Exhibit 10.1

 

BOOT BARN HOLDINGS, INC.

CASH INCENTIVE PLAN FOR EXECUTIVES

 

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TABLE OF CONTENTS

 

1. PURPOSE

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2. DEFINITIONS

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3. ELIGIBILITY

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4. ADMINISTRATION

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5. DETERMINATION OF AWARDS

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6. PAYMENT OF AWARDS

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7. LIMITATIONS ON RIGHTS TO PAYMENT OF AWARDS

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8. CHANGE OF CONTROL

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9. DEFERRALS

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10. AMENDMENTS

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11. TERMINATION

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12. MISCELLANEOUS PROVISIONS

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1.                          Purpose

 

The purpose of the Boot Barn Holdings, Inc. Cash Incentive Plan for Executives
(the “Plan”) is to enhance the ability of Boot Barn Holdings, Inc. to attract,
reward and retain employees, to strengthen employee commitment to its success
and to align employee interests with those of its stockholders by providing
variable compensation, based on the achievement of performance objectives. To
this end, the Plan provides a means of rewarding participants based on the
performance of the Company and its subsidiaries and business units and, where
appropriate, on a participant’s personal performance. The Plan is intended to
allow (but not require) the Committee (defined below) to make awards that meet
the requirements for “qualified performance-based compensation” under section
162(m) of the Code (defined below). The Plan shall be effective as of June 29,
2017, subject to stockholder approval in 2017.

 

2.                          Definitions

 

(a)                                 “Award” shall mean an incentive award earned
by a Participant under the Plan for any Performance Period.

 

(b)                                 “Base Salary” shall mean the Participant’s
annual base salary rate in effect at the beginning of a Performance Period
without regard to subsequent adjustment during the Performance Period unless
otherwise determined by the Committee. Base Salary does not include Awards under
this Plan or any other short-term or long-term incentive plan, imputed income
from programs such as group-term life insurance, or non-recurring earnings such
as moving expenses. Base Salary is based on annual salary before reductions for
deferrals under Company-sponsored deferred compensation plans, contributions
under Code section 401(k) and contributions to flexible spending accounts under
Code section 125.

 

(c)                                  “Board” shall mean the Company’s Board of
Directors.

 

(d)                                 “Bonus Pool” shall have the meaning set
forth in Section 5(b).

 

(e)                                  “Change of Control” shall have the meaning
set forth in the Company’s 2014 Equity Incentive Plan (or its successor) in
effect at the beginning of the Performance Period.

 

(f)                                   “Code” shall mean the Internal Revenue
Code of 1986, as amended or any successor statute thereto.

 

(g)                                  “Committee” shall mean the Compensation
Committee of the Board. The Committee shall consist of two or more persons
appointed by the Board, all of whom shall be “outside directors” as defined
under Code section 162(m) and related Treasury regulations.

 

(h)                                 “Company” shall mean Boot Barn
Holdings, Inc., a Delaware corporation, and any successor corporation.

 

(i)                                     “Participant” for any Performance
Period, shall mean an executive employee of the Company or a subsidiary who is
designated by the Committee to participate in the Plan.

 

(j)                                    “Performance Goals” shall have the
meaning set forth in Section 5(b).

 

(k)                                 “Performance Period” shall mean the fiscal
year of the Company or any other period of up to 12 months or more than one year
designated by the Committee with respect to which an Award may be earned.

 

(l)                                     “Plan” shall mean this Boot Barn
Holdings, Inc. Cash Incentive Plan for Executives, as in effect from time to
time.

 

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(m)                             “Target Award” shall mean the targeted amount,
expressed either as a cash amount or as a percentage of the Participant’s Base
Salary that the Participant will earn as an Award for the Performance Period if
the targeted level of performance is achieved for each of the Performance Goals
set by the Committee for the Participant. A Participant’s Target Award shall be
determined by the Committee based on the Participant’s responsibility level,
position or such other criteria as the Committee shall determine.

 

3.                          Eligibility

 

All executive employees of the Company and its subsidiaries are eligible to
participate in the Plan. The Committee shall designate which executive employees
shall participate in the Plan for each Performance Period. In order to be
eligible to receive an Award with respect to any Performance Period, an employee
must be actively employed by the Company or a subsidiary on the payment date,
except as provided in Section 7 or 8 below.

 

4.                          Administration

 

(a)                                 Committee Authority. The Plan shall be
administered by the Committee. The Committee shall have full discretionary
authority to establish the rules and regulations relating to the Plan, to
interpret the Plan and those rules and regulations, to select Participants in
the Plan, to determine each Participant’s Target Award, Award amount and the
terms of any Bonus Pool, to approve all Awards, to determine whether Awards will
be designated as “qualified performance-based compensation” for purposes of Code
section 162(m), to decide the facts in any case arising under the Plan and to
make all other determinations, including factual determinations, and to take all
other actions necessary or appropriate for the proper administration of the
Plan, including the delegation of such authority or power, where appropriate.
All powers of the Committee shall be executed in its sole discretion, in the
best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
individuals.

 

(b)                                 Committee Determinations. All Awards shall
be made conditional upon the Participant’s acknowledgement, in writing or by
acceptance of the Award, that all decisions and determinations of the Committee
shall be final and binding on the Participant, his or her beneficiaries and any
other person having or claiming an interest under such Award. Awards need not be
uniform as among Participants. The Committee’s administration of the Plan,
including all such rules and regulations, interpretations, selections,
determinations, approvals, decisions, delegations, amendments, terminations and
other actions, shall be final and binding on the Company and all employees of
the Company, including, the Participants and their respective beneficiaries.

 

5.                          Determination of Awards

 

(a)                                 Establishment of Target Awards and
Performance Goals.  As soon as practicable, but no later than the earlier of
(i) 90 days after the beginning of the Performance Period or (ii) the date on
which 25% of the period of service has elapsed, or such other date as may be
required or permitted under applicable regulations under Code section 162(m),
the Committee shall determine the executive employees who shall be Participants
during that Performance Period, each Participant’s Target Award and the
Performance Goals for each Participant, all of which shall be set forth in the
Committee’s minutes. The Target Awards may provide for differing amounts to be
paid based on differing thresholds of performance. The Committee shall establish
a maximum dollar amount that may be paid to a Participant for the Performance
Period. The Company shall notify each Participant of the Participant’s Target
Award and the applicable Performance Goals for the Performance Period.

 

(b)                                 Establishment of a Bonus Pool.  As an
alternative to establishing individual Target Awards, the Committee may
establish a pool, which shall be an unfunded pool, for purposes of measuring
performance of the Company in connection with Awards (a “Bonus Pool”). The
amount of the Bonus Pool shall be based upon the achievement of one or more
Performance Goals during the Performance Period and each Participant’s Award
shall be based on a fixed percentage of the Bonus Pool, in each case as
specified by the Committee as soon as practicable, but no later than the earlier
of (i) 90 days after the beginning of the Performance Period or (ii) the date on
which 25% of the period of service has elapsed, or such other date as may be
required or permitted under applicable regulations under Code section 162(m).
The Committee may specify the amount of the Bonus Pool as a percentage of any
Performance Goal, a percentage thereof in excess of a threshold amount, or as
another amount bearing a mathematical relationship to such Performance Goal. The
terms of the Bonus Pool and the Awards thereunder shall be set forth in the
Committee minutes. The Committee shall establish a maximum dollar amount that
may be paid to a Participant under the Bonus Pool. The Company shall notify each
Participant of the Participant’s portion of the Bonus Pool and the applicable
Performance Goals for the Performance Period.

 

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(c)                                  Performance Goal Criteria. For any
Performance Period, “Performance Goal” shall mean the performance goals of the
Company or an individual or one or more divisions, business units, or
subsidiaries, either individually, alternatively or in any combination, and
measured on an absolute basis or relative to a pre-established target, to
previous years’ results or to a designated comparison group, in each case as
specified by the Committee.  The Performance Goals shall be based on one or more
of the following objective criteria: (i) cash flow (before or after dividends),
(ii) earnings per share (including, without limitation, earnings before
interest, taxes, depreciation and amortization), (iii) stock price, (iv) return
on equity, (v) stockholder return or total stockholder return, (vi) return on
capital (including, without limitation, return on total capital or return on
invested capital), (vii) return on investment, (viii) return on assets or net
assets, (ix) market capitalization, (x) economic value added, (xi) debt leverage
(debt to capital), (xii) revenue, (xiii) sales or net sales, (xiv) e-commerce
sales, (xv) private brand sales or penetration, (xvi) backlog, (xvii) income,
pre-tax income or net income, (xviii) operating income or pre-tax profit,
(xix) earnings before interest, taxes, depreciation and amortization (or
EBITDA), (xx) earnings before interest and taxes (or EBIT), (xxi) operating
profit, net operating profit or economic profit, (xxii) gross margin, operating
margin, merchandise margin or profit margin, (xxiii) return on operating revenue
or return on operating assets, (xxiv) cash from operations, (xxv) operating
ratio, (xxvi) operating revenue, (xxvii) market share improvement,
(xxviii) general and administrative expenses and (xxix) customer service.

 

(d)                                 Calculation of Performance Goals. The
Committee will objectively define the manner of calculating the Performance Goal
or Performance Goals it selects to use for such Performance Period for such
Participant, including whether or to what extent there shall not be taken into
account any of the following events that occurs during the Performance Period:
(i) changes in corporate capitalization or corporate transactions, (ii) asset
write-downs, (iii) litigation, claims, judgments or settlements, (iv) the effect
of changes in tax law, accounting principles or other such laws or provisions
affecting reported results, (v) accruals for reorganization and restructuring
programs, (vi) any extraordinary, unusual, non-recurring or non-comparable items
(A) as described in Accounting Standard Codification Section 225-20, (B) as
described in management’s discussion and analysis of financial condition and
results of operations appearing in the Company’s Annual Report to stockholders
for the applicable year, or (C) publicly announced by the Company in a press
release or conference call relating to the Company’s results of operations or
financial condition for a completed quarterly or annual fiscal period, or
(vii) any other event to the extent consistent with the requirements of section
162(m) of the Code. To the extent consistent with section 162(m) of the Code,
the Committee may provide that such calculation shall be made on the same basis
as reflected in a release of the Company’s earnings. The Committee shall specify
in the minutes how the financial calculations for the Performance Goals will be
made.

 

(e)                                  Earning an Award.  A Participant will earn
an Award for a Performance Period based on the level of achievement of the
Performance Goals established by the Committee for that period; provided that
the Committee may reduce (but not increase) an Award below the level determined
based on the Performance Goals based on additional established performance
criteria and/or based on its assessment of personal performance or other
factors. Such reduction shall be based on any factors determined by the
Committee in its sole discretion. A Participant will receive no Award if the
level of achievement of Performance Goals is below the minimum required to earn
an Award for the Performance Period, as specified by the Committee at the time
the Performance Goals are established.

 

(f)                                   Maximum Award Amount.  The maximum
aggregate amount that may be paid to each Participant pursuant to Awards granted
under the Plan with respect to each fiscal year shall not exceed $2,500,000. If
a Performance Period includes more than one fiscal year, the amount payable with
respect to each fiscal year during the Performance Period shall be determined by
dividing the total amount payable for the Performance Period by the number of
whole and partial fiscal years in the Performance Period.

 

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(g)                                  Section 162(m).  Awards that are intended
to be “qualified performance-based compensation” under Code section 162(m) shall
be based on Performance Goals for each Performance Period that shall satisfy the
requirements for “qualified performance-based compensation” under Code section
162(m), including the requirement that the achievement of the Performance Goals
be substantially uncertain at the time they are established and that the
Performance Goals be established in such a way that a third party with knowledge
of the relevant facts could determine whether and to what extent the Performance
Goals have been met. An Award that is designated as “qualified performance-based
compensation” under Code section 162(m) may not be awarded as an alternative to
any other award that is not designated as “qualified performance-based
compensation,” but instead must be separate and apart from all other awards
made. The Committee is authorized to reduce an Award for any Performance Period
based upon its assessment of personal performance or other factors, but not to
increase the Award beyond the amount determined based on achievement of the
Performance Goals for that Participant. Any reduction of a Participant’s Award
shall not result in an increase in any other Participant’s Award.

 

6.                          Payment of Awards

 

The Committee shall certify achievement of the Performance Goals and determine
the Awards that will be paid by the Company to each Participant as soon as
practicable following the final determination of the Company’s financial results
for the relevant Performance Period. Payment of the Awards certified by the
Committee shall be made within 2 ½ months following the last day of the
Performance Period.

 

7.                          Limitations on Rights to Payment of Awards

 

(a)                                 Employment. No Participant shall have any
right to receive payment of an Award under the Plan for a Performance Period
unless the Participant remains in the employ of the Company through the payment
date; provided, however, that the Committee may determine at the time an Award
is granted or anytime thereafter, to the extent consistent with section
162(m) of the Code, that if a Participant’s employment with the Company
terminates prior to the payment date, the Participant shall remain eligible to
receive all or a pro-rated portion of any Award that would otherwise have been
earned for the applicable Performance Period, based on attainment of the
Performance Goals, in such circumstances as the Committee deems appropriate. If
payments are to be made under the Plan after a Participant’s death, such
payments shall be made to the personal representative of the Participant’s
estate.  Payment of any Awards pursuant to this Section 7 shall be made at the
time Awards are paid to other Participants for the Performance Period, in
accordance with Section 6 above, and subject to Section 8.

 

(b)                                 Leaves of Absence. If a Participant is on an
authorized leave of absence during the Performance Period, the Participant may
be eligible to receive a pro-rated portion of any Award that would otherwise
have been earned, as determined by the Committee.

 

8.                          Change of Control

 

(a)                                 Awards. Unless the Committee determines
otherwise at the time an Award is granted or anytime thereafter, to the extent
consistent with section 162(m) of the Code, if a Change of Control occurs prior
to the end of a Performance Period, the Performance Period shall cease upon the
Change of Control date and each Participant who is in the employ of the Company
on the date of the Change of Control, or as otherwise determined by the
Committee pursuant to Section 7 above, shall receive an Award for the
Performance Period in which the Change of Control occurs, based on performance
measured as of the date of the Change of Control, or as otherwise determined by
the Committee.

 

(b)                                 Payment. Payment shall be made within 60
days after the Change of Control date (regardless of whether the Participant is
employed after the Change of Control).

 

9.                          Deferrals

 

Notwithstanding the foregoing, the Committee may permit a Participant to defer
receipt of an Award that would otherwise be payable to the Participant. The
Committee shall establish rules and procedures for any such deferrals,
consistent with the applicable requirements of Code section 409A.

 

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10.                   Amendments

 

The Committee may at any time amend this Plan; provided, however, that the
Committee shall not amend the Plan without stockholder approval if such approval
is required by Code section 162(m). The Committee may determine that the Plan
will be submitted to the Company’s stockholders for reapproval by the first
stockholders meeting that occurs in the fifth year following the year in which
the stockholders previously approved the Plan, if additional Awards that are
intended to be “qualified performance-based compensation” under Code section
162(m) are to be paid under the Plan and if required by Code section 162(m) or
the regulations thereunder. Except as provided in Section 12(g) below, no
amendment that adversely affects any Participant’s rights to an Award that has
been earned prior to the date of the amendment shall be effective for such Award
unless the Participant consents to the amendment.

 

11.                   Termination

 

The Committee may terminate this Plan at any time. In the case of termination of
the Plan other than in connection with a Change of Control, the Committee may
determine that each Participant may receive a pro-rated portion of the Award
that would otherwise have been earned for the then current Performance Period
had the Plan not been terminated, as determined by the Committee. Each Award
payable in accordance with this Section 11 shall be paid as described in
Section 6 above.

 

12.                   Miscellaneous Provisions

 

(a)                                 No Employment Right. This Plan is not a
contract between the Company and any employee or Participant. Neither the
establishment of this Plan, nor any action taken hereunder, shall be construed
as giving any employee or any Participant any right to be retained in the employ
of the Company. The Company is under no obligation to continue the Plan. Nothing
contained in the Plan shall limit or affect in any manner or degree the normal
and usual powers of management, exercised by the officers and the Board or
committees thereof, to change the duties or the character of employment of any
employee or to remove any individual from the employment of the Company at any
time, all of which rights and powers are expressly reserved.

 

(b)                                 No Assignment. A Participant’s right and
interest under the Plan may not be assigned or transferred, except upon death as
provided in Section 7 above, and any attempted assignment or transfer shall be
null and void.

 

(c)                                  Funding of the Plan; Limitation on Rights.
This Plan shall be unfunded. The Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any Awards under this Plan.  Nothing contained in the Plan and no
action taken pursuant hereto shall create or be construed to create a fiduciary
relationship between the Company and any Participant or any other person. No
Participant or any other person shall under any circumstances acquire any
property interest in any specific assets of the Company. To the extent that any
person acquires a right to receive payment from the Company hereunder, such
right shall be no greater than the right of any unsecured general creditor of
the Company.

 

(d)                                 Obligations to the Company. If a Participant
becomes entitled to payment of an Award under the Plan, and if at such time the
Participant has outstanding any debt, obligation or other liability representing
an amount owing to the Company, then the Company may offset such amount owed to
it against the Award otherwise distributable, to the extent consistent with Code
section 409A. Any determination under this Section 12(d) shall be made by the
Committee in its sole discretion.

 

(e)                                  Withholding Taxes. All Awards under the
Plan shall be subject to applicable federal (including FICA), state and local
tax withholding requirements. The Company may require that the Participant or
his or her personal representative pay to the Company the amount of any federal,
state or local taxes that the Company is required to withhold with respect to
such Awards, or the Company may deduct from such Awards or other wages paid by
the Company the amount of any withholding taxes due with respect to such Awards.

 

(f)                                   Stockholder Approval. All Awards for the
2018 fiscal year Performance Period will be made contingent upon, and subject
to, stockholder approval of the Plan at the 2017 annual stockholders’ meeting.

 

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(g)                                  Compliance with Law. It is the intent of
the Company that the Plan and Awards that are intended to be “qualified
performance-based compensation” under Code section 162(m) comply with the
applicable provisions of Code section 162(m). It is the intent of the Company
that the Plan and Awards comply with the applicable provisions of Code section
409A or an exemption, including any six month delay required for specified
employees, if applicable. To the extent that any legal requirement of Code
section 162(m) or 409A as set forth in the Plan ceases to be required under Code
section 162(m) or 409A, that Plan provision shall cease to apply. Payment of
Awards shall only be made in a manner and upon an event permitted under Code
section 409A. Each payment shall be treated as a separate payment for purposes
of Code section 409A, and in no event shall a Participant, directly or
indirectly, designate the calendar year in which a distribution is made except
in accordance with Code section 409A. Notwithstanding the foregoing, in no event
shall the Company be liable for any taxes, penalties, interest or other expenses
that may be incurred by a Participant on account of non-compliance with Code
section 409A. The Committee may revoke any Award if it is contrary to law or
modify an Award to bring it into compliance with any valid and mandatory
government regulation.

 

(h)                                 Governing Law. The validity, construction,
interpretation and effect of the Plan shall exclusively be governed by and
determined in accordance with the law of the State of Delaware, without giving
effect to the conflict of laws provisions thereof.

 

(i)                                     Adjustments in Awards.  The Committee
may make adjustments in the terms and conditions of, and the criteria included
in, Awards in recognition of unusual or nonrecurring events affecting the
Company or the financial statements of the Company or of changes in applicable
laws, regulations, or accounting principles, whenever the Committee determines,
in its sole discretion, that such adjustments are appropriate in order to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under the Plan; provided that, any such adjustments with
respect to Awards that are intended to be “qualified performance-based
compensation” shall be consistent with the requirements of Code section 162(m).

 

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