Fox Factory Holding Corp 8-K, filed May 6, 2022
Fox Factory Holding Corp (FOXF)
8-K
2022-05-06
For: 2022-05-06
View Original
Added on
April 07, 2026
About this 8-K
Fox Factory Holding Corp filed this 8-K on May 6, 2022.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 5.07: Shareholder vote results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
(Exact name of Registrant as Specified in its Charter)
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) | ||||||||||||
(Address of Principal Executive Offices) (Zip Code)
(831 ) 274-6500
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
At the 2022 Annual Meeting of Stockholders (the “Annual Meeting”) of Fox Factory Holding Corp. (the “Company”), the Company’s stockholders approved the Company’s 2022 Omnibus Incentive Plan (the “2022 Plan”). The 2022 Plan became effective as of such stockholder approval. The 2022 Plan had previously been approved by the Company’s Board of Directors, subject to stockholder approval. The 2022 Plan authorizes award grants of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, unrestricted stock, restricted stock units, performance shares, performance units and any other type of award authorized by the 2022 Plan to the Company’s and its affiliates’ employees (including officers), directors and consultants. The 2022 Plan will be administered by the Compensation Committee of the Company’s Board of Directors (the “Board”) subject to certain delegation rights permitted thereunder. Unless earlier terminated by the Board, the 2022 Plan will expire on the tenth anniversary of its effective date.
The 2022 Plan is designed to replace the Company’s 2013 Omnibus Plan, as amended (the “2013 Plan”), for awards granted on or after May 6, 2022. Any awards granted under the 2013 Plan remain in effect pursuant to the terms of the 2013 Plan and the respective award agreements thereunder. Effective as of May 6, 2022, awards will be issued under the 2022 Plan and no further awards will be granted under the 2013 Plan.
A more detailed description of the 2022 Plan was set forth in the Company’s Proxy Statement filed with the Securities and Exchange Commission on March 23, 2022 under the heading “Proposal 3 – Approval of the Fox Factory Holding Corp. 2022 Omnibus Incentive Plan” and is incorporated herein by reference. The foregoing summary is not intended to be complete and is qualified in its entirety by reference to the full text of the 2022 Plan, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference. A copy of the Form of Non-Employee Director Restricted Stock Unit Award Agreement (U.S.), Form of Employee Restricted Stock Unit Award Agreement (U.S.) and Form of Performance Share Unit Award Agreement for the 2022 Plan are attached to this Form 8-K as Exhibits 10.2, 10.3 and 10.4, respectively, and incorporated herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders.
The 2022 Annual Meeting was held on May 6, 2022, at 1:00 p.m., Eastern Time. A total of 42,132,376 shares of the Company’s common stock, were outstanding and entitled to vote as of March 8, 2022, the record date for the 2022 Annual Meeting. A total of 40,442,370 shares of the Company’s common stock were present or represented by proxy at the 2022 Annual Meeting, representing approximately 95.99% of the shares outstanding and entitled to vote at the 2022 Annual Meeting, thus providing a quorum.
Set forth below are the matters acted upon by the stockholders and the number of votes with respect to each proposal, as certified by the inspector of election.
Proposal No. 1: Election of Directors
The Company’s stockholders elected Thomas E. Duncan and Jean H. Hlay to serve on the Company’s Board of Directors as Class III directors, for a three year term, ending at the 2025 Annual Meeting of Stockholders, by the votes indicated below:
| Director Nominee | For | Withheld | Broker Non-Votes | ||||||||
| Thomas E. Duncan | 37,719,912 | 1,557,913 | 1,164,545 | ||||||||
| Jean H. Hlay | 39,050,633 | 227,192 | 1,164,545 | ||||||||
Proposal 2: Ratification of Appointment of Independent Public Accountants
The Company’s stockholders ratified the appointment of Grant Thornton LLP as the Company’s independent public accountants for fiscal year 2022 by the votes indicated below:
| For | Against | Abstain | Broker Non-Votes | ||||||||
| 40,322,889 | 97,333 | 22,148 | 0 | ||||||||
Proposal 3: Approval of Fox Factory Holding Corp.’s 2022 Omnibus Incentive Plan
The Company’s stockholders approved the Fox Factory Holding Corp. 2022 Omnibus Incentive Plan by the votes indicated below:
| For | Against | Abstain | Broker Non-Votes | ||||||||
| 38,431,558 | 813,176 | 33,091 | 1,164,545 | ||||||||
Proposal 4: Advisory Vote on the Company’s Executive Compensation
The Company’s stockholders approved, on an advisory basis, the resolution approving the compensation of the Company’s named executive officers as disclosed in the Company’s definitive proxy statement by the votes indicated below:
| For | Against | Abstain | Broker Non-Votes | ||||||||
| 37,743,322 | 1,509,251 | 25,252 | 1,164,545 | ||||||||
For more information regarding Proposals 1, 2, 3 and 4, please refer to the Company’s definitive proxy statement, as filed with the Securities and Exchange Commission on March 23, 2022.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are furnished herewith:
| Exhibit Number | Description | ||||
Fox Factory Holding Corp. 2022 Omnibus Plan | |||||
Form of Non-Employee Director Restricted Stock Unit Award Agreement under 2022 Omnibus Plan (U.S.) | |||||
Form of Employee Restricted Stock Unit Award Agreement under 2022 Omnibus Plan (U.S.) | |||||
Form of Performance Share Unit Award Agreement under 2022 Omnibus Plan | |||||
| 104 | Cover Page Interactive Data File (embedded with the Inline XBRL document) | ||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Fox Factory Holding Corp. | ||||||||||||||
| Date: | May 6, 2022 | By: | /s/ Michael C. Dennison | |||||||||||
| Michael C. Dennison | ||||||||||||||
| Chief Executive Officer | ||||||||||||||
Exhibit 10.1
FOX FACTORY HOLDING CORP.
2022 Omnibus Plan
(Effective as of May 6, 2022)
1.Purpose and Duration
1.1Purpose. The purpose of the Fox Factory Holding Corp. 2022 Omnibus Plan is to promote the interests of Fox Factory Holding Corp. and its stockholders by: (i) providing a means for the Company and its Affiliates to attract, engage and retain world-class employees, directors and consultants of and to the Company and its Affiliates; (ii) motivating such individuals to assist in the long-term growth and success of the Company; and (iii) providing such individuals with incentives that will align the interests of such individuals with those of the stockholders of the Company.
1.2Duration. The Plan shall commence on the Effective Date and terminate on the ten (10) year anniversary of the Effective Date, subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Section 13. In no event may an Award be granted under the Plan on or after the ten (10) year anniversary of the Effective Date or its earlier termination date; provided, however, that unless otherwise expressly provided in an applicable Award Agreement, any Award granted prior to the ten (10) year anniversary of the Effective Date or earlier termination date may extend beyond such date. The Plan is intended to replace the Fox Factory Holding Corp. 2013 Omnibus Plan, and no further awards will be granted thereunder on and after the Effective Date.
2.Definitions
The following terms shall have the meanings set forth below:
2.1“Acquired Entity” means an entity that is acquired by the Company or an Affiliate through a merger, consolidation, combination, exchange of shares, acquisition or other business transaction, provided that upon the acquisition such entity is an Affiliate.
2.2“Acquired Entity Plan” means a shareholder-approved equity incentive plan established by an Acquired Entity and any awards outstanding thereunder.
2.3“Affiliate” means (i) any entity that, directly or indirectly, is controlled by the Company, and (ii) any entity with which the Company would be considered a single employer under Sections 414(b) and (c) of the Code, applied using fifty percent (50%) as the percentage of ownership required under such Code sections; provided that for Options and Stock Appreciation Rights an “Affiliate” shall be an entity with respect to which the Common Stock will qualify as “service recipient stock” within the meaning of Section 409A.
2.4“Award” means, individually or collectively, a grant under the Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Unrestricted Stock, Restricted Stock Units, Performance Shares, Performance Share Units, Other Awards or Substitute Awards.
2.5“Award Agreement” means any written agreement, contract, certificate or other instrument or document, which may be in electronic format, evidencing the terms and conditions of an Award granted under the Plan.
2.6“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in Rule l3d-3 and Rule 13d-5 of the Exchange Act.
2.7“Beneficiary” means either (i) any person named by a Participant, in a written designation of beneficiary acceptable to the Company, who is entitled to receive payments or exercise rights that are available under the Plan in the event of such Participant’s death, or (ii) if no such person is named by a Participant, or if no such person designated by such Participant is eligible to receive payments or exercise rights that are available under the Plan in the event of such Participant’s death, such Participant’s Beneficiary shall be the Participant’s estate.
2.8“Board” or “Board of Directors” means the Board of Directors of the Company.
2.9“Cause” means:
(i)If the Participant is a party to a written employment, service or other agreement with the Company or its Affiliates and such agreement provides for a definition of Cause, the definition contained therein; or
(ii)If no written employment or service agreement or other agreement exists, or if such employment or service agreement or other agreement does not define Cause, unless otherwise defined in the Award Agreement, any one or more of the following, in each case as determined in good faith by the Committee: (a) breach of any fiduciary duty or legal or material contractual obligation to the Company or any of its Affiliates; (b) failure to perform satisfactorily such Participant’s material duties to the Company or any of its Affiliates; (c) gross negligence or engagement in insubordination, willful misconduct, willful violation of any law, fraud, embezzlement, acts of dishonesty or a conflict of interest relating to the affairs of the Company or any of its Affiliates; (d) conviction of or pleading nolo contendere to any misdemeanor relating to the affairs of the Company or any of its Affiliates, or any felony; or (e) failure to use the Participant’s best efforts to promote the interests of the Company or any of its Affiliates or, except as otherwise agreed upon between the Participant and the Company, to devote the Participant’s full business time and efforts to the business and affairs of the Company or any of its Affiliates.
2.10“Change in Control” of the Company shall mean the occurrence of any one or more of the following:
(i)The sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions, of substantially all of the assets of the Company to any Person; or
(ii)Any Person becomes the Beneficial Owner (except that a Person shall be deemed to have Beneficial Ownership of all Shares that any such Person has the right to acquire, whether such right is exercisable immediately or only after the passage of time) directly or indirectly of more than fifty percent (50%) of the total voting power of the voting stock of the Company, including by way of merger, consolidation or otherwise; or
(iii)A change in the composition of the Board such that individuals who, as of the beginning of any period of twenty-four (24) months determined on a rolling basis (the “measurement date”), constitute the Board (the “Incumbent Board”) cease for any reason to constitute a majority of the Board; provided, however, that any individual who becomes a member of the Board subsequent to the measurement date, whose election, or nomination for election by the Company’s stockholders, was approved by a vote of a majority of those individuals then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of Board membership occurs as a result of either an actual or threatened election contest with respect to the election or removal of Directors of the Board or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board shall not be so considered as a member of the Incumbent Board.
(iv)Notwithstanding the foregoing, (a) if any payment or benefit pursuant to an Award is “nonqualified deferred compensation” under Section 409A to which an exception to Section 409A does not apply, and the payment of benefit of such Award is triggered by a Change in Control, the events described above shall not constitute a Change in Control with respect to such nonqualified deferred compensation unless the event constitutes a change in ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, as described under Section 409A; and (b) for the avoidance of doubt, a Change in Control shall not be deemed to have occurred as a result of a sale or other disposition of any Affiliate (or any Affiliate’s assets) by which a Participant may be employed.
2.11“Code” means the Internal Revenue Code of 1986, as amended from time to time. Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.
2.12“Committee” means the Compensation Committee of the Board or such other committee as may be designated by the Board to administer the Plan composed of not less than two (2) Directors who are members of the Board, each of whom is a “non-employee director” within the meaning of Rule 16b-3. If the Committee does not exist or cannot function for any reason or if the Board withdraws the Committee’s authority to administer the Plan, references to the Committee shall mean the Board.
2.13“Common Stock” means Fox Factory Holding Corp. common stock, $0.001 par value per Share, or any such other securities of the Company into which such common stock shall be changed by reason of a recapitalization, merger, consolidation, split-up, combination, exchange of shares, or similar transaction; provided, however, that such other securities shall, for Options and Stock Appreciation Rights, always constitute “service recipient stock” within the meaning of Section 409A.
2.14“Company” means Fox Factory Holding Corp., a Delaware corporation, and any successor thereto.
2.15“Continuous Service” means the absence of any interruption or termination of service as an Employee, Director or Key Person. Continuous Service Status shall not be considered interrupted in the case of: (i) a statutory leave of absence or a sick leave; (ii) military leave; (iii) any other leave of absence approved by the Committee, provided that such leave is for a period of not more than ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy (including, without limitation, a policy related to COVID-19 and other pandemics) adopted from time to time; or (iv) in the case of transfers between (a) locations of the Company or its Affiliates or (b) the Company and its Affiliates; provided, however, that for purposes of Incentive Stock Options, “Continuous Service” means the absence of termination of employment service as an “employee” within the meaning of Sections 422 and 3401(c) of the Code. Except with respect to Incentive Stock Options, a change in the capacity in which the Participant renders services to the Company or its Affiliates as an Employee, Director or Key Person will not constitute an interruption of Continuous Service status.
2.16“Director” means a member of the Board or of the board of directors of an Affiliate who is not an Employee.
2.17“Disability” means:
(i)If the Participant is a party to a written employment or service agreement with the Company or its Affiliates and such agreement provides for a definition of Disability, the definition contained therein; or
(ii)If no written employment or service agreement exists, or if such employment or service agreement does not define Disability, then Disability shall mean “permanent and total disability” as defined in Section 22(e)(3) of the Code.
Notwithstanding the foregoing, with respect to any Incentive Stock Option, “Disability” shall mean “permanent and total disability” as defined in Section 22(e)(3) of the Code, and to the extent the vesting or payment of any Award hereunder is accelerated by reason of a Participant’s Disability, no such acceleration shall occur until the Participant experiences a Separation from Service.
2.18“Effective Date” shall mean the date the Plan is approved by the Company’s stockholders.
2.19“Employee” means any person employed by the Company or any Affiliate, with the status of employment determined based upon such factors as are deemed appropriate by the Committee in its discretion, subject to any requirements of the Code or applicable laws.
2.20“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the rules, regulations and guidance thereunder, or any successor act thereto.
2.21“Fair Market Value” means, as of any date, the value of a Share, which shall be an amount equal to the closing price of a Share on such date (excluding any “after hours” trading) as reported on the NASDAQ (or, if there is no reported sales on such date, on the last preceding date on which the Shares were principally trading) or other principal stock market or exchange or inter-dealer quotation system on which the Shares are traded or quoted. If Shares are not so traded or quoted, fair market value as determined by the Committee in good faith in accordance with Section 409A.
2.22“Fiscal Year” means the fiscal year of the Company, which is the calendar year as of the Effective Date.
2.23“Good Reason” as a reason for a Participant’s termination of employment or service shall have the meaning assigned such term in the employment, severance or similar agreement, if any, between the Participant and the Company or an Affiliate; provided, however, if Participant is not a party to an employment, severance or similar agreement with the Company or an Affiliate in which such term is defined, then unless otherwise defined in the applicable Award Agreement, for purposes of the Plan, the Participant shall not be entitled to terminate his or her employment or service for Good Reason.
2.24“Incentive Stock Option” or “ISO” means an Award to purchase Shares granted under Section 6 to Employees who are “employees” within the meaning of Section 3401(c) of the Code, and which meets the requirements of Section 422 of the Code.
2.25“Insider” means an individual who is, on the relevant date, subject to Section 16 of the Exchange Act due to his or her status with the Company.
2.26“Key Person” means a consultant, other than an Employee or Director, who is a natural person and provides services to the Company or an Affiliate.
2.27“NASDAQ” means the Nasdaq Stock Market stock exchange.
2.28“Nonqualified Stock Option” or “NQSO” means an Award to purchase Shares granted under Section 6 and which is not an ISO.
2.29“Other Award” means a cash-based or Share-based award grant made pursuant to Section 10.
2.30“Option” means an Incentive Stock Option or a Nonqualified Stock Option, as described in Section 6.
2.31“Option Price” means the price at which a Share may be purchased by a Participant upon the exercise of an Option.
2.32“Participant” means an Employee, Director or Key Person who is eligible to receive an Award pursuant to Section 3 or who has an outstanding Award granted under the Plan.
2.33“Performance Criteria” means any criterion or criteria selected by the Committee for purposes of establishing the performance goals for a Performance Period, which may include, without limitation, one or more of the following: return on net assets; return on stockholders’ equity; return on assets; return on capital; return on invested capital; revenue; average revenue; stockholder returns; profit margin; earnings per Share; net earnings; operating earnings; free cash flow; earnings before interest, taxes, depreciation and amortization; cash flows; growth of business; operating expenses; capital expenses; cost targets; Share price; enterprise value; equity market capitalization; or sales or market share.
2.34“Performance Share” means an Award denominated in Shares which may be earned, in whole or in part, upon attainment of performance goals during a Performance Period pursuant to Section 9, the terms and conditions of which shall be specified in an Award Agreement.
2.35“Performance Share Unit” means an Award denominated in a unit which may be earned, in whole or in part, upon attainment of performance goals during a Performance Period pursuant to Section 9, the terms and conditions of which shall be specified in an Award Agreement.
2.36“Performance Period” means one or more periods of time, as the Committee may select, over which the attainment of one or more performance goals based on Performance Criteria will be measured for the purpose of determining a Participant’s right to and payment of a Performance Share Unit or Performance Share.
2.37“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof.
2.38“Prior Plan” means the Fox Factory Holding Corp. 2013 Omnibus Plan.
2.39“Repricing” means, with respect to an Option or Stock Appreciation Right, any of the following except pursuant to Section 5.5 or a Change in Control: (i) the lowering of the Option Price after the date of grant of an Award, (ii) the taking of any other action that is treated as a repricing under generally accepted accounting principles, or (iii) the cancellation of an Option or Stock Appreciation Right at a time when the Option Price (or with respect to a Stock Appreciation Right, the Fair Market Value of the Shares covered by the Stock Appreciation Right on the date of the Award) exceeds the Fair Market Value of the underlying Shares in exchange for any other Award or for cash.
2.40“Restricted Stock” means an Award of a Share pursuant to Section 8, the terms and conditions of which shall be specified in an Award Agreement.
2.41“Restricted Stock Unit” or “RSU” means an Award denominated in a unit pursuant to Section 8, the terms and conditions of which shall be specified in an Award Agreement.
2.42“Rule 16b-3” means Rule 16b-3 as promulgated and interpreted by the SEC under the Exchange Act, or any successor rule or regulation thereto as in effect from time to time.
2.43“SEC” means the Securities and Exchange Commission or any successor thereto and shall include the staff thereof.
2.44“Section 409A” means Section 409A of the Code and similar applicable state law.
2.45“Separation from Service” means a termination of the employment or other service relationship between the Participant and the Company meeting the requirements of Section 409A(a)(2)(A)(i) of the Code.
2.46“Share Reserve” shall have the meaning ascribed to such term in Section 5.1.
2.47“Share” means a share of the Common Stock.
2.48“Stock Appreciation Right” or “SAR” means an Award, granted alone and designated as a SAR, pursuant to the terms of Section 7.
2.49“Subsidiary” means, with respect to an Incentive Stock Option, a “subsidiary corporation” as defined in Section 424(f) of the Code.
2.50“Substitute Award” means an Award granted in assumption of, or in substitution for, an outstanding award previously granted by an Acquired Entity to such Acquired Entity’s employee or other service provider pursuant to an Acquired Entity Plan.
2.51 “Unrestricted Stock” means a Share awarded to a Participant pursuant to Section 8 without any vesting restrictions imposing a forfeiture risk on the Participant.
3.Eligibility and Participation
3.1Eligibility. Persons eligible to participate in this Plan include:
(i)All Employees, Directors and Key Persons.
(ii)Holders of equity-based awards granted pursuant to an Acquired Entity Plan are eligible for grants of Substitute Awards, as determined by the Committee, to the extent permitted under applicable listing standards of NASDAQ or any other stock market or exchange on which the Shares are listed.
3.2Participation.
(i)Subject to the provisions of the Plan, the Committee may from time to time select from all eligible Employees, Directors and Key Persons, those to whom Awards shall be granted and shall determine the nature and amount of each Award, and Awards may be granted to Participants at any time and from time to time as shall be determined by the Committee, including in connection with any other compensation program established by the Company.
(ii)Eligibility for participation in this Plan is not a guarantee or grant of a right to be selected to receive an Award, and being selected to receive an Award is not a representation or guarantee of being selected to receive any additional Awards. Selection is at the sole discretion of the Committee.
4.Administration
4.1General. The Plan shall be administered by the Committee.
4.2Authority of the Committee. Subject to the terms of the Plan and applicable law, the Committee (or, to the extent permitted hereby, its delegate) shall have full power, authority and discretion to:
(i)designate Participants;
(ii)determine the type or types of Awards to be granted to each Participant under the Plan;
(iii)determine the number of Shares to be covered by (or with respect to which payments, rights or other matters are to be calculated in connection with) Awards;
(iv)determine the terms and conditions of any Award, grant Awards, and establish any Performance Criteria;
(v)determine whether, to what extent and under what circumstances Awards may be settled or exercised in cash, Shares, other property, net settlement, or any combination thereof, or canceled, forfeited or suspended, and the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended;
(vi)determine whether, to what extent and under what circumstances a tax withholding obligation may be satisfied in cash, Shares, or other property;
(vii)determine whether, to what extent and under what circumstances cash, Shares, other Awards, other property and other amounts payable with respect to an Award under the Plan shall be deferred either automatically or at the election of the holder thereof or of the Committee;
(viii)interpret, administer, resolve any ambiguity, and reconcile any inconsistency in, and correct any defect in and/or supply any omission, or reconcile any inconsistency in, the Plan and any Award Agreement in the manner and to the extent it deems necessary to carry out the intent of the Plan and any Award Agreement;
(ix)establish, adopt, amend, revise, suspend or waive any rules, regulations, guidelines or procedures as it may deem necessary or advisable to administer the Plan and Award Agreements; and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and
(x)make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan including, without limitation, the correction of any administrative errors and, consistent with the provisions of Section 16.10, the adoption of such modifications, procedures, and sub-plans as may be necessary or desirable to comply with the laws of non-United States jurisdictions in which the Company or any Affiliate may operate.
4.3Delegation. The Committee may delegate its power, authority and duties as identified herein to a subcommittee, except (i) for the power and authority to grant Awards to Insiders, and (ii) as otherwise prohibited by law. In addition to the delegation authority provided by the previous sentence, to the extent permitted by applicable law or rule of NASDAQ or other applicable stock market or exchange on which the Shares are listed, the Committee may delegate to one or more officers of the Company the authority to grant Awards to Employees that are not Insiders.
4.4Decisions Binding. All determinations, interpretations, designations and decisions made by the Board, the Committee or the Committee’s delegate pursuant to the provisions of the Plan, any Award or any Award Agreement (and all related directives and resolutions of the Board, the Committee or the Committee’s delegate) shall be final, conclusive and binding on all persons, including the Company, its stockholders, Employees, Directors, Key Persons and their Beneficiaries.
4.5Committee Composition. Any grant of an Award by the Committee to an Insider shall require the approval of (i) a Committee consisting of two (2) or more Board members who are “non-employee directors” within the meaning of Rule 16b-3, or (ii) the full Board.
4.6Limitation of Committee Authority Regarding Repricing and Reloads . The Committee is prohibited from (i) Repricing any Option or Stock Appreciation Right, and (ii) providing a cash buyout to holders of Options and Stock Appreciation rights where the Option Price or grant price is greater than the Fair Market Value of the underlying Shares on the date of grant of the Award, without the prior approval of the stockholders of the Company with respect to any proposed Repricing or cash buyout. No Option or Stock Appreciation Right may include provisions that entitle a Participant to the automatic “reload” grant of additional Options or Stock Appreciation Rights in connection with the exercise or expiration of the original Option or Stock Appreciation Right.
5.Shares Subject to the Plan and Maximum Awards
5.1.Number of Shares Available for Grants. Subject to the provisions of Sections 5.2 and 5.5, the aggregate number of Shares that may be granted pursuant to Awards shall be (i) two million nine hundred thousand (2,900,000) Shares, plus (ii) the number of Shares that are subject to outstanding awards under the Prior Plan which either cease for any reason to be subject to such awards or are forfeited, cancelled, or repurchased at their original issue price, (the combined total of (i) and (ii) being the “Share Reserve”); and two million nine hundred thousand (2,900,000) Shares are the aggregate number of Shares with respect to which Incentive Stock Options may be granted under the Plan. Any awards granted under the Prior Plan after March 8, 2022 and prior to the Effective Date shall reduce the Share Reserve.
5.2.Share Counting. Shares covered by an Award granted under the Plan shall not be counted unless and until they are actually issued and delivered to a Participant or a Beneficiary, and, therefore, the Share Reserve as of a given date shall not be reduced by Shares relating to prior Awards that have expired or have been forfeited or cancelled; and upon payment in cash of the benefit provided by any Award, any Shares that were covered by such Award will be available for issue hereunder. Notwithstanding anything to the contrary contained herein, (i) if Shares are tendered or otherwise used in payment of the exercise price of an Option, the total number of Shares covered by the Option being exercised shall reduce the Share Reserve; (ii) Shares withheld by the Company to satisfy a tax withholding obligation shall count against the Share Reserve; (iii) the number of Shares covered by a Stock Appreciation Right, to the extent that it is exercised and settled in Shares, and whether or not Shares are actually issued to the Participant upon exercise of the Stock Appreciation Right, shall be considered issued and transferred pursuant to the Plan; (iv) the number of Shares underlying any Substitute Awards shall be counted against, and reduce, the Share Reserve; and (v) Shares that are repurchased by the Company using Option exercise proceeds shall be counted against, and reduce, the Share Reserve.
5.3.Maximum Fiscal Year Awards for Directors of the Board. The maximum aggregate number of Shares subject to Awards granted during a single Fiscal Year to any Director who is a member of the Board, taken together with any cash fees paid to such Director during such Fiscal Year, shall not exceed Nine Hundred Thousand Dollars ($900,000) in total value (calculating the Share value of any such Awards based on the grant date Fair Market Value of such Awards).
5.4.Minimum Vesting Requirement. Notwithstanding any other provision of the Plan to the contrary, Awards granted under the Plan shall vest no earlier than the one (1) year anniversary of the date on which the Award is granted; provided, that the following Awards shall not be subject to the foregoing minimum one (1) year vesting requirement: any (i) Substitute Awards where more than one (1) year has elapsed since the grant date of the outstanding award previously granted by an Acquired Entity pursuant to an Acquired Entity Plan, (ii) Shares delivered in lieu of fully vested cash-based Awards where more than one (1) year has elapsed since the grant date of such Award, (iii) Awards to Directors of the Board that vest on earlier of the one (1) year anniversary of the date of grant and the next annual meeting of the Company’s stockholders which is at least fifty (50) weeks after the immediately preceding year’s annual stockholders’ meeting, and (iv) any Awards the Committee may grant, up to a maximum of five percent (5%) of the available Share Reserve authorized for issuance under the Plan pursuant to Section 5.1 (subject to adjustment under Section 5.5); and, provided, further, that the foregoing one (1) year restriction does not apply to accelerated exercisability or vesting of any Award in case of death or Disability pursuant to the terms of an Award Agreement or otherwise.
5.5.Adjustments. In the event that the Committee determines in its reasonable discretion that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other corporate transaction or event affects the Shares, such that an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall equitably adjust any or all of (i) the number of Shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted, (ii) the number of Shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards, and (iii) the Option Price or grant price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award in consideration for the cancellation of such Award, which, in the case of Options and Stock Appreciation Rights shall equal the excess, if any, of the Fair Market Value of the Share subject to each such Option or Stock Appreciation Right over the per Share Option Price or grant price of such Option or Stock Appreciation Right. No adjustment shall be made to an Option or SAR to the extent that it causes such Option or SAR to be treated as the granting of a new Option or SAR under Code Sections 409A and 424, as applicable, or to provide for a deferral of compensation subject to Section 409A.
5.6.Sources of Shares. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares, treasury Shares or Shares purchased in the open market or Shares otherwise acquired by the Company.
6.Options
6.1Grant of Options. Options may be granted to Participants in such number, upon such terms, and at such times as determined by the Committee; provided, however, that ISOs may be granted only to Participants who are Employees of the Company or a Subsidiary. ISOs shall not be granted to any person who owns or is deemed to own pursuant to Section 424(d) of the Code stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates (including any Subsidiary or parent corporation), unless the Option Price is at least one hundred and ten percent (110%) of the Fair Market Value of a Share at the grant date and the Option is not exercisable after the expiration of five (5) years from the grant date of the Award. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Shares with respect to which ISOs are exercisable for the first time by any Participant during any calendar year (under all plans of the Company and its Affiliates) exceeds One Hundred Thousand Dollars ($100,000), the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as NQSOs.
Notwithstanding the foregoing, the Company shall have no liability to any Participant or any other person if an Option designated as an ISO fails to qualify as such at any time, or if an Option is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and the terms of such Option (or the provisions of the Award Agreement relating thereto) do not satisfy the requirements of Section 409A.
6.2Award Agreement. Options granted under this Plan shall be evidenced by an Award Agreement, which shall specify whether the Option is intended to be an ISO or a NQSO.
6.3Option Price. Except with respect to an Option that is a Substitute Award, the Option Price for each Option shall be at least equal to one hundred percent (100%) of the Fair Market Value of a Share on the date as of which the Option is granted (or, in the case of an ISO, granted to a person identified in Section 6.1 above, one hundred and ten percent (110%) of the Fair Market Value of a Share). Notwithstanding the foregoing, an ISO may be granted with a lower Option Price if such ISO is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code, and a NQSO may be granted with a lower Option Price if such NQSO is a Substitute Award granted in a manner satisfying the provisions of Section 409A of the Code and Treasury Regulation 1.409A-1(b)(5)(v)(D).
6.4Duration of Options; Blackout Periods. Each Option shall expire at such time as the Committee shall determine at the time of grant; provided, however, that no Option shall be exercisable after the expiration of the ten (10) year period beginning on the date of its grant. If determined by the Committee in its discretion, on such terms and conditions and under such circumstances as the Committee may establish, which may be applied differently among Participants or Awards, Options may be deemed exercised by the Participant (or in the event of the death of the Participant, by the Participant’s Beneficiary) on the expiration date of the Option using a net share settlement (or net settlement) method of exercise to the extent that as of such expiration date the Option is vested and exercisable and the Option Price per Share of the Option is below the Fair Market Value of a Share on such expiration date. If there is a blackout period under the Company’s insider trading policy or applicable law (or a Committee-imposed blackout period) that prohibits the buying or selling of Shares during any part of the ten (10) day period before the expiration of any Option based on the termination of a Participant’s Continuous Service, the period for exercising such Options be extended until ten (10) days beyond when such blackout period ends. Notwithstanding any provision hereof or within an Award Agreement, no Option shall be exercised after the expiration date of its original term as set forth in the award Agreement.
6.5Vesting and Exercisability of Options. Subject to Section 5.4, Options shall become vested and exercisable at such times and conditions and be subject to such restrictions and conditions as the Committee shall in each instance approve, which need not be the same for each grant or for each Participant, as set forth in the Award Agreement.
6.6Exercise of Options. Options may be exercised upon whatever terms and conditions the Committee, in its sole discretion, imposes upon them pursuant to an Award Agreement. An Award of an Option imposes no obligation upon the Participant to exercise the Option. The Company, its Affiliates and the Committee have no obligation to inform a Participant or Beneficiary of the date on which an Option is no longer exercisable except in the Award Agreement.
6.7Payment. Unless otherwise provided under the terms of an Award Agreement, or as otherwise determined by the Committee, the Option Price shall be payable to the Company in full either: (i) in cash or its equivalent, (ii) by delivery (by either actual delivery or attestation) of previously acquired Shares (which are not subject to any pledge or other security interest and acquired other than through the exercise of an ISO) having an aggregate Fair Market Value on the date of exercise equal to the total Option Price, (iii) through a reduction in the number of Shares received through the exercise of the Option (net share settlement) based on the Fair Market Value of the Shares on the date the Option is exercised, (iv) by a combination of (i), (ii) and (iii), or (v) by a broker-assisted sale through delivery of irrevocable instructions to a broker to sell Shares otherwise deliverable upon the exercise of the Option and to promptly deliver to the Company an amount equal to the aggregate Option Price. Subject to any governing rules or regulations, as soon as practicable after receipt of notification of exercise and full payment, the Company shall transfer Shares in an appropriate amount based upon the number of Shares purchased under the Option.
7.Stock Appreciation Rights
7.1Grant of SARs. SARs may be granted to Participants in such number, upon such terms and at such times as determined by the Committee. A SAR granted in connection with an Option shall become exercisable, be transferable and shall expire according to the same vesting schedule, transferability rules and expiration provisions as the corresponding Option. A SAR granted independent of an Option shall become exercisable, be transferable and shall expire in accordance with a vesting schedule, transferability rules and expiration provisions as established by the Committee and reflected in an Award Agreement. Except with respect to a SAR that is a Substitute Award and is granted in a manner that satisfies Section 409A and Treasury Regulation 1.409A-I (b)(5)(v)(D), the grant price of a SAR shall be at least equal to the Fair Market Value of a Share on the date of grant of the SAR.
7.2Vesting and Exercisability of SARs. Subject to Section 5.4, SARs shall become vested and exercisable at such times and conditions and be subject to such restrictions and conditions as the Committee shall in each instance approve, which need not be the same for each grant or for each Participant, as set forth in the Award Agreement.
7.3Exercise of SARs. SARs may be exercised upon whatever terms and conditions the Committee, in its sole discretion, imposes upon them pursuant to an Award Agreement. An Award of a Stock Appreciation Right imposes no obligation upon the Participant to exercise the Stock Appreciation Right. The Company, its Affiliates and the Committee have no obligation to inform a Participant or Beneficiary of the date on which a Stock Appreciation Right is no longer exercisable except in the Award Agreement.
7.4Duration of SARs. The term of a SAR shall be determined by the Committee, in its sole discretion; provided, however, that such term shall not exceed ten (10) years, If determined by the Committee in its discretion, on such terms and conditions and under such circumstances as the Committee shall establish, which may be applied differently among Participants or Awards, SARs may be deemed exercised by the Participant (or in the event of the death of the Participant by the Participant’s Beneficiary) on the expiration date of the SAR to the extent that as of such expiration date the SAR is vested and exercisable and the per Share grant price of the SAR is below the Fair Market Value of a Share on such expiration date.
7.5Payment of SAR Amount. Upon exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying the difference between the Fair Market Value of a Share on the date of exercise over the grant price, by the number of Shares with respect to which the SAR is exercised. At the discretion of the Committee, the payment upon exercise of a SAR may be in cash, in Shares of equivalent value, or in a combination thereof.
8.Restricted Stock, Unrestricted Stock and Restricted Stock Units
8.1Grant of Restricted Stock, Unrestricted Stock or RSUs. Subject to Section 5.4, Restricted Stock, Unrestricted Stock and RSUs may be granted to Participants in such amounts, upon such terms and at such times as determined by the Committee. Subject to Section 11.6, dividends paid on any Shares of Restricted Stock will be withheld by the Company subject to vesting of the Restricted Stock pursuant to the terms of the applicable Award Agreement, or may be reinvested in additional Shares of Restricted Stock as determined by the Committee and specified in an applicable Award Agreement with such additional Shares of Restricted Stock being subject to the same vesting schedule specified therein.
8.2Restrictions; Evidence of Ownership. The Committee shall impose conditions and/or restrictions on Restricted Stock or RSUs as it may deem advisable including, without limitation, time-based restrictions and/or restrictions based upon the achievement of other specific goals or circumstances. Restricted Stock or RSUs shall be forfeited to the extent that a Participant fails to satisfy the applicable conditions and/or restrictions. All such conditions and/or restrictions shall be set forth in the applicable Award Agreement. Any Restricted Stock or Unrestricted Stock granted under the Plan may be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates. In the event any stock certificate is issued in respect of Restricted Stock granted under the Plan, such certificate shall be registered in the name of such Participant and shall bear an appropriate legend referring to the terms, conditions and restrictions applicable to such Restricted Stock. The Company may retain possession of Restricted Stock until such time as all conditions and/or restrictions applicable to such Shares have been satisfied.
8.3Lapse of Restrictions, Payment of Restricted Stock or RSUs. Except as otherwise provided in the Award Agreement or as required by applicable law, Shares of Restricted Stock shall become freely transferable by the Participant as soon as practicable after all applicable conditions and/or restrictions have been satisfied. Except as otherwise provided in the Award Agreement or as required by applicable law, RSUs shall be settled as soon as practicable after all applicable conditions and/or restrictions with respect to such RSUs have been satisfied, in the form of cash or in Shares (or in a combination thereof) as determined by the Committee and set forth in the applicable Award Agreement. If a cash payment is made in lieu of delivering Shares, the amount of such payment shall be equal to the Fair Market Value of the Shares as of the date on which all applicable conditions and/or restrictions have been satisfied.
9.Performance Shares and Performance Units
9.1Grant of Performance Shares or Performance Share Units. Subject to Section 5.4, Performance Shares and Performance Share Units may be granted to Participants in such amounts, upon such terms and at such times as determined by the Committee.
9.2Performance Goals and Other Terms. The Committee will set performance goals in its discretion which, depending on the extent to which they are met, will determine the number or value of Performance Share which will vest or the number or value of Performance Share Units that will be paid out to the Participants. Performance Share Units may, as determined by the Committee, be denominated as a cash amount, a number of Shares, a number of units referencing a cash amount, a number of Shares or other property, or a combination thereof. The time period during which the performance objectives or other vesting provisions must be met will be called the “Performance Period.” Each Award of Performance Shares or Performance Share Units will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Committee will determine. The Committee may set performance goals based upon Performance Criteria and the achievement of Company-wide, Affiliate, divisional, business unit, department or individual goals, applicable federal or state securities laws, or any other basis (including, without limitation, relative performance or performance compared to an outside reference or peer group) determined by the Committee in its discretion. After the grant of a Performance Shares or Performance Share Units, the Committee, in its sole discretion, may, subject to Section 5.4, adjust, reduce, eliminate or waive any performance goals, in whole or in part, or other vesting provisions for such Performance Shares or Performance Share Units.
9.3Lapse of Restrictions, Payment of Performance Shares and Performance Share Units. Except as otherwise provided in the Award Agreement or as required by applicable law, Performance Shares shall become freely transferable by the Participant after all applicable conditions and/or restrictions have been satisfied. Except as otherwise provided in the Award Agreement or as required by applicable law, payment of earned Performance Share Units will be made as soon as practicable after the expiration of the applicable Performance Period and a determination is made by the Committee as to the extent to which the Performance Share Units have been earned. The Committee, in its sole discretion, may pay earned Performance Share Units in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Share Units at the end of the applicable Performance Period) or in a combination thereof.
10.Other Awards and Substitute Awards
10.1Other Awards. The Committee may grant to Participants Other Awards that are denominated in cash or Shares or valued in whole or in part by reference to or are otherwise based upon Shares, either alone or in addition to other Awards granted under this Plan. Other Awards may be settled in Shares, cash or any other form of property, as the Committee shall determine in its sole discretion. Other Awards may be granted for past services, in lieu of bonus or other cash compensation, as determined by the Committee. The Committee shall have sole and complete authority to determine the Employees, Directors and Key Persons to whom and the time or times at which Other Awards shall be made, the number of Shares to be granted pursuant to such Other Awards and all other terms and conditions of Other Awards, including, subject to Section 5.4, whether such Other Awards are made with or without vesting requirements or require payment of a specified purchase price. Other Awards shall be subject to such other terms and conditions as the Committee shall deem advisable or appropriate. In the discretion of the Committee, an Award Agreement, other than for an Award of Options or Stock Appreciation Rights, may provide for the payment and crediting of dividends and dividend equivalents, subject to the vesting of the Award, payable in cash, Shares, other securities or other property in compliance with Section 409A.
10.2Substitute Awards. Substitute Awards may, in the discretion of the Committee, be made in assumption of, or in substitution for, outstanding awards previously granted by an Acquired Entity pursuant to the Acquired Entity’s Acquired Entity Plan.
11.Provisions Applicable to All Awards
11.1Award Agreement. Each Award shall be evidenced by an Award Agreement. Such Award Agreement shall specify the terms of the Award, including without limitation, the type of the Award, the Option Price or grant price, if any, the number of Shares subject to the Award, the duration of the Award and such other provisions as the Committee shall determine.
11.2Continuous Service, Death and Disability. Each Award Agreement shall set forth the governing terms and conditions in the event of the Participant’s death, Disability, and any interruption or termination of a Participant’s Continuous Service. The Committee shall not have discretion to accelerate the vesting of an Award except in the event of the Participant’s death or Disability.
11.3Transferability. Except for designations of Beneficiaries by Participants or as otherwise provided otherwise in an Award Agreement, Awards and Shares that have not been issued or as to which any applicable restriction, performance or deferral period has not lapsed, may not be sold, assigned, transferred, pledged, alienated, attached, or otherwise encumbered (and any such purported sale, assignment, transfer, pledge, alienation, attachment or other encumbrance shall be void and unenforceable against the Company or any Affiliate), other than by will or the laws of descent and distribution, and such Award may be exercised during the life of the Participant only by the Participant or the Participant’s legal guardian or legal representative; provided, however, that the Committee may (but shall not be required to) permit other transfers (other than transfers for value) where the Committee concludes that such transferability is otherwise appropriate and desirable, taking into account any factors deemed relevant by the Committee, including without limitation, state or federal tax or securities laws applicable to transferable Awards. In addition to the foregoing, a Participant is prohibited from transferring Options to a third party financial institution without approval of the Company’s stockholders.
11.4Restrictive Legends. All Shares delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the SEC, NASDAQ or any other stock market or exchange upon which such Shares are then quoted, traded or listed, and any applicable securities laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
11.5No Fractional Shares. No fractional Shares shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional Shares or whether any fractional shares should be rounded, up or down, forfeited or otherwise eliminated.
11.6Dividends and Dividend Equivalents. Except with regard to Options and SARs, the Committee may, in its sole discretion and subject to compliance with applicable law including Section 409A, provide that Awards granted under the Plan earn dividends or dividend equivalents and provide that dividends and dividend equivalents either (i) will be deemed to have been reinvested in additional shares of Common Stock or otherwise reinvested, which shall be subject to the same vesting provisions as provided for the Award, or (ii) will be credited to a bookkeeping or other account for the Participant and accumulated without interest until the date upon which the Award becomes vested (and any such dividends or dividend equivalents accrued with respect to forfeited Awards will be reconveyed to the Company or cancelled without further consideration or any act or action by the Participant); and except in the case of Awards of Performance Shares and Performance Share Units, will be paid or distributed to the Participant as accrued no later than the fifteenth (15th) day of the third (3rd) month following the first (1st) calendar year in which the Participant’s right to such dividends and dividend equivalents is no longer subject to a substantial risk of forfeiture or are otherwise vested. In no event shall dividends or dividend equivalents with respect to an Award of Performance Shares or Performance Share Units be paid or distributed until the performance goals of such Award are met, and thereafter shall be paid or distributed no later than the fifteenth (15th) day of the third (3rd) month following the first calendar year in which the Participant’s right to such dividends and dividend equivalents is no longer subject to a substantial risk of forfeiture or are otherwise vested. No dividends or dividend equivalents shall be granted with respect to Options or SARs.
12.Change in Control
12.1Effect of Change in Control. The provisions of this Section 12 shall apply in the case of a Change in Control :
(i)Awards not Assumed, Continued or Substituted. Upon the occurrence of a Change in Control, and except with respect to any Awards assumed by the surviving entity, continued by the continuing entity or otherwise equitably converted or substituted in connection with the Change in Control in a manner approved by the Committee or the Board: (i) outstanding Options, SARs, and other Awards in the nature of rights that may be exercised shall become fully exercisable, (ii) time-based vesting restrictions on outstanding Awards shall lapse, and (iii) the target payout opportunities attainable under all outstanding Performance Shares and Performance Share Units shall be deemed to have been fully earned as of the date of the Change in Control based upon an assumed achievement of all relevant performance goals at the “target” level as provided in the applicable Award Agreement and, subject to compliance with Section 409A, there shall be a pro rata payout to Participants within thirty (30) days following the date of the Change in Control based upon the length of time within the performance period that has elapsed prior to the date of the Change in Control. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the Award Agreement. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422, the excess Options shall be Nonqualified Stock Options.
(ii)Awards Assumed, Continued or Substituted. With respect to Awards assumed by the surviving entity, continued by the continuing entity or otherwise equitably converted or substituted in connection with a Change in Control: if within two (2) years after the effective date of the Change in Control, a Participant’s employment is terminated without Cause or the Participant resigns for Good Reason, then (i) all of that Participant’s outstanding Options, SARs and other Awards in the nature of rights that may be exercised shall become fully exercisable, (ii) all time-based vesting restrictions on the his or her outstanding Awards shall lapse, and (iii) the payout opportunities attainable under all of such Participant’s outstanding Performance Shares and Performance Share Units shall be earned based on actual performance through the end of the performance period, and there shall be a pro rata payout to the Participant within thirty (30) days after the amount earned has been determined based upon the length of time within the performance period that has elapsed prior to the date of termination. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422, the excess Options shall be Nonqualified Stock Options
12.2Termination, Amendment and Modification of Change in Control Provisions. Notwithstanding any other provision of this Plan or any Award Agreement provision to the contrary, the provisions of this Section 12 may not be terminated, amended, or modified on or after the date of a Change in Control to affect adversely any Award granted under the Plan prior to the Change in Control without the prior written consent of the Participant to whom the Award was made; except that no action shall be permitted under this Section 12.2 that would impermissibly accelerate or postpone payment of an Award subject to Section 409A.
13.Amendment, Modification and Termination
13.1Amendment, Modification and Termination. Subject to the terms of the Plan, the Board may at any time and from time to time, alter, amend, suspend or terminate the Plan in whole or in part; provided that without the prior approval of the Company’s stockholders, no material amendment shall be made if stockholder approval is required by law, regulation or applicable listing requirement of NASDAQ or any other stock exchange upon which the Common Stock is then listed; provided, further that notwithstanding any other provision of the Plan or any Award Agreement, no such alteration, amendment, suspension or termination shall be made without the approval of the stockholders of the Company if the alteration, amendment, suspension or termination would increase the number of Shares available for Awards under the Plan, except as provided in Section 5.
13.2Awards Previously Granted. No termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan, without the prior written consent of the Participant to whom the Award was made. The Committee may amend any Award previously granted without the prior written consent of the Participant if such amendment does not adversely affect the Award in any material way, and may amend any Award previously granted with the written consent of the Participant. As provided in Section 4.6, Repricing of an Award of Options and Stock Appreciation Rights without the prior approval of the Company’s stockholders is prohibited.
14.Withholding
The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company or an applicable Affiliate, an amount sufficient to satisfy federal, state, and local taxes (including the Participant’s FICA obligation) required by law to be withheld with respect to any exercise, lapse of restriction or other taxable event arising as a result of the Plan or an Award. The obligations of the Company under the Plan will be conditioned on such payment or arrangements and the Company or such Affiliate will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. Unless otherwise determined by the Committee, at the time the Award is granted or thereafter, any such withholding requirement may be satisfied, in whole or in part, by withholding Shares having a Fair Market Value on the date of withholding equal to the minimum amount required to be withheld for tax purposes (or such greater amount up to the maximum individual statutory rate in the applicable jurisdiction as may be permitted under then-current accounting principles to qualify the Award for equity classification), all in accordance with such procedures as the Committee establishes. Without limiting the generality of the foregoing, a Participant may satisfy, in whole or in part, such withholding liability by delivery of Shares owned by the Participant (which are not subject to any pledge or other security interest) with a Fair Market Value equal to such withholding liability, or by having the Company withhold from the number of Shares otherwise issuable pursuant to the exercise of an Option a number of Shares with a Fair Market Value equal to such withholding liability.
15.Indemnification
Each person who is or shall have been a member of the Committee, or of the Board, shall be indemnified and held harmless by the Company (to the extent permissible under applicable law) against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any bona fide claim, action, suit, or proceeding against such person or against the Company and in which he or she may be involved by reason of any action taken or failure to act by him or her under the Plan in his or her capacity as a member of the Committee or of the Board and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
16.Miscellaneous
16.1Number. Except where otherwise indicated by the context, the plural shall include the singular and the singular shall include the plural.
16.2Severability. In the event any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Participant or Award , or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Participant or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
16.3Requirements of Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules, and regulations.
16.4Governing Law; Choice of Forum. To the extent not governed by federal law, the Plan and each Award Agreement shall be governed by the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Plan to the substantive law of another jurisdiction. The Company and each Participant, as a condition to such Participant’s participation in the Plan, hereby irrevocably submit to the exclusive jurisdiction of the Delaware Court of Chancery, over any suit, action or proceeding arising out of or relating to or concerning the Plan or, to the extent not otherwise specified in any Award Agreement between the Company and Participant, any aspect of the Participant’s Award Agreement. The Company and each Participant, as a condition to such Participant’s participation in the Plan, acknowledge that the forum designated in this Section 16.4 has a reasonable relation to the Plan and to the relationship between such Participant and the Company. Notwithstanding the foregoing, nothing herein shall preclude the Company from bringing any action or proceeding in any other court for the purpose of enforcing the provisions of this Section 16.4. By accepting an Award under the Plan, each Participant waives any right to a trial by jury in any action, proceeding or counterclaim concerning any rights under the Plan, any Award and Award Agreement.
16.5Plan Controls. Unless expressly stated otherwise in the Plan, in the event of any conflict between the provisions of an Award Agreement and the Plan, the Plan shall control, and the conflicting provisions of the Award Agreement shall be null and void ab initia.
16.6Recoupment, Clawback, Forfeiture. Awards, including any Shares subject to or issued under an Award or the value received pursuant to an Award, as appropriate, notwithstanding any contrary provision of the Plan, shall be subject to recovery, recoupment, clawback and/or other forfeiture pursuant to the Company’s clawback policy. In addition, any Award, including any Shares subject to or issued under an Award or the value received pursuant to an Award, is also subject to any applicable law or regulation or the standards of NASDAQ or any other stock exchange on which the Shares are then listed that provide for any such recovery, recoupment, clawback and/or forfeiture. In addition, the Committee may also specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition to applicable vesting conditions of an Award. Such events may include, without limitation, breach of non-competition, non-solicitation, confidentiality or other restrictive covenants that are contained in the Award Agreement or otherwise applicable to the Participant, a termination of the Participant’s employment for Cause, or other conduct by the Participant that is detrimental to the business or reputation of the Company and/or its Affiliates.
16.7Section 409A Compliance. It is intended that Awards are either exempt from the requirements of Section 409A or will satisfy the requirements of Section 409A (in form and operation). Notwithstanding anything else in the Plan, if the Committee determines a Participant to be one of the Company’s “specified employees” under Section 409A at the time of such Participant’s Separation from Service in accordance with the Company’s specified employee identification date and the Award is subject to Section 409A, then any payment that otherwise would be made to such Participant with respect to this Award as a result of such Separation from Service shall not be made until the date that is six (6) months after such Separation from Service or, if earlier, the date of the death of the Participant. Notwithstanding the foregoing, the Company, its Affiliates, the Board and the Committee shall not have any (i) liability to any Participant or Beneficiary for taxes or penalties under Section 409A, or (ii) obligation to indemnify any Participant or Beneficiary for any taxes or penalties under Section 409A.
16.8Stockholder Rights. Except as provided in the Plan or an Award Agreement, no Participant or Beneficiary shall have any rights as a stockholder with respect to Shares subject to an Award until such Shares are delivered to the Participant or the Beneficiary. Notwithstanding the foregoing, in connection with each Award of Restricted Stock, the applicable Award Agreement shall specify if and to what extent the Participant shall not be entitled to the rights of a stockholder in respect of such Restricted Stock.
16.9No Employment or Other Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the employment or service capacity in effect at the time the Award was granted or shall affect the right of the Company or an Affiliate to terminate (a) the employment of an Employee with or without notice and with or without Cause, or (b) the service of a Key Person, or (c) the service of a Director pursuant to the By-laws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be; in each case free from any liability or any claim under the Plan unless expressly otherwise provided in any applicable employment or service agreement.
16.10Sub-plans. The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying blue sky, securities, tax, or other laws of various jurisdictions in which the Company intends to grant Awards. Any sub-plans shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.
16.11Unfunded Plan. The Plan shall be unfunded. Neither the Company, any Affiliate, the Board, nor the Committee shall be required to establish any special or separate fund, or trust, or to segregate any assets to assure the performance of their obligations under the Plan. The Plan is not subject to the Employee Retirement Income Security Act of 1974, as amended. To the extent that any Participant or Beneficiary acquires any right to receive Shares or other payments pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Affiliate.
16.12Disqualifying Dispositions. Any Participant who shall make a “disposition” under Section 424(c) of the Code of all or any portion of Shares acquired upon exercise of an ISO within two (2) years from the grant date of such ISO or within one (1) year after the issuance of the Shares acquired upon exercise of such ISO, shall be required to immediately notify the Company in writing as to the occurrence of the sale and the price realized upon the sale of such Shares.
16.13Non-Uniform Treatment. The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective determinations, amendments, and adjustments, and to enter into non-uniform and selective Award Agreements.
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Exhibit 10.2
FOX FACTORY HOLDING CORP.
2022 OMNIBUS PLAN
2022 OMNIBUS PLAN
Restricted Stock Unit Award Agreement for Non-Employee Directors
Name of Participant:
Grant Date:
THIS AGREEMENT (the “Agreement”), is executed as of , between Fox Factory Holding Corp., a Delaware corporation (“Fox Factory” or the “Company”), and , a non-employee director (the “Participant”).
RECITALS:
Fox Factory desires to carry out the purposes of Fox Factory Holding Corp. 2022 Omnibus Plan, as it may be amended and/or restated (the “Plan”), by affording the Participant a long-term incentive compensation opportunity as hereinafter provided.
In consideration of the foregoing, of the mutual promises set forth below and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
1.Incorporation of Plan. The rights and duties of Fox Factory and the Participant under this Agreement shall in all respects be subject to and governed by the provisions of the Plan, the terms of which are incorporated herein by reference. In the event of any conflict between the provisions in the Agreement and those of the Plan, the provisions of the Plan shall govern. Unless otherwise provided herein, capitalized terms in this Agreement shall have the same definitions as set forth in the Plan.
2.Grant of Award; Vesting.
(a)Subject to the terms and conditions of this Agreement and the Plan, the Company hereby grants to the Participant the right (this “Award”) to earn an aggregate of shares (the “Shares”) of common stock, par value $0.001 per share (“Common Stock”), of the Company subject to the terms and conditions set forth in this Agreement. Such Shares shall not be issued, and the Participant shall have no rights as a Shareholder of the Company, until Shares are issued pursuant to Section 5 below.
(b)Subject to the terms of this Agreement and those of the Plan, this Award shall vest on the day immediately prior to the Company’s annual meeting of shareholders held in ; provided that the Participant’s service as a non-employee director who is a member of the Company’s Board of Directors (“Board”)has not ceased before the particular vesting date. Notwithstanding the foregoing, this award shall vest with respect to all of the Shares, upon the occurrence of the death of the Participant or a Change of Control of the Company; provided in each case that the Participant’s service with the Company has not ceased before the date of the occurrence of such event.
(c)Except as provided in the Plan and in this Agreement, if the Participant’s continuous service with the Company ceases, this Award, to the extent not then vested, shall immediately terminate without consideration.
3.Vesting of Award. The Committee has sole authority (unless arbitrary and capricious) to determine whether and to what degree the Award has vested and is payable and to interpret the terms and conditions of this Agreement and the Plan.
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4.Forfeiture of Award. Except as set forth in Section 2.15 of the Plan, in the event that the continuous service of the Participant with Fox Factory or an Affiliate terminates for any reason and the Award has not vested pursuant to Section 5.4, then the Award, to the extent not vested as of the Participant’s termination of continuous service date, shall be forfeited immediately upon such termination, and the Participant shall have no further rights with respect to the Award or the Shares underlying the Award. The Committee (or its designee, to the extent permitted under this Agreement or the Plan) shall have sole discretion (unless arbitrary and capricious) to determine if a Participant’s rights have terminated pursuant to the Plan and this Agreement, including but not limited to the authority to determine the basis for the Participant’s termination of continuous service. The Participant expressly acknowledges and agrees that, except as otherwise provided in this Agreement or Section 2.15 of the Plan, the termination of the Participant’s continuous service shall result in forfeiture of the Award and any underlying payout to the extent the Award has not vested as of the Participant’s termination of continuous service date. For the purposes of this Agreement and the Plan, a legal leave under short term disability or applicable law shall not be deemed to be a termination of the Participant’s continuous service; provided, however, that no such leave shall last longer than six continuous months.
5.Award Payout.
(a)The Award and the number of Shares that the Award represents shall, to the extent vested on each particular vesting date, be payable, and paid, in whole shares of Common Stock, with cash being paid in lieu of fractional Shares and with each settlement to include any dividend equivalents that accrued on the number of vested Shares underlying the Award from the Grant Date through the settlement date.
(b)Award payout shall, upon vesting of the Award, be made to the Participant (or in the event of the Participant’s death, to the Participant’s beneficiary or beneficiaries) in a lump sum as soon as practicable, but in all cases within two and one-half (2-1/2) months following the applicable vesting date. Notwithstanding the foregoing, if the Participant is or may be a “specified employee” (within the meaning of Section 409A of the Code (“Section 409A”)), a distribution that is subject to Section 409A restrictions and that is due to Separation from Service may not be made until within the thirty- (30-) day period commencing with the first day of the seventh month following the month of Separation from Service, or, if earlier, the date of death of the Participant (with all such payments that otherwise would have been made during such six-month period to be made during the seventh month following Separation from Service), in each case except as may be otherwise permitted under Section 409A.
6.No Right to Continued Employment or Service. Neither the Plan, the grant of the Award, nor any other action related to the Plan shall confer upon the Participant any right to continue as a member of the Board or otherwise in the employment or service of Fox Factory or an Affiliate or affect in any way the right of Fox Factory or an Affiliate to terminate the Participant’s employment or service at any time. Except as otherwise expressly provided in the Plan or this Agreement or as determined by the Committee, all rights of the Participant with respect to the Award shall terminate upon termination of the service of the Participant as a member of the Board. The grant of the Award does not create any obligation on the part of Fox Factory or an Affiliate to grant any further awards.
7.Nontransferability of Award and Shares. The Award, and any Award payout, shall not be transferable (including by sale, assignment, pledge or hypothecation) other than by will or the laws of intestate succession. The designation of a beneficiary in accordance with Plan procedures does not constitute a transfer.
8.Superseding Agreement: Binding Effect. This Agreement supersedes any statements, representations or agreements of Fox Factory with respect to the grant of the Award or any related rights, and the Participant hereby waives any rights or claims related to any such statements, representations or agreements. This Agreement does not supersede or amend any existing confidentiality agreement, non-solicitation agreement, noncompetition agreement, employment agreement or any other similar agreement between the Participant and Fox Factory or an Affiliate, including, but not limited to, any restrictive covenants contained in such agreements.
9.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law, and in accordance with applicable United States federal laws.
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10.Amendment and Termination, Waiver. Subject to the terms of the Plan, this Agreement may be amended or terminated only by the written agreement of the parties hereto. The waiver by Fox Factory of a breach of any provision of the Agreement by the Participant shall not operate or be construed as a waiver of any subsequent breach by the Participant. Notwithstanding the foregoing, the Committee shall have unilateral authority to amend the Plan and this Agreement (without Participant consent) to the extent necessary to comply with applicable law or changes to applicable law (including but in no way limited to Section 409A and federal securities laws), and the Participant hereby consents to any such amendments to the Plan and this Agreement.
11.Withholding; Tax Matters.
(a)Fox Factory or an Affiliate shall report all income and Participant shall be solely responsible for the satisfaction of any federal, state or local taxes that may arise under the Award and the vesting of Shares.
(b)Fox Factory has made no warranties or representations to the Participant with respect to the tax consequences (including but not limited to income tax consequences) related to the Award or the payout, if any, pursuant to the Award, and the Participant is in no manner relying on Fox Factory or its representatives for an assessment of such tax consequences. The Participant acknowledges that there may be adverse tax consequences with respect to the Award and that the Participant should consult a tax advisor. The Participant acknowledges that the Participant has been advised that the Participant should consult with the Participant’s own attorney, accountant, and/or tax advisor regarding the decision to enter into this Agreement and the consequences thereof. The Participant also acknowledges that Fox Factory has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for the Participant.
12.Administration. The authority to construe and interpret this Agreement and the Plan, and to administer all aspects of the Plan, shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as are provided in the Plan. Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement are final and binding on the parties hereto.
13.Notices. Any and all notices under this Agreement shall be in writing and sent by hand delivery or by certified or registered mail (return receipt requested and first-class postage prepaid), in the case of Fox Factory, 2055 Sugarloaf Circle, Suite 300, Duluth, GA 30097; Attention: Compensation Committee, and in the case of the Participant, to the last known address of the Participant as reflected in Fox Factory’s records.
14.Severability. The provisions of this Agreement are severable; and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
15.Compliance with Laws, Restrictions on Award and Shares of Common Stock. Fox Factory may impose such restrictions on the Award and the shares of Common Stock or other benefits underlying the Award or relating to the payout of the Award as it may deem advisable in order to comply with restrictions under the federal securities laws, federal tax laws, the requirements of any stock exchange or similar organization and any blue sky, state or foreign securities laws applicable to such Award or shares of Common Stock. Notwithstanding any other provision in the Plan or this Agreement to the contrary, Fox Factory shall not be obligated to issue, deliver or transfer any shares of Common Stock, make any other distribution of benefits under the Plan, or take any other action, unless such delivery, distribution or action is in compliance with all applicable laws, rules and regulations (including but not limited to the requirements of the Securities Act). Fox Factory may cause a restrictive legend or legends to be placed on any certificate for shares of Common Stock issued pursuant to the Award in such form as may be prescribed from time to time by applicable laws and regulations or as may be advised by legal counsel.
16.Successors and Assigns. Subject to the limitations stated herein and in the Plan, this Agreement shall be binding upon and inure to the benefit of the Participant and the Participant’s executors, Committees and permitted transferees and beneficiaries and Fox Factory and its successors and assigns.
17.Counterparts, Further Instruments. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The parties hereto agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.
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18.Right of Offset. Notwithstanding any other provision of the Plan or this Agreement, Fox Factory may reduce the amount of any benefit or payment otherwise payable to or on behalf of the Participant by the amount of any obligation of the Participant to Fox Factory or an Affiliate that is or becomes due and payable, and the Participant shall be deemed to have consented to such reduction; provided, however, that to the extent Section 409A is applicable, such offset shall not exceed the greater of Five Thousand Dollars ($5,000) or the maximum offset amount then permitted under Section 409A.
19.Adjustment of Award.
(a)In the event of any change in the outstanding Shares by reason of any stock split, stock dividend or other non-recurring dividends or distributions, recapitalization, merger, consolidation, spin off, combination, repurchase or exchange of stock, reorganization, liquidation, dissolution or other similar corporate transaction that affects the Common Stock, an adjustment shall be made, as the Committee deems necessary or appropriate, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. Such adjustment may include an adjustment to the number and class of Shares which may be delivered under the Plan, the number, class and price of Shares subject to outstanding Awards, the number and class of Shares issuable pursuant to Options or Stock Appreciation Rights, and the numerical limits contained in Section 5 of the Plan. Notwithstanding the preceding sentence, the number of Shares subject to any Award always will be a whole number.
(b)Notwithstanding anything contained in the Plan or elsewhere in this Agreement to the contrary, (i) the Committee, in order to comply with applicable law (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Sarbanes-Oxley Act of 2002), retains the right at all times to decrease or terminate the Award and payments under the Plan, and any and all amounts payable under the Plan or paid under the Plan shall be subject to clawback, forfeiture, and reduction to the extent determined by the Committee as necessary to comply with applicable law; and (ii) in the event any legislation, regulation(s), or formal guidance require(s) any compensation payable under the Plan (including, without limitation, the Award) to be deferred, reduced, eliminated, or subjected to vesting, the Award shall be deferred, reduced, eliminated, paid in a different form or subjected to vesting or other restrictions as, and solely to the extent, required by such legislation, regulation(s), or formal regulatory guidance.
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Exhibit 10.3
FOX FACTORY HOLDING CORP.
2022 OMNIBUS PLAN
2022 OMNIBUS PLAN
Restricted Stock Unit Award Agreement
Name of Participant:
Grant Date:
THIS AGREEMENT (the “Agreement”), is executed between Fox Factory Holding Corp., a Delaware corporation (“Fox Factory” or the “Company”), and , an Employee (the “Participant”).
RECITALS:
Fox Factory desires to carry out the purposes of Fox Factory Holding Corp. 2022 Omnibus Plan, as it may be amended and/or restated (the “Plan”), by affording the Participant a long-term incentive compensation opportunity as hereinafter provided.
In consideration of the foregoing, of the mutual promises set forth below and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
1.Incorporation of Plan. The rights and duties of Fox Factory and the Participant under this Agreement shall in all respects be subject to and governed by the provisions of the Plan, the terms of which are incorporated herein by reference. In the event of any conflict between the provisions in the Agreement and those of the Plan, the provisions of the Plan shall govern. Unless otherwise provided herein, capitalized terms in this Agreement shall have the same definitions as set forth in the Plan.
2.Grant of Award; Vesting.
(a)Subject to the terms and conditions of this Agreement and the Plan, the Company hereby grants to the Participant the right (this “Award”) to earn an aggregate of shares (the “Shares”) of common stock, par value $0.001 per share (“Common Stock”), of the Company subject to the terms and conditions set forth in this Agreement. Such Shares shall not be issued, and the Participant shall have no rights as a Shareholder of the Company, until Shares are issued pursuant to Section 5 below.
(b)Subject to the terms of this Agreement and those of the Plan, this Award shall vest and become earned at its Fair Market Value in installments, as follows, provided that the Participant’s service with the Company and its subsidiaries has not ceased before the particular vesting date: .
(c)Except as provided in the Plan and in this Agreement, if the Participant’s continuous service with the Company ceases, this Award, to the extent not then vested, shall immediately terminate without consideration.
3.Vesting of Award. The Committee has sole authority (unless arbitrary and capricious) to determine whether and to what degree the Award has vested and is payable and to interpret the terms and conditions of this Agreement and the Plan.
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4.Forfeiture of Award. Except as set forth in Section 2.15, in the event that the continuous service of the Participant with Fox Factory or an Affiliate terminates for any reason and the Award has not vested pursuant to Section 5.4, then the Award, to the extent not vested as of the Participant’s termination of continuous service date, shall be forfeited immediately upon such termination, and the Participant shall have no further rights with respect to the Award or the Shares underlying the Award. The Committee (or its designee, to the extent permitted under this Agreement or the Plan) shall have sole discretion (unless arbitrary and capricious) to determine if a Participant’s rights have terminated pursuant to the Plan and this Agreement, including but not limited to the authority to determine the basis for the Participant’s termination of continuous service. The Participant expressly acknowledges and agrees that, except as otherwise provided in this Agreement or Section 2.15 of the Plan, the termination of the Participant’s continuous service shall result in forfeiture of the Award and any underlying payout to the extent the Award has not vested as of the Participant’s termination of continuous service date. For the purposes of this Agreement and the Plan, a legal leave under short term disability or FMLA or similar law shall not be deemed to be a termination of the Participant’s continuous service; provided, however, that no such leave shall last longer than six continuous months.
5.Award Payout.
(a)The Award and the number of Shares that the Award represents shall, to the extent vested on each particular vesting date, be payable, and paid, in whole shares of Common Stock, with cash being paid in lieu of fractional Shares and with each settlement to include any dividends that accrued on the vested Shares from the Grant Date through the settlement date.
(b)Award payout shall, upon vesting of the Award, be made to the Participant (or in the event of the Participant’s death, to the Participant’s beneficiary or beneficiaries) in a lump sum as soon as practicable, but in all cases within two and one-half (2-1/2) months following the applicable vesting date. Notwithstanding the foregoing, if the Participant is or may be a “specified employee” (within the meaning of Section 409A of the Code), a distribution that is subject to Section 409A restrictions and that is due to Separation from Service may not be made until within the thirty- (30-) day period commencing with the first day of the seventh month following the month of Separation from Service, or, if earlier, the date of death of the Participant (with all such payments that otherwise would have been made during such six-month period to be made during the seventh month following Separation from Service), in each case except as may be otherwise permitted under Section 409A.
6.No Right to Continued Employment or Service. Neither the Plan, the grant of the Award, nor any other action related to the Plan shall confer upon the Participant any right to continue in the employment or service of Fox Factory or an Affiliate or affect in any way the right of Fox Factory or an Affiliate to terminate the Participant’s employment or service at any time. Except as otherwise expressly provided in the Plan or this Agreement or as determined by the Committee, all rights of the Participant with respect to the Award shall terminate upon termination of the employment or service of the Participant with Fox Factory or an Affiliate. The grant of the Award does not create any obligation on the part of Fox Factory or an Affiliate to grant any further awards. So long as the Participant shall continue to be an employee of Fox Factory or an Affiliate, the Award shall not be affected by any change in the duties or position of the Participant.
7.Nontransferability of Award and Shares. The Award, and any Award payout, shall not be transferable (including by sale, assignment, pledge or hypothecation) other than by will or the laws of intestate succession. The designation of a beneficiary in accordance with Plan procedures does not constitute a transfer.
8.Superseding Agreement: Binding Effect. This Agreement supersedes any statements, representations or agreements of Fox Factory with respect to the grant of the Award or any related rights, and the Participant hereby waives any rights or claims related to any such statements, representations or agreements. This Agreement does not supersede or amend any existing confidentiality agreement, non-solicitation agreement, noncompetition agreement, employment agreement or any other similar agreement between the Participant and Fox Factory or an Affiliate, including, but not limited to, any restrictive covenants contained in such agreements.
9.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of law, and in accordance with applicable United States federal laws.
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10.Amendment and Termination, Waiver. Subject to the terms of the Plan, this Agreement may be amended or terminated only by the written agreement of the parties hereto. The waiver by Fox Factory of a breach of any provision of the Agreement by the Participant shall not operate or be construed as a waiver of any subsequent breach by the Participant. Notwithstanding the foregoing, the Committee shall have unilateral authority to amend the Plan and this Agreement (without Participant consent) to the extent necessary to comply with applicable law or changes to applicable law (including but in no way limited to Section 409A and federal securities laws), and the Participant hereby consents to any such amendments to the Plan and this Agreement.
11.Withholding; Tax Matters.
(a)Fox Factory or an Affiliate shall report all income and withhold all required local, state, federal, foreign income and other taxes and any other amounts required to be withheld by any governmental authority or law from any amount payable in cash with respect to the Award. Prior to the delivery or transfer of any shares of Common Stock or any other benefit conferred under the Plan, Fox Factory shall require the Participant to pay to Fox Factory in cash the amount of any tax or other amount required by any governmental authority to be withheld and paid over by Fox Factory or an Affiliate to such authority for the account of such recipient. Alternatively, at the election of Participant, Participant shall be entitled (subject to procedures satisfactory to the Committee) to satisfy such obligation in whole or in part, and any local, state, federal, foreign or other income, employment and other tax obligations relating to the Award, by electing (the “election”) to have Fox Factory withhold shares of Common Stock from the shares of Common Stock to which the recipient is entitled. The number of shares of Common Stock to be withheld shall have a Fair Market Value as of the date that the amount of tax to be withheld is determined as nearly equal as possible to the amount of such obligations being satisfied. Each election must be made in writing to the Committee in accordance with election procedures established by the Committee.
(b)Fox Factory has made no warranties or representations to the Participant with respect to the tax consequences (including but not limited to income tax consequences) related to the Award or the payout, if any, pursuant to the Award, and the Participant is in no manner relying on Fox Factory or its representatives for an assessment of such tax consequences. The Participant acknowledges that there may be adverse tax consequences with respect to the Award and that the Participant should consult a tax advisor. The Participant acknowledges that the Participant has been advised that the Participant should consult with the Participant’s own attorney, accountant, and/or tax advisor regarding the decision to enter into this Agreement and the consequences thereof. The Participant also acknowledges that Fox Factory has no responsibility to take or refrain from taking any actions in order to achieve a certain tax result for the Participant.
12.Administration. The authority to construe and interpret this Agreement and the Plan, and to administer all aspects of the Plan, shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as are provided in the Plan. Any interpretation of the Agreement by the Committee and any decision made by it with respect to the Agreement are final and binding on the parties hereto.
13.Notices. Any and all notices under this Agreement shall be in writing and sent by hand delivery or by certified or registered mail (return receipt requested and first-class postage prepaid), in the case of Fox Factory, 2055 Sugarloaf Circle, Suite 300, Duluth, GA 30097; Attention: Compensation Committee, and in the case of the Participant, to the last known address of the Participant as reflected in Fox Factory’s records.
14.Severability. The provisions of this Agreement are severable; and if any one or more provisions may be determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
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15.Compliance with Laws, Restrictions on Award and Shares of Common Stock. Fox Factory may impose such restrictions on the Award and the shares of Common Stock or other benefits underlying the Award or relating to the payout of the Award as it may deem advisable in order to comply with restrictions under the federal securities laws, federal tax laws, the requirements of any stock exchange or similar organization and any blue sky, state or foreign securities laws applicable to such Award or shares of Common Stock. Notwithstanding any other provision in the Plan or this Agreement to the contrary, Fox Factory shall not be obligated to issue, deliver or transfer any shares of Common Stock, make any other distribution of benefits under the Plan, or take any other action, unless such delivery, distribution or action is in compliance with all applicable laws, rules and regulations (including but not limited to the requirements of the Securities Act). Fox Factory may cause a restrictive legend or legends to be placed on any certificate for shares of Common Stock issued pursuant to the Award in such form as may be prescribed from time to time by applicable laws and regulations or as may be advised by legal counsel.
16.Successors and Assigns. Subject to the limitations stated herein and in the Plan, this Agreement shall be binding upon and inure to the benefit of the Participant and the Participant’s executors, Committees and permitted transferees and beneficiaries and Fox Factory and its successors and assigns.
17.Counterparts, Further Instruments. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The parties hereto agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.
18.Right of Offset. Notwithstanding any other provision of the Plan or this Agreement, Fox Factory may reduce the amount of any benefit or payment otherwise payable to or on behalf of the Participant by the amount of any obligation of the Participant to Fox Factory or an Affiliate that is or becomes due and payable, and the Participant shall be deemed to have consented to such reduction; provided, however, that to the extent Section 409A is applicable, such offset shall not exceed the greater of Five Thousand Dollars ($5,000) or the maximum offset amount then permitted under Section 409A.
19.Adjustment of Award.
(a)In the event of any change in the outstanding Shares by reason of any stock split, stock dividend or other non-recurring dividends or distributions, recapitalization, merger, consolidation, spin off, combination, repurchase or exchange of stock, reorganization, liquidation, dissolution or other similar corporate transaction that affects the Common Stock, an adjustment shall be made, as the Committee deems necessary or appropriate, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan. Such adjustment may include an adjustment to the number and class of Shares which may be delivered under the Plan, the number, class and price of Shares subject to outstanding Awards, the number and class of Shares issuable pursuant to Options or Stock Appreciation Rights, and the numerical limits contained in Section 5 of the Plan. Notwithstanding the preceding sentence, the number of Shares subject to any Award always will be a whole number.
(b)Notwithstanding anything contained in the Plan or elsewhere in this Agreement to the contrary, (i) the Committee, in order to comply with applicable law (including, without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Sarbanes-Oxley Act of 2002), retains the right at all times to decrease or terminate the Award and payments under the Plan, and any and all amounts payable under the Plan or paid under the Plan shall be subject to clawback, forfeiture, and reduction to the extent determined by the Committee as necessary to comply with applicable law; and (ii) in the event any legislation, regulation(s), or formal guidance require(s) any compensation payable under the Plan (including, without limitation, the Award) to be deferred, reduced, eliminated, or subjected to vesting, the Award shall be deferred, reduced, eliminated, paid in a different form or subjected to vesting or other restrictions as, and solely to the extent, required by such legislation, regulation(s), or formal regulatory guidance.
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Exhibit 10.4
FOX FACTORY HOLDING CORP.
2022 OMNIBUS PLAN
PERFORMANCE SHARE UNIT AWARD AGREEMENT
Pursuant to this Performance Share Unit Award Agreement (this “Award Agreement”), and subject to the terms and conditions herein and in the Fox Factory Holding Corp. 2022 Omnibus Plan (the “Plan”), Fox Factory Holding Corp. (the “Company,” as defined in the Plan) grants an Award of performance based Restricted Stock Units (“Performance Share Units” or “PSUs”) to the following identified Grantee with the following specified terms:
Summary of Award Terms:
Name of Grantee: (the “Grantee”)
Date of Grant: (the “Grant Date”)
Target Number of Performance Share Units: (the “Target PSUs”)
Performance Period: [_____] – [______] (“Performance Period”)
Vesting: The PSUs shall vest only upon the achievement of the applicable Performance Goals for the Performance Period. Depending on the actual achievements of Performance Goals, the Grantee may earn between 0% and 200% of the Target PSUs.
Performance Goals: The number of PSUs earned by the Grantee at the end of the Performance Period, if any, will be determined by the Committee, in its sole but reasonable discretion, on or before the Settlement Date, based on the satisfaction of Performance Goals identified in Exhibit A to this Award Agreement.
Unless otherwise provided in this Award Agreement, Grantee must have Continuous Service throughout the Performance Period to remain eligible for any rights or interests with respect to this Award.
Settlement Date of Award: As soon as practicable following the end of the Performance Period, but no later than March 15th following the last day of the Performance Period (the “Settlement Date”).
Capitalized terms used in this Award Agreement, unless otherwise defined, shall have the meanings set forth in the Plan.
1.Grant of Performance Share Units. The Company hereby grants this Award of PSUs, pursuant to which, subject to the terms and conditions of this Award Agreement and the Plan, the Company will pay to the Grantee on the Settlement Date one (1) Share as of the Settlement Date multiplied by the number of vested PSUs earned hereby, subject to applicable withholding for taxes.
2.Vesting. The Award is subject to the vesting terms set forth in the Summary of Award Terms above, except as may otherwise be provided in this Award Agreement or in the Plan. Any portion of the Award that does not vest for any reason shall automatically be cancelled and terminated and be of no further force and effect.
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3.Forfeiture.
(a)If the Grantee has a termination of employment or a leave of absence that isn’t a qualified leave of absence under the applicable Company’s or Affiliate’s employment policies (“Qualified Leave”) prior to the end of the Performance Period for any reason, then except as provided in an employment agreement between the Company and the Grantee then in effect, the Grantee shall forfeit, and shall have no further rights or interest with respect to, any of the PSUs granted hereby, with automatic and immediate effect as of the termination of employment date. Notwithstanding the foregoing, if the Grantee’s employment is terminated by the Company without cause or due to Grantee’s death or disability (within the meaning of Code Section 409A), or if the Grantee has a leave of absence during the Performance Period that isn’t a Qualified Leave, the Grantee will receive a pro-rated Award on the Settlement Date, provided the Performance Goals are met as determined by the Committee, by multiplying the number of Shares the Grantee would have received had the Grantee’s employment not terminated , or had the Grantee had a Qualified Leave, by a fraction, the numerator of which is the number of full and partial months of employment, excluding periods of leaves of absences that are not Qualified Leaves, completed during the Performance Period, and the denominator of which is the number of total months in the Performance Period.
(b)The Award, and the Committee’s determination of the satisfaction of Performances Goals, shall be subject to adjustment by the Committee (i) as provided in the Plan, and (ii) in recognition of unusual or nonrecurring events affecting the Company or any Affiliate, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations or accounting principles, if the Committee determines that such adjustments are appropriate or necessary.
4.Change of Control. In the event of a Change of Control, the Award shall be subject to the provisions of Sections 12 of the Plan.
5.Settlement of Award. On the Settlement Date, the Company will, in full satisfaction of the PSUs granted hereby, pay to the Grantee the amount owed, as determined by the Committee based upon the Committee’s determination of achievement of the Performance Goals, in whole Shares, rounded down to the nearest whole Share.
(a)Notwithstanding anything herein to the contrary, no transfer of Shares shall become effective until the Company determines that such transfer, issuance, and delivery is in compliance with all applicable, laws, regulations of governmental authority, and the requirements of any securities exchange on which Shares may be traded.
(b)The Committee may, as a condition to the issuance of Shares, require the Grantee to make covenants and representations and/or enter into agreements with the Company to reflect the Grantee’s rights and obligations as a stockholder of the Company and any limitations and restrictions on such Shares.
(c)The transfer of Shares pursuant to this Award Agreement shall be effectuated by an appropriate entry on the books of the Company, the issuance of certificates representing such shares (bearing such legends as the Committee deems necessary or desirable), the transfer of shares to a brokerage account in the name of the Grantee, and/or other appropriate means as determined by the Committee.
(d)Unless and until any Shares are issued in settlement of the Award on the Settlement Date, the Award shall not confer to the Grantee any rights or status as a stockholder of the Company.
6.Withholding. The Grantee shall surrender to the Company, for no consideration, the portion of any Shares that become vested under this Award whose aggregate Fair Market Value is sufficient to satisfy federal, state, and local withholding tax requirements.
7.No Assignment or Transfer. The Award granted hereunder may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution. No transfer by will or the laws of descent and distribution shall be effective to bind the Company unless the Committee shall have been furnished with (i) written notice thereof along with such evidence as the Committee may deem necessary to establish the validity of the transfer and (ii) an agreement by the transferee to comply with all the terms and conditions of the Award that are or would have been applicable to the Grantee and to be bound by the acknowledgements made by the Grantee in connection with the grant.
8.Grantee Representations. By accepting the Award, the Grantee represents and acknowledges the following:
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(a)The Grantee has received a copy of the Plan, has reviewed the Plan and this Award Agreement in their entirety, and has had an opportunity to obtain the advice of independent legal counsel prior to accepting the Award.
(b)The Grantee has had the opportunity to consult with a tax advisor concerning the tax consequences of accepting the Award, and understands that the Company makes no representation regarding the tax treatment as to any aspect of the Award, including the grant, vesting, settlement, or conversion of the Award.
(c)The Grantee understands that neither the grant of this Award nor the Grantee’s participation in the Plan confers any right to continue in the service of the Company or any Affiliate or to receive any other award or amount of compensation, whether under the Plan or otherwise, and no payment of any award under the Plan will be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance, or other benefit plan of the Company or any Affiliate except as otherwise specifically provided in such other plan.
(d)The Grantee consents to the collection, use, and transfer, in electronic or other form, of the Grantee’s personal data by the Company, any Affiliate, the Committee, and any third party retained to administer the Plan for the exclusive purpose of administering the Award and Grantee’s participation in the Plan. The Grantee agrees to promptly notify the Committee of any changes in the Grantee’s name, address, or contact information during the entire period of Plan participation.
For the avoidance of doubt, the Grantee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Grantee’s personal data as described in this award Agreement and any other equity grant materials ("Data") by and among, as applicable, the Company and any Affiliate employer for the exclusive purpose of implementing, administering and managing the Grantee's participation in the Plan. The Grantee understands that the Company and any Affiliate may hold certain personal data about the Grantee, including, but not limited to, the Grantee’s name, home address and telephone number, e-mail address, date of birth, Social Security number, passport or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company or any Affiliate, details of all equity or any other entitled to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor, for the exclusive purpose of implementing, administering and managing the Plan.
The Grantee understands that Data may be transferred to a third party (or third parties) to assist the Company and any Affiliate with the implementation, administration and management of the Plan. The Grantee understands the recipients of the Data may be located in the Grantee’s country, in the United States or elsewhere, and that the recipients’ country may have different data privacy laws and protections than the Grantee’s country. The Grantee understands that the Grantee may request a list with the names and addresses of any potential recipients of Data by contacting the Grantee’s local human resources representative. The Grantee authorizes the Company and any Affiliate, and any foregoing third party, and any other possible recipients which may assist the Company or any Affiliate (whether presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purpose of implementing, administering and managing the Grantee’s participation in the Plan. The Grantee understands that Data will be held only as long as is necessary to implement, administer and manage the Grantee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Grantee may elect to deposit any Shares acquired upon settlement of the Award. The Grantee understands that the Grantee may, at any time, view Data, request information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Grantee’s local human resources representative. Further, the Grantee understands that the Grantee is providing the consents herein on a purely voluntary basis. If the Grantee does not consent, or if the Grantee later revokes his or her consent, the Grantee’s employment status or service with the Company or any Affiliate will not be affected; the only consequence of refusing or withdrawing the Grantee’s consent is that the Company would not be able to grant the Award or other equity awards to the Grantee or administer or maintain such Award or other equity awards. Therefore, the Grantee understands that refusing or withdrawing the Grantee’s consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of the Grantee’s refusal to consent or withdrawal of consent, the Grantee understands that the Grantee may contact the Participant’s local human resources representative.
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(e)Notwithstanding anything in this Award Agreement to the contrary or any other agreement to the contrary, the Grantee further agrees that (i) the Grantee is not entitled to, and has no rights to, future Awards, (ii) any rights of the Grantee to future Awards shall be in the sole discretion of the Company, (iii) the Company may discontinue the granting of future Awards at any time, without notice and without the Grantee’s consent, (iv) the Award is discretionary on behalf of the Company and is not related to the salary or any other contractual benefits granted to the Grantee by the Company or any Affiliate, and therefore, any benefits derived from the Award will not under any circumstances be considered as an integral part of the Grantee’s compensation, (v) the value of the Award will not be considered at any time for purposes of any severance calculations associated with the Grantee, and (vi) the Grantee understands and agrees that any modification to this Award shall not constitute a change or impairment of the terms and conditions of his or her employment with the Company or any Affiliate.
9.Adjustments. If there is a change in the outstanding Shares due to a stock dividend, split, or consolidation, or a recapitalization, corporate change, corporate transaction, or other similar event relating to the Company, the Committee may adjust the number of Target PSUs subject to the Award in accordance with Section 5 of the Plan.
10.Administration; Interpretation. In accordance with the Plan and this Award Agreement, the Committee shall have full discretionary authority to administer the Award, including discretionary authority to interpret and construe any and all provisions relating to the Award. Decisions of the Committee shall be final, binding, and conclusive on all parties.
11.Section 409A. It is intended that this Award Agreement is exempt from Code Section 409A and the interpretive guidance thereunder (“Section 409A”), and this Award Agreement shall be administered accordingly, and interpreted and construed on a basis consistent with such intent. The provisions of Section 16.7 of the Plan are incorporated by reference herein.
12.Successors. The terms of this Award Agreement shall be binding upon and inure to the benefit of the heirs of the Grantee or distributees of the Grantee’s estate and any successor to the Company.
13.Governing Law; Severability.
(a)Governing Law. This Award Agreement shall be construed and administered in accordance with the laws of the State of Delaware without regard to its conflict of law principles.
(b)Severability. Any determination by a court of competent jurisdiction or relevant governmental authority that any provision or part of a provision in this Award Agreement is unlawful or invalid shall not serve to invalidate any portion of this Award Agreement not found to be unlawful or invalid, and any provision or part of a provision found to be unlawful or invalid shall be construed in a manner that will give effect to the terms of such provision or part of a provision to the fullest extent possible while remaining lawful and valid.
14.Acknowledgment of Receipt and Acceptance. By signing below (or acceptance by other means, including by electronic signature), the undersigned acknowledges receipt and acceptance of the Award, agrees to the representations made in the Award, and indicates his/her intention to be bound by this Award Agreement and the terms of the Plan.
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