EXHIBIT 10.4
ZAGG INC
Performance STOCK Unit award Agreement
This Performance Stock Unit Award Agreement (this “Agreement”) is made and
entered into as of __________ (the “Grant Date”) by and between ZAGG Inc, a
Delaware corporation (the “Company”) and __________ (the “Grantee”).
WHEREAS, the Company has adopted the ZAGG Inc Amended and Restated 2013 Equity
Incentive Award Plan (the “Plan”) pursuant to which Performance Share Units may
be granted; and
WHEREAS, the Compensation Committee of the Board of Directors (the “Committee”)
has determined that it is in the best interests of the Company and its
shareholders to grant the award of Performance Stock Units provided for herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
1.Grant of Performance Stock Units. Pursuant to Articles 8 and 9 of the Plan,
the Company hereby grants to the Grantee an Award for a target number of
[__________] Performance Stock Units (the “Target Award”). Each Performance
Stock Unit (“PSU”) represents the right to receive one share of Common Stock,
subject to the terms and conditions set forth in this Agreement and the Plan.
The number of PSUs that the Grantee actually earns for the Performance Period
(up to a maximum of [__________]) will be determined by the level of achievement
of the Performance Goal(s) in accordance with Exhibit A attached hereto.
Capitalized terms that are used but not defined herein have the meanings
ascribed to them in the Plan.
2.Performance Period. For purposes of this Agreement, the term “Performance
Period” shall be the period commencing on [_________] and ending on
[__________].
3.Performance Goals.
(a)The number of PSUs earned by the Grantee for the Performance Period will be
determined at the end of the Performance Period based on the level of
achievement of the Performance Goal(s) in accordance with Exhibit A. All
determinations of whether Performance Goal(s) have been achieved, the number of
PSUs earned by the Grantee, and all other matters related to this Section 3
shall be made by the Committee in its sole discretion.
(b)Promptly following completion of the Performance Period (and no later than
[__________ (___)] days following the end of the Performance Period), the
Committee will review and certify in writing (a) whether, and to what extent,
the Performance Goal(s) for the Performance Period have been achieved, and (b)
the number of PSUs that the Grantee shall earn, if any, subject to compliance
with the requirements of Section 4. Such certification shall be final,
conclusive and binding on the Grantee, and on all other persons, to the maximum
extent permitted by law.
4.Vesting of PSUs. The PSUs are subject to forfeiture until they vest. Except as
otherwise provided herein, the PSUs will vest and become nonforfeitable in
accordance with the vesting schedule set forth in Exhibit B attached hereto,
subject to (a) the achievement of the minimum threshold Performance Goal(s) for
payout set forth in Exhibit A attached hereto, and (b) the Grantee’s continuous
employment with or provision of services to the Company (“Continuous Service”)
from the Grant Date through the applicable vesting date. The number of PSUs that
vest and become payable under this Agreement shall be determined by the
Committee based on the level of achievement of the Performance Goal(s) set forth
in Exhibit A and shall be rounded to the nearest whole PSU.
5.Termination of Continuous Service.
(a)Except as otherwise expressly provided in this Agreement, if the Grantee’s
Continuous Service terminates for any reason at any time before all of his PSUs
have vested, the Grantee’s unvested PSUs shall be automatically forfeited upon
such termination of Continuous Service and the Company shall not have any
further obligations to the Grantee under this Agreement.
(b)Notwithstanding Section 5(a), if the Grantee’s Continuous Service terminates
during the Performance Period as a result of the Grantee’s death or Disability,
the Grantee will vest on such date in a pro rata portion of the Target Award
calculated by multiplying the Target Award by a fraction, the numerator of which
equals the number of days that the Grantee was employed during the Performance
Period and the denominator of which equals the total number of days in the
Performance Period.
6.Effect of a Change in Control. If there is a Change in Control during the
Performance Period, then in the event of the Grantee’s termination of Continuous
Service without cause or for good reason within [__________] months following
the effective date of the Change in Control, all outstanding PSUs shall vest at
Target Award levels on the date of such termination and shall be paid no later
than [__________ (___)] days following such termination of Continuous Service.
7.Payment of PSUs. Payment in respect of the PSUs earned for the Performance
Period shall be made in shares of Common Stock and shall be issued to the
Grantee as soon as practicable following the vesting date. The Company shall (a)
issue and deliver to the Grantee the number of shares of Common Stock equal to
the number of vested PSUs, and (b) enter the Grantee’s name on the books of the
Company as the shareholder of record with respect to the shares of Common Stock
delivered to the Grantee.
8.Transferability. Subject to any exceptions set forth in this Agreement or the
Plan, the PSUs or the rights relating thereto may not be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by the Grantee,
except by will or the laws of descent and distribution, and upon any such
transfer by will or the laws of descent and distribution, the transferee shall
hold such PSUs subject to all of the terms and conditions that were applicable
to the Grantee immediately prior to such transfer.
9.Rights as Shareholder; Dividend Equivalents.
(a)The Grantee shall not have any rights of a shareholder with respect to the
shares of Common Stock underlying the PSUs, including, but not limited to,
voting rights and the right to receive or accrue dividends or dividend
equivalents.
(b)As of any date that the Company pays an ordinary cash dividend on its shares
of Common Stock, the Company will increase the number of PSUs hereunder (i.e.,
by increasing the Target Award) by the number of shares that represent an amount
equal to the per share cash dividend paid by the Company on its shares of Common
Stock multiplied by the number of target PSUs held by the Participant as of the
related dividend payment record date. Any such additional PSUs shall be subject
to the same vesting, forfeiture, payment, termination and other terms,
conditions and restrictions as the original PSUs to which they relate. No
additional PSUs shall be granted with respect to any PSUs which, as of the
record date, have either been paid or terminated.
(c)Upon and following the vesting of the PSUs and the issuance of shares, the
Grantee shall be the record owner of the shares of Common Stock underlying the
PSUs unless and until such shares are sold or otherwise disposed of, and as
record owner shall be entitled to all rights of a shareholder of the Company
(including voting and dividend rights).
10.No Right to Continued Service. Neither the Plan nor this Agreement shall
confer upon the Grantee any right to be retained in any position, as an
Employee, Consultant or Director of the Company. Further, nothing in the Plan or
this Agreement shall be construed to limit the discretion of the Company to
terminate the Grantee’s Continuous Service at any time, with or without Cause.
11.Adjustments. If any change is made to the outstanding Common Stock or the
capital structure of the Company, if required, the PSUs shall be adjusted or
terminated in any manner as contemplated by Article 11 of the Plan.
12.Tax Liability and Withholding.
(a)The Grantee shall be required to pay to the Company, and the Company shall
have the right to deduct from any compensation paid to the Grantee pursuant to
the Plan, the amount of any required withholding taxes in respect of the PSUs
and to take all such other action as the Committee deems necessary to satisfy
all obligations for the payment of such withholding taxes. Grantee shall be
permitted to satisfy any federal, state or local tax withholding obligation by
any of the following means, or by a combination of such means:
(i)tendering a cash payment;
(ii)authorizing the Company to withhold shares of Common Stock from the shares
of Common Stock otherwise issuable or deliverable to the Grantee as a result of
the vesting of the PSUs; provided, however, that no shares of Common Stock shall
be withheld with a value exceeding the minimum amount of tax required to be
withheld by law; or
(iii)delivering to the Company previously owned and unencumbered shares of
Common Stock.
(b)Notwithstanding any action the Company takes with respect to any or all
income tax, social insurance, payroll tax, or other tax-related withholding
(“Tax-Related Items”), the ultimate liability for all Tax-Related Items is and
remains the Grantee’s responsibility and the Company (a) makes no representation
or undertakings regarding the treatment of any Tax-Related Items in connection
with the grant, vesting or settlement of the PSUs or the subsequent sale of any
shares, and (b) does not commit to structure the PSUs to reduce or eliminate the
Grantee’s liability for Tax-Related Items.
13.Compliance with Law. The issuance and transfer of shares of Common Stock in
connection with the PSUs shall be subject to compliance by the Company and the
Grantee with all applicable requirements of federal and state securities laws
and with all applicable requirements of any stock exchange on which the
Company’s shares of Common Stock may be listed. No shares of Common Stock shall
be issued or transferred unless and until any then applicable requirements of
state and federal laws and regulatory agencies have been fully complied with to
the satisfaction of the Company and its counsel.
14.Notices. Any notice required to be delivered to the Company under this
Agreement shall be in writing and addressed to the Chief Financial Officer of
the Company at the Company’s principal corporate offices. Any notice required to
be delivered to the Grantee under this Agreement shall be in writing and
addressed to the Grantee at the Grantee’s address as shown in the records of the
Company. Either party may designate another address in writing (or by such other
method approved by the Company) from time to time.
15.Governing Law. This Agreement will be construed and interpreted in accordance
with the laws of the State of Utah without regard to conflict of law principles.
16.Interpretation. Any dispute regarding the interpretation of this Agreement
shall be submitted by the Grantee or the Company to the Committee for review.
The resolution of such dispute by the Committee shall be final and binding on
the Grantee and the Company.
17.PSUs Subject to Plan. This Agreement is subject to the Plan as approved by
the Company’s shareholders. The terms and provisions of the Plan as it may be
amended from time to time are hereby incorporated herein by reference. In the
event of a conflict between any term or provision contained herein and a term or
provision of the Plan, the applicable terms and provisions of the Plan will
govern and prevail.
18.Successors and Assigns. The Company may assign any of its rights under this
Agreement. This Agreement will be binding upon and inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer
set forth herein, this Agreement will be binding upon the Grantee and the
Grantee’s beneficiaries, executors, administrators and the person(s) to whom the
PSUs may be transferred by will or the laws of descent or distribution.
19.Severability. The invalidity or unenforceability of any provision of the Plan
or this Agreement shall not affect the validity or enforceability of any other
provision of the Plan or this Agreement, and each provision of the Plan and this
Agreement shall be severable and enforceable to the extent permitted by law.
20.Discretionary Nature of Plan. The Plan is discretionary and may be amended,
cancelled or terminated by the Company at any time, in its discretion. The grant
of the PSUs in this Agreement does not create any contractual right or other
right to receive any PSUs or other Awards in the future. Future Awards, if any,
will be at the sole discretion of the Company. Any amendment, modification, or
termination of the Plan shall not constitute a change or impairment of the terms
and conditions of the Grantee’s employment with the Company.
21.Amendment. The Committee has the right to amend, alter, suspend, discontinue
or cancel the PSUs, prospectively or retroactively; provided, that, no such
amendment shall adversely affect the Grantee’s material rights under this
Agreement without the Grantee’s consent.
22.Section 162(m). All payments under this Agreement are intended to constitute
“qualified performance-based compensation” within the meaning of Section 162(m)
of the Code. This Award shall be construed and administered in a manner
consistent with such intent.
23.Section 409A. This Agreement is intended to comply with Section 409A of the
Code or an exemption thereunder and shall be construed and interpreted in a
manner that is consistent with the requirements for avoiding additional taxes or
penalties under Section 409A of the Code. Notwithstanding the foregoing, the
Company makes no representations that the payments and benefits provided under
this Agreement comply with Section 409A of the Code and in no event shall the
Company be liable for all or any portion of any taxes, penalties, interest or
other expenses that may be incurred by the Grantee on account of non-compliance
with Section 409A of the Code.
24.No Impact on Other Benefits. The value of the Grantee’s PSUs is not part of
his or her normal or expected compensation for purposes of calculating any
severance, retirement, welfare, insurance or similar employee benefit.
25.Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which together will constitute one and
the same instrument. Counterpart signature pages to this Agreement transmitted
by facsimile transmission, by electronic mail in portable document format
(.pdf), or by any other electronic means intended to preserve the original
graphic and pictorial appearance of a document, will have the same effect as
physical delivery of the paper document bearing an original signature.
26.Acceptance. The Grantee hereby acknowledges receipt of a copy of the Plan and
this Agreement. The Grantee has read and understands the terms and provisions
thereof, and accepts the PSUs subject to all of the terms and conditions of the
Plan and this Agreement. The Grantee acknowledges that there may be adverse tax
consequences upon the vesting or settlement of the PSUs or disposition of the
underlying shares and that the Grantee has been advised to consult a tax advisor
prior to such vesting, settlement or disposition.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
Company:

ZAGG Inc

By:
Name:
Title:
Grantee:

[__________]

Exhibit a
Performance Goals EXHIBIT B
Vesting Schedule