<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
DECKERS OUTDOOR CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
DECKERS OUTDOOR CORPORATION
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
DECKERS OUTDOOR CORPORATION
April 23, 1997
Dear Stockholder:
We cordially invite you to attend our 1997 Annual Meeting of Stockholders
to be held at 5:00 p.m. on Friday, May 30, 1997 at the Radisson Hotel Santa
Barbara, 1111 East Cabrillo Boulevard, Santa Barbara, California 93103. Enclosed
are the Notice of Annual Meeting, Proxy Statement and a Proxy Card relating to
the Annual Meeting which we urge you to read carefully. Also enclosed is the
Company's 1996 Annual Report to Stockholders. Whether or not you expect to
attend the Annual Meeting, please sign and date the enclosed Proxy Card and
return it as promptly as possible to ensure that your shares will be voted.
Properly executed Proxy Cards received by the Company prior to the Annual
Meeting will be voted in accordance with the instructions indicated in such
cards. Because mail delays occur frequently, it is important that the enclosed
Proxy Card be returned well in advance of the meeting.
ON BEHALF OF YOUR
BOARD OF DIRECTORS
DOUGLAS B. OTTO
Chairman of the Board,
President and Chief Executive Officer
<PAGE> 3
DECKERS OUTDOOR CORPORATION
495A S. FAIRVIEW AVENUE, GOLETA, CALIFORNIA 93117
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 30, 1997
TO THE STOCKHOLDERS OF
DECKERS OUTDOOR CORPORATION
Notice is hereby given that the Annual Meeting of Stockholders (the "Annual
Meeting") of Deckers Outdoor Corporation, a Delaware corporation (the
"Company"), will be held at the Radisson Hotel Santa Barbara, 1111 East Cabrillo
Boulevard, Santa Barbara, California 93103, on Friday, May 30, 1997, beginning
at 5:00 p.m., local time. The Annual Meeting will be held for the following
purposes:
1. To elect two (2) directors of the Company to serve as Class I
directors until the Annual Meeting of Stockholders to be held in 2000.
2. To ratify the selection of KPMG Peat Marwick LLP as the Company's
independent auditors.
3. To transact such other business as may properly come before the
meeting or any postponements or adjournments thereof.
The Board of Directors has fixed April 11, 1997 as the record date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting and any postponements or adjournments thereof, and only stockholders of
record at the close of business on that date are entitled to such notice and to
vote at the Annual Meeting.
A list of stockholders entitled to vote at the Annual Meeting will be
available at the offices of the Company for ten (10) days prior to the Annual
Meeting.
We hope that you will use this opportunity to take an active part in the
affairs of the Company by voting on the business to come before the Annual
Meeting either by executing and returning the enclosed Proxy Card or by casting
your vote in person at the Annual Meeting.
STOCKHOLDERS UNABLE TO ATTEND THE ANNUAL MEETING IN PERSON ARE REQUESTED TO
DATE AND SIGN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. A STAMPED
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. IF A STOCKHOLDER RECEIVES MORE THAN
ONE PROXY CARD BECAUSE HE OR SHE OWNS SHARES REGISTERED IN DIFFERENT NAMES OR
ADDRESSES, EACH PROXY CARD SHOULD BE COMPLETED AND RETURNED.
BY ORDER OF THE BOARD OF DIRECTORS
DIANA M. WILSON
Chief Operating Officer,
Vice President and Secretary
Goleta, California
April 23, 1997
<PAGE> 4
DECKERS OUTDOOR CORPORATION
495A S. FAIRVIEW AVENUE
GOLETA, CALIFORNIA 93117
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 30, 1997
-------------------------
PROXY STATEMENT
-------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Deckers Outdoor Corporation, a Delaware
corporation (the "Company"), for use at the Annual Meeting of Stockholders (the
"Annual Meeting") to be held at 5:00 p.m., local time, on May 30, 1997, at the
Radisson Hotel Santa Barbara, 1111 East Cabrillo Boulevard, Santa Barbara,
California 93103, and any postponements or adjournments thereof for the purposes
set forth in the accompanying Notice of Annual Meeting. This Proxy Statement and
the accompanying Form of Proxy were first mailed to stockholders on or about
April 25, 1997.
RECORD DATE AND VOTING
April 11, 1997 has been fixed as the record date (the "Record Date") for
the determination of stockholders entitled to notice of and to vote at the
Annual Meeting, and any postponements or adjournments thereof. As of April 11,
1997, there were 8,950,331 shares of the Company's common stock, par value $.01
per share (the "Common Stock"), issued and outstanding. No shares of the
Company's preferred stock, par value $.01 per share, were outstanding as of that
date. A majority of the shares of Common Stock entitled to vote, present in
person or represented by proxy, will constitute a quorum at the meeting.
Each share of Common Stock issued and outstanding on the Record Date is
entitled to one vote on any matter presented for consideration and action by the
stockholders at the Annual Meeting. With respect to all matters other than the
election of directors, the affirmative vote of a majority of shares of the
Company's Common Stock present in person or represented by proxy at the meeting
and entitled to vote on the subject matter will be the act of the stockholders.
Directors will be elected by a plurality of the votes of the shares of the
Company's Common Stock present in person or represented by proxy and entitled to
vote on the election of directors. Abstentions will be treated as the equivalent
of a negative vote for the purpose of determining whether a proposal has been
adopted and will have no effect for the purpose of determining whether a
director has been elected. Unless otherwise instructed, proxies solicited by the
Company will be voted "FOR" the nominees named herein for election as director,
"FOR" the ratification of the selection of KPMG Peat Marwick LLP as the
Company's independent auditors, and in their discretion upon such other business
as may properly come before such meeting or any and all postponements or
adjournments thereof.
With respect to brokers who are members of the New York Stock Exchange, the
New York Stock Exchange Rules ("NYSE Rules") generally require that when shares
are registered in street or nominee name, its member brokers must receive
specific instructions from the beneficial owners in order to vote on certain
proposals. However, the NYSE Rules do not require specific instructions in order
for a broker to vote on the election of the Class I directors and on
ratification of the selection of the Company's independent auditors. If a member
broker indicates on the proxy that such broker does not have discretionary
authority as to certain shares to vote on any proposal that does require
specific instructions, those shares will not be considered as present and
entitled to vote with respect to that matter. Pursuant to Delaware law, a broker
non-vote will not be treated as present or voting in person or by proxy on the
proposal. A broker non-vote will have no effect for the purpose of determining
whether a director has been elected.
A stockholder giving a proxy has the power to revoke it at any time before
it is exercised by giving written notice of revocation to the Secretary of the
Company, by executing a subsequent proxy, or by attending the Annual Meeting and
voting in person. Subject to any such revocation, all shares represented by
properly executed proxies will be voted in accordance with the specifications on
the enclosed proxy card.
1
<PAGE> 5
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The Company's By-Laws state that the Board of Directors shall consist of
not less than one nor more than seven members. The specific number of Board
members within this range is established by the Board of Directors and is
currently set at six. The Company's Certificate of Incorporation provides that
the Board shall be classified into three classes of directors, which classes
serve staggered three-year terms. The Board consists of two Class I directors,
two Class II directors and two Class III directors. The current term of each
Class I director expires at the Annual Meeting of Stockholders to be held in
1997, the current term of each Class II director expires at the Annual Meeting
of Stockholders to be held in 1998, and the current term of each Class III
director expires at the Annual Meeting of Stockholders to be held in 1999. The
Board of Directors is proposing Ronald D. Page and Diana M. Wilson, who are now
serving as Class I directors, for election as Class I directors at the Annual
Meeting. Each of the Class I directors elected at the Annual Meeting will serve
until the Annual Meeting of Stockholders to be held in 2000, until such
director's successor has been duly elected and qualified or until such director
has otherwise ceased to serve as a director. To the Company's knowledge, each
nominee is and will be available to serve. The nominees have supplied the
following background information to the Company:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION DURING THE LAST 5 YEARS,
OTHER BUSINESS DIRECTOR
NAME AGE EXPERIENCE AND DIRECTORSHIPS SINCE
- ------------------------------ --- --------------------------------------------- --------
<S> <C> <C> <C>
Ronald D. Page................ 57 Managing Director -- European Operations 1993
since March 1997, Executive Vice
President -- Sales since August 1995, Vice
President -- Sales from January 1993 to
August 1995, and Sales Manager from May 1991
to January 1993.
Diana M. Wilson............... 38 Chief Operating Officer and Vice President of 1997
the Company and Chief Executive Officer of
Ugg Holdings, Inc. since August 1995,
Secretary of the Company since August 1993,
Chief Financial Officer of the Company from
January 1993 to January 1997, and Controller
of the Company from August 1990 to January
1993.
</TABLE>
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE
"FOR" THE ELECTION OF THE ABOVE NOMINEES.
2
<PAGE> 6
MANAGEMENT
The directors and executive officers of the Company are set forth below.
The following table includes information with respect to each director and
executive officer of the Company.
<TABLE>
<CAPTION>
CLASS OF
NAME AGE POSITION DIRECTOR
- ------------------------------ --- --------------------------------------------- --------
<S> <C> <C> <C>
Douglas B. Otto............... 45 Chairman of the Board, President and Chief III
Executive Officer
Diana M. Wilson............... 38 Director, Chief Operating Officer, I
Vice President and Secretary
Ronald D. Page................ 57 Director, Managing Director -- European I
Operations and Executive Vice
President -- Sales
M. Scott Ash.................. 32 Chief Financial Officer
Jeffrey C.L. Hoffman.......... 38 Vice President -- Marketing
Connie X. Rishwain............ 39 Vice President -- Merchandising
Scott A. Brabson.............. 42 Vice President -- Global Sourcing and
Production
Keith F. Sparks............... 49 Vice President -- Sales, Teva, Ugg, and
Trukke
James R. Van Dine............. 43 Vice President -- Sales, Simple
Rick D. Otto.................. 39 Vice President -- Operations
Bruce A. Nuttman.............. 42 Management Information Systems Director
Gene E. Burleson.............. 56 Director III
Rex A. Licklider.............. 54 Director II
Karl F. Lopker................ 45 Director II
</TABLE>
Douglas B. Otto, co-founder of the Company in 1973, has served as an
executive officer since that time and as Chairman of the Board, President and
Chief Executive Officer since 1982. He also served as Chief Financial Officer
from June 1990 through December 1992.
Diana M. Wilson has been Chief Operating Officer and Vice President of the
Company and the Chief Executive Officer of Ugg Holdings, Inc. since August 1995
and has been the Secretary of the Company since August 1993. She has been a
Director of the Company since February 1997. She served as Chief Financial
Officer from January 1993 through January 1997 and served as Controller of the
Company from August 1990 to January 1993. Prior to joining the Company, she was
employed by KPMG Peat Marwick LLP from January 1988 to April 1990. Ms. Wilson is
a Certified Public Accountant.
Ronald D. Page joined the Company as a sales manager in May 1991, became
Vice President -- Sales in January 1993 and has been Executive Vice
President -- Sales since August 1995 and Managing Director -- European
Operations since March 1997. Mr. Page has been a Director of the Company since
August 1993. Prior to joining the Company, Mr. Page was President of
Technisport, Inc., the West Coast distributorship for Nike from August 1984 to
May 1991. In 1991, Technisport, Inc. filed for protection under Chapter 7 of the
United States Bankruptcy Code as a result of various lawsuits filed against Nike
alleging product liability and patent and trademark infringements also being
filed against Technisport, Inc. as an agent of Nike.
M. Scott Ash has been Chief Financial Officer since January 1997. Prior to
such time, Mr. Ash served as Controller of the Company, beginning in January
1993. Prior to joining the Company, he was employed by Dole Food Company, Inc.
from August 1992 to January 1993 as Manager of Corporate Reporting. Previously
he was a Senior Manager at KPMG Peat Marwick LLP where he was employed from
September 1986 to August 1992. Mr. Ash is a Certified Public Accountant.
Jeffrey C.L. Hoffman joined the Company in January 1995 as Vice
President -- Marketing. Previously, Mr. Hoffman was Director of Marketing for
Children's Footwear at L.A. Gear from June 1993 until joining the Company. From
1989 to 1993 he was Director of Concept Stores and, later, Product Line Manager
at G.H. Bass. Prior to joining G.H. Bass, Mr. Hoffman worked at U.S. Shoe, where
he was Divisional
3
<PAGE> 7
Merchandise Manager from 1981 to 1986 and General Manager -- Papagallo Retail
Division from 1986 to 1989.
Connie X. Rishwain has been Vice President -- Merchandising of the Company
since August 1995. Prior to such time, Ms. Rishwain served as Director of
Merchandising of the Company since January 1995. Previously, she was employed as
Vice President of Merchandising for Impo International from June 1988 to
December 1994. From April 1984 to May 1988, Ms. Rishwain worked for Nine West
Group where she was a Director of Merchandising from 1984 to 1987 and was a Vice
President of Merchandising from 1987 to 1988.
Scott A. Brabson has been the Company's Vice President -- Global Sourcing
and Production since January 1997. Prior to that, Mr. Brabson was a consultant
for the Company on its Asian operations since October 1996. Previously, Mr.
Brabson was employed by L.A. Gear, where he was Regional Managing
Director -- Asian Operations from March 1992 to September 1996. From October
1991 to March 1992, Mr. Brabson was employed by Reebok as Director of Technical
Services -- Asia.
Keith F. Sparks has been the Company's Vice President -- Sales, Teva, Ugg
and Trukke since August 1995. Prior to that, Mr. Sparks was the Company's
National Sales Manager, Teva since May 1994. Previously, Mr. Sparks was employed
by Nike Inc., where he was Northwest Regional Sales Manager for Footwear and
Apparel from January 1988 to April 1994 and was National Sales Manager, Apparel
from May 1981 to December 1987.
James R. Van Dine has been the Company's Vice President -- Sales, Simple
since December 1996. Prior to that, Mr. Van Dine was the Company's National
Sales Manager, Simple since November 1995. Previously, Mr. Van Dine was employed
by Reebok International, where he was Regional Vice President from June 1991 to
October 1995.
Rick D. Otto has been Vice President -- Operations since 1990. Mr. Otto
served as Production Manager at the Company from 1987 to 1990 and as Purchasing
Manager from 1986 to 1987. Mr. Otto and Douglas B. Otto are brothers.
Bruce A. Nuttman has been Management Information Systems Director for the
Company since September 1989.
Gene E. Burleson has been a Director of the Company since September 1993.
Since February 1997, Mr. Burleson has been Chief Executive Officer and a
Director of Vitalink Pharmacy Services, Inc., a provider of pharmacy services to
nursing facilities. From October 1989 to February 1997, Mr. Burleson was
employed by GranCare, Inc., a provider of routine and specialty medical care and
rehabilitative services, where he served as President and a Director from
October 1989 to December 1990 and as Chief Executive Officer and a Director from
December 1990 to February 1997. He assumed the position of Chairman of the Board
of GranCare, Inc. in January 1994, and continues to serve in this capacity. Mr.
Burleson is also a Director of Alternative Living Services, Inc., Walnut
Financial Services, Inc., and Equimed, Inc. From June 1986 to March 1989, Mr.
Burleson was President, Chief Operating Officer and a Director of American
Medical International, Inc., an owner and operator of acute care hospitals.
Rex A. Licklider has been a Director of the Company since September 1993.
From 1975 until February 1992, Mr. Licklider served as Chairman of the Board and
Chief Executive Officer of Com Systems, Inc., a long distance telecommunications
company. From February 1992 to January 1993, Mr. Licklider was Chairman of the
Board of Resurgens Communications Group, with whom Com Systems, Inc. had merged.
Since January 1993, Mr. Licklider has been a private investor. Mr. Licklider is
currently a Director of The Sports Club Co.
Karl F. Lopker has been a Director of the Company since May 1995 and was
originally a co-founder of the Company in 1973. Since 1979, Mr. Lopker has been
Chief Executive Officer of QAD Inc., a developer and marketer of computer
software.
For information concerning beneficial ownership of Common Stock by
directors and executive officers, see "Security Ownership of Certain Beneficial
Owners and Management" below.
4
<PAGE> 8
CERTAIN RELATIONSHIPS
In March 1996, the Company loaned $60,000 to Jeffrey C.L. Hoffman to assist
Mr. Hoffman in the purchase of a residence. The largest aggregate amount of
indebtedness outstanding at any time during 1996 was $64,125, including accrued
interest of $4,125. As of February 28, 1997, the balance outstanding was
$64,950, including accrued interest of $4,950. The promissory note is due in
annual installments through December 31, 1998 and is secured by any accrued but
unpaid bonuses, the value of any stock options held by Mr. Hoffman and any other
potential amounts due to Mr. Hoffman by the Company.
INFORMATION ABOUT THE BOARD OF DIRECTORS AND
COMMITTEES OF THE BOARD OF DIRECTORS
COMMITTEES OF THE BOARD
Audit Committee -- The Board has a standing Audit Committee that reviews
the audit and control functions of the Company, the Company's accounting
principles, policies and practices and financial reporting, the scope of the
audit conducted by the Company's auditors, the fees and all non-audit services
of the independent auditors and the independent auditors' opinion and letter of
comment to management and management's response thereto. The committee met four
times during 1996. At the date of this Proxy Statement the Audit Committee was
comprised of Messrs. Burleson, Licklider, and Lopker.
Compensation Committee -- The Board has a Compensation Committee (the
"Compensation Committee") that is authorized to review and recommend to the
Board the salaries, bonuses and prerequisites of the Company's executive
officers. The Compensation Committee also reviews and recommends to the Board
any new compensation or retirement plans and administers the Company's 1993
Employee Stock Incentive Plan (the "1993 Plan") and the Company's 1995 Employee
Stock Purchase Plan (the "1995 Plan"). The committee met four times during 1996.
At the date of this Proxy Statement the Compensation Committee was comprised of
Messrs. Burleson, Licklider and Lopker.
DIRECTOR ATTENDANCE
In 1996, the Company held five meetings of the Board of Directors. During
1996, all of the directors attended at least 75% of the aggregate of the
meetings of the Board and of the committees of which they were members.
DIRECTOR COMPENSATION
Standard Compensation -- Directors who are not employees of the Company or
its subsidiaries ("Nonemployee Directors") receive an Annual Retainer to be paid
as follows: $11,000 in cash, or, at the option of a Nonemployee Director,
exercised ten days prior to the start of each year, in Common Stock of the
Company at a 20% discount off the price of the shares at the closing price at
the beginning of the year; and 500 shares of the Common Stock of the Company per
quarter (2,000 shares annually), vesting on the first day of each quarter. On
January 1, 1999 and every three years thereafter, the Board will set the number
of shares for the following three years. Additionally, Nonemployee Directors
receive $1,500 for each meeting of the Board and $1,000 for each committee
meeting that they attend plus reimbursement of any expenses they may incur with
respect to such meetings. Committee Chairmen receive additional annual retainer
fees of $4,000. Directors who are employees of the Company or its subsidiaries
serve as directors without compensation.
Stock Options -- Nonemployee Directors receive additional compensation in
the form of stock options granted automatically under the 1993 Plan. Upon their
initial election to the Board of Directors, Nonemployee Directors automatically
receive options to purchase 10,000 shares of Common Stock. Such options vest in
annual one-third installments, with the first such installment vesting on the
first anniversary of the date of grant of such option. In addition, beginning on
the fourth annual meeting of stockholders after a Nonemployee Director is first
elected, such Nonemployee Director will automatically be granted each year
options to purchase 2,000 shares of Common Stock. Such additional options will
be fully vested and exercisable at the time of grant. All options granted to
Nonemployee Directors have an exercise price equal to the fair market value of
the shares on the date of grant of such option.
5
<PAGE> 9
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth for the years ended December 31, 1996, 1995
and 1994, the reportable compensation paid or awarded to the Chief Executive
Officer and to each of the four other most highly compensated executive officers
of the Company who were executive officers of the Company at December 31, 1996
and received compensation in excess of $100,000 in such year (the "Named
Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-------------
ANNUAL COMPENSATION SECURITIES
-------------------------------------- UNDERLYING
OTHER ANNUAL OPTIONS/SARS
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (#)
- ------------------------------------- ----- -------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Douglas B. Otto...................... 1996 $274,000 $ 250,000 $ -- --
President and Chief Executive 1995 260,000 102,000 -- --
Officer 1994 260,000 204,000 -- --
Diana M. Wilson...................... 1996 180,000 76,000 -- --
Chief Operating and Financial 1995 140,000 91,000 -- 240,000(1)
Officer, Vice President 1994 88,000 48,000 -- 15,250
and Secretary
Ronald D. Page....................... 1996 150,000 91,000 -- --
Executive Vice President -- Sales 1995 130,000 10,000 -- 37,000(1)
1994 104,000 123,000 -- 12,250
Jeffrey C.L. Hoffman................. 1996 120,000 57,000 -- --
Vice President -- Marketing 1995 95,000 77,000 -- 50,000
Keith F. Sparks...................... 1996 120,000 49,000 --
Vice President -- Sales, Teva and 1995 104,000 23,000 50,000
Trukke
</TABLE>
- ---------------
(1) In February 1995, the Board of Directors approved the repricing of certain
stock options. The number of shares indicated includes the following number
of shares under options that were repriced in 1995: Diana M.
Wilson -- 15,000 and Ronald D. Page -- 12,000.
The following table sets forth, for the Named Executive Officers,
information with respect to options exercised, unexercised options and year-end
option values, in each case with respect to options to purchase shares of the
Company's Common Stock.
AGGREGATED OPTION EXERCISES IN 1996 AND
1996 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES DECEMBER 31, 1996(#) DECEMBER 31, 1996
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Douglas B. Otto................ -- $ -- -- -- $ -- $ --
Diana M. Wilson................ -- -- 102,250 159,000 135,831 20,625
Ronald D. Page................. -- -- 22,000 15,000 13,750 20,625
Jeffrey C.L. Hoffman........... 5,000 17,750 15,000 30,000 6,875 20,625
Keith F. Sparks................ -- -- 25,000 25,000 13,750 20,625
</TABLE>
6
<PAGE> 10
The following table sets forth, for the Named Executive Officers,
information with respect to repricings of stock options during 1995.
TEN YEAR OPTION REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET EXERCISE OPTION TERM
UNDERLYING PRICE OF STOCK PRICE NEW REMAINING
REPRICING OPTIONS AT TIME OF AT TIME EXERCISE AT DATE OF
NAME DATE REPRICED(#) REPRICING($) OF REPRICING PRICE($) REPRICING
- --------------------------- --------- ------------- -------------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Douglas B. Otto............ -- -- $ -- $ -- $ -- --
Diana M. Wilson............ 02-17-95 15,000 12.00 14.63 12.00 4 yrs
Ronald D. Page............. 02-17-95 12,000 12.00 14.63 12.00 4 yrs
Jeffrey C.L. Hoffman....... -- -- -- -- -- --
Keith F. Sparks............ -- -- -- -- -- --
</TABLE>
REPORT OF THE COMPENSATION COMMITTEE ON REPRICING OF STOCK OPTIONS
In February 1995, the Committee repriced all outstanding stock options,
other than those which were already in the money, which were held by executive
officers and other employees. Such options were repriced to $12.00 per share,
the fair market value of the Company's common stock on the date of the
repricing. All other terms of the existing stock options remained unchanged.
Such repricing was approved by the Committee in order to incentivize the
executive officers and employees. The Committee determined that the decrease in
the market price of the Company's common stock since the date of grant was not
reflective of the individual performance of the executive officers and other
employees but was the result of unforeseen factors beyond their control.
COMPENSATION COMMITTEE
Gene E. Burleson
Rex A. Licklider
Karl F. Lopker
The Report of the Compensation Committee on Repricing of Stock Options
shall not be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing under the
Securities Act of 1933 or under the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such acts.
EMPLOYMENT AGREEMENTS
Effective January 1992, Douglas B. Otto entered into a five-year employment
agreement with the Company, which was subsequently extended through 2001. Such
employment agreement provides for an annual salary of $260,000, with annual cost
of living increases and a bonus of up to $500,000 per year, determined by the
Compensation Committee, based upon the operating results of the Company. In the
event Mr. Otto's employment agreement is terminated for any reason, including
"For Cause" as defined therein, Mr. Otto will receive an annual payment of
$260,000 and his existing employee benefits for five years from the date of
termination. After any termination of employment, Mr. Otto may not compete with
the Company for one year in the United States (except in Montana and Wyoming).
The Company may not terminate such employment agreement except "For Cause."
Diana M. Wilson entered into an employment agreement with the Company,
effective August 4, 1995, which was subsequently amended on April 16, 1997,
effective as of January 1, 1997. As amended, the agreement provides for an
annual salary of $240,000 with a potential bonus of up to $240,000. The
agreement also provides for a loan by the Company to Ms. Wilson to purchase up
to 100,000 shares of the Company's common stock at fair market value. The
promissory note will bear interest at the applicable federal rate and will be
secured by the stock so acquired and, under certain circumstances, by any
severance pay, including any unpaid bonuses. In connection with her employment
agreement, Ms. Wilson was granted an option to
7
<PAGE> 11
purchase 200,000 shares of the Company's common stock at an exercise price of
$9.50, the fair market value of the Company's common stock on the date of grant.
This option vests with respect to 20,000 shares on August 4, 1995 and the
remainder vests in annual 36,000 share installments on August 4, 1996 through
August 4, 2000. Such option expires in August 2005. In the event Ms. Wilson's
employment is terminated for reasons other than: (1) cause, or (2) voluntary
termination, she will receive six months severance plus committed incentives. In
the event there is a change of control and termination or constructive
termination, she will receive twelve months severance, including minimum
guarantees, plus the acceleration of vesting of all stock options.
The other officers of the Company do not have employment agreements with
the Company and serve at the pleasure of the Board.
REPORT OF THE COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors,
consisting entirely of directors who have never served as officers or employees
of the Company or any of its subsidiaries except for Mr. Lopker who was formerly
the President of the Company from 1976 to 1982, determines and administers the
compensation of the Company's executive officers. Set forth below are the
principal factors underlying the Committee's philosophy used in setting
compensation.
Compensation Philosophy -- At the direction of the Board of Directors, the
Committee endeavors to ensure that the compensation programs for executive
officers of the Company and its subsidiaries are competitive and consistent in
order to attract and retain key executives critical to the Company's long-term
success. The Committee believes that the Company's overall financial performance
should be an important factor in the total compensation of executive officers.
At the executive officer level, the Committee has a policy that a significant
proportion of potential total compensation should consist of variable,
performance-based components, such as stock options, stock awards and bonuses,
which can increase or decrease to reflect changes in corporate and individual
performance. These incentive compensation programs are intended to reinforce
management's commitment to enhancement of profitability and stockholder value.
The Committee takes into account various qualitative and quantitative
indicators of corporate and individual performance in determining the level and
composition of compensation for the chief executive officer and other executive
officers. While the Committee considers such corporate performance measures as
net sales, net income and earnings per common and common equivalent shares, the
Committee does not apply any specific quantitative formula in making
compensation decisions. The Committee also appreciates the importance of
achievements that may be difficult to quantify, and accordingly recognizes
qualitative factors, such as successful supervision of major corporate projects,
demonstrated leadership ability and contributions to industry and community
development. For 1996, the most important qualitative factors in determining
incentive compensation awards to executive officers were the Committee's
assessments of their contributions to the Company's sales, gross margin, net
earnings, product development and manufacturing efficiencies.
The Committee also evaluates the total compensation of the Company's chief
executive officer and other executive officers in light of information regarding
the compensation practices and corporate financial performance of similar
companies in the Company's industry. However, the Committee does not target a
specific percentile range within the peer group compensation structure in
determining compensation for executive officers. From time to time, the
Committee also receives assessments and advice regarding the Company's
compensation practices from independent compensation consultants.
Relationship of Performance to Compensation -- Compensation that may be
earned by the executive officers in any fiscal year consists of base salary,
cash bonus and stock options. Base salaries for the chief executive officer and
other executive officers are established at levels that are considered to be at
the "low-end" of the range for the peer group, after considering the duties and
scope of responsibilities of each officer's position. Salaries are reviewed
periodically and adjusted as warranted to reflect sustained individual
performance. The Committee focuses primarily on total annual compensation,
including incentives awards,
8
<PAGE> 12
and cash bonuses, rather than base salary alone, as the appropriate measures of
executive officer performance and contribution.
The executive officers receive incentive compensation awards based on
individual goals and milestones established for each officer at the beginning of
each year and other factors as determined by the Committee. Such officers
receive compensation for the subsequent attainment of these goals.
The 1993 Employee Stock Incentive Plan (the "1993 Plan") authorizes the
Committee to make grants and awards of stock options, stock appreciation rights,
restricted stock and other stock-based awards. The Committee grants stock
options to executive officers, as well as other employees of the Company and its
subsidiaries below the executive officer level. Executive officers are eligible
to receive stock option grants, which the Committee approves from time to time
as it deems appropriate.
In approving grants and awards under the 1993 Plan, the quantitative and
qualitative factors and industry comparisons outlined above will be considered.
The number of options previously awarded to and held by executive officers is
reviewed but is not an important factor in determining the size of current
option grants.
To the extent readily determinable and as one of the factors in its
consideration of compensation matters, the Committee considers the anticipated
tax treatment to the Company and to the executives of various payments and
benefits. Some types of compensation payments and their deductibility (e.g., the
spread of exercise of non-qualified options) depend upon the timing of an
executive's vesting or exercise of previously granted rights. Further,
interpretations of and changes in the tax laws and other factors beyond the
Committee's control also affect the deductibility of compensation.
Chief Executive Officer Compensation -- Douglas B. Otto entered into a five
year employment agreement, effective January 1992, and subsequently extended
through 2001. Such employment agreement provides for an annual salary of
$260,000, with annual cost of living increases, and provides for a bonus of up
to $500,000 per year, determined by the Compensation Committee, based upon a
combination of factors including the Company's common stock price and the
operating results of the Company.
In evaluating the discretionary bonus component of the compensation of
Douglas B. Otto, Chairman of the Board, President and Chief Executive Officer of
the Company, the Committee has taken into consideration Mr. Otto's long service
with the Company and the significant contributions he has made toward the
Company's growth and financial stability. For 1996, the Committee determined Mr.
Otto's bonus based on three criteria: the Company's stock price in relation to
that of the Company's Peer Group; the Company's ability to achieve targeted
goals for earnings per share; and a general assessment by the Committee of his
contributions to the Company. In 1996, the Company's stock price did not meet
the criteria set by the Committee. Consequently, Mr. Otto did not receive this
portion of the bonus. Mr. Otto's 1996 bonus was therefore based solely upon the
Company's earnings per share together with a general assessment by the Committee
of his contributions to the Company. Mr. Otto was not granted any stock options
during fiscal year 1996, although the Committee may grant such options in the
future.
In November 1996, the Committee established the compensation of the
Company's executive officers for fiscal year 1997. In each case, the Committee's
decision was based upon the principles and procedures outlined above.
COMPENSATION COMMITTEE
Gene E. Burleson
Rex A. Licklider
Karl F. Lopker
The Report of the Compensation Committee on Executive Compensation shall
not be deemed incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the Securities Act of
1933 or under the Securities Exchange Act of 1934, except to the extent that the
Company specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such acts.
9
<PAGE> 13
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
As of the date of this Proxy Statement, the members of the Compensation
Committee were Messrs. Burleson, Licklider and Lopker, none of whom was an
officer or employee of the Company or any of its subsidiaries during fiscal year
1996 or is a former officer of the Company, or any of its subsidiaries, except
that Mr. Lopker was formerly the President of the Company from 1976 to 1982.
STOCKHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the percentage change in the
cumulative total stockholder return on the Company's Common Stock against the
cumulative total return of the Nasdaq Composite Index and two peer group indices
for the period commencing October 14, 1993 (the effective date of the
registration statement for the Company's Common Stock) and ending December 31,
1996. The data represented below assumes $100 invested in each of the Company's
Common Stock, the Nasdaq Composite Index and the peer group indices on October
14, 1993. The stock performance graph shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not otherwise
be deemed filed under such acts.
COMPARISON OF TOTAL RETURN (ASSUMING DIVIDEND REINVESTMENT)
SINCE THE INITIAL PUBLIC OFFERING OF DECKERS OUTDOOR CORPORATION
<TABLE>
<CAPTION>
DECKERS
MEASUREMENT PERIOD OUTDOOR NASDAQ ATHLETIC SHOE ATHLETIC SHOE
(FISCAL YEAR COVERED) CORPORATION COMPOSITE COMPOSITE(1)* COMPOSITE(2)**
<S> <C> <C> <C> <C>
OCTOBER 14, 1993 100.0 100.0 100.0 100.0
DECEMBER 31, 1993 120.0 98.9 102.0 100.9
DECEMBER 31, 1994 83.3 95.7 129.4 128.5
DECEMBER 31, 1995 38.3 134.0 171.5 190.7
DECEMBER 31, 1996 45.9 164.4 303.0 308.5
</TABLE>
* Athletic Shoe Composite peer group index(1) consisting of Hyde Athletic
Industries, Inc. (Class B), K-Swiss, L.A. Gear Inc., Nike Inc., Reebok
International Ltd., Rocky Boots & Shoes Inc., The Stride Rite Company, The
Timberland Company, Vans Inc. and Wolverine World Wide Inc.
** Athletic Shoe Composite peer group index(2)consisting of Hyde Athletic
Industries, Inc. (Class B), K-Swiss, L.A. Gear Inc., Nike Inc., Reebok
International Ltd., Rocky Boots & Shoes Inc., The Stride Rite Company, The
Timberland Company, Vans Inc., Wolverine World Wide Inc., Fila Holding SPA,
and Kenneth Cole Productions. The Company has added Fila Holding SPA and
Kenneth Cole Productions because they are competitors of the Company and the
Company believes this expanded index is more representative of the Company's
peer group. The Company currently intends to use this expanded peer group in
future proxy statements.
10
<PAGE> 14
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following security ownership information is set forth, as of February
28, 1997, with respect to certain persons or groups known to the Company to be
beneficial owners of more than 5% of the Company's outstanding Common Stock and
with respect to each director of the Company, each of the Named Executive
Officers, and all current directors, nominees and executive officers as a group
(fourteen persons). Other than as set forth below, the Company is not aware of
any other person who may be deemed to be a beneficial owner of more than 5% of
the Company's Common Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(2),(4) PERCENT OF CLASS
----------------------------------------------- --------------------------- ----------------
<S> <C> <C>
Douglas B. Otto(3)............................. 4,073,475 45.3%
Diana M. Wilson................................ 122,849 1.4
Ronald D. Page................................. 223,621 2.5
Jeffrey C.L. Hoffman........................... 25,671 *
Keith F. Sparks................................ 25,200 *
Gene A. Burleson............................... 33,791 *
Rex A. Licklider............................... 60,760 *
Karl F. Lopker................................. 14,024 *
All directors and executive officers as a group
(fourteen persons)........................... 4,729,903 51.3%
</TABLE>
- ---------------
(1) The address of each beneficial owner is 495A S. Fairview Avenue, Goleta,
California 93117, unless otherwise noted.
(2) Unless otherwise noted, sole voting and dispositive power are possessed with
respect to all shares of Common Stock owned.
(3) Includes (a) 2,555,575 shares held by the Douglas B. Otto Trust and 910,000
shares held by the Otto Family Living Trust, as to which Mr. Otto has sole
voting and investment power, and (b) 303,950 shares and 303,950 shares,
respectively, held as custodian under the Uniform Gifts to Minors Act for
the benefit of Mr. Otto's daughter and son.
(4) Includes shares under stock options that are presently exercisable or are
exercisable within 60 days for the following: Diana M. Wilson -- 102,250;
Ronald D. Page -- 22,000; Jeffrey C.L. Hoffman -- 25,000; Keith F.
Sparks -- 25,000; Gene A. Burleson -- 10,000; Rex A. Licklider -- 10,000;
Karl F. Lopker -- 3,333; and all directors and executive officers as a
group -- 235,333.
* Percentage of shares beneficially owned does not exceed 1% of the class so
owned.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors, executive officers and persons who own more
than 10% of the Common Stock (collectively "Section 16 Persons") to file initial
reports of ownership (Forms 3) and reports of changes in ownership of Common
Stock (Forms 4 and Forms 5) with the Securities and Exchange Commission as well
as the Company.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and representations from each Section 16 Person
known to the Company that no other reports were required, during the fiscal year
ended December 31, 1996, all Section 16(a) filing requirements applicable to its
Section 16 Persons were complied with.
11
<PAGE> 15
PROPOSAL NO. 2
INDEPENDENT AUDITORS
For the 1996 fiscal year, KPMG Peat Marwick LLP provided audit services
which included examination of the Company's annual consolidated financial
statements. Upon the recommendation of the Audit Committee, the Board has
selected KPMG Peat Marwick LLP to provide audit services to the Company and its
subsidiaries for the fiscal year ending December 31, 1997. The stockholders are
being requested to ratify such selection at the Annual Meeting. A representative
of KPMG Peat Marwick LLP will attend the Annual Meeting to make any statements
he or she may desire and to respond to appropriate stockholder questions.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE "FOR" THE
RATIFICATION OF THE ELECTION OF KPMG PEAT MARWICK LLP AS THE
COMPANY'S INDEPENDENT AUDITORS.
DATE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
FOR 1998 ANNUAL MEETING
Any proposal relating to a proper subject which an eligible stockholder may
intend to present for action at the Company's 1998 Annual Meeting of
Stockholders and which such stockholder may wish to have included in the proxy
materials for such meeting in accordance with the provisions of Rule 14a-8
promulgated under the Exchange Act must be received as far in advance of the
meeting as possible in proper form by the Secretary of the Company at 495A S.
Fairview Avenue, Goleta, California 93117 and in any event not later than
December 25, 1997. It is suggested that any such proposal be submitted by
certified mail, return receipt requested.
OTHER BUSINESS OF THE ANNUAL MEETING
Management is not aware of any matters to come before the Annual Meeting or
any postponement or adjournment thereof other than the election of directors and
the ratification of the selection of the Company's independent auditors.
However, inasmuch as matters of which management is not now aware may come
before the meeting or any postponement or adjournment thereof, the proxies
confer discretionary authority with respect to acting thereon, and the persons
named in such proxies intend to vote, act and consent in accordance with their
best judgment with respect thereto, provided that, to the extent the Company
becomes aware a reasonable time before the Annual Meeting of any matter to come
before such meeting, the Company will provide an opportunity to vote by proxy
directly on such matter. Upon receipt of such proxies in time for voting, the
shares represented thereby will be voted as indicated thereon and as described
in this Proxy Statement.
12
<PAGE> 16
MISCELLANEOUS
The solicitation of proxies is made on behalf of the Company and all the
expenses of soliciting proxies from stockholders will be borne by the Company.
In addition to the solicitation of proxies by use of the mails, officers and
regular employees may communicate with stockholders personally or by mail,
telephone, telegram or otherwise for the purpose of soliciting such proxies, but
in such event no additional compensation will be paid to any such persons for
such solicitation. The Company will reimburse banks, brokers and other nominees
for their reasonable out-of-pocket expenses in forwarding soliciting material to
beneficial owners of shares held of record by such persons.
BY ORDER OF THE BOARD OF DIRECTORS
DIANA M. WILSON
Chief Operating Officer,
Vice President and Secretary
Goleta, California
April 23, 1997
13
<PAGE> 17
PROXY
DECKERS OUTDOOR CORPORATION
495A S. Fairview Avenue
Goleta, California 93117
This Proxy is solicited on Behalf of the Board of Directors of Deckers Outdoor
Corporation. The undersigned hereby appoints Douglas B. Otto and Diana M.
Wilson, and each of them, as Proxies, each with the power to appoint his or her
substitute, and hereby authorizes each of them to represent and to vote as
designated below, all the shares of common stock of Deckers Outdoor Corporation
held of record by the undersigned on April 11, 1997, at the Annual Meeting of
Shareholders to be held on May 30, 1997 and any postponements or adjournments
thereof.
PLEASE DATE, SIGN ON REVERSE SIDE AND RETURN IN THE ACCOMPANYING ENVELOPE.
- -------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
<PAGE> 18
Please mark ___
your votes as
indicated in X
this example. ___
WITHHOLD
FOR AUTHORITY
the nominees to vote for the
listed below nominees listed below
1. ELECTION OF CLASS I DIRECTORS: ___ ___
Instruction: To withhold authority
to vote for a nominee listed below, ___ ___
strike a line through the nominee's
name.
Nominees: Ronald D. Page
Diana M. Wilson
FOR AGAINST ABSTAIN
2. TO RATIFY THE SELECTION OF ___ ___ ___
KPMG PEAT MARWICK LLP AS THE
COMPANY'S INDEPENDENT AUDITORS. ___ ___ ___
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before such meeting or any and all
postponements or adjournments thereof.
YES NO
Do You Plan to Attend the Meeting? ___ ___
___ ___
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, the Proxies
will vote for the nominees listed above, for the ratification of the selection
of KPMG Peat Marwick LLP as the Company's independent auditor and in their
discretion on matters described in Item 3.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
_______
/
/
/
/
Signature(s) ________________________________________ Dated ____________, 1997
Please sign exactly as the name appears above. When shares are held by joint
tenants, both should sign. When signing as an attorney, executor,
administrator, trustee or guardian, please give your full title as such. If a
corporation, please sign in full corporate name by the President or other
authorized officer. If a partnership, please sign in the partnership name by an
authorized person.
