Crocs’ Departing Executive Feels Plenty of Love__»

April 7, 2010

Colorado-based Crocs, Inc. (CROX) is marketing its new footware line with the slogan —Feel the Love. But that motto probably also describes how retiring President and CEO, John Duerden, feels after negotiating the terms of his departure from the company.

Longtime readers may recall that Crocs has been a footnoted frequent flyer for several years now (a few recent examples are here, here, and here). However, most of those stories pre-date Duerden’s arrival; he joined the company just over a year ago — at the end of February 2009.

Duerden came to Crocs after leaving the Chrysallis Group, a consulting firm he founded in 2006 that specialized in developing and renewing brands. He was 68 years old at the time and had been an executive at companies such as Reebok.

The terms of Duerden’s employment agreement gave him an $850,000 base salary, a $350,000 signing bonus, 400,000 restricted shares of stock and an equal number of options, and other benefits. Interestingly, the agreement did not give Duerden any guarantee that the position would be his for a particular number of years; in fact, it stated that it —shall not be for any specific term and shall be subject to termination at will by either Executive or the Company for any reason upon written notice to the other party.

That day arrived just over a year later. On March 1, 2010, Duerden relinquished both his position as an executive and as a member of the board of directors. Although the company announced Duerden’s retirement then (and named John McCarvel as his successor), the parties had not yet negotiated the terms of Duerden’s departure. It was just yesterday that Crocs filed this Separation Agreement, dated March 31, 2010.

According to the document, Crocs will pay Duerden $1.7 million in cash in September and it will accelerate the vesting for Duerden’s 100,000 shares of restricted stock shares and another 100,000 option shares. Even with the stock currently trading at $8.90, the early vesting of those equities is worth a lot to Duerden. Crocs will also pay him $336,000 for his 2009 annual incentive compensation, and it will continue to pay the employer portion of health care premiums for Duerden and his family through February, 2011 (unless Duerden ceases to be eligible for COBRA health insurance continuation). In exchange, Duerden signed a release and agreed not to compete against Crocs, solicit its customers and vendors, and protect its propriety information.

With that kind of severance package, wouldn—t any of us —Feel the Love?

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