Period, this Plan shall terminate without further obligations to the
Employee, other than the obligation to pay to the Employee (x) his Annual Base Salary through the
Date of Termination, (y) the amount of any compensation previously deferred by the Employee and (z)
Other Benefits through the Date of Termination, in each case to the extent theretofore unpaid. If
the Employee voluntarily terminates employment during the Change in Control Period, excluding a
termination for Good Reason, this Plan shall terminate without further obligations to the Employee,
other than for Accrued Obligations and the timely payment or provision of Other Benefits through
the Date of Termination. In such case, all Accrued Obligations shall be paid to the Employee in a
lump sum in cash within 30 days of the Date of Termination or as otherwise required by law.

SECTION 5. CONFIDENTIALITY.

          An Employee shall hold in a fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or any of its Affiliates, and
their respective businesses, which shall have been obtained by the Employee during the Employee’s
employment by the Company or any of its Affiliates and which shall not be or become public
knowledge (other than by acts by the Employee or representatives of the Employee in violation of
this Plan). After the Employee’s Date of Termination, the Employee shall not, without the prior
written consent of the Company or as may otherwise be required by law or legal process, communicate
or divulge any such information, knowledge or data to anyone other than the Company and those
designated by it.

SECTION 6. EXPENSES.

          The Company shall pay any and all reasonable legal fees and expenses incurred by an Employee
in seeking to obtain or enforce, by bringing an action

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against the Company, any right or benefit
provided in this Plan if the Employee is successful in whole or in part in such action.

SECTION 7. WITHHOLDING.

          Notwithstanding anything in this Plan to the contrary, all payments required to be made by the
Company hereunder to an Employee or his or her estate or beneficiaries shall be subject to the
withholding of such amounts relating to taxes as the Company reasonably may determine it should
withhold pursuant to any applicable law or regulation. In lieu of withholding such amounts, in
whole or in part, the Company may, in its sole discretion, accept other provisions for the payment
of taxes and any withholdings as required by law, provided that the Company is satisfied that all
requirements of law affecting its responsibilities to withhold compensation have been satisfied.

SECTION 8. NO DUTY TO MITIGATE.

          An Employee’s payments received hereunder shall be considered severance pay in consideration
of past service, and pay in consideration of continued service from the date hereof and entitlement
thereto shall not be governed by any duty to mitigate damages by seeking further employment.

SECTION 9. AMENDMENT, SUSPENSION OR TERMINATION.

          This Plan may be amended, suspended or terminated at any time by the Board; provided, however,
that, following a Change in Control Event and during the Change in Control Period relating to such
Change in Control Event, the Board may not amend, suspend or terminate this Plan without the
consent of all Employees then subject to the Plan.

SECTION 10. GOVERNING LAW.

          This Plan shall be governed by the laws of the United States to the extent applicable and
otherwise by the laws of the State of Delaware, excluding the choice of law rules thereof.

SECTION 11. SEVERABILITY.

          If any part of any provision of this Plan shall be invalid or unenforceable under applicable
law, such part shall be ineffective to the extent of such invalidity or unenforceability only,
without in any way affecting the remaining parts of such provision or the remaining provisions of
this Plan.

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SECTION 12. DISCLAIMER OF RIGHTS.

          No provision in this Plan shall be construed to confer upon any individual the right to remain
in the employ or service of the Company or any Affiliate, or to interfere in any way with any
contractual or other right or authority of the Company either to increase or decrease the
compensation or other payments
to any individual at any time, or to terminate any employment or other relationship between any
individual and the Company. The obligation of the Company to pay any benefits pursuant to this Plan
shall be interpreted as a contractual obligation to pay only those amounts described herein, in the
manner and under the conditions prescribed herein. The Plan shall in no way be interpreted to
require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts
in trust or escrow for payment to any participant or beneficiary under the terms of the Plan.

SECTION 13. CAPTIONS.

          The use of captions in this Plan is for the convenience of reference only and shall not affect
the meaning of any provision of this Plan.

SECTION 14. NUMBER AND GENDER.

          With respect to words used in this Plan, the singular form shall include the plural form, the
masculine gender shall include the feminine gender, etc., as the context requires.

SECTION 15. SECTION 409A.

          It is the intention of the parties that payments or benefits payable under this Plan not be
subject to the additional tax imposed pursuant to Section 409A of the Code. To the extent such
potential payments or benefits could become subject to such Section, the parties shall cooperate to
amend this Plan with the goal of giving the Employees the economic benefits described herein in a
manner that does not result in such tax being imposed.

* * * * *

          This Plan was duly adopted and approved by the Board of Directors as of the 3rd day of May,
2006.

	 	 	 	 	 
	 

	 	          /s/ Richard P. Dobb
	 	 
	 

	 	 	 	 
	 

	 	Secretary of the Company	 	 

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Schedule A

Executive Officer Without an Employment Agreement

     If the Employee is a Executive Officer of the Company and does not have an individual
employment agreement with the Company, an amount equal to the Employee’s Annual Base Salary.

 

 

Schedule B

Vice President/General Manager

     If the Employee is a Vice President or General Manager an amount equal to the product of (a)
nine (9), multiplied by (b) one-twelfth of the Employee’s Annual Base Salary.

 

 

Schedule C

Directors

     If the Employee is a Director an amount equal to the product of (a) six (6), multiplied
by (b) one-twelfth of the Employee’s Annual Base Salary.

 

 

Schedule D

Manager or Senior Individual Contributor

     If the Employee is a Manager or Senior Individual Contributor an amount equal to the product
of (a) either (i) the sum of (x) two plus (y) the number of complete years of service with
the Company (subject to a maximum of twenty-four (24)), or (ii) such other number as may be
designated by the Company in writing on or prior to August 1, 2006 (subject to a maximum of twelve
(12)), multiplied by (b) one-twenty-fourth of the Employee’s Annual Base Salary.

 

 

Schedule E

Individual Contributor

     If the Employee is an Individual Contributor, an amount equal to the product of (a) either (i)
the sum of (x) one plus (y) the number of complete years of service with the Company, or
(ii) such other number as may be designated by the Company in writing on or prior to August 1, 2006
(in each case subject to a maximum of twelve (12)), multiplied by (b) one-twenty-fourth of
the Employee’s Annual Base Salary.

 

 

Schedule F

Waiver and Release Agreement

          THIS
WAIVER AND RELEASE AGREEMENT is entered into as of
                    , 200 ___ (the “Effective
Date”), by                      (the “Employee”) in consideration of the severance pay provided to the
Employee by S1 Corporation (“Company”) pursuant to the S1 Corporation Severance Pay Plan (the
“Severance Payment”).

          1. Waiver and Release. The Employee, on his or her own behalf and on behalf of his or
her heirs, executors, administrators, attorneys and assigns, hereby unconditionally and irrevocably
releases, waives and forever discharges Company and each of its affiliates, parents, successors,
predecessors, and the subsidiaries, directors, owners, members, shareholders, officers, agents, and
employees of the Company and its affiliates, parents, successors, predecessors, and subsidiaries
(collectively, all of the foregoing are referred to as the “Employer”), from any and all causes of
action, claims and damages, including attorneys’ fees, whether known or unknown, foreseen or
unforeseen, presently asserted or otherwise arising through the date of his or her signing of the
Waiver and Release Agreement, concerning his or her employment or separation from employment. This
release includes, but is not limited to, any claim or entitlement to salary, bonuses, any other
payments, benefits or damages arising under any federal law (including, but not limited to, Title
VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Employee
Retirement Income Security Act of 1974, the Americans with Disabilities Act, Executive Order 11246,
the Family and Medical Leave Act, and the Worker Adjustment and Retraining Notification Act, each
as amended); any claim arising under any state or local laws, ordinances or regulations (including,
but not limited to, any state or local laws, ordinances or regulations requiring that advance
notice be given of certain workforce reductions); and any claim arising under any common law
principle or public policy, including, but not limited to, all suits in tort or contract, such as
wrongful termination, defamation, emotional distress, invasion of privacy or loss of consortium.

               The Employee understands that by signing this Waiver and Release Agreement he or she is not
waiving any claims or administrative charges which cannot be waived by law. He or she is waiving,
however, any right to monetary recovery or individual relief should any federal, state or local
agency (including the Equal Employment Opportunity Commission) pursue any claim on his or her
behalf arising out of or related to his or her employment with and/or separation from employment
with the Company.

               The Employee further agrees without any reservation whatsoever, never to sue the Employer or
become a party to a lawsuit on the basis

 

 

of any and all claims of any type lawfully and validly released in this Waiver and Release
Agreement.

          2. Acknowledgments. The Employee is signing this Waiver and Release Agreement
knowingly and voluntarily. He or she acknowledges that:

	 	(a)	 	He or she is hereby advised in writing to
consult an attorney before signing this Waiver and Release Agreement;
	 
	 	(b)	 	He or she has relied solely on his or her own
judgment and/or that of his or her attorney regarding the consideration
for and the terms of this Waiver and Release Agreement and is signing
this Waiver and Release Agreement knowingly and voluntarily of his or
her own free will;
	 
	 	(c)	 	He or she is not entitled to the Severance
Payment unless he or she agrees to and honors the terms of this Waiver
and Release Agreement;
	 
	 	(d)	 	He or she has been given at least [twenty-one
(21)] [forty-five (45)] calendar days to consider this Waiver and
Release Agreement, or he or she expressly waives his or her right to
have at least [twenty-one (21)] [forty-five (45)] days to consider this
Waiver and Release Agreement;
	 
	 	(e)	 	He or she may revoke this Waiver and Release
Agreement within seven (7) calendar days after signing it by submitting
a written notice of revocation to the Employer. He or she further
understands that this Waiver and Release Agreement is not effective or
enforceable until after the seven (7) day period of revocation has
expired without revocation, and that if he or she revokes this Waiver
and Release Agreement within the seven (7) day revocation period, he or
she will not receive the Severance Payment;
	 
	 	(f)	 	He or she has read and understands the Waiver
and Release Agreement and further understands that it includes a
general release of any and all known and unknown, foreseen or
unforeseen claims presently asserted or otherwise arising through the
date of his or

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	 	 	 	her signing of this Waiver and Release Agreement that he or she may
have against the Employer; and

	 	(g)	 	No statements made or conduct by the Employer
has in any way coerced or unduly influenced him or her to execute this
Waiver and Release Agreement.

          3. No Admission of Liability. This Waiver and Release Agreement does not constitute
an admission of liability or wrongdoing on the part of the Employer, the Employer does not admit
there has been any wrongdoing whatsoever against the Employee, and the Employer expressly denies
that any wrongdoing has occurred.

          4. Entire Agreement. There are no other agreements of any nature between the Employer
and the Employee with respect to the matters discussed in this Waiver and Release Agreement, except
as expressly stated herein, and in signing this Waiver and Release Agreement, the Employee is not
relying on any agreements or representations, except those expressly contained in this Waiver and
Release Agreement.

          5. Execution. It is not necessary that the Employer sign this Waiver and Release
Agreement following the Employee’s full and complete execution of it for it to become fully
effective and enforceable.

          6. Severability. If any provision of this Waiver and Release Agreement is found, held
or deemed by a court of competent jurisdiction to be void, unlawful or unenforceable under any
applicable statute or controlling law, the remainder of this Waiver and Release Agreement shall
continue in full force and effect.

          7. Governing Law. This Waiver and Release Agreement shall be governed by the laws of
the State of Delaware, excluding the choice of law rules thereof.

          8. Headings. Section and subsection headings contained in this Waiver and Release
Agreement are inserted for the convenience of reference only. Section and subsection headings
shall not be deemed to be a part of this Waiver and Release Agreement for any purpose, and they
shall not in any way define or affect the meaning, construction or scope of any of the provisions
hereof.

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     IN WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day and year
first herein above written.

	 	 	 	 	 
	 

	 	EMPLOYEE:	 	 
	 
	 	 	 	 
	 

	 	 

[Name]
	 	 

4exv10w1

 

Exhibit 10.1

Agreement to Establish a Rule 10b5-1 Selling Plan

     This Agreement to Establish a Rule 10b5-1 Selling Plan (this “Selling Plan”),
dated August   2  , 2006, between Douglas B. Otto Trust created July 31, 1996 (the
“Seller”), and RBC Dain Rauscher Inc. (the “Broker”).

     WHEREAS, Seller desires to enter into this Selling Plan to sell shares of common stock, par
value $0.01 per share (the “Stock”), of Deckers Outdoor Corporation (the “Issuer”)
in accordance with the terms set forth on Annex A hereto;

     WHEREAS, Seller desires to engage Broker to effect sales of shares of Stock in accordance with
this Selling Plan; and

     WHEREAS, Issuer has provided its consent as provided in Annex B hereto.

     NOW, THEREFORE, the Seller and Broker hereby agree as follows:

1. Broker shall effect all sales (each a “Sale”) of Stock under this Selling Plan in
accordance with it terms, including those terms set forth on Annex A.

2. Seller understands that Broker may not be able to effect a Sale in the event of: (i) a market
disruption; (ii) a legal, regulatory or contractual restriction applicable to Issuer or Broker;
(iii) the receipt by Broker of written notice from counsel for the Issuer advising it that this
Selling Plan is no longer in effect, or alternatively, that Sales to be made under this Selling
Plan are suspended until further notice. If any Sale cannot be executed as required by this
Selling Plan for any of these reasons, Broker shall effect such Sale as promptly as practical after
the cessation or termination of any market disruption, restriction, or suspension described above,
or as promptly as possible after receipt of written affirmation of the continuing effect or
validity of this Selling Plan or an amended or substituted Selling Plan.

3. Seller represents and warrants that, as of the date hereof, he is not aware of material,
nonpublic information with respect to the Issuer or any securities of the Issuer (including the
Stock) and is entering into this Selling Plan in good faith and not as part of a plan or scheme to

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evade the prohibitions of Rule 10b-5 and Rule 10b5-1 under the Securities Exchange Act of 1934 (the
“Exchange Act”).

4. It is the intent of the parties that this Selling Plan comply with the requirements of Rule
l0b5-1(c)(1) under the Exchange Act and that this Selling Plan shall be interpreted to comply with
the requirements of Rule 10b5-1(c)(1).

5. Where applicable, Broker agrees to effect all Sales in accordance with the manner of sale
requirements of Rule 144 under the Securities Act of 1933, and in no event shall Broker effect any
Sale if such Sale would exceed the then applicable volume limitation under Rule 144, assuming that
Sales effected by Broker for Seller under this Selling Plan are the only sales subject to that
limitation. Seller agrees not to take, and agrees to cause any person or entity with which he or
she would be required to aggregate sales of Stock pursuant to paragraph (a)(2) or (e) of Rule 144
not to take, any action that would cause the Sales not to comply with Rule 144. Broker will be
responsible for completing and filing on behalf of Seller the required Form 144.

6. Seller agrees to make all filings, if any, required under Sections 13(d), 13(g) and 16 of the
Exchange Act.

7. Seller agrees to identify to Broker all orders or instructions that will or could result in
Sales under this Selling Plan as “Rule 10b5-1 Orders” or “Rule 10b5-1 Instructions” and understands
and further agrees that he may not amend, substitute or otherwise alter any such Order or
Instruction without the prior written permission of Issuer, which written permission shall be
provided to Broker directly from Issuer. Seller further understands and agrees that he bears all
legal and regulatory risks associated with any such amendment, substitution or alteration.

8. Seller understands and acknowledges that this is his Selling Plan, further represents that he
has had full opportunity to consult with his legal counsel with respect to the validity of this
Selling Plan, and that he is not relying on Broker for such counsel.

9. This Selling Plan shall terminate when Issuer’s insider trading policies are no longer in effect
with respect to Seller, and Seller agrees to promptly advise Broker upon occurrence of such event.

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10. This Selling Plan may be suspended or terminated by Seller at any time upon five (5) business
days prior written notice sent to Broker. Seller agrees that Seller shall not terminate this
Selling Plan except upon consultation with Seller’s own legal counsel.

11. This Selling Plan shall be suspended or, at Broker’s option, terminated, within five (5)
business days of receipt by Broker of written notice from the Issuer of the occurrence of a legal,
contractual or regulatory restriction that is applicable to Seller, including, but not limited to,
any restriction related to a merger or acquisition of Issuer or a stock offering requiring an
affiliate lock-up.

12. This Selling Plan, shall be governed by and construed in accordance with the laws of the State
of California and may be modified or amended only by a writing signed by the parties hereto.

13. Proceeds from each Sale effected under the Selling Plan will be delivered to Seller’s account
with Broker on a normal three (3) day settlement basis, less any commission or other expenses of
sale to be paid to Broker.

14. This Selling Plan constitutes the entire agreement between the parties with respect to this
Selling Plan and supersedes any prior agreements or understandings with regard to the Selling Plan.

15. All notices under this Selling Plan shall be sent by facsimile or certified mail as follows:

If to Seller:

Douglas B. Otto Trust created July 31, 1996

495-A S. Fairview Ave.

Goleta, CA 93117

If to Broker:

RBC Dain Rauscher Inc.

2 Embarcadero Center, Suite 1200

San Francisco, CA 94111

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16. This Selling Plan may be executed in counterparts, each of which shall be deemed an original.

17. If any provision of this Selling Plan is or becomes inconsistent with applicable present or
future law, rule or regulation, including Rule 10b5-1, that provision will be deemed modified or,
if necessary, rescinded in order to comply with the relevant law, rule or regulation.

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IN WITNESS WHEREOF, the undersigned have signed this Selling Plan as of the date first written
above.

	 	 	 	 	 
	 	 	 
	 	     /s/ Douglas B. Otto, Trustee
 	 
	 	Douglas B. Otto Trust created July 31, 1996 	 
	 	 	 
	 
	 	RBC DAIN RAUSCHER INC.

 	 
	 	By:  	/s/ Justin James
 	 
	 	 	Name:  	Justin James 	 
	 	 	Title:  	Vice President – Sales Trader 	 

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Annex A

to

Agreement to Establish a Rule10b5-1 Selling Plan

Deckers Outdoor Corporation (“Deckers”)

This is Annex A to the Selling Plan between Seller and Broker dated August   2  ,
2006. The provisions hereof are incorporated into the Selling Plan and made a part thereof.

	 	1.	 	Beginning on August   2  , 2006, and on the first (1st) trading day (a
“Trading Day” is any day on which Deckers Stock trades on the Nasdaq National
Market) of each quarter thereafter, Broker shall effect sales of Deckers Stock for Seller
as follows:

	 	a.	 	30,000 shares of Deckers Stock at a limit price of at least $20.00 per
share;
	 
	 	b.	 	an additional 30,000 shares of Deckers Stock at a limit price of at
least $30.00 per share;
	 
	 	c.	 	an additional 30,000 shares of Deckers Stock at a limit price of at
least $40.00 per share;
	 
	 	d.	 	an additional 30,000 shares of Deckers Stock at a limit price of at
least $50.00 per share;
	 
	 	e.	 	an additional 30,000 shares of Deckers Stock at a limit price of at
least $60.00 per share; and
	 
	 	f.	 	an additional 30,000 shares of Deckers Stock at a limit price of at
least $70.00 pre share.

	 	2.	 	If, consistent with ordinary principles of best execution or for any other reason,
Broker cannot effect all sales as set forth above (hereafter, a “Shortfall”),
Broker shall sell the Shortfall as soon as practicable (consistent with the limit prices
and quantities set forth above) in accordance with ordinary principles of best execution.
	 
	 	3.	 	The pricing guidelines outlined in paragraph 1. above shall be followed each quarter;
provided however, that:

	 	a.	 	If Deckers Stock price is such that the above formula results in no
sales being made for an entire calendar quarter, then the limit prices in
paragraphs 1(a) – (f) above shall all be reduced by $2.00 for the next
succeeding Sell Date and shall continue at these new reduced levels for all
subsequent quarters; and
	 
	 	b.	 	The limit price reducing feature in paragraph 3(a) above shall be
repeated each quarter that no sales occur, which may result in further limit price
reductions; provided however, that
	 
	 	c.	 	The limit price in paragraph 1(a) shall not be reduced below $15.00 per
share; the limit price in paragraph 1(b) shall not be reduced below $25.00 per
share; the limit price in paragraph 1(c) shall not be reduced below $35.00 per
share; the limit price in paragraph 1(d) shall not be reduced below $45.00 per
share; the limit price in paragraph 1(e) shall not be reduced below $55.00 per
share; and the limit price in paragraph 1(f) shall not be reduced below $65.00 per
share.

	 	4.	 	The Selling Plan shall terminate on June 30, 2008.

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	 	5.	 	All limit prices above are net of commissions to the Broker.
	 
	 	6.	 	The share amounts and limit prices set forth in paragraph 1 above shall be
appropriately increased or decreased to reflect any stock splits and recapitalizations.
	 
	 	7.	 	Subject to the conditions of paragraphs 1 through 7 above, Broker is granted absolute
discretion to determine how, when and whether to sell Shares under the Plan. Apart from
the instructions set forth in the Plan, Seller shall not exercise any influence over how,
when or whether to effect sales of Shares under the Plan, whether through communications
with Broker or otherwise.

*     *     *

The undersigned have signed this Annex A as of the date of the Selling Plan.

Dated: August 2, 2006

	 	 	 	 	 
	 	 	 
	/s/ Douglas B. Otto
 	 	 
	Douglas B. Otto Trust created July 31, 1996 	 	 
	 	 	 
	 
	 	 	 	 	 
	RBC DAIN RAUSCHER, INC.

 	 	 
	By:  	/s/ Justin James
 	 	 
	 	Name:  	Justin James 	 	 
	 	Title:  	Vice President – Sales Trader 	 	 

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Annex B

to

Agreement to Establish a Rule10b5-1 Selling Plan

1. Deckers Outdoor Corporation (the “Issuer”) represents that it has pre-cleared, as
permitted under its insider trading policy, the Agreement to Establish a Rule 10b5-1 Selling Plan
dated August   2  , 2006 (the “Selling Plan”) between Douglas B. Otto Trust created
July 31, 1996 (“Seller”) and RBC Dain Rauscher Inc. relating to the common stock, par value
$0.01 per share, of the Issuer.

2. Pre-clearance of the Selling Plan constitutes permission only under the Issuer’s insider trading
policy. In no event will Issuer or any of its officers, employees, directors or agents be
responsible for Seller’s compliance with applicable securities laws.

Dated: August 7, 2006

	 	 	 	 	 
	Deckers Outdoor Corporation

 	 	 
	By:  	/s/ Zohar Ziv
 	 	 
	 	Zohar Ziv, Chief Financial Officer and Executive 	 	 
	 	Vice President of Finance and Adminstration 	 	 
	 	Print Name and Title 	 	 
	 

-8-

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