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(Mark one)
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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2013
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or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Delaware
(State or other jurisdiction of
incorporation or organization)
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95-3015862
(I.R.S. Employer
Identification No.)
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250 Coromar Drive, Goleta, California
(Address of principal executive offices)
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93117
(Zip Code)
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Registrant's telephone number, including area code: (805) 967-7611
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.01 per share
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NASDAQ Global Select Market
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Page
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•
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our global business, growth, operating, investing, and financing strategies;
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•
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our product offerings, distribution channels and geographic mix;
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•
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the success of our new products, brands, and growth initiatives;
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•
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the impact of seasonality on our operations;
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expectations regarding our net sales and earnings growth and other financial metrics;
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our development of worldwide distribution channels;
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trends affecting our financial condition, results of operations, or cash flows;
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our expectations for expansion of our retail and E-Commerce capabilities;
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information security and privacy of customer, employee or company information;
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overall global economic trends;
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reliability of overseas factory production and storage; and
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the availability and cost of raw materials.
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shape and stimulate consumer tastes and preferences by offering innovative, attractive, and exciting products;
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anticipate and respond to changing consumer demands in a timely manner;
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maintain brand authenticity;
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develop high quality products that appeal to consumers;
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price our products suitably;
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provide strong and effective marketing support; and
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ensure product availability.
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increase our working capital needs beyond our capacity;
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increase costs if we fail to successfully integrate a newly acquired business or achieve expected cost savings;
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result in impairment charges related to acquired businesses;
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create remote-site management issues, which would adversely affect our internal control environment;
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have significant domestic or international legal or compliance implications;
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make it difficult to attract, retain, and manage adequate human resources in remote locations;
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cause additional inventory manufacturing, distribution, and management costs;
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cause us to experience difficulty in filling customer orders;
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result in distribution termination transaction costs; or
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•
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create other production, distribution, and operating difficulties.
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As of December 31, 2013
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||||||||||||||||||
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UGG
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Teva
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Sanuk
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Other
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Total
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||||||||||
Trademarks
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$
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154
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$
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15,301
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$
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—
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$
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—
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$
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15,455
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Goodwill
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6,101
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—
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113,944
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8,680
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128,725
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|||||
Total nonamortizable intangibles
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$
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6,255
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$
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15,301
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$
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113,944
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$
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8,680
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$
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144,180
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•
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tariffs, import and export controls, and other non-tariff barriers such as quotas and local content rules on raw materials and finished products, including the potential threat of anti-dumping duties and quotas;
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•
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increasing transportation costs and a limited supply of international shipping capacity;
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•
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increasing labor costs;
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•
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poor infrastructure and shortages of equipment, which can disrupt transportation and utilities;
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restrictions on the transfer of funds;
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changing economic conditions;
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violations or changes in governmental policies and regulations including labor, safety, and environmental regulations in China, Vietnam, the US, and elsewhere;
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refusal to adopt or comply with our Supplier Code of Conduct and Restricted Substances Policy;
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customary business traditions in China and Vietnam such as local holidays, which are traditionally accompanied by high levels of turnover in the factories;
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labor unrest, which can lead to work stoppages and interruptions in transportation or supply;
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delays during shipping, at the port of entry or at the port of departure;
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political instability, which can interrupt commerce;
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use of unauthorized or prohibited materials or reclassification of materials;
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expropriation and nationalization; and
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adverse changes in consumer perception of goods, trade, or political relations with China and Vietnam.
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critical business systems become inoperable or require significant costs to restore;
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key personnel are unable to perform their duties, communicate, or access information systems;
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significant quantities of merchandise are damaged or destroyed;
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we are required to make unanticipated investment in state-of-the-art technologies and security measures;
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key wholesale and distributor customers cannot place or receive orders;
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E-Commerce customer orders may not be received or fulfilled;
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confidential information about our customers may be misappropriated or lost damaging our reputation and customer relationships;
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we are exposed to unanticipated liabilities; or
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carriers cannot ship or unload shipments.
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changes in currency exchange rates, which impact the price to international consumers;
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ability to move currency out of international markets;
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the burdens of complying with a variety of foreign laws and regulations, the interpretation and application of which are uncertain;
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legal costs and penalties related to defending allegations of non-compliance;
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unexpected changes in legal and regulatory requirements;
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inability to successfully import into a country;
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changes in tax laws;
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complications due to lack of familiarity with local customs;
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difficulties associated with promoting products in unfamiliar cultures;
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political instability;
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changes in diplomatic and trade relationships; and
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general economic fluctuations in specific countries or markets.
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changes in expectations of our future performance, whether realized or perceived;
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changes in estimates by securities analysts or failure to meet such estimates;
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published research and opinions by securities analysts and other market forecasters;
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changes in our credit ratings;
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the financial results and liquidity of our customers;
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shift of revenue recognition as a result of changes in our distribution model, delivery of merchandise, or entering into agreements with related parties;
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claims brought against us by a regulatory agency or our stockholders;
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quarterly fluctuations in our sales, expenses, and financial results;
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general equity market conditions and investor sentiment;
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economic conditions and consumer confidence;
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broad market fluctuations in volume and price;
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increasing short sales of our stock;
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announcements to repurchase our stock;
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the declaration of stock or cash dividends; and
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a variety of risk factors, including the ones described elsewhere in this Annual Report on Form 10-K and in our other periodic reports.
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Facility Location
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Description
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Business Segment
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Approximate Square Footage
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Camarillo, California
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Warehouse Facility
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Unallocated
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723,000
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Goleta California
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Corporate Offices
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Unallocated
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91,000
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Common Stock
Price Per Share
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||||||
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Low
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High
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||||
Year ended December 31, 2013
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First Quarter
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$
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36.12
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$
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55.69
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Second Quarter
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$
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47.35
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$
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59.69
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Third Quarter
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$
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51.07
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$
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66.09
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Fourth Quarter
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$
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57.84
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$
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86.09
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Year ended December 31, 2012
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First Quarter
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$
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62.90
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$
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90.21
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Second Quarter
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$
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43.25
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$
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69.46
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Third Quarter
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$
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34.99
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$
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51.21
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Fourth Quarter
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$
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28.63
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$
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42.76
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December 31,
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2008
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2009
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2010
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2011
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2012
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2013
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||||||||||||
Deckers Outdoor Corporation
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$
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100.0
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$
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127.4
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$
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299.6
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$
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283.9
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$
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151.3
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$
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317.3
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NASDAQ Market Index#
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100.0
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145.3
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171.7
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170.3
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200.6
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281.1
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|||||||
S&P 500 Apparel, Accessories & Luxury Goods Index
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100.0
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162.7
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229.8
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285.7
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293.1
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366.2
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|||||||
Peer Group Index*
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100.0
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186.7
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242.4
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238.0
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279.6
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406.3
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|||||||
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#
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The NASDAQ Market Index is the same NASDAQ Index used in our 2012 Form 10-K.
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*
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The Peer Group Index consists of Steven Madden, Ltd.; Wolverine World Wide, Inc.; Crocs, Inc.; and Skechers USA, Inc. In our 2012 Form 10-K the peer group also included K-Swiss Inc., LaCrosse Footwear, Inc. and Kenneth Cole Productions which are not included in the current presentation because K-Swiss Inc. was acquired in January 2013 and LaCrosse Footwear, Inc. and Kenneth Cole Productions became private companies during 2012.
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Years ended December 31,
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2013
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2012
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2011
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2010
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2009
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||||||||||
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(In thousands, except per share data)
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Statements of operations data
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Net sales:
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UGG wholesale
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$
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818,377
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$
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819,256
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$
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915,203
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$
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663,854
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$
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566,964
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Teva wholesale
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109,334
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108,591
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118,742
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96,207
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71,952
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Sanuk wholesale
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94,420
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89,804
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26,039
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—
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—
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|||||
Other brands wholesale
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38,276
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20,194
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21,801
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23,476
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19,644
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|||||
E-Commerce
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169,534
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130,592
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106,498
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91,808
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75,666
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|||||
Retail stores
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326,677
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245,961
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189,000
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|
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125,644
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|
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78,951
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|
|||||
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1,556,618
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1,414,398
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1,377,283
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1,000,989
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813,177
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|||||
Cost of sales
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820,135
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782,244
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698,288
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|
498,051
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442,087
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|
|||||
Gross profit
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736,483
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632,154
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|
678,995
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|
|
502,938
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|
|
371,090
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|
|||||
Selling, general and administrative expenses
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528,586
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|
|
445,206
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|
|
394,157
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|
|
253,850
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|
|
189,843
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|
|||||
Income from operations
|
207,897
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|
|
186,948
|
|
|
284,838
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|
|
249,088
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|
|
181,247
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|
|||||
Other expense (income), net
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2,340
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|
|
2,830
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(424
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)
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(1,021
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)
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|
(1,976
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)
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|||||
Income before income taxes
|
205,557
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|
|
184,118
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|
|
285,262
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250,109
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183,223
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|
|||||
Income taxes
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59,868
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|
|
55,104
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|
|
83,404
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|
|
89,732
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|
|
66,304
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|
|||||
Net income
|
145,689
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|
|
129,014
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|
|
201,858
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|
|
160,377
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|
|
116,919
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|
|||||
Net income attributable to noncontrolling interest
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—
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|
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(148
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)
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(2,806
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)
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(2,142
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)
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(133
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)
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|||||
Net income attributable to Deckers Outdoor Corporation
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$
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145,689
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$
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128,866
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$
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199,052
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$
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158,235
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$
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116,786
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Net income per share attributable to Deckers Outdoor Corporation common stockholders:
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||||||||||
Basic
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$
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4.23
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|
$
|
3.49
|
|
|
$
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5.16
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$
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4.10
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|
$
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2.99
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Diluted
|
$
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4.18
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|
$
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3.45
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$
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5.07
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$
|
4.03
|
|
|
$
|
2.96
|
|
Weighted-average common shares outstanding:
|
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|
|
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|
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||||||||||
Basic
|
34,473
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|
|
36,879
|
|
|
38,605
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|
|
38,615
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|
|
39,024
|
|
|||||
Diluted
|
34,829
|
|
|
37,334
|
|
|
39,265
|
|
|
39,292
|
|
|
39,393
|
|
|
As of December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
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(In thousands)
|
||||||||||||||||||
Balance sheet data
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
237,125
|
|
|
$
|
110,247
|
|
|
$
|
263,606
|
|
|
$
|
445,226
|
|
|
$
|
315,862
|
|
Working capital
|
508,786
|
|
|
424,569
|
|
|
585,823
|
|
|
570,869
|
|
|
420,117
|
|
|||||
Total assets
|
1,259,729
|
|
|
1,068,064
|
|
|
1,146,196
|
|
|
808,994
|
|
|
599,043
|
|
|||||
Long-term liabilities
|
51,092
|
|
|
62,246
|
|
|
72,687
|
|
|
8,456
|
|
|
6,269
|
|
|||||
Total Deckers Outdoor Corporation stockholders' equity
|
888,119
|
|
|
738,801
|
|
|
835,936
|
|
|
652,987
|
|
|
491,358
|
|
•
|
UGG®: Premier brand in luxurious comfort footwear, handbags, apparel, and cold weather accessories;
|
•
|
Teva®: Born from the outdoors, active lifestyle footwear for the adventurous spirit; and
|
•
|
Sanuk®: Innovative action sport footwear brand rooted in the surf community.
|
•
|
Sales of our products are highly seasonal and are sensitive to weather conditions, which are beyond our control. Even though we are creating more year-round styles for our brands, the effect of favorable or unfavorable weather on sales can be significant.
|
•
|
Continuing uncertainty surrounding US and global economic conditions has adversely impacted businesses worldwide. Some of our customers have been, and more may be, adversely affected, which in turn has, and may continue to, adversely impact our financial results.
|
•
|
The sheepskin used in certain UGG products is in high demand and limited supply, and there have been significant fluctuations in the price of sheepskin as the demand from competitors for this material has changed. However, our sheepskin costs decreased in 2013 compared to 2012 due to lower pricing negotiated for our Fall 2013 product costs, as well as the use of UGGpure, real wool woven into a durable backing used as an alternative to table grade sheepskin, in select linings and foot beds.
|
•
|
The markets for casual, outdoor, and athletic footwear have grown significantly during the last decade. We believe this growth is a result of the trend toward casual dress in the workplace, increasingly active outdoor lifestyles, and a growing emphasis on comfort.
|
•
|
Consumers are more often seeking footwear designed to address a broader array of activities with the same quality, comfort, and high performance attributes they have come to expect from traditional athletic footwear.
|
•
|
Consumers have narrowed their footwear product breadth, focusing on brands with a rich heritage and authenticity as market category creators and leaders.
|
•
|
Consumers have become increasingly focused on luxury and comfort, seeking out products and brands that are fashionable while still comfortable.
|
•
|
There is an emerging sustainable lifestyle movement happening all around the world, and consumers are demanding that brands and companies become more environmentally responsible.
|
•
|
Consumers are following a recent trend of buy now, wear now. This trend entails the consumer waiting to purchase shoes until they will actually wear them, contrasted with a tendency in the past to purchase shoes they did not plan to wear until later.
|
•
|
High consumer brand loyalty, due to over 35 years of delivering quality and luxuriously comfortable UGG footwear;
|
•
|
Continued innovation of new product categories and styles, including those beyond footwear such as loungewear, handbags, cold-weather accessories and a new home offering;
|
•
|
A more robust footwear offering, including transitional collections to better bridge the gap between late summer and the start of the holiday season;
|
•
|
Expanded slipper category showing incremental growth with added styles for both women and men;
|
•
|
Growing Direct-to-Consumer platform and enhanced omni-channel capabilities that enable us to increasingly engage existing and prospective consumers in a more connected environment to introduce our evolving product lines;
|
•
|
Product customization with our UGG by You program allows for deeper connection with brand and products;
|
•
|
Focus on mobile consumers with responsive site design providing shoppers access to the brand from their mobile device;
|
•
|
Year-round holistic paid advertising approach for women, men and kids in targeted high-end print, OOH, digital and social media;
|
•
|
Holiday focused advertising campaign to drive important seasonal sales;
|
•
|
Continued creation of targeted UGG for Men campaigns featuring brand ambassador Tom Brady;
|
•
|
Targeted E-Commerce based marketing to existing and prospective consumers through integrated outreach including email blasts, interactive site design and search engine optimization based content;
|
•
|
Successful targeting of higher-end distribution;
|
•
|
Expanded product assortments from existing accounts;
|
•
|
Adoption by high-profile celebrities as a favored footwear brand;
|
•
|
Continued media attention that has enabled us to introduce the brand to consumers much faster than we would have otherwise been able to;
|
•
|
Increased exposure to the brand driven by our concept stores that showcase all of our product offerings;
|
•
|
Continued expansion of worldwide retail through new UGG stores; and
|
•
|
Continued geographic expansion through our UGG concept and outlet stores globally.
|
|
2013
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Net sales
|
$
|
263,760
|
|
|
$
|
170,085
|
|
|
$
|
386,725
|
|
|
$
|
736,048
|
|
Income (loss) from operations
|
$
|
2,652
|
|
|
$
|
(42,751
|
)
|
|
$
|
46,497
|
|
|
$
|
201,499
|
|
|
2012
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
Net sales
|
$
|
246,306
|
|
|
$
|
174,436
|
|
|
$
|
376,392
|
|
|
$
|
617,264
|
|
Income (loss) from operations
|
$
|
11,933
|
|
|
$
|
(28,708
|
)
|
|
$
|
59,609
|
|
|
$
|
144,114
|
|
|
Years ended December 31,
|
|||||||||||||||||||
|
2013
|
|
2012
|
|
Change
|
|||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
Net sales
|
$
|
1,556,618
|
|
|
100.0
|
%
|
|
$
|
1,414,398
|
|
|
100.0
|
%
|
|
$
|
142,220
|
|
|
10.1
|
%
|
Cost of sales
|
820,135
|
|
|
52.7
|
|
|
782,244
|
|
|
55.3
|
|
|
37,891
|
|
|
4.8
|
|
|||
Gross profit
|
736,483
|
|
|
47.3
|
|
|
632,154
|
|
|
44.7
|
|
|
104,329
|
|
|
16.5
|
|
|||
Selling, general and administrative expenses
|
528,586
|
|
|
33.9
|
|
|
445,206
|
|
|
31.5
|
|
|
83,380
|
|
|
18.7
|
|
|||
Income from operations
|
207,897
|
|
|
13.4
|
|
|
186,948
|
|
|
13.2
|
|
|
20,949
|
|
|
11.2
|
|
|||
Other expense, net
|
2,340
|
|
|
0.2
|
|
|
2,830
|
|
|
0.2
|
|
|
(490
|
)
|
|
(17.3
|
)
|
|||
Income before income taxes
|
205,557
|
|
|
13.2
|
|
|
184,118
|
|
|
13.0
|
|
|
21,439
|
|
|
11.6
|
|
|||
Income taxes
|
59,868
|
|
|
3.8
|
|
|
55,104
|
|
|
3.9
|
|
|
4,764
|
|
|
8.6
|
|
|||
Net income
|
145,689
|
|
|
9.4
|
|
|
129,014
|
|
|
9.1
|
|
|
16,675
|
|
|
12.9
|
|
|||
Net income attributable to the noncontrolling interest
|
—
|
|
|
—
|
|
|
(148
|
)
|
|
—
|
|
|
148
|
|
|
*
|
||||
Net income attributable to Deckers Outdoor Corporation
|
$
|
145,689
|
|
|
9.4
|
%
|
|
$
|
128,866
|
|
|
9.1
|
%
|
|
$
|
16,823
|
|
|
13.1
|
%
|
|
Years Ended December 31,
|
|||||||||||||
|
|
|
|
|
Change
|
|||||||||
|
2013
|
|
2012
|
|
Amount
|
|
%
|
|||||||
Net sales by location:
|
|
|
|
|
|
|
|
|||||||
US
|
$
|
1,042,274
|
|
|
$
|
972,987
|
|
|
$
|
69,287
|
|
|
7.1
|
%
|
International
|
514,344
|
|
|
441,411
|
|
|
72,933
|
|
|
16.5
|
|
|||
Total
|
$
|
1,556,618
|
|
|
$
|
1,414,398
|
|
|
$
|
142,220
|
|
|
10.1
|
%
|
Net sales by brand and distribution channel:
|
|
|
|
|
|
|
|
|
||||||
UGG:
|
|
|
|
|
|
|
|
|
||||||
Wholesale
|
$
|
818,377
|
|
|
$
|
819,256
|
|
|
$
|
(879
|
)
|
|
(0.1
|
)%
|
E-Commerce
|
155,635
|
|
|
118,886
|
|
|
36,749
|
|
|
30.9
|
|
|||
Retail stores
|
324,868
|
|
|
245,397
|
|
|
79,471
|
|
|
32.4
|
|
|||
Total
|
1,298,880
|
|
|
1,183,539
|
|
|
115,341
|
|
|
9.7
|
|
|||
Teva:
|
|
|
|
|
|
|
|
|
||||||
Wholesale
|
109,334
|
|
|
108,591
|
|
|
743
|
|
|
0.7
|
|
|||
E-Commerce
|
6,627
|
|
|
6,578
|
|
|
49
|
|
|
0.7
|
|
|||
Retail stores
|
426
|
|
|
347
|
|
|
79
|
|
|
22.8
|
|
|||
Total
|
116,387
|
|
|
115,516
|
|
|
871
|
|
|
0.8
|
|
|||
Sanuk:
|
|
|
|
|
|
|
|
|
||||||
Wholesale
|
94,420
|
|
|
89,804
|
|
|
4,616
|
|
|
5.1
|
|
|||
E-Commerce
|
6,077
|
|
|
4,172
|
|
|
1,905
|
|
|
45.7
|
|
|||
Retail stores
|
1,183
|
|
|
20
|
|
|
1,163
|
|
|
5,815.0
|
|
|||
Total
|
101,680
|
|
|
93,996
|
|
|
7,684
|
|
|
8.2
|
|
|||
Other brands:
|
|
|
|
|
|
|
|
|
||||||
Wholesale
|
38,276
|
|
|
20,194
|
|
|
18,082
|
|
|
89.5
|
|
|||
E-Commerce
|
1,195
|
|
|
956
|
|
|
239
|
|
|
25.0
|
|
|||
Retail stores
|
200
|
|
|
197
|
|
|
3
|
|
|
1.5
|
|
|||
Total
|
39,671
|
|
|
21,347
|
|
|
18,324
|
|
|
85.8
|
|
|||
Total
|
$
|
1,556,618
|
|
|
$
|
1,414,398
|
|
|
$
|
142,220
|
|
|
10.1
|
%
|
Total E-Commerce
|
$
|
169,534
|
|
|
$
|
130,592
|
|
|
$
|
38,942
|
|
|
29.8
|
%
|
Total Retail stores
|
$
|
326,677
|
|
|
$
|
245,961
|
|
|
$
|
80,716
|
|
|
32.8
|
%
|
•
|
increased retail costs of approximately $53,000 largely related to 40 new retail stores that were not open as of
December 31, 2012
and related corporate infrastructure;
|
•
|
increased recognition of performance-based compensation of approximately $17,000;
|
•
|
increased E-Commerce expenses of approximately $13,000 largely related to increased marketing and advertising;
|
•
|
increased expenses of approximately $9,000 for the Hoka brand which we acquired on September 27, 2012; partially offset by
|
•
|
decreased expense related to the fair value of the Sanuk contingent consideration liability of approximately $8,000 primarily due to changes made during 2012 to the brand's forecast of sales and gross profit through 2015, which increased the expense in 2012 without a comparable increase in 2013.
|
|
Years Ended December 31,
|
|||||||||||||
|
|
|
|
|
Change
|
|||||||||
|
2013
|
|
2012
|
|
Amount
|
|
%
|
|||||||
UGG wholesale
|
$
|
224,736
|
|
|
$
|
206,039
|
|
|
$
|
18,697
|
|
|
9.1
|
%
|
Teva wholesale
|
9,165
|
|
|
9,228
|
|
|
(63
|
)
|
|
(0.7
|
)
|
|||
Sanuk wholesale
|
20,591
|
|
|
14,398
|
|
|
6,193
|
|
|
43.0
|
|
|||
Other brands wholesale
|
(9,807
|
)
|
|
(4,523
|
)
|
|
(5,284
|
)
|
|
(116.8
|
)
|
|||
E-Commerce
|
66,819
|
|
|
56,190
|
|
|
10,629
|
|
|
18.9
|
|
|||
Retail stores
|
65,716
|
|
|
63,306
|
|
|
2,410
|
|
|
3.8
|
|
|||
Unallocated overhead costs
|
(169,323
|
)
|
|
(157,690
|
)
|
|
(11,633
|
)
|
|
(7.4
|
)
|
|||
Total
|
$
|
207,897
|
|
|
$
|
186,948
|
|
|
$
|
20,949
|
|
|
11.2
|
%
|
|
Years Ended December 31,
|
||||||
|
2013
|
|
2012
|
||||
Income tax expense
|
$
|
59,868
|
|
|
$
|
55,104
|
|
Effective income tax rate
|
29.1
|
%
|
|
29.9
|
%
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
2012
|
|
2011
|
|
Change
|
|||||||||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|
Amount
|
|
%
|
|||||||||
Net sales
|
$
|
1,414,398
|
|
|
100.0
|
%
|
|
$
|
1,377,283
|
|
|
100.0
|
%
|
|
$
|
37,115
|
|
|
2.7
|
%
|
Cost of sales
|
782,244
|
|
|
55.3
|
|
|
698,288
|
|
|
50.7
|
|
|
83,956
|
|
|
12.0
|
|
|||
Gross profit
|
632,154
|
|
|
44.7
|
|
|
678,995
|
|
|
49.3
|
|
|
(46,841
|
)
|
|
(6.9
|
)
|
|||
Selling, general and administrative expenses
|
445,206
|
|
|
31.5
|
|
|
394,157
|
|
|
28.6
|
|
|
51,049
|
|
|
13.0
|
|
|||
Income from operations
|
186,948
|
|
|
13.2
|
|
|
284,838
|
|
|
20.7
|
|
|
(97,890
|
)
|
|
(34.4
|
)
|
|||
Other expense (income), net
|
2,830
|
|
|
0.2
|
|
|
(424
|
)
|
|
—
|
|
|
3,254
|
|
|
767.5
|
|
|||
Income before income taxes
|
184,118
|
|
|
13.0
|
|
|
285,262
|
|
|
20.7
|
|
|
(101,144
|
)
|
|
(35.5
|
)
|
|||
Income taxes
|
55,104
|
|
|
3.9
|
|
|
83,404
|
|
|
6.1
|
|
|
(28,300
|
)
|
|
(33.9
|
)
|
|||
Net income
|
129,014
|
|
|
9.1
|
|
|
201,858
|
|
|
14.7
|
|
|
(72,844
|
)
|
|
(36.1
|
)
|
|||
Net income attributable to the noncontrolling interest
|
(148
|
)
|
|
—
|
|
|
(2,806
|
)
|
|
(0.2
|
)
|
|
2,658
|
|
|
94.7
|
|
|||
Net income attributable to Deckers Outdoor Corporation
|
$
|
128,866
|
|
|
9.1
|
%
|
|
$
|
199,052
|
|
|
14.5
|
%
|
|
$
|
(70,186
|
)
|
|
(35.3
|
)%
|
|
Years Ended December 31,
|
|||||||||||||
|
|
|
|
|
Change
|
|||||||||
|
2012
|
|
2011
|
|
Amount
|
|
%
|
|||||||
Net sales by location:
|
|
|
|
|
|
|
|
|||||||
US
|
$
|
972,987
|
|
|
$
|
945,109
|
|
|
$
|
27,878
|
|
|
2.9
|
%
|
International
|
441,411
|
|
|
432,174
|
|
|
9,237
|
|
|
2.1
|
|
|||
Total
|
$
|
1,414,398
|
|
|
$
|
1,377,283
|
|
|
$
|
37,115
|
|
|
2.7
|
%
|
Net sales by brand and distribution channel:
|
|
|
|
|
|
|
|
|
||||||
UGG:
|
|
|
|
|
|
|
|
|
||||||
Wholesale
|
$
|
819,256
|
|
|
$
|
915,203
|
|
|
$
|
(95,947
|
)
|
|
(10.5
|
)%
|
E-Commerce
|
118,886
|
|
|
98,256
|
|
|
20,630
|
|
|
21.0
|
|
|||
Retail stores
|
245,397
|
|
|
188,377
|
|
|
57,020
|
|
|
30.3
|
|
|||
Total
|
1,183,539
|
|
|
1,201,836
|
|
|
(18,297
|
)
|
|
(1.5
|
)
|
|||
Teva:
|
|
|
|
|
|
|
|
|
||||||
Wholesale
|
108,591
|
|
|
118,742
|
|
|
(10,151
|
)
|
|
(8.5
|
)
|
|||
E-Commerce
|
6,578
|
|
|
5,571
|
|
|
1,007
|
|
|
18.1
|
|
|||
Retail stores
|
347
|
|
|
452
|
|
|
(105
|
)
|
|
(23.2
|
)
|
|||
Total
|
115,516
|
|
|
124,765
|
|
|
(9,249
|
)
|
|
(7.4
|
)
|
|||
Sanuk:
|
|
|
|
|
|
|
|
|
||||||
Wholesale
|
89,804
|
|
|
26,039
|
|
|
63,765
|
|
|
244.9
|
|
|||
E-Commerce
|
4,172
|
|
|
539
|
|
|
3,633
|
|
|
674.0
|
|
|||
Retail stores
|
20
|
|
|
—
|
|
|
20
|
|
|
*
|
||||
Total
|
93,996
|
|
|
26,578
|
|
|
67,418
|
|
|
253.7
|
|
|||
Other brands:
|
|
|
|
|
|
|
|
|
||||||
Wholesale
|
20,194
|
|
|
21,801
|
|
|
(1,607
|
)
|
|
(7.4
|
)
|
|||
E-Commerce
|
956
|
|
|
2,132
|
|
|
(1,176
|
)
|
|
(55.2
|
)
|
|||
Retail stores
|
197
|
|
|
171
|
|
|
26
|
|
|
15.2
|
|
|||
Total
|
21,347
|
|
|
24,104
|
|
|
(2,757
|
)
|
|
(11.4
|
)
|
|||
Total
|
$
|
1,414,398
|
|
|
$
|
1,377,283
|
|
|
$
|
37,115
|
|
|
2.7
|
%
|
Total E-Commerce
|
$
|
130,592
|
|
|
$
|
106,498
|
|
|
$
|
24,094
|
|
|
22.6
|
%
|
Total Retail stores
|
$
|
245,961
|
|
|
$
|
189,000
|
|
|
$
|
56,961
|
|
|
30.1
|
%
|
•
|
increased retail costs of approximately $36,000 largely related to 30 new retail stores that were not open as of December 31, 2011;
|
•
|
approximately $25,000 of expenses for our Sanuk brand, including an increase of approximately $9,000 to the fair value of the contingent consideration liability from the Company's purchase of the brand;
|
•
|
increased marketing expenses of approximately $14,000 largely related to our new UGG women's prospects, UGG Men's and Classic campaigns;
|
•
|
increased E-Commerce expenses of approximately $7,000 largely related to increased marketing and advertising; partially offset by
|
•
|
decreased performance-based cash compensation of approximately $16,000;
|
•
|
decreased legal expense of approximately $10,000, due to having fewer litigation costs in the current year, a decrease in anti-counterfeiting expenses, as well as receiving increased judgments and collections in the current year from our website litigation;
|
•
|
decreased sales commissions of approximately $5,000 primarily due to the decrease in wholesale sales; and
|
•
|
decreased UGG amortization expense of approximately $4,000 primarily related to order books we acquired from our distributor conversions in Europe being fully amortized in 2011.
|
|
Years Ended December 31,
|
|||||||||||||
|
|
|
|
|
Change
|
|||||||||
|
2012
|
|
2011
|
|
Amount
|
|
%
|
|||||||
UGG wholesale
|
$
|
206,039
|
|
|
$
|
339,665
|
|
|
$
|
(133,626
|
)
|
|
(39.3
|
)%
|
Teva wholesale
|
9,228
|
|
|
19,265
|
|
|
(10,037
|
)
|
|
(52.1
|
)
|
|||
Sanuk wholesale
|
14,398
|
|
|
798
|
|
|
13,600
|
|
|
1,704.3
|
|
|||
Other brands wholesale
|
(4,523
|
)
|
|
(9,993
|
)
|
|
5,470
|
|
|
54.7
|
|
|||
E-Commerce
|
56,190
|
|
|
47,244
|
|
|
8,946
|
|
|
18.9
|
|
|||
Retail stores
|
63,306
|
|
|
58,552
|
|
|
4,754
|
|
|
8.1
|
|
|||
Unallocated overhead costs
|
(157,690
|
)
|
|
(170,693
|
)
|
|
13,003
|
|
|
7.6
|
|
|||
Total
|
$
|
186,948
|
|
|
$
|
284,838
|
|
|
$
|
(97,890
|
)
|
|
(34.4
|
)%
|
|
Years Ended December 31,
|
||||||
|
2012
|
|
2011
|
||||
Income tax expense
|
$
|
55,104
|
|
|
$
|
83,404
|
|
Effective income tax rate
|
29.9
|
%
|
|
29.2
|
%
|
|
Year Ended December 31,
|
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
|
||||||
Net cash provided by operating activities
|
$
|
262,125
|
|
|
$
|
163,906
|
|
|
$
|
30,091
|
|
|
Net cash used in investing activities
|
$
|
(85,197
|
)
|
|
$
|
(75,362
|
)
|
|
$
|
(184,766
|
)
|
|
Net cash used in financing activities
|
$
|
(50,513
|
)
|
|
$
|
(242,621
|
)
|
|
$
|
(27,160
|
)
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
237,125
|
|
|
$
|
110,247
|
|
|
$
|
263,606
|
|
|
Trade accounts receivable
|
184,013
|
|
|
190,756
|
|
|
193,375
|
|
|
|||
Inventories
|
260,791
|
|
|
300,173
|
|
|
253,270
|
|
|
|||
Prepaids and other current assets
|
147,375
|
|
|
90,410
|
|
|
107,651
|
|
|
|||
Total current assets
|
$
|
829,304
|
|
|
$
|
691,586
|
|
|
$
|
817,902
|
|
|
Trade accounts payable
|
$
|
151,037
|
|
|
$
|
133,457
|
|
|
$
|
110,853
|
|
|
Other current liabilities
|
169,481
|
|
|
133,560
|
|
|
121,226
|
|
|
|||
Total current liabilities
|
$
|
320,518
|
|
|
$
|
267,017
|
|
|
$
|
232,079
|
|
|
Net working capital
|
$
|
508,786
|
|
|
$
|
424,569
|
|
|
$
|
585,823
|
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 Years
|
||||||||||
Operating lease obligations(1)
|
$
|
322,630
|
|
|
$
|
46,060
|
|
|
$
|
87,630
|
|
|
$
|
72,347
|
|
|
$
|
116,593
|
|
Purchase obligations(2)
|
245,168
|
|
|
245,168
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
567,798
|
|
|
$
|
291,228
|
|
|
$
|
87,630
|
|
|
$
|
72,347
|
|
|
$
|
116,593
|
|
(1)
|
Our operating lease obligations consist primarily of building leases for our retail locations, distribution centers, and regional offices. The majority of other long-term liabilities on our consolidated balance sheets, with the exception of our Sanuk contingent consideration liability discussed below, are related to deferred rents, of which the cash lease payments are included in operating lease obligations in this table.
|
(2)
|
Our purchase obligations consist mostly of open purchase orders. They also include capital expenditures, promotional expenses and service contracts. Outstanding purchase orders are primarily with our third party manufacturers and are expected to be paid within one year. These are outstanding open orders and not minimum purchase obligations. Our promotional expenditures and service contracts are due periodically through 2014.
|
•
|
36.0% of the Sanuk brand gross profit in 2013, which was approximately
$18,600
, and
|
•
|
40.0% of the Sanuk brand gross profit in 2015.
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||
|
Amount
|
|
% of Gross
Trade Accounts
Receivable
|
|
Amount
|
|
% of Gross
Trade Accounts
Receivable
|
||||||
Gross trade accounts receivable
|
$
|
209,081
|
|
|
|
|
|
$
|
215,842
|
|
|
|
|
Allowance for doubtful accounts
|
$
|
2,039
|
|
|
1.0
|
%
|
|
$
|
2,782
|
|
|
1.3
|
%
|
Allowance for sales discounts
|
$
|
3,540
|
|
|
1.7
|
%
|
|
$
|
3,836
|
|
|
1.8
|
%
|
Allowance for estimated chargebacks
|
$
|
4,935
|
|
|
2.4
|
%
|
|
$
|
5,563
|
|
|
2.6
|
%
|
|
Amount
|
|
% of Net Sales
|
|
Amount
|
|
% of Net Sales
|
||||||
Net sales for the three months ended
|
$
|
736,048
|
|
|
|
|
|
$
|
617,264
|
|
|
|
|
Allowance for estimated returns
|
$
|
14,554
|
|
|
2.0
|
%
|
|
$
|
12,905
|
|
|
2.1
|
%
|
Estimated returns liability
|
$
|
10,144
|
|
|
1.4
|
%
|
|
$
|
6,471
|
|
|
1.0
|
%
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and the directors of the company; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.
|
Exhibit
Number
|
|
Description of Exhibit
|
|
3.1
|
|
|
Amended and Restated Certificate of Incorporation of Deckers Outdoor Corporation as amended through May 27, 2010 (Exhibit 3.1 to the Registrant's Form 10-Q for the quarterly period ended June 30, 2010 and incorporated by reference herein)
|
*3.2
|
|
|
Restated Bylaws of Deckers Outdoor Corporation
|
10.1
|
|
|
Lease Agreement dated November 1, 2003 between Ampersand Aviation, LLC and Deckers Outdoor Corporation for office building at 495-A South Fairview Avenue, Goleta, California, 93117 (Exhibit 10.34 to the Registrant's Form 10-K for the period ended December 31, 2003 and incorporated by reference herein)
|
10.2
|
|
|
Lease Agreement dated September 15, 2004 between Mission Oaks Associates, LLC and Deckers Outdoor Corporation for distribution center at 3001 Mission Oaks Blvd., Camarillo, CA 93012 (Exhibit 10.37 to the Registrant's Form 10-K for the period ended December 31, 2004 and incorporated by reference herein)
|
10.3
|
|
|
First Amendment to Lease Agreement between Mission Oaks Associates, LLC and Deckers Outdoor Corporation for distribution center at 3001 Mission Oaks Blvd., Camarillo, CA 93012, dated December 1, 2004 (Exhibit 10.38 to the Registrant's Form 10-K for the period ended December 31, 2004 and incorporated by reference herein)
|
10.4
|
|
|
Amendment to Lease Agreement between Mission Oaks Associates, LLC and Deckers Outdoor Corporation for distribution center at 3001 Mission Oaks Blvd., Camarillo, CA 93012, dated September 1, 2011 (Exhibit 10.23 to the Registrant's Form 10-K filed on February 29, 2012 and incorporated by reference herein)
|
10.5
|
|
|
Amendment to Lease Agreement between 450 N. Baldwin Park Associates, LLC and Deckers Outdoor Corporation for distribution center at 3175 Mission Oaks Blvd., Camarillo, CA 93012, dated September 1, 2011 (Exhibit 10.24 to the Registrant's Form 10-K filed on February 29, 2012 and incorporated by reference herein)
|
*10.6
|
|
|
Lease Agreement between Deckers Outdoor Corporation and Moreno Knox, LLC dated as of December 5, 2013
|
#10.7
|
|
|
Deckers Outdoor Corporation 2006 Equity Incentive Plan (incorporated herein by reference to Appendix A to the Registrant's Definitive Proxy Statement dated April 21, 2006 in connection with its 2006 Annual Meeting of Stockholders)
|
#10.8
|
|
|
First Amendment to Deckers Outdoor Corporation 2006 Equity Incentive Plan (incorporated herein by reference to Appendix A to the Registrant's Definitive Proxy Statement dated April 9, 2007 in connection with its 2007 Annual Meeting of Stockholders)
|
#10.9
|
|
|
Deckers Outdoor Corporation Amended and Restated Deferred Stock Unit Compensation Plan, a Sub Plan under the Deckers Outdoor Corporation 2006 Equity Incentive Plan, adopted by the Board of Directors on December 14, 2010 (Exhibit 10.24 to the Registrant's Form 10-K filed on March 1, 2011 and incorporated by reference herein)
|
*#10.10
|
|
|
Deckers Outdoor Corporation Amended and Restated Deferred Compensation Plan effective as of August 1, 2013
|
#10.11
|
|
|
Form of Deckers Outdoor Corporation Management Incentive Program under the 2006 Equity Incentive Plan (Exhibit 10.28 to the Registrant’s Form 10-K filed on March 1, 2013 and incorporated by reference herein)
|
#10.12
|
|
|
Form of Restricted Stock Unit Award Agreement (Level 2) Under 2006 Equity Incentive Plan (Exhibit 10.3 to the Registrant's Form 8-K filed on May 11, 2007 and incorporated by reference herein)
|
#10.13
|
|
|
Form of Restricted Stock Unit Award Agreement (Level III) Under 2006 Equity Incentive Plan adopted on June 22, 2011 (Exhibit 10.1 to the Registrant's Form 8-K filed on June 28, 2011 and incorporated by reference herein)
|
#10.14
|
|
|
Form of Stock Appreciation Rights Award Agreement (Level 2) Under 2006 Equity Incentive Plan (Exhibit 10.5 to the Registrant's Form 8-K filed on May 11, 2007 and incorporated by reference herein)
|
#10.15
|
|
|
Form of Restricted Stock Unit Award Agreement (2012 LTIP) Under 2006 Equity Incentive Plan (Exhibit 10.1 to the Registrant's Form 8-K filed on May 31, 2012 and incorporated by reference herein
|
Exhibit
Number
|
|
Description of Exhibit
|
|
#10.16
|
|
|
Form of Restricted Stock Unit Award Agreement (2013 LTIP) Under 2006 Equity Incentive Plan (Exhibit 10.1 to the Registrant's Form 8-K filed on December 19, 2013 and incorporated by reference herein)
|
#10.17
|
|
|
Form of Stock Unit Award Agreement under the Deckers Outdoor Corporation 2006 Equity Incentive Plan (Exhibit 10.27 to the Registrant’s Form 10-K filed on March 1, 2013 and incorporated by reference herein)
|
#10.18
|
|
|
Form of Indemnification Agreement (Exhibit 10.1 to the Registrant's Form 8-K filed on June 2, 2008 and incorporated by reference herein)
|
#10.19
|
|
|
Change of Control and Severance Agreement with Deckers Outdoor Corporation for Angel Martinez on December 22, 2009 (Exhibit 10.33 to the Registrant's Form 10-K filed on March 1, 2010 and incorporated by reference herein)
|
#10.20
|
|
|
Change of Control and Severance Agreement with Deckers Outdoor Corporation for Zohar Ziv on December 22, 2009 (Exhibit 10.34 to the Registrant's Form 10-K filed on March 1, 2010 and incorporated by reference herein)
|
#10.21
|
|
|
Change of Control and Severance Agreement with Deckers Outdoor Corporation for Thomas George on December 22, 2009 (Exhibit 10.35 to the Registrant's Form 10-K filed on March 1, 2010 and incorporated by reference herein)
|
#10.22
|
|
|
Change of Control and Severance Agreement with Deckers Outdoor Corporation for Constance Rishwain on December 22, 2009 (Exhibit 10.36 to the Registrant's Form 10-K filed on March 1, 2010 and incorporated by reference herein)
|
*#10.23
|
|
|
Employment Agreement with Deckers Europe Limited for Stephen Murray dated February 28, 2011
|
10.24
|
|
|
Asset Purchase Agreement, dated as of May 19, 2011 by and among Deckers Outdoor Corporation, Deckers Acquisition, Inc., Deckers International Limited, Sanuk USA, LLC, Thomas J. Kelley, Ian L. Kessler, C&C Partners, Ltd., Donald A. Clark and Paul Carr (Exhibit 10.1 to the Registrant's Form 8-K filed on May 19, 2011 and incorporated herein by reference)
|
10.25
|
|
|
Amendment No. 1 to Asset Purchase Agreement, dated as of July 1, 2011, by and among Deckers Outdoor Corporation, Deckers Acquisition, Inc., Deckers International Limited, Sanuk USA, LLC, Thomas J. Kelley, Ian L. Kessler, C&C Partners, Ltd., Donald A. Clark and Paul Carr (Exhibit 10.1 to the Registrant's Form 8-K filed on July 6, 2011 and incorporated by reference herein)
|
10.26
|
|
|
Amended and Restated Credit Agreement, dated as of August 10, 2012, by and among Deckers Outdoor Corporation, as Borrower, JPMorgan Chase Bank, National Association, as Administrative Agent, Comerica Bank and HSBC Bank USA, National Association, as Co-Syndication Agents, and the lenders from time to time party thereto (Exhibit 10.1 to the Registrant's Form 8-K filed on August 16, 2012 and incorporated by reference herein)
|
*10.27
|
|
|
Amendment No. 1 to Amended and Restated Credit Agreement, dated as of June 24, 2013, by and among Deckers Outdoor Corporation, as Borrower, and the Lenders party thereto
|
*10.28
|
|
|
Form of Stock Unit Award Agreement under the Deckers Outdoor Corporation 2006 Equity Incentive Plan
|
*21.1
|
|
|
Subsidiaries of Registrant
|
*23.1
|
|
|
Consent of Independent Registered Public Accounting Firm
|
*31.1
|
|
|
Certification of the Chief Executive Officer pursuant to Rule 13A-14(a) under the Exchange Act, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
*31.2
|
|
|
Certification of the Chief Financial Officer pursuant to Rule 13A-14(a) under the Exchange Act, adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
**32.1
|
|
|
Certification pursuant to 18 USC. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
*101.1
|
|
|
The following materials from the Company's Annual Report on Form 10-K for the annual period ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language); (i) Consolidated Balance Sheets as of December 31, 2013 and 2012; (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012, and 2011; (iii) Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012, and 2011, and (iv) Notes to Consolidated Financial Statements.
|
DECKERS OUTDOOR CORPORATION
(Registrant)
|
/s/ ANGEL R. MARTINEZ
|
Angel R. Martinez
Chief Executive Officer
|
/s/ ANGEL R. MARTINEZ
|
|
Chairman of the Board,
President and Chief Executive
Officer (Principal Executive Officer)
|
March 3, 2014
|
Angel R. Martinez
|
|
||
|
|
|
|
/s/ THOMAS A. GEORGE
|
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
March 3, 2014
|
Thomas A. George
|
|
||
|
|
|
|
/s/ KARYN O. BARSA
|
|
Director
|
March 3, 2014
|
Karyn O. Barsa
|
|
||
|
|
|
|
/s/ MAUREEN CONNERS
|
|
Director
|
March 3, 2014
|
Maureen Conners
|
|
||
|
|
|
|
/s/ MICHAEL DEVINE
|
|
Director
|
March 3, 2014
|
Michael Devine
|
|
||
|
|
|
|
/s/ JOHN M. GIBBONS
|
|
Director
|
March 3, 2014
|
John M. Gibbons
|
|
||
|
|
|
|
/s/ REX A. LICKLIDER
|
|
Director
|
March 3, 2014
|
Rex A. Licklider
|
|
||
|
|
|
|
/s/ JOHN G. PERENCHIO
|
|
Director
|
March 3, 2014
|
John G. Perenchio
|
|
||
|
|
|
|
/s/ JAMES QUINN
|
|
Director
|
March 3, 2014
|
James Quinn
|
|
||
|
|
|
|
/s/ LAURI SHANAHAN
|
|
Director
|
March 3, 2014
|
Lauri Shanahan
|
|
|
Page
|
Consolidated Financial Statements
|
|
Consolidated Financial Statement Schedule
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
237,125
|
|
|
$
|
110,247
|
|
Trade accounts receivable, net of allowances of $25,068 and $25,086 as of December 31, 2013 and December 31, 2012, respectively
|
184,013
|
|
|
190,756
|
|
||
Inventories
|
260,791
|
|
|
300,173
|
|
||
Prepaid expenses
|
14,980
|
|
|
14,092
|
|
||
Other current assets
|
112,514
|
|
|
59,028
|
|
||
Deferred tax assets
|
19,881
|
|
|
17,290
|
|
||
Total current assets
|
829,304
|
|
|
691,586
|
|
||
Property and equipment, net of accumulated depreciation of $99,473 and $69,580 as of December 31, 2013 and December 31, 2012, respectively
|
174,066
|
|
|
125,370
|
|
||
Goodwill
|
128,725
|
|
|
128,725
|
|
||
Other intangible assets, net of accumulated amortization of $24,140 and $16,164 as of December 31, 2013 and December 31, 2012, respectively
|
93,278
|
|
|
95,965
|
|
||
Deferred tax assets
|
15,751
|
|
|
13,372
|
|
||
Other assets
|
18,605
|
|
|
13,046
|
|
||
Total assets
|
$
|
1,259,729
|
|
|
$
|
1,068,064
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings
|
$
|
9,728
|
|
|
$
|
33,000
|
|
Trade accounts payable
|
151,037
|
|
|
133,457
|
|
||
Accrued payroll
|
35,725
|
|
|
15,896
|
|
||
Other accrued expenses
|
45,301
|
|
|
43,858
|
|
||
Income taxes payable
|
49,453
|
|
|
25,067
|
|
||
Value added tax (VAT) payable
|
29,274
|
|
|
15,739
|
|
||
Total current liabilities
|
320,518
|
|
|
267,017
|
|
||
Long-term liabilities
|
51,092
|
|
|
62,246
|
|
||
Commitments and contingencies (note7)
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Deckers Outdoor Corporation stockholders' equity:
|
|
|
|
||||
Common stock, $0.01 par value; authorized 125,000 shares; issued and outstanding 34,618 and 34,400 shares for 2013 and 2012, respectively
|
346
|
|
|
344
|
|
||
Additional paid-in capital
|
143,916
|
|
|
139,046
|
|
||
Retained earnings
|
746,500
|
|
|
600,811
|
|
||
Accumulated other comprehensive loss
|
(2,643
|
)
|
|
(1,400
|
)
|
||
Total stockholders' equity
|
888,119
|
|
|
738,801
|
|
||
Total liabilities and equity
|
$
|
1,259,729
|
|
|
$
|
1,068,064
|
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net sales
|
$
|
1,556,618
|
|
|
$
|
1,414,398
|
|
|
$
|
1,377,283
|
|
Cost of sales
|
820,135
|
|
|
782,244
|
|
|
698,288
|
|
|||
Gross profit
|
736,483
|
|
|
632,154
|
|
|
678,995
|
|
|||
Selling, general and administrative expenses
|
528,586
|
|
|
445,206
|
|
|
394,157
|
|
|||
Income from operations
|
207,897
|
|
|
186,948
|
|
|
284,838
|
|
|||
Other expense (income), net:
|
|
|
|
|
|
||||||
Interest income
|
(60
|
)
|
|
(217
|
)
|
|
(180
|
)
|
|||
Interest expense
|
3,079
|
|
|
3,840
|
|
|
249
|
|
|||
Other, net
|
(679
|
)
|
|
(793
|
)
|
|
(493
|
)
|
|||
|
2,340
|
|
|
2,830
|
|
|
(424
|
)
|
|||
Income before income taxes
|
205,557
|
|
|
184,118
|
|
|
285,262
|
|
|||
Income taxes
|
59,868
|
|
|
55,104
|
|
|
83,404
|
|
|||
Net income
|
145,689
|
|
|
129,014
|
|
|
201,858
|
|
|||
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
|
|||||
Unrealized loss on foreign currency hedging
|
(486
|
)
|
|
(633
|
)
|
|
(931
|
)
|
|||
Foreign currency translation adjustment
|
(757
|
)
|
|
963
|
|
|
(1,952
|
)
|
|||
Total other comprehensive (loss) income
|
(1,243
|
)
|
|
330
|
|
|
(2,883
|
)
|
|||
Comprehensive income
|
$
|
144,446
|
|
|
$
|
129,344
|
|
|
$
|
198,975
|
|
|
|
|
|
|
|
||||||
Net income attributable to:
|
|
|
|
|
|
||||||
Deckers Outdoor Corporation
|
$
|
145,689
|
|
|
$
|
128,866
|
|
|
$
|
199,052
|
|
Noncontrolling interest
|
—
|
|
|
148
|
|
|
2,806
|
|
|||
|
$
|
145,689
|
|
|
$
|
129,014
|
|
|
$
|
201,858
|
|
Comprehensive income attributable to:
|
|
|
|
|
|
||||||
Deckers Outdoor Corporation
|
$
|
144,446
|
|
|
$
|
129,196
|
|
|
$
|
196,169
|
|
Noncontrolling interest
|
—
|
|
|
148
|
|
|
2,806
|
|
|||
|
$
|
144,446
|
|
|
$
|
129,344
|
|
|
$
|
198,975
|
|
|
|
|
|
|
|
||||||
Net income per share attributable to Deckers Outdoor Corporation common stockholders:
|
|
|
|
|
|
||||||
Basic
|
$
|
4.23
|
|
|
$
|
3.49
|
|
|
$
|
5.16
|
|
Diluted
|
$
|
4.18
|
|
|
$
|
3.45
|
|
|
$
|
5.07
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
34,473
|
|
|
36,879
|
|
|
38,605
|
|
|||
Diluted
|
34,829
|
|
|
37,334
|
|
|
39,265
|
|
|
Years Ended December 31, 2011, 2012 and 2013
|
|||||||||||||||||||||||||||||
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
|
Total Deckers
Outdoor Corp.
Stockholders'
Equity
|
|
Non-controlling Interest
|
|
Total Stockholders'
Equity
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||||||||||
Balance December 31, 2010
|
38,581
|
|
|
$
|
386
|
|
|
$
|
137,989
|
|
|
$
|
513,459
|
|
|
$
|
1,153
|
|
$
|
652,987
|
|
|
$
|
2,688
|
|
|
$
|
655,675
|
|
|
Stock compensation expense
|
10
|
|
|
—
|
|
|
14,803
|
|
|
—
|
|
|
—
|
|
|
14,803
|
|
|
—
|
|
|
14,803
|
|
|||||||
Exercise of stock options
|
12
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
—
|
|
|
62
|
|
|
—
|
|
|
62
|
|
|||||||
Shares issued upon vesting
|
334
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Excess tax benefit from stock compensation
|
—
|
|
|
—
|
|
|
15,330
|
|
|
—
|
|
|
—
|
|
|
15,330
|
|
|
—
|
|
|
15,330
|
|
|||||||
Shares withheld for taxes
|
—
|
|
|
—
|
|
|
(23,497
|
)
|
|
—
|
|
|
—
|
|
|
(23,497
|
)
|
|
—
|
|
|
(23,497
|
)
|
|||||||
Stock repurchase
|
(245
|
)
|
|
(2
|
)
|
|
—
|
|
|
(19,916
|
)
|
|
—
|
|
|
(19,918
|
)
|
|
—
|
|
|
(19,918
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
199,052
|
|
|
—
|
|
|
199,052
|
|
|
2,806
|
|
|
201,858
|
|
|||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,883
|
)
|
|
(2,883
|
)
|
|
—
|
|
|
(2,883
|
)
|
|||||||
Balance December 31, 2011
|
38,692
|
|
|
$
|
387
|
|
|
$
|
144,684
|
|
|
$
|
692,595
|
|
|
$
|
(1,730
|
)
|
|
$
|
835,936
|
|
|
$
|
5,494
|
|
|
$
|
841,430
|
|
Stock compensation expense
|
19
|
|
|
—
|
|
|
14,661
|
|
|
—
|
|
|
—
|
|
|
14,661
|
|
|
—
|
|
|
14,661
|
|
|||||||
Exercise of stock options
|
4
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
|||||||
Shares issued upon vesting
|
199
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Deficient tax benefit from stock compensation
|
—
|
|
|
—
|
|
|
(381
|
)
|
|
—
|
|
|
—
|
|
|
(381
|
)
|
|
—
|
|
|
(381
|
)
|
|||||||
Shares withheld for taxes
|
—
|
|
|
—
|
|
|
(5,888
|
)
|
|
—
|
|
|
—
|
|
|
(5,888
|
)
|
|
—
|
|
|
(5,888
|
)
|
|||||||
Stock repurchase
|
(4,514
|
)
|
|
(45
|
)
|
|
—
|
|
|
(220,650
|
)
|
|
—
|
|
|
(220,695
|
)
|
|
—
|
|
|
(220,695
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
128,866
|
|
|
—
|
|
|
128,866
|
|
|
148
|
|
|
129,014
|
|
|||||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
(14,037
|
)
|
|
—
|
|
|
—
|
|
|
(14,037
|
)
|
|
(5,642
|
)
|
|
(19,679
|
)
|
|||||||
Total other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
330
|
|
|
330
|
|
|
—
|
|
|
330
|
|
|||||||
Balance December 31, 2012
|
34,400
|
|
|
$
|
344
|
|
|
$
|
139,046
|
|
|
$
|
600,811
|
|
|
$
|
(1,400
|
)
|
|
$
|
738,801
|
|
|
$
|
—
|
|
|
$
|
738,801
|
|
Stock compensation expense
|
15
|
|
|
—
|
|
|
13,136
|
|
|
—
|
|
|
—
|
|
|
13,136
|
|
|
—
|
|
|
13,136
|
|
|||||||
Exercise of stock options
|
8
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|
—
|
|
|
52
|
|
|
—
|
|
|
52
|
|
|||||||
Shares issued upon vesting
|
195
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Excess tax benefit from stock compensation
|
—
|
|
|
—
|
|
|
319
|
|
|
—
|
|
|
—
|
|
|
319
|
|
|
—
|
|
|
319
|
|
|||||||
Shares withheld for taxes
|
—
|
|
|
—
|
|
|
(8,635
|
)
|
|
—
|
|
|
—
|
|
|
(8,635
|
)
|
|
—
|
|
|
(8,635
|
)
|
|||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
145,689
|
|
|
—
|
|
|
145,689
|
|
|
—
|
|
|
145,689
|
|
|||||||
Total other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,243
|
)
|
|
(1,243
|
)
|
|
|
|
|
(1,243
|
)
|
|||||||
Balance, December 31, 2013
|
34,618
|
|
|
$
|
346
|
|
|
$
|
143,916
|
|
|
$
|
746,500
|
|
|
$
|
(2,643
|
)
|
|
$
|
888,119
|
|
|
$
|
—
|
|
|
$
|
888,119
|
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
145,689
|
|
|
$
|
129,014
|
|
|
$
|
201,858
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation, amortization, and accretion
|
41,439
|
|
|
33,367
|
|
|
28,977
|
|
|||
Change in fair value of contingent consideration
|
1,815
|
|
|
8,659
|
|
|
—
|
|
|||
Provision for (recovery of) doubtful accounts, net
|
125
|
|
|
2,128
|
|
|
(704
|
)
|
|||
Deferred tax provision
|
(4,092
|
)
|
|
(5,657
|
)
|
|
(67
|
)
|
|||
Stock compensation
|
13,136
|
|
|
14,661
|
|
|
14,803
|
|
|||
Other
|
1,306
|
|
|
1,229
|
|
|
2,735
|
|
|||
Changes in operating assets and liabilities, net of assets and
|
|
|
|
|
|
||||||
liabilities acquired in the acquisition of businesses:
|
|
|
|
|
|
||||||
Trade accounts receivable
|
6,618
|
|
|
491
|
|
|
(63,199
|
)
|
|||
Inventories
|
40,580
|
|
|
(46,903
|
)
|
|
(120,730
|
)
|
|||
Prepaid expenses and other current assets
|
(58,554
|
)
|
|
23,511
|
|
|
(75,525
|
)
|
|||
Other assets
|
(4,290
|
)
|
|
(3,028
|
)
|
|
(5,385
|
)
|
|||
Trade accounts payable
|
21,251
|
|
|
18,932
|
|
|
38,237
|
|
|||
Contingent consideration
|
(6,458
|
)
|
|
(959
|
)
|
|
—
|
|
|||
Accrued expenses
|
33,556
|
|
|
(9,983
|
)
|
|
850
|
|
|||
Income taxes payable
|
24,386
|
|
|
(5,820
|
)
|
|
5,722
|
|
|||
Long-term liabilities
|
5,618
|
|
|
4,264
|
|
|
2,519
|
|
|||
Net cash provided by operating activities
|
262,125
|
|
|
163,906
|
|
|
30,091
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(79,829
|
)
|
|
(61,575
|
)
|
|
(55,538
|
)
|
|||
Acquisitions of businesses and equity method investment
|
—
|
|
|
(8,829
|
)
|
|
(125,203
|
)
|
|||
Purchases of intangible assets
|
(5,368
|
)
|
|
(4,958
|
)
|
|
(4,025
|
)
|
|||
Net cash used in investing activities
|
(85,197
|
)
|
|
(75,362
|
)
|
|
(184,766
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of short-term borrowings
|
320,728
|
|
|
307,000
|
|
|
45,000
|
|
|||
Repayments of short-term borrowings
|
(344,000
|
)
|
|
(274,000
|
)
|
|
(45,000
|
)
|
|||
Cash paid for shares withheld for taxes
|
(6,736
|
)
|
|
(6,535
|
)
|
|
(22,634
|
)
|
|||
Excess tax benefit from stock compensation
|
2,071
|
|
|
2,457
|
|
|
15,330
|
|
|||
Cash received from issuances of common stock
|
52
|
|
|
—
|
|
|
62
|
|
|||
Loan origination costs on short-term borrowings
|
—
|
|
|
(1,807
|
)
|
|
—
|
|
|||
Contingent consideration paid
|
(22,628
|
)
|
|
(29,041
|
)
|
|
—
|
|
|||
Cash paid for noncontrolling interest
|
—
|
|
|
(20,000
|
)
|
|
—
|
|
|||
Cash paid for repurchases of common stock
|
—
|
|
|
(220,695
|
)
|
|
(19,918
|
)
|
|||
Net cash used in financing activities
|
(50,513
|
)
|
|
(242,621
|
)
|
|
(27,160
|
)
|
|||
Effect of exchange rates on cash
|
463
|
|
|
718
|
|
|
215
|
|
|||
Net change in cash and cash equivalents
|
126,878
|
|
|
(153,359
|
)
|
|
(181,620
|
)
|
|||
Cash and cash equivalents at beginning of year
|
110,247
|
|
|
263,606
|
|
|
445,226
|
|
|||
Cash and cash equivalents at end of year
|
$
|
237,125
|
|
|
$
|
110,247
|
|
|
$
|
263,606
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid during the year for:
|
|
|
|
|
|
||||||
Income taxes
|
$
|
39,122
|
|
|
$
|
66,899
|
|
|
$
|
62,405
|
|
Interest
|
$
|
2,586
|
|
|
$
|
3,338
|
|
|
$
|
88
|
|
Non-cash investing and financing activity:
|
|
|
|
|
|
||||||
Deferred purchase payments for acquisition of business
|
$
|
—
|
|
|
$
|
3,671
|
|
|
$
|
—
|
|
Accruals for purchases of property and equipment
|
$
|
2,283
|
|
|
$
|
489
|
|
|
$
|
3,268
|
|
Contingent consideration arrangement for acquisition of business
|
$
|
—
|
|
|
$
|
1,128
|
|
|
$
|
88,100
|
|
Accruals for asset retirement obligations
|
$
|
1,936
|
|
|
$
|
526
|
|
|
$
|
236
|
|
Accruals for shares withheld for taxes
|
$
|
3,702
|
|
|
$
|
1,804
|
|
|
$
|
2,460
|
|
Write-off for shares exercised with a tax deficit
|
$
|
1,752
|
|
|
$
|
2,838
|
|
|
$
|
—
|
|
•
|
A significant decrease in the market price of a long-lived asset group;
|
•
|
a significant adverse change in the extent or manner in which a long-lived asset group is being used or in its physical condition;
|
•
|
a significant adverse change in legal factors or in business climate that could affect the value of a long-lived asset group, including an adverse action or assessment by a regulator;
|
•
|
an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset group;
|
•
|
a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset group; or
|
•
|
a current expectation that, more likely than not, a long-lived asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.
|
•
|
the assets' ability to continue to generate income from operations and positive cash flow in future periods;
|
•
|
changes in consumer demand or acceptance of the related brand names, products, or features associated with the assets; and
|
•
|
other considerations that could affect fair value or otherwise indicate potential impairment.
|
•
|
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
•
|
Level 2: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable.
|
•
|
Level 3: Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.
|
|
Fair Value at December 31, 2013
|
|
Fair Value Measurement Using
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets (Liabilities) at fair value
|
|
|
|
|
|
|
|
||||||||
Nonqualified deferred compensation asset
|
$
|
4,410
|
|
|
$
|
4,410
|
|
|
|
|
|
||||
Nonqualified deferred compensation liability
|
$
|
(4,410
|
)
|
|
$
|
(4,410
|
)
|
|
|
|
|
||||
Designated derivatives liability
|
$
|
(550
|
)
|
|
|
|
$
|
(550
|
)
|
|
|
||||
Contingent consideration for acquisition of business
|
$
|
(48,000
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(48,000
|
)
|
|
Fair Value at December 31, 2012
|
|
Fair Value Measurement Using
|
||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Assets (Liabilities) at fair value
|
|
|
|
|
|
|
|
||||||||
Nonqualified deferred compensation asset
|
$
|
3,653
|
|
|
$
|
3,653
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Nonqualified deferred compensation liability
|
$
|
(3,653
|
)
|
|
$
|
(3,653
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-designated derivatives asset
|
$
|
839
|
|
|
$
|
—
|
|
|
$
|
839
|
|
|
$
|
—
|
|
Non-designated derivatives liability
|
$
|
(336
|
)
|
|
$
|
—
|
|
|
$
|
(336
|
)
|
|
$
|
—
|
|
Contingent consideration for acquisition of business
|
$
|
(71,500
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(71,500
|
)
|
Beginning balance, January 1, 2012
|
$
|
91,600
|
|
Payments
|
(30,000
|
)
|
|
Hoka acquisition contingent consideration
|
1,100
|
|
|
Change in fair value
|
8,800
|
|
|
Balance, December 31, 2012
|
$
|
71,500
|
|
Payments
|
(25,400
|
)
|
|
Change in fair value
|
1,900
|
|
|
Balance, December 31, 2013
|
$
|
48,000
|
|
|
Year Ended December 31,
|
|||||||
|
2013
|
|
2012
|
|
2011
|
|||
Weighted-average shares used in basic computation
|
34,473,000
|
|
|
36,879,000
|
|
|
38,605,000
|
|
Dilutive effect of stock-based awards*
|
356,000
|
|
|
455,000
|
|
|
660,000
|
|
Weighted-average shares used for diluted computation
|
34,829,000
|
|
|
37,334,000
|
|
|
39,265,000
|
|
|
|
|
|
|
|
*Excluded NSUs as of December 31, 2013, 2012, and 2011
|
—
|
|
|
200,000
|
|
|
—
|
|
*Excluded RSUs as of December 31, 2013, 2012, and 2011
|
795,000
|
|
|
671,000
|
|
|
319,000
|
|
*Excluded SARs as of December 31, 2013, 2012, and 2011
|
525,000
|
|
|
525,000
|
|
|
525,000
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Land
|
$
|
19,954
|
|
|
$
|
19,954
|
|
Machinery and equipment
|
84,941
|
|
|
67,582
|
|
||
Furniture and fixtures
|
25,961
|
|
|
22,280
|
|
||
Leasehold improvements
|
142,683
|
|
|
85,134
|
|
||
|
273,539
|
|
|
194,950
|
|
||
Less accumulated depreciation and amortization
|
99,473
|
|
|
69,580
|
|
||
Net property and equipment
|
$
|
174,066
|
|
|
$
|
125,370
|
|
|
Federal
|
|
State
|
|
Foreign
|
|
Total
|
||||||||
2013:
|
|
|
|
|
|
|
|
||||||||
Current
|
$
|
51,058
|
|
|
$
|
6,252
|
|
|
$
|
6,650
|
|
|
$
|
63,960
|
|
Deferred
|
(2,580
|
)
|
|
(209
|
)
|
|
(1,303
|
)
|
|
(4,092
|
)
|
||||
|
$
|
48,478
|
|
|
$
|
6,043
|
|
|
$
|
5,347
|
|
|
$
|
59,868
|
|
2012:
|
|
|
|
|
|
|
|
||||||||
Current
|
$
|
50,911
|
|
|
$
|
6,482
|
|
|
$
|
3,368
|
|
|
$
|
60,761
|
|
Deferred
|
(6,083
|
)
|
|
414
|
|
|
12
|
|
|
(5,657
|
)
|
||||
|
$
|
44,828
|
|
|
$
|
6,896
|
|
|
$
|
3,380
|
|
|
$
|
55,104
|
|
2011:
|
|
|
|
|
|
|
|
||||||||
Current
|
$
|
63,758
|
|
|
$
|
12,226
|
|
|
$
|
7,487
|
|
|
$
|
83,471
|
|
Deferred
|
1,003
|
|
|
(1,067
|
)
|
|
(3
|
)
|
|
(67
|
)
|
||||
|
$
|
64,761
|
|
|
$
|
11,159
|
|
|
$
|
7,484
|
|
|
$
|
83,404
|
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Computed expected income taxes
|
$
|
71,945
|
|
|
$
|
64,282
|
|
|
$
|
99,842
|
|
State income taxes, net of federal income tax benefit
|
4,435
|
|
|
3,562
|
|
|
6,912
|
|
|||
Foreign rate differential
|
(16,399
|
)
|
|
(12,908
|
)
|
|
(24,783
|
)
|
|||
Other
|
(113
|
)
|
|
168
|
|
|
1,433
|
|
|||
|
$
|
59,868
|
|
|
$
|
55,104
|
|
|
$
|
83,404
|
|
|
2013
|
|
2012
|
||||
Deferred tax assets (liabilities), current:
|
|
|
|
||||
Uniform capitalization adjustment to inventory
|
$
|
5,492
|
|
|
$
|
6,870
|
|
Bad debt and other reserves
|
10,655
|
|
|
11,582
|
|
||
State taxes
|
508
|
|
|
799
|
|
||
Prepaid expenses
|
(2,193
|
)
|
|
(1,961
|
)
|
||
Accrued bonus
|
5,071
|
|
|
—
|
|
||
Foreign currency hedge
|
348
|
|
|
—
|
|
||
Total deferred tax assets, current
|
19,881
|
|
|
17,290
|
|
||
Deferred tax assets (liabilities), noncurrent:
|
|
|
|
||||
Amortization and impairment of intangible assets
|
4,603
|
|
|
5,312
|
|
||
Depreciation of property and equipment
|
(6,034
|
)
|
|
(8,524
|
)
|
||
Share-based compensation
|
11,226
|
|
|
11,906
|
|
||
Foreign currency translation
|
667
|
|
|
244
|
|
||
Deferred rent
|
4,028
|
|
|
3,247
|
|
||
Acquisition costs
|
755
|
|
|
834
|
|
||
Other
|
—
|
|
|
111
|
|
||
Net operating loss carryforwards
|
506
|
|
|
242
|
|
||
Total deferred tax assets, noncurrent
|
15,751
|
|
|
13,372
|
|
||
Net deferred tax assets
|
$
|
35,632
|
|
|
$
|
30,662
|
|
Balance at January 1, 2012
|
$
|
3,271
|
|
Gross decrease related to prior years' tax positions
|
—
|
|
|
Settlements
|
(3,271
|
)
|
|
Balance at December 31, 2012
|
$
|
—
|
|
Gross change related to current and prior years' tax positions
|
—
|
|
|
Balance at December 31, 2013
|
$
|
—
|
|
|
Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Compensation expense recorded for:
|
|
|
|
|
|
||||||
NSUs
|
$
|
10,545
|
|
|
$
|
11,849
|
|
|
$
|
11,719
|
|
SARs
|
1,302
|
|
|
1,501
|
|
|
1,813
|
|
|||
RSUs
|
287
|
|
|
231
|
|
|
305
|
|
|||
Directors' shares
|
1,002
|
|
|
1,080
|
|
|
966
|
|
|||
Total compensation expense
|
13,136
|
|
|
14,661
|
|
|
14,803
|
|
|||
Income tax benefit recognized
|
(4,950
|
)
|
|
(5,573
|
)
|
|
(5,788
|
)
|
|||
Net compensation expense
|
$
|
8,186
|
|
|
$
|
9,088
|
|
|
$
|
9,015
|
|
|
Unrecognized
Compensation
Cost
|
|
Weighted-Average
Remaining
Vesting Period (Years)
|
||
NSUs
|
$
|
12,427
|
|
|
1.8
|
SARs
|
3,582
|
|
|
2.2
|
|
RSUs
|
4,859
|
|
|
2.2
|
|
Total
|
$
|
20,868
|
|
|
|
|
Number of
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Nonvested at January 1, 2011
|
798,000
|
|
|
$
|
35.61
|
|
Granted
|
199,000
|
|
|
87.50
|
|
|
Vested
|
(263,000
|
)
|
|
40.31
|
|
|
Forfeited
|
(57,000
|
)
|
|
46.61
|
|
|
Nonvested at December 31, 2011
|
677,000
|
|
|
$
|
48.14
|
|
Granted
|
209,000
|
|
|
63.18
|
|
|
Vested
|
(297,000
|
)
|
|
35.90
|
|
|
Forfeited
|
(18,000
|
)
|
|
63.68
|
|
|
Cancelled*
|
(200,000
|
)
|
|
62.17
|
|
|
Nonvested at December 31, 2012
|
371,000
|
|
|
$
|
58.51
|
|
Granted
|
304,000
|
|
|
57.30
|
|
|
Vested
|
(315,000
|
)
|
|
53.19
|
|
|
Forfeited
|
(20,000
|
)
|
|
61.08
|
|
|
Nonvested at December 31, 2013
|
340,000
|
|
|
$
|
62.23
|
|
|
Number of
SARs
|
|
Weighted-
Average
Exercise
Price
|
|
Weighted-
Average
Remaining
Contractual
Term
(Years)
|
|
Aggregate
Intrinsic
Value
|
|||||
Outstanding at January 1, 2011
|
1,125,000
|
|
|
$
|
26.73
|
|
|
8.7
|
|
$
|
59,636
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Exercised
|
(365,000
|
)
|
|
26.73
|
|
|
|
|
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Outstanding at December 31, 2011
|
760,000
|
|
|
$
|
26.73
|
|
|
8.8
|
|
$
|
37,118
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Exercised
|
(15,000
|
)
|
|
26.73
|
|
|
|
|
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Outstanding at December 31, 2012
|
745,000
|
|
|
$
|
26.73
|
|
|
7.9
|
|
$
|
10,087
|
|
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Exercised
|
(15,000
|
)
|
|
26.73
|
|
|
|
|
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|
||
Outstanding at December 31, 2013
|
730,000
|
|
|
$
|
26.73
|
|
|
6.9
|
|
$
|
42,143
|
|
Exercisable at December 31, 2013
|
205,000
|
|
|
$
|
26.73
|
|
|
3.4
|
|
$
|
11,835
|
|
Expected to vest and exercisable at December 31, 2013
|
694,817
|
|
|
$
|
26.73
|
|
|
6.9
|
|
$
|
40,112
|
|
|
Number of
Shares
|
|
Weighted-
Average
Grant-Date
Fair Value
|
|||
Nonvested at January 1, 2011
|
85,000
|
|
|
$
|
26.73
|
|
Granted
|
275,000
|
|
|
82.09
|
|
|
Vested
|
(16,000
|
)
|
|
26.73
|
|
|
Forfeited
|
(25,000
|
)
|
|
82.09
|
|
|
Nonvested at December 31, 2011
|
319,000
|
|
|
$
|
70.15
|
|
Granted
|
352,000
|
|
|
56.12
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Nonvested at December 31, 2012
|
671,000
|
|
|
$
|
62.80
|
|
Granted
|
156,000
|
|
|
84.52
|
|
|
Vested
|
—
|
|
|
—
|
|
|
Forfeited
|
(32,000
|
)
|
|
63.69
|
|
|
Nonvested at December 31, 2013
|
795,000
|
|
|
$
|
67.03
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Cumulative foreign currency translation adjustment
|
$
|
(2,157
|
)
|
|
$
|
(1,400
|
)
|
Unrealized loss on foreign currency hedging, net of tax
|
(486
|
)
|
|
—
|
|
||
Accumulated other comprehensive loss
|
$
|
(2,643
|
)
|
|
$
|
(1,400
|
)
|
Year ending December 31:
|
|
||
2014
|
$
|
46,060
|
|
2015
|
45,194
|
|
|
2016
|
42,436
|
|
|
2017
|
39,129
|
|
|
2018
|
33,218
|
|
|
Thereafter
|
116,593
|
|
|
|
$
|
322,630
|
|
Contract
Effective Date
|
|
Final
Target Date
|
|
Advance
Deposit
|
|
Total
Minimum
Commitment
|
|
Remaining
Deposit
|
|
Remaining
Commitment,
Net of Deposit
|
October 2011
|
|
September 2014
|
|
$50,000
|
|
$286,000
|
|
$38,273
|
|
$13,034
|
October 2012
|
|
September 2013
|
|
—
|
|
$83,000
|
|
—
|
|
$3,265
|
April 2013
|
|
September 2014
|
|
$28,931
|
|
$42,800
|
|
$28,931
|
|
$13,869
|
September 2013
|
|
September 2014
|
|
—
|
|
$50,730
|
|
—
|
|
$39,958
|
•
|
36.0%
of the Sanuk brand gross profit in 2013, which was approximately
$18,600
, and
|
•
|
40.0%
of the Sanuk brand gross profit in 2015.
|
|
Years Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net sales to external customers:
|
|
|
|
|
|
||||||
UGG wholesale
|
$
|
818,377
|
|
|
$
|
819,256
|
|
|
$
|
915,203
|
|
Teva wholesale
|
109,334
|
|
|
108,591
|
|
|
118,742
|
|
|||
Sanuk wholesale
|
94,420
|
|
|
89,804
|
|
|
26,039
|
|
|||
Other brands wholesale
|
38,276
|
|
|
20,194
|
|
|
21,801
|
|
|||
E-Commerce
|
169,534
|
|
|
130,592
|
|
|
106,498
|
|
|||
Retail stores
|
326,677
|
|
|
245,961
|
|
|
189,000
|
|
|||
|
$
|
1,556,618
|
|
|
$
|
1,414,398
|
|
|
$
|
1,377,283
|
|
Income (loss) from operations:
|
|
|
|
|
|
||||||
UGG wholesale
|
$
|
224,736
|
|
|
$
|
206,039
|
|
|
$
|
339,665
|
|
Teva wholesale
|
9,165
|
|
|
9,228
|
|
|
19,265
|
|
|||
Sanuk wholesale
|
20,591
|
|
|
14,398
|
|
|
798
|
|
|||
Other brands wholesale
|
(9,807
|
)
|
|
(4,523
|
)
|
|
(9,993
|
)
|
|||
E-Commerce
|
66,819
|
|
|
56,190
|
|
|
47,244
|
|
|||
Retail stores
|
65,716
|
|
|
63,306
|
|
|
58,552
|
|
|||
Unallocated overhead
|
(169,323
|
)
|
|
(157,690
|
)
|
|
(170,693
|
)
|
|||
|
$
|
207,897
|
|
|
$
|
186,948
|
|
|
$
|
284,838
|
|
Depreciation and amortization:
|
|
|
|
|
|
||||||
UGG wholesale
|
$
|
641
|
|
|
$
|
622
|
|
|
$
|
4,375
|
|
Teva wholesale
|
641
|
|
|
515
|
|
|
587
|
|
|||
Sanuk wholesale
|
7,761
|
|
|
8,838
|
|
|
5,125
|
|
|||
Other brands wholesale
|
507
|
|
|
1,622
|
|
|
533
|
|
|||
E-Commerce
|
744
|
|
|
839
|
|
|
540
|
|
|||
Retail stores
|
21,117
|
|
|
12,073
|
|
|
6,082
|
|
|||
Unallocated overhead
|
9,959
|
|
|
8,911
|
|
|
8,185
|
|
|||
|
$
|
41,370
|
|
|
$
|
33,420
|
|
|
$
|
25,427
|
|
Capital expenditures:
|
|
|
|
|
|
||||||
UGG wholesale
|
$
|
313
|
|
|
$
|
314
|
|
|
$
|
706
|
|
Teva wholesale
|
63
|
|
|
326
|
|
|
305
|
|
|||
Sanuk wholesale
|
91
|
|
|
448
|
|
|
1,778
|
|
|||
Other brands wholesale
|
477
|
|
|
197
|
|
|
198
|
|
|||
E-Commerce
|
676
|
|
|
347
|
|
|
1,419
|
|
|||
Retail stores
|
34,993
|
|
|
34,004
|
|
|
22,297
|
|
|||
Unallocated overhead
|
43,217
|
|
|
25,966
|
|
|
29,083
|
|
|||
|
$
|
79,830
|
|
|
$
|
61,602
|
|
|
$
|
55,786
|
|
Total assets from reportable segments:
|
|
|
|
|
|
||||||
UGG wholesale
|
$
|
314,122
|
|
|
$
|
377,997
|
|
|
$
|
347,213
|
|
Teva wholesale
|
54,868
|
|
|
59,641
|
|
|
61,893
|
|
|||
Sanuk wholesale
|
208,669
|
|
|
209,861
|
|
|
217,936
|
|
|||
Other brands wholesale
|
34,315
|
|
|
29,446
|
|
|
10,690
|
|
|||
E-Commerce
|
7,331
|
|
|
5,058
|
|
|
5,964
|
|
|||
Retail stores
|
182,491
|
|
|
134,804
|
|
|
80,514
|
|
|||
|
$
|
801,796
|
|
|
$
|
816,807
|
|
|
$
|
724,210
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Total assets from reportable segments
|
$
|
801,796
|
|
|
$
|
816,807
|
|
Unallocated cash and cash equivalents
|
237,125
|
|
|
110,247
|
|
||
Unallocated deferred tax assets
|
35,632
|
|
|
30,662
|
|
||
Other unallocated corporate assets
|
185,176
|
|
|
110,348
|
|
||
Consolidated total assets
|
$
|
1,259,729
|
|
|
$
|
1,068,064
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
US
|
$
|
136,726
|
|
|
$
|
89,423
|
|
All other countries*
|
37,340
|
|
|
35,947
|
|
||
Total
|
$
|
174,066
|
|
|
$
|
125,370
|
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Money market fund accounts
|
$
|
154,105
|
|
|
$
|
52,650
|
|
Cash
|
83,020
|
|
|
57,597
|
|
||
Total cash and cash equivalents
|
$
|
237,125
|
|
|
$
|
110,247
|
|
For the Year Ended December 31,
|
|
Derivatives in
Designated
Cash Flow
Hedging
Relationships
|
|
Amount of
Gain (Loss)
Recognized in
OCI on
Derivative
(Effective
Portion)
|
|
Location of
Gain (Loss)
Reclassified
from
Accumulated
OCI into
Income
(Effective
Portion)
|
|
Amount of
Gain (Loss)
Reclassified
from
Accumulated
OCI into
Income
(Effective
Portion)
|
|
Location of
Amount
Excluded from
Effectiveness
Testing
|
|
Gain (Loss)
from Amount
Excluded from
Effectiveness
Testing
|
2013
|
|
Foreign Exchange Contracts
|
|
$(779)
|
|
Net Sales
|
|
$17
|
|
SG&A
|
|
$(11)
|
2012
|
|
Foreign Exchange Contracts
|
|
$(1,191)
|
|
Net Sales
|
|
$617
|
|
SG&A
|
|
$26
|
For the Year Ended December 31,
|
|
Derivatives Not Designated
as Hedging Instruments
|
|
Location of Gain (Loss)
Recognized in Income on
Derivatives
|
|
Amount of Gain (Loss)
Recognized in Income on
Derivatives
|
2013
|
|
Foreign Exchange Contracts
|
|
SG&A
|
|
$728
|
2012
|
|
Foreign Exchange Contracts
|
|
SG&A
|
|
$1,030
|
|
Gross
Carrying
Amount
|
|
Weighted-
Average
Amortization
Period
|
|
Accumulated
Amortization
|
|
Net Carrying
Amount
|
|
||||||
As of December 31, 2013
|
|
|
|
|
|
|
|
|
||||||
Intangibles subject to amortization
|
$
|
101,963
|
|
|
14 years
|
|
$
|
24,140
|
|
|
$
|
77,823
|
|
|
Intangibles not subject to amortization:
|
|
|
|
|
|
|
|
|
||||||
Goodwill
|
|
|
|
|
|
|
|
|
128,725
|
|
|
|||
Trademarks
|
|
|
|
|
|
|
|
|
15,455
|
|
|
|||
Total goodwill and other intangible assets
|
|
|
|
|
|
|
|
|
$
|
222,003
|
|
|
||
As of December 31, 2012
|
|
|
|
|
|
|
|
|
||||||
Intangibles subject to amortization
|
$
|
96,674
|
|
*
|
14 years
|
|
$
|
16,164
|
|
|
$
|
80,510
|
|
*
|
Intangibles not subject to amortization:
|
|
|
|
|
|
|
|
|
||||||
Goodwill
|
|
|
|
|
|
|
|
|
128,725
|
|
*
|
|||
Trademarks
|
|
|
|
|
|
|
|
|
15,455
|
|
|
|||
Total goodwill and other intangible assets
|
|
|
|
|
|
|
|
|
$
|
224,690
|
|
|
|
Goodwill,
Gross
|
|
Accumulated
Impairment
|
|
Goodwill, Net
|
|
||||||
Balance at January 1, 2012
|
$
|
135,876
|
|
|
$
|
(15,831
|
)
|
|
$
|
120,045
|
|
|
Additions through acquisitions
|
8,680
|
|
*
|
—
|
|
|
8,680
|
|
*
|
|||
Impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Balance at December 31, 2012
|
$
|
144,556
|
|
*
|
$
|
(15,831
|
)
|
|
$
|
128,725
|
|
*
|
Additions through acquisitions
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Impairment loss
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Balance at December 31, 2013
|
$
|
144,556
|
|
|
$
|
(15,831
|
)
|
|
$
|
128,725
|
|
|
|
As of December 31,
|
|
||||||
|
2013
|
|
2012
|
|
||||
UGG brand
|
$
|
6,101
|
|
|
$
|
6,101
|
|
|
Sanuk brand
|
113,944
|
|
|
113,944
|
|
|
||
Other brands
|
8,680
|
|
|
8,680
|
|
*
|
||
Total
|
$
|
128,725
|
|
|
$
|
128,725
|
|
*
|
|
2012
|
||||||||||||||
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Net sales
|
$
|
246,306
|
|
|
$
|
174,436
|
|
|
$
|
376,392
|
|
|
$
|
617,264
|
|
Gross profit
|
113,288
|
|
|
73,579
|
|
|
159,293
|
|
|
285,994
|
|
||||
Net income (loss) attributable to Deckers Outdoor Corporation
|
7,887
|
|
|
(20,139
|
)
|
|
43,061
|
|
|
98,057
|
|
||||
Net income (loss) per share attributable to Deckers Outdoor Corporation common stockholders:
|
|||||||||||||||
Basic
|
$
|
0.20
|
|
|
$
|
(0.53
|
)
|
|
$
|
1.19
|
|
|
$
|
2.81
|
|
Diluted
|
$
|
0.20
|
|
|
$
|
(0.53
|
)
|
|
$
|
1.18
|
|
|
$
|
2.77
|
|
|
Balance at
Beginning of
Year
|
|
Additions
|
|
Deductions
|
|
Balance at
End of Year
|
||||||||
Year ended December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts(1)
|
$
|
2,782
|
|
|
$
|
125
|
|
|
$
|
868
|
|
|
$
|
2,039
|
|
Allowance for sales discounts(2)
|
3,836
|
|
|
46,989
|
|
|
47,285
|
|
|
3,540
|
|
||||
Allowance for sales returns(3)
|
12,905
|
|
|
67,800
|
|
|
66,151
|
|
|
14,554
|
|
||||
Chargeback allowance(4)
|
5,563
|
|
|
187
|
|
|
815
|
|
|
4,935
|
|
||||
Year ended December 31, 2012
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts(1)
|
$
|
1,719
|
|
|
$
|
2,128
|
|
|
$
|
1,065
|
|
|
$
|
2,782
|
|
Allowance for sales discounts(2)
|
4,629
|
|
|
35,759
|
|
|
36,552
|
|
|
3,836
|
|
||||
Allowance for sales returns(3)
|
11,313
|
|
|
53,165
|
|
|
51,573
|
|
|
12,905
|
|
||||
Chargeback allowance(4)
|
4,031
|
|
|
5,879
|
|
|
4,347
|
|
|
5,563
|
|
||||
Year ended December 31, 2011
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts(1)
|
$
|
1,379
|
|
|
$
|
642
|
|
|
$
|
302
|
|
|
$
|
1,719
|
|
Allowance for sales discounts(2)
|
5,819
|
|
|
36,254
|
|
|
37,444
|
|
|
4,629
|
|
||||
Allowance for sales returns(3)
|
4,039
|
|
|
37,355
|
|
|
30,081
|
|
|
11,313
|
|
||||
Chargeback allowance(4)
|
2,535
|
|
|
1,744
|
|
|
248
|
|
|
4,031
|
|
(1)
|
The additions to the allowance for doubtful accounts represent the estimates of our bad debt expense based upon the factors for which we evaluate the collectability of our accounts receivable, with actual recoveries netted into additions. Deductions are the actual write offs of the receivables.
|
(2)
|
The additions to the allowance for sales discounts represent estimates of discounts to be taken by our customers based upon the amount of available outstanding terms discounts in the year-end aging. Deductions are the actual discounts taken by our customers.
|
(3)
|
The additions to the allowance for returns represent estimates of returns based upon our historical returns experience. Deductions are the actual returns of products.
|
(4)
|
The additions to the chargeback allowance represent chargebacks taken in the respective year as well as an estimate of chargebacks related to sales in the respective reporting period that will be taken subsequent to the respective reporting period. Deductions are the actual chargebacks written off against outstanding accounts receivable. The Company has estimated the additions and deductions by netting each quarter's change and summing the four quarters for the respective year.
|
LANDLORD:
|
MORENO KNOX, LLC, a Delaware limited liability company
|
TENANT:
|
DECKERS OUTDOOR CORPORATION, a Delaware corporation
|
PROJECT:
|
Vantage Pointe Logistics Center
|
CITY, STATE:
|
Moreno Valley, California
|
DATE:
|
December 5, 2013
|
|
|
|
|
Page
|
1.
|
|
BASIC LEASE TERMS
|
|
1
|
2.
|
|
PREMISES
|
|
3
|
3.
|
|
LEASE TERM
|
|
3
|
4.
|
|
POSSESSION
|
|
4
|
5.
|
|
RENT
|
|
4
|
6.
|
|
PREPAID RENT
|
|
6
|
7.
|
|
SECURITY DEPOSIT
|
|
6
|
8.
|
|
USE OF PREMISES AND PROJECT FACILITIES
|
|
6
|
9.
|
|
SURRENDER OF PREMISES; HOLDING OVER
|
|
7
|
10.
|
|
SIGNAGE
|
|
8
|
11.
|
|
TAXES
|
|
8
|
12.
|
|
UTILITIES; INTERRUPTIONS
|
|
10
|
13.
|
|
MAINTENANCE AND REPAIR
|
|
11
|
14.
|
|
ALTERATIONS
|
|
13
|
15.
|
|
RELEASE AND INDEMNITY
|
|
14
|
16.
|
|
INSURANCE
|
|
14
|
17.
|
|
DESTRUCTION
|
|
15
|
18.
|
|
CONDEMNATION
|
|
16
|
19.
|
|
ASSIGNMENT OR SUBLEASE
|
|
17
|
20.
|
|
DEFAULT
|
|
18
|
21.
|
|
LANDLORD'S REMEDIES
|
|
18
|
22.
|
|
DEFAULT BY LANDLORD
|
|
19
|
23.
|
|
ENTRY OF PREMISES AND PERFORMANCE BY TENANT
|
|
19
|
24.
|
|
SUBORDINATION
|
|
20
|
25.
|
|
NOTICE
|
|
21
|
26.
|
|
WAIVER
|
|
21
|
27.
|
|
LIMITATION OF LIABILITY
|
|
21
|
28.
|
|
FORCE MAJEURE
|
|
21
|
29.
|
|
PROFESSIONAL FEES
|
|
21
|
30.
|
|
EXAMINATION OF LEASE
|
|
22
|
31.
|
|
ESTOPPEL CERTIFICATE
|
|
22
|
32.
|
|
RULES AND REGULATIONS
|
|
22
|
33.
|
|
LIENS
|
|
22
|
34.
|
|
MISCELLANEOUS PROVISIONS
|
|
22
|
35.
|
|
LEASE EXECUTION
|
|
24
|
36.
|
|
ADDITIONAL PROVISIONS
|
|
24
|
EXHIBITS
|
|
|
|
|
|
|
|
EXHIBIT
|
A:
|
|
DEPICTION OF PREMISES
|
EXHIBIT
|
B:
|
|
DESCRIPTION OF PREMISES LAND
|
EXHIBIT
|
C:
|
|
WORK LETTER AGREEMENT
|
EXHIBIT
|
D:
|
|
NOTICE OF LEASE TERM DATES
|
EXHIBIT
|
E:
|
|
TENANT ESTOPPEL CERTIFICATE
|
EXHIBIT
|
F:
|
|
RULES AND REGULATIONS
|
EXHIBIT
|
G:
|
|
APPROXIMATE LOCATION OF TENANT'S SIGNAGE
|
EXHIBIT
|
H:
|
|
HAZARDOUS MATERIALS ADDENDUM
|
EXHIBIT
|
I:
|
|
HAZARDOUS MATERIALS QUESTIONNAIRE
|
EXHIBIT
|
J:
|
|
REFERENCE PROVISION
|
EXHIBIT
|
K:
|
|
PARKING
|
EXHIBIT
|
L:
|
|
MEMORANDUM OF LEASE
|
EXHIBIT
|
M:
|
|
EXCLUSIONS FROM NNN CHARGES
|
EXHIBIT
|
X:
|
|
FORM PURCHASE AND SALE AGREEMENT
|
EXHIBIT
|
X-1:
|
|
MODIFICATIONS TO PURCHASE AND SALE AGREEMENT
|
RIDERS
|
|
|
|
|
|
|
|
RIDER
|
1:
|
|
OPTION TO EXTEND
|
RIDER
|
2:
|
|
EXPANSION OPTION
|
RIDER
|
3:
|
|
RIGHT OF FIRST REFUSAL TO PURCHASE (Premises)
|
RIDER
|
4:
|
|
RIGHT OF FIRST OFFER TO LEASE (Expansion Building)
|
RIDER
|
5:
|
|
RIGHT OF FIRST OFFER TO PURCHASE (Remainder Land/Building)
|
Address for Notices:
|
Deckers Outdoor Corporation
495-A South Fairview Avenue Goleta, CA 93117 Attn: Facilities Department |
Address for Rent:
|
c/o SARES•REGIS Group
18802 Bardeen Avenue Irvine, CA 92612 Attn: Property Manager, Commercial Property Services Division |
Address for Notices:
|
c/o SARES·REGIS Group
18802 Bardeen Avenue Irvine, CA 92612 Attn: Property Manager, Commercial Property Services Division |
Months Following the Rent Commencement Date
|
Basic Rent Per Month
(Per Square Foot) |
1 – 12*
|
$0.3600*
|
13 – 24
|
$0.3600
|
25 – 36
|
$0.3690
|
37 – 48
|
$0.3780
|
49 – 60
|
$0.3780
|
61 – 72
|
$0.3969
|
73 – 84
|
$0.3969
|
85 – 96
|
$0.4068
|
97 – 108
|
$0.4167
|
109 – 120
|
$0.4167
|
121 – 124
|
$0.4167
|
125 – 132**
|
$0.4271
|
133 – 144**
|
$0.4375
|
145 – 156**
|
$0.4375
|
157 – 171**
|
$0.4484
|
Category of NNN Charges
|
Estimate Per Yr./SF
|
Estimate Per Month/SF
|
Property Taxes
|
$.6600
|
$.055
|
Insurance (inclusive of earthquake coverage)
|
$.1800
|
$.015
|
Common Area Maintenance
|
$.1014
|
$.008
|
Property Management
|
$.0300
|
$.002
|
Applicable Space
|
Charges Abated
|
Abatement Period
|
|
Premises
|
Basic Rent
|
Months 2, 3, 4 and 5 of initial Term
|
|
Premises
|
NNN Charges
|
Months 2, 3 and 4 of initial Term
|
|
Premises
|
Sixty-two percent (62%) of Basic Rent (i.e., $177,320.57 based upon the Premises containing 794,447 square feet)
|
Month 7 of initial Term
|
|
Expansion Space
|
Basic Rent
|
Months 2 and 3 of Expansion Space Term
|
|
Expansion Space
|
Eleven and 12/100 percent (11.12%) of Basic Rent (i.e., $17,538.84 based upon the Expansion Space containing 404,419 square feet and an initial Basic Rent of $0.39 per square foot per month)
|
Month 4 of Expansion Space Term
|
|
(i)
|
Electrical - Moreno Valley Utility
|
(ii)
|
Water - Eastern Municipal Water District
|
(iii)
|
Gas – Southern California Gas Company
|
(iv)
|
Phone - Verizon
|
(v)
|
Sewer - Eastern Municipal Water District
|
i)
|
THE PARTY SEEKING ARBITRATION SHALL DELIVER A WRITTEN NOTICE OF DEMAND TO RESOLVE DISPUTE (THE "
DEMAND
") TO THE OTHER PARTY AND TO JAMS. THE DEMAND SHALL INCLUDE A BRIEF STATEMENT OF SUCH PARTY'S CLAIM, THE AMOUNT THEREOF, AND THE NAME OF THE PROPOSED RETIRED JUDGE FROM JAMS TO DECIDE THE DISPUTE ("
ARBITRATOR
"). WITHIN TEN (10) DAYS AFTER THE EFFECTIVE DATE OF THE DEMAND, THE OTHER PARTY AGAINST WHOM A DEMAND IS MADE SHALL DELIVER A WRITTEN RESPONSE TO THE DEMANDING PARTY AND JAMS. SUCH RESPONSE SHALL INCLUDE A SHORT AND PLAIN STATEMENT OF THE NON-DEMANDING PARTY'S DEFENSES TO THE CLAIM AND SHALL ALSO STATE WHETHER SUCH PARTY AGREES TO THE ARBITRATOR CHOSEN BY THE DEMANDING PARTY. IN THE EVENT THE PARTIES CANNOT AGREE UPON AN ARBITRATOR, THEN JAMS SHALL SELECT AND NAME A SINGLE ARBITRATOR, IN ACCORDANCE WITH ITS EXPEDITED ARBITRATION PROCEDURES, TO CONDUCT THE HEARINGS.
|
ii)
|
UNLESS OTHERWISE AGREED BY THE PARTIES, THE ARBITRATOR SHALL BE A RETIRED OR FORMER JUDGE WITH SUBSTANTIAL EXPERIENCE IN CALCULATING, ADJUDICATING OR LITIGATING RENT AND OTHER CHARGES DUE UNDER A COMMERCIAL LEASE.
|
iii)
|
IF JAMS IS NO LONGER IN BUSINESS AND THERE IS NO COMPARABLE SUCCESSOR, THEN THE PARTIES SHALL AGREE UPON ANOTHER ARBITRATOR. IF THE PARTIES CANNOT AGREE UPON ANOTHER ARBITRATOR, THEN A SINGLE NEUTRAL ARBITRATOR SHALL BE APPOINTED PURSUANT TO SECTION 1281.6 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE.
|
iv)
|
THE ARBITRATOR'S POWERS SHALL BE LIMITED AS FOLLOWS: THE ARBITRATOR SHALL FOLLOW THE SUBSTANTIVE LAWS OF THE STATE OF CALIFORNIA, INCLUDING RULES OF EVIDENCE. THE ARBITRATOR SHALL NOT CONSIDER ANYTHING OUTSIDE THE MATERIALS MADE AVAILABLE TO TENANT DURING THE AUDIT UNLESS NOTICE IS GIVEN TO ALL PARTIES WITH THE OPPORTUNITY TO RESPOND TO SUCH MATTERS THAT WERE NOT MADE AVAILABLE TO TENANT DURING THE AUDIT. NOTWITHSTANDING THE FOREGOING, THE ARBITRATOR SHALL HAVE NO POWER TO MODIFY ANY OF THE PROVISIONS OF THIS LEASE AND THE ARBITRATOR'S JURISDICTION IS LIMITED ACCORDINGLY. THE ARBITRATOR SHALL PREPARE AND SERVE A WRITTEN AND REASONED DECISION WHICH DETERMINES THE DISPUTE, CONTROVERSY, OR CLAIM AND WHICH DESIGNATES THE PARTY AGAINST WHOSE POSITION THE DECISION IS RENDERED. JUDGMENT UPON THE AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING JURISDICTION THEREOF.
|
v)
|
THE COSTS OF THE RESOLUTION SHALL BE DIVIDED EQUALLY AMONG THE PARTIES INVOLVED IN SUCH DISPUTE; PROVIDED, HOWEVER, THAT SUCH COSTS, ALONG WITH ALL OTHER COSTS AND EXPENSES OR ARBITRATION, INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES, SHALL BE SUBJECT TO AWARD, IN FULL OR IN PART, BY THE ARBITRATOR, IN THE ARBITRATOR'S DISCRETION, TO THE PREVAILING PARTY. UNLESS THE ARBITRATOR SO AWARDS ATTORNEYS' FEES AND COSTS, EACH PARTY SHALL BE RESPONSIBLE FOR SUCH PARTY'S OWN ATTORNEYS' FEES AND COSTS.
|
vi)
|
TO THE EXTENT POSSIBLE, THE ARBITRATION HEARINGS SHALL BE CONDUCTED ON CONSECUTIVE DAYS, EXCLUDING SATURDAYS, SUNDAYS AND HOLIDAYS, UNTIL THE COMPLETION OF THE CASE.
|
______________________
Landlord's Initials |
______________________
Tenant's Initials |
|
|
|
|
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
|
|
14
|
ARTICLE 6
|
|
BENEFICIARY DESIGNATION
|
|
16
|
ARTICLE 7
|
|
LEAVE OF ABSENCE
|
|
17
|
ARTICLE 8
|
|
TERMINATION, AMENDMENT OR MODIFICATION
|
|
17
|
ARTICLE 9
|
|
ADMINISTRATION
|
|
19
|
ARTICLE 10
|
|
OTHER BENEFITS AND AGREEMENTS
|
|
19
|
ARTICLE 11
|
|
CLAIMS PROCEDURES
|
|
20
|
ARTICLE 12
|
|
TRUST
|
|
20
|
ARTICLE 13
|
|
MISCELLANEOUS
|
|
20
|
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 returns 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
|
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.
|
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 any 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 or entity or entities, designated in accordance with Article 6, who is (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 Plan Administrator that a Participant completes, signs and returns to the Plan Administrator 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 either a Discretionary Bonus or a Performance Bonus, as applicable.
|
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
|
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 returns, 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
|
“Deferral Account” shall consist of a Participant’s In-Service Accounts and Retirement Account.
|
1.15
|
“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.
|
1.16
|
“Deferral Election” shall mean a Participant's election on an Election Form to defer a portion of his or her Base Salary or Bonus, in accordance with the provisions of Article 3.
|
1.17
|
“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"
|
1.18
|
“Disability Benefit” shall mean the benefit set forth in Section 5.5.
|
1.19
|
“Discretionary Bonus” shall mean any bonus or cash incentive compensation payable by an Employer to a Participant as an Employee and relating to services performed during the Plan Year, other than a Performance Bonus.
|
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 completes, signs and returns 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
|
“Performance Bonus” shall mean (i) any compensation relating to services performed during the Plan Year 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).
|
1.28
|
“Plan” shall mean this Deckers Outdoor Corporation Deferred Compensation Plan, as amended from time to time.
|
1.29
|
“Plan Administrator” shall mean the person(s) or entity(ies) 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.
|
1.30
|
“Plan Year” shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.
|
1.31
|
“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.
|
1.32
|
“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.
|
1.33
|
“Retirement Benefit” shall mean the benefit set forth in Section 5.1.
|
1.34
|
“Termination Benefit” shall mean the benefit set forth in Section 5.2.
|
1.35
|
“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 (6) 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).
|
1.36
|
“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.
|
1.37
|
“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 or her 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).
|
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 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 ERISA Sections 201(2), 301(a)(3) and 401(a)(1), 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.
|
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 Plan Administrator 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 or a Discretionary Bonus, as of December 31
st
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 Performance Bonus, as of the date six (6) months prior to the end of the performance period of the Performance 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, Discretionary Bonus and/or Performance 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 each of the Participant’s Discretionary Bonus and Performance 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.
|
(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,
|
(d)
|
Duration of Deferral Election
. A Participant’s Deferral Election shall apply only to Base Salary and Bonuses 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 Plan Administrator prior to the beginning of such Plan Year or at such time as the Plan Administrator 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 and, if a Participant so elects in accordance with Section 3.1(c), multiple In-Service Accounts may be established for the Participant for the same Class Year. Separate distribution elections shall apply with respect to each Class Year and, if a Participant has designated multiple In-Service Accounts for the Class Year, separate distribution elections shall apply to each such In-Service Account. 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. Any 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 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
|
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, Discretionary Bonus Deferral Amounts and Performance Bonus Deferral Amounts, shall 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 and, if a Participant so elects in accordance with Section 3.1(c), multiple In-Service Accounts shall be established for the Participant for the same Class Year. Each Participant’s Deferral Account shall be further divided into separate subaccounts (“notional investment 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 notional investment subaccounts 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 notional investment 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 notional investment subaccount corresponding to that investment fund.
|
(c)
|
As of the end of each business day, each of the Participant’s notional investment subaccounts shall be credited with earnings (gains or losses) in an amount equal to that determined by multiplying the balance credited to such notional investment subaccount as of the prior day plus amounts allocated to the notional investment 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 notional investment 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 notional investment subaccounts under Section 3.5.
|
(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, Discretionary Bonus or Performance Bonus will be deemed to be invested for purposes of determining the amount of earnings (gains or losses) to be allocated to the notional investment subaccounts. 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. Participants may change their investment designations on a daily basis, both with respect to reallocations of their current Account Balance and allocations of future Deferral Amounts, by electing such investment changes through such procedures as may be specified by the Plan Administrator. If the Company establishes a Trust pursuant to Section 12.1 or otherwise sets aside assets to assist in meeting its obligations under the Plan, the Company shall not be obligated to mirror the Participant’s notional investment subaccount elections.
|
(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 (notional) 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
|
(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.
|
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 each of that Class Year’s In-Service Accounts. The Participant shall not be required to make the same distribution election for the Base Salary, Discretionary Bonus and Performance Bonus Deferral Elections made on the Deferral Election form for that Class Year, and shall not be required to make the same distribution election for each In-Service Account established 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 or, effective as of January 1, 2014, fifteen (15) years. If a Participant elects to direct a percentage of the particular Class Year’s Deferral Amount to an 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 (15
th
) 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.
|
4.2
|
Change in Time or Form of Payment for In-Service Distribution
. Notwithstanding the methods of payment elected for each In-Service Account, the Participant may elect to change the time 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 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 Accounts, if any (on a prorata basis from all such accounts, if more than one In-Service Account was established for the Class Year), 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.
|
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 (15
th
) day of the third (3
rd
) 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.
|
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 or, effective as of January 1, 2014, fifteen (15) 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 Elections made on the Deferral Election form. Any Company Contribution Amount credited to the Participant’s Retirement Account for that Class Year shall be paid in the same manner as elected by the Participant for that Class Year’s 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.
|
5.3
|
Death Prior to Retirement or Termination of Employment
.
If a Participant dies prior to Retirement or Termination of Employment, the Participant’s Beneficiaries shall receive 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 (15
th
) 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 (15
th
) 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:
|
(d)
|
The subsequent election may not take effect until at least twelve (12) months after the date on which the subsequent election is made.
|
(e)
|
The subsequent election is made not less than twelve (12) months prior to the date of the scheduled payment.
|
(f)
|
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 benefits payable upon death pursuant to Section 5.3 or 5.4, as applicable, or upon the occurrence of a Disability.
|
(g)
|
The subsequent election may not accelerate the time of any payment.
|
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) f
|
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.
|
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.
|
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.
|
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 or its authorized delegate. 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.
|
(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.
|
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.
|
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.
|
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.
|
11.1
|
Procedures for Handling Claims
. In accordance with the provisions of ERISA Section 503, 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.
|
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.
|
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 ERISA Sections 201(2), 301(a)(3) and 401(a)(1). 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.
|
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, 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 for no reason at all, 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 a Participant at any time for any 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.
|
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, the Company or the Plan Administrator under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the address below:
|
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.
|
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
|
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.
|
1.
|
JOB TITLE AND COMMENCEMENT
|
1.1
|
You are employed by the Company as the President of EMEA (Europe, Middle East, Africa) and will report to the CEO of Deckers Outdoor Corporation
|
1.2
|
Your employment under this Agreement will commence (XX) June 2011 and shall continue unless and until terminated pursuant to these terms and conditions.
|
1.3
|
During your employment you shall faithfully and diligently carry out your duties by the lawful instructions of the Company and at all times use you best endeavours to promote the best interests of the Company.
|
1.4
|
The Company reserves the right at its discretion to make reasonable changes to your job title and duties from time to time.
|
1.5
|
You must devote the whole of your time, attention and ability during your hours of work to carrying out your duties for the Company.
|
1.6
|
You must ensure that you maintain the highest standards of conduct at all times and conduct your personal and working life in a way that does not damage or risk damaging the Company’s reputation;
|
2.
|
PLACE OF WORK
|
2.1
|
Your place of work will be the Company’s European Office: 83-84 George Street, Richmond, Surrey, TW9 1HE
|
2.2
|
The Company may on reasonable notice to you require you to accept a new normal place of work within a reasonable commuting distance.
|
2.3
|
The Company may require you to undertake work on a temporary basis, away from your normal place of work for period(s) of time, subject to the Company meeting any reasonable expenses necessarily incurred and providing reasonable prior notice where practicable.
|
2.4
|
You may be required to undertake business trips and/or assignments both within the United Kingdom and internationally from time to time. If such trips and/or assignments require you to remain away from your home for more than a twenty-four (24) hour period the Company will endeavour to give you reasonable prior notice. During such business trips and/or assignments you will be required to undertake your duties at such locations as the Company may reasonably require.
|
2.5
|
Due to the nature of your role, you may be expected to undertake a significant amount of travel in order to properly undertake your duties including international travel as and when required.
|
3.
|
PAYMENTS
|
3.1
|
Your salary will be £400,000 per annum, paid monthly in arrears into your bank/building society account on the last working day of the month, less applicable deductions. Your salary will be reviewed annually in March. The decision with regard to any salary adjustment will be entirely at the Company’s discretion.
|
3.2
|
It will be your responsibility to ensure the Company has the correct Bank or Building Society Account Name, Number and Sort Code Number.
|
3.3
|
In addition you will be eligible to receive incentive bonuses under the Company Bonus Scheme subject to terms of the scheme. Bonus payments are conditional upon you continuing to be employed by the Company at the date any such payment is due and not paid under notice of termination as a result of your resignation. The first bonus payment you will be eligible for will be for the year ended 31 December 2011. Any incentive payment for this period will be prorated based on the proportion of the year you have been employed and will be paid in March 2012. Decisions as to whether a payment is due and the amount of any such payment shall be made at the Company’s discretion. The Company reserves the right to amend, replace or discontinue the scheme from year to year.
|
4.
|
DEDUCTIONS
|
4.1
|
You hereby authorise the Company to deduct from your pay or from any other amounts due to you from the Company (or any Group Company) any sums which you owe to the Company (or Group Company). This includes but not limited to overpayments of salary or other benefits, loans or advances made to you by the Company (or Group Company), outstanding amounts on employee accounts, the reclaiming of professional education fees, relocation or accommodation fees, any losses suffered by the Company (or Group Company) as a result of your negligence, breach of authority or breach of the Company’s rules, or any sums in respect of holidays taken in excess of your accrued entitlement at the termination of employment.
|
4.2
|
If you commit any material breach of any of the provisions of this Agreement or the Company’s rules, policies and procedures from time to time, the Company reserves the right to withhold any bonus payment due to you in addition to any disciplinary action which may be deemed appropriate.
|
5.
|
HOURS OF WORK
|
5.1
|
Your contracted hours or work are 37.5 per week. Normal office hours are 09.00am – 5.30pm with a one hour lunch break, however, you will (subject to the working time regulations) be required to work such additional hours as may be required for the satisfactory performance of your duties. No remuneration will be paid for additional hours worked. Time off in lieu is discretionary and subject to the needs of the business and will normally only be granted in exceptional circumstances.
|
5.2
|
The Company expects all employees to co-operate in the day to day operation of its business and this includes being available to work flexibly in accordance with the needs of the business.
|
5.3
|
As part of the Working Time Regulations, your working hours will be monitored to ensure that our responsibilities as an employer are met. You will be required to declare any details of authorized secondary employment, as these additional working hours accumulate within the statutory limit of the Working Times Regulations.
|
5.4
|
You agree that you may work for more than an average of 48 hours a week unless you notify us in writing at the time of signing this Agreement that you do not wish to do so. If you change your mind about the agreement to work for more than an average of 48 hours a week, you must give us three months notice in writing.
|
6.
|
ELIGIBILITY TO WORK IN THE UK
|
6.1
|
You warrant that you are lawfully entitled to work in the United Kingdom without any additional approvals or permit and will notify the Company immediately if you cease to be so entitled at any time during your employment with the Company.
|
6.2
|
The Company may terminate your employment with immediate effect if you cease at any time to be eligible to work in the United Kingdom.
|
6.3
|
The following provisions apply if your stay in the UK is subject to a time limit.
|
6.4
|
If asked you must show the Company (and allow us to copy) such documents and other evidence as the UK Border Agency accepts as showing that you have the right to work in the UK. Information on what documents and evidence are acceptable may be obtained from the HR Manager.
|
6.5
|
If you are sponsored by the Company under the UK Border Agency’s Points Based System, you much give us contact details (including your address and any phone numbers you use) and let us know if these change. You must also comply with any policy or procedure we may have relating to sponsorship and your and our obligations.
|
6.6
|
The Company may provide the UK Border Agency with information about you from time to time.
|
7.
|
HOLIDAYS
|
7.1
|
The Company’s holiday year runs from 1 January to 31 December.
|
7.2
|
In a full calendar year of employment you will be entitled to 25 working days holidays, plus the 8 bank and public holidays normally observed in England. Part years and part time employment will be calculated on a pro rata basis. If on leaving the Company you have exceeded your entitlement to holidays the overpayments will be deducted from your final salary.
|
7.3
|
All holidays should be taken during the calendar year unless otherwise agreed by your Head of Department or other appointed authorised person, in advance in writing. Any untaken holidays will be lost and you will not be entitled to payment for any unused holiday entitlement.
|
7.4
|
Holiday entitlement is only to be taken at a time convenient to the Company. The Company reserves the right to require you to take your holiday entitlement at a time or times specified by the Company.
|
7.5
|
When leaving the Company’s employment, you will normally be paid in lieu for the number of day’s holiday accrued but not taken at the termination date. If upon leaving the company you have exceeded your entitlement to holidays the overpayment will be deducted from your final salary. No payment will be made for any outstanding lieu days.
|
8.1
|
You will be eligible to join the Company pension scheme after the initial qualifying period of three (3) months. Details of the scheme are available upon request from the Human Resources Department.
|
8.2
|
A contracting-out certificate under the Pensions Scheme Act 1993 is not in force for this employment.
|
9.1
|
Subject to the rules of the scheme (which may be changed for time to time) the Company will provide you with life insurance cover in the event of death in service.
|
9.2
|
Subject to the rules of the scheme (which may be changed from time to time) will provide you with long term disability insurance.
|
10.
|
PRIVATE HEALTH
|
10.1
|
You will have the opportunity for you, your partner and your family to be covered by the private health scheme operated by the Company, currently with BUPA, subject to the insurer accepting cover for you under the relevant policy and at normal rates and subject to their terms and conditions from time to time in force. Your premium will be paid by Deckers UK Ltd as a benefit, however to take the benefit you must complete the application forms and return to HR Department. The Company reserves the right to vary the provider of this benefit time to time.
|
11.
|
CAR ALLOWANCE
|
11.1
|
We will pay you a car allowance of £15,000 per annum which will be paid in monthly installations at the same time as your basic salary payment.
|
12.
|
BENEFITS SCHEME AND CHANGES
|
12.1
|
The Company may amend, discontinue or replace ant of the above benefits or insurance schemes at any time.
|
12.2
|
The benefits available under any insurance scheme will depend upon the terms, conditions and requirements of the insurer from time to time whether or not the relevant insurer considers them to be satisfied. The Company will pay insured benefits to you only to the extent that and for so long as it receives those benefits for the relevant insurer in respect of you.
|
12.3
|
If the relevant insurer refuses or otherwise fails to provide cover or benefits under the private medical scheme or Long Term Disability scheme, the Company will pass to the insurer such representations as you may wish to make in respect of such refusal or failure. However, the Company will have no duty to take any further steps or to incur expense in relation to such refusal or failure (and, in particular, will have no obligation to obtain medical reports or to take proceedings against any such insurer).
|
12.4
|
if the relevant insurer accepts a claim relating to you for benefits under the Long Term Disability Scheme you will cease to be entitled to any further salary, sick pay, car allowance or contractual holiday entitlement for the Company during any period in which benefits are paid; and the Company may appoint another individual to fulfill your duties on a temporary or permanent basis.
|
13.
|
EXPENSES
|
13.1
|
You will upon submission of appropriate vouchers or receipts be entitled to reimbursement of all reasonable travelling and incidental expenses properly incurred by you in the course of your employment.
|
13.2
|
You will have the use of a Company credit card for the payment of reasonable travelling and incidental expenses. Any other expense properly incurred by you in the course of employment will be reimbursed upon submission of appropriate vouchers or receipts.
|
14.
|
SICK PAY & MEDICAL EXAMINATIONS
|
14.1
|
The Company has a pick pay scheme in operation, in addition to the Governments statutory scheme. Company sick pay may be awarded at the absolute discretion of the Company as per the sickness and absence policy.
|
14.2
|
We may, at our expense and at any time (whether you are absent from work or not), require you to obtain and give us a medical report from your GP or another person responsible for you clinical care; and/or to be examined or tested by a medical practitioner appointed by us so that we can receive medical advice about you.
|
15.
|
ACCIDENTS AT WORK
|
15.1
|
Any accidents at work, however minor, must be reported immediately and recorded in the accident book for Health and Safety reporting purposes.
|
16.
|
NO SMOKING POLICY
|
16.1
|
Deckers UK operates a No Smoking Policy on all of the Company’s premises’. This policy applies to all the employees, visitors, customers and contractors.
|
16.2
|
Any breach of this policy will be subject to disciplinary action and may result in summary dismissal.
|
17.
|
DATA PROTECTION
|
17.1
|
You consent to the Company or any associated company holding and processing both electronically and in hard copy form any personal and sensitive data relating to yourself for the purposes of employee-related administration, processing your file and management of its business, for compliance with applicable procedures, laws and regulations and for providing data to external suppliers who administer his benefits solely for the purpose of providing you with those benefits. It may also be necessary for the Company to forward such personal and sensitive information to other offices in may have or to another associated company outside of the European Economic area (including to our parent company Deckers Outdoor in the US) for storage and processing for administrative purposes and you consent to the Company doing so as may be necessary from time to time.
|
18.
|
COLLECTIVE AGREEMENT
|
18.1
|
There are no collective agreements in place with any trade union relation to your employment.
|
19.
|
NOTICE
|
19.1
|
Except where you are summarily dismissed for any of the reasons set out in clause 19.3 below, should the Company decide to terminate you employment for any reason, you will be entitled to written notice as follows:-
|
19.2
|
If you decide to leave the Company you are required to give the following periods of written notice:-
|
19.3
|
The Company may terminate your employment immediately without notice or payment in lieu of notice or provision of benefits it:
|
-
|
you commit any serious or repeated breach or non-observance of this Agreement or refuse or neglect to comply with any reasonable and lawful directions of the Company or the Board;
|
-
|
we reasonably consider that you have materially damaged or risk materially damaging your own or our reputation’
|
-
|
you resign from office as a director of the Employer or of a Group Company or refuse to hold office as a director of the Employer or of a Group Company;
|
-
|
You are absent on sick leave for more than 6 months in total in any 12 month period;
|
-
|
you become bankrupt or make any arrangement or composition with or for the benefit of you creditors generally; or
|
-
|
you are convicted of any criminal offence (other than minor road traffic offences for which no custodial penalty is imposed).
|
19.4
|
On termination of employment you must immediately resign from any directorships or other offices which you hold in connection with you employment by the Company.
|
20.
|
PAYMENT IN LIEU OF NOTICE
|
20.1
|
The Company reserves the right to pay you salary only in lieu of notice at its discretion whether notice has been given by you or the company, less any appropriate tax and other statutory deductions.
|
21.
|
GARDEN LEAVE
|
21.1
|
The Company reserves the right to require you, whether you have resigned with notice or you have been given notice to terminate you contract by the Company, to undertake no, reduced, alternative duties, and exclude you from your place of work and its other premises for all or part of the notice period.
|
21.2
|
During such notice period the Company will not be obliged to provide you with work and/or may ask you:
|
22.1
|
In case of gross misconduct the company reserves the right to terminate your employment without notice, or payment in lieu of notice, payment in lieu of holiday, or lieu time (except in accordance with the minimum requirements of the Working Times Regulations 1998). You should note that any list of offences referred to in the Disciplinary Policy as gross misconduct in non-exhaustive.
|
22.2
|
The Disciplinary and Dismissal Procedure and the Grievance Policy which apply to you, are contained within the Deckers Disciplinary and Grievance Policy are available upon request from
|
22.3
|
The Company reserves the right to suspend you without pay from your duties, in appropriate circumstances, for however long it considers necessary to investigate any aspect of your performance or conduct or to follow disciplinary proceedings.
|
23.
|
COMPANY PROPERTY
|
23.1
|
On request and in the event of the termination of your employment you must immediately return all items of our property which you have in your possession in connection with your employment (including any car, keys, security pass, mobile phone, computer, disks, tapes, memory sticks, blackberry, business cards, credit cards, data listings, codes, tapes, memory sticks, documents or copies of documents); and if you have any document or information belonging to us on a personal computer (which is not to be returned under the above provisions), forward a copy to us and then irretrievably delete the document or information. You will permit us to inspect any such computer upon request to ensure such steps have been taken.
|
23.2
|
If asked to do so, you must inform us of any computer passwords used by you in the course of your employment or any passwords of which you are otherwise aware.
|
23.3
|
We may withhold payment of your final salary or any other payment due or outstanding upon termination of your employment until you have fully complied with your obligations to return property and reveal passwords.
|
24.
|
INTELLECTUAL PROPERTY
|
24.1
|
You agree that all right to material created in the course of you employment with the company (including ownership of any physical material) shall vest in the Company. In consideration of the Company entering into this agreement, you hereby assign the Intellectual Property Rights with full title guarantee to the Company absolutely for so long as such rights subsist (including all renewals, reversions, extensions and revivals of such rights). You undertake to do anything reasonably required (both during and after the termination of your employment) to ensure that all such Intellectual Property Rights belong to or are assigned to the Company and to assist us in protecting or maintaining them (although we will not be obliged to do so).
|
24.2
|
For the purposes of this clause 24, Intellectual Property Rights shall mean all rights of and in the nature of copyright, or database rights, patent rights (registered and/or unregistered), rights to trademarks (registered and/or unregistered) and all analogous rights whether now existing or created in the future to which you may now or at any time after the date of this agreement be entitled to in respect of material created in the course of your employment under this agreement.
|
25.
|
COMPANY INDEMNITY
|
25.1
|
For the purpose of Part 11 of the Employment Rights act 1996 you agree that the Company may insist that you repay any loses which you cause to the property of monies of the Company, client, customer, visitor or other employee during the course of your employment which is a result of carelessness, negligence, recklessness, breach of the Company rules or dishonesty on your part and that repayment will be made either by deduction from salary or any other method acceptable to the Company.
|
26.
|
OTHER EMPLOYMENT / INTERESTS
|
26.1
|
During your employment with the Company you must not be employed, engaged or interested in any way in any other business without the Company’s prior written consent, save for holding small shareholdings (being less than 3% of the issued share capital) of any company listed on a relevant stock/investment exchange.
|
27.
|
CONFIDENTIALITY
|
27.1
|
Failure to comply with any of the following provisions during your employment may, if the circumstances warrant, be regarded as Gross Misconduct for which you may be liable to summary dismissal.
|
27.2
|
You shall not except as required by law or in the proper performance of your duties during your employment, or at any time thereafter, disclose to any person, company, or other third party, through any failure to exercise due care and diligence cause any unauthorized disclosure of, or make use of (for your own benefit or that of others) any trade secrets or confidential information relating to the Company, any associated company (including Deckers Outdoor) or any of its or their brands or activities. Such information includes but is not limited to business methods / plans, finances, pricing strategies/tariffs and discount levels, marketing plans, brand development plans/new products, brand and product designs, manpower plans, sales targets, sales statistics, customer/client lists and addresses, trading terms and conditions and distribution policy. You will be held personally liable for any breaches of confidence.
|
27.3
|
Further to the purposes of this clause confidential information shall include any information which you are told or ought reasonably to have known is such.
|
27.4
|
Confidential information does not include information which is generally known or easily accessible by the public, unless it is generally known or easily accessible by the public because of a breach of your obligations.
|
28.
|
RESTRICTIONS
|
28.1
|
In order to protect the Company’s and nay Group Company’s confidential information, trade secrets, goodwill, customer base, supplier base, other business connections and stable workforce, you agree to the restrictions in this clause.
|
28.2
|
In this clause 28:
|
(a)
|
who at any time during the period of 6 months immediately before the Termination Date was engaged or employed as an employee, director or consultant by the Company or any Relevant Group Company;
|
(b)
|
with whom you worked to a material extent or for whom you had managerial responsibility at any time during that period; and
|
(c)
|
who was employed or engaged during that period earning more than £20,000 per year;
|
28.3
|
For the periods set out below immediately following the Termination Date you will not either Directly or Indirectly without written consent from the Company:
|
28.3.1
|
for the 12 months in competition with the Company or any Relevant Group Company be Materially Involved with any Person providing Restricted Products in the UK or any other territory in the EU in which Restricted Products are sold or distributed;
|
28.3.2
|
for 12 months in competition with the Company or any Relevant Group Company either
|
-
|
solicit or try to solicit the custom of any Client or any Prospective Client with a view to supplying that Client or Prospective Client with Restricted Products; and/or
|
-
|
supply Restricted Products to any Client or any Prospective Client;
|
-
|
entice away or try to entice away from the Company or any Relevant Group Company any Key Person and/or
|
-
|
employ or enter into partnership or association with or retain the services of any Key Person of offer to do so;
|
28.4
|
You agree that the Company is entering into the above restrictions and all relevant definitions for its own benefit and as trustee for each Relevant Group Company.
|
28.5
|
For the avoidance of doubt, none of the restrictions contained in this clause 28 shall prohibit any activities by you which are not in direct or indirect competition with any business being carried on by the Company or Relevant Group Company on the termination of your employment.
|
28.6
|
At no time after the termination of your employment shall you directly or indirectly represent yourself as being interested in or employed by or in any way connected with the Company, other than as a former employee of the Company.
|
28.7
|
If you apply for or are offered a new employment, appointment or engagement, before entering into any related contract you will bring the terms of this clause 28 to the attention of the third party proposing to directly or indirectly employ, appoint or engage you.
|
28.8
|
You agree that, having regard to all the circumstances, the restrictions contained in this clause are reasonable and necessary for the protection of the Company and that they do not bear harshly upon you and the parties agree that:
|
(a)
|
each restriction shall be read and construed independently of the other restrictions so that if one or more are found to be void or unenforceable as an unreasonable restraint of trade or for any other reason the remaining restrictions shall not be affected; and
|
(b)
|
if any restriction is found to be void but would be valid and enforceable if some part of it were deleted, that restrictions shall apply with such deletion as may be necessary to make it valid and enforceable.
|
29.1
|
Both during and after the termination of your employment, you will provide both us and any Group Company with whatever assistance may reasonably be required in connections with actual or prospective legal or regulatory proceedings or related investigations. We will pay your reasonable out-of-pocket expenses in doing so.
|
30.
|
CHANGE OF OWNERSHIP
|
30.1
|
If within six months following a Change of Control there is any material diminution in your title, duties, responsibilities, status or reporting relationship from the title, duties, responsibilities, status or reporting relationship existing immediately prior to such Change of Control, or you are removed from any of the positions you held immediately prior to such Change of Control, then:
|
31.
|
GENERAL
|
31.1
|
This agreement is in substitution for any previous contracts, whether by way of letters of appointment, agreements or arrangements, whether written, oral or implied, relating to your employment, which shall be deemed to have been superseded/terminated by mutual consent as from the date of this Agreement and you acknowledge that you have no outstanding claims of any kind again the Company in respect of any such contract. In the event of any discrepancy between the terms set out in this Agreement or any offer letter or previous agreement or document, the terms set out in this Agreement shall prevail.
|
31.2
|
You confirm that you are not bound by or subject to any court order, agreement; arrangement or undertaking which in any way restricts or prohibits you from entering into this contract of employment or from performing your obligations and duties under it.
|
31.3
|
The Company may at its sole discretion transfer this Agreement to any company in the group at any time.
|
31.4
|
You undertake responsibility for familiarizing yourself with the company policies and procedures.
|
31.5
|
The terms of this Agreement are governed by and construed in accordance with English law and the English Courts will have non-exclusive jurisdiction to adjudicate any disputes arising under it.
|
31.6
|
The Company reserves the right to make reasonable changes to any of the terms and conditions of employment contained in this document with due notice. You will be notified of minor changes of detail by way of a general notice to employees and any such changes will take effect from the date of that notice. You will be given not less than one month’s written notice of any significant changes which may be given by way of an individual notice or a general notice. Such changes will be deemed to be accepted unless you notify the Company of any objection in writing before the expiry date of the notice period.
|
31.7
|
The Company reserves the right to terminate your contract of employment should the information which has been provided by you in your Curriculum Vitae be found to be untruthful.
|
31.8
|
In signing this contract you are agreeing that you have declared the Company any unspent convictions.
|
Name of Awardee:
|
|
|
|
Total Number of Stock Units Granted:
|
|
|
|
Grant Date:
|
|
|
|
Vesting Schedule:
|
|
XXXX
|
33.33%
|
|
|
XXXX
|
33.33%
|
|
|
XXXX
|
33.33%
|
Name of Entity
|
|
State or Other Jurisdiction of Incorporation or Organization
|
Deckers Asia Pacific Retail Limited
|
|
Hong Kong
|
Deckers Consumer Direct Corporation
|
|
USA (Arizona)
|
Deckers International Limited
|
|
Bermuda
|
Deckers Macau Limited
|
|
Macau
|
Deckers Europe Limited
|
|
United Kingdom
|
Deckers Asia Pacific Limited
|
|
Hong Kong
|
Deckers UK, LTD
|
|
United Kingdom
|
Deckers Beijing Trading Co., Ltd
|
|
China
|
Deckers Japan GK
|
|
Japan
|
Deckers Outdoor (Guangzhou) Consulting Co., Ltd
|
|
China
|
Deckers Dutch Coöperatie UA
|
|
Netherlands
|
Deckers France SAS
|
|
France
|
Deckers Benelux BV
|
|
Netherlands
|
Deckers Outdoor Canada ULC
|
|
British Columbia
|
Deckers Cabrillo, LLC
|
|
USA (California)
|
Deckers Retail, LLC
|
|
USA (California)
|
Deckers Sales Co. LLC
|
|
USA (California)
|
Deckers France 2 SAS
|
|
France
|
Hoka Europe SAS
|
|
France
|
Deckers Belgium BVBA
|
|
Belgium
|
1.
|
I have reviewed this annual report on Form 10-K of Deckers Outdoor Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
/s/ ANGEL R. MARTINEZ
|
Angel R. Martinez
Chief Executive Officer
Deckers Outdoor Corporation
|
1.
|
I have reviewed this annual report on Form 10-K of Deckers Outdoor Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
/s/ THOMAS A. GEORGE
|
Thomas A. George
Chief Financial Officer
Deckers Outdoor Corporation
|
/s/ ANGEL R. MARTINEZ
|
|
Dated:
|
March 3, 2014
|
Angel R. Martinez
Chief Executive Officer
|
|
|
|
|
|
|
|
/s/ THOMAS A. GEORGE
|
|
Dated:
|
March 3, 2014
|
Thomas A. George
Chief Financial Officer
|
|
|
|