Exhibit 10.35


 


No. 14-PSU-20__-__


Rocky Brands, Inc.


PSU Agreement


 


This PSU Agreement (this “Agreement”)
is made and entered into as of ______________ (the “Grant Date”) by and between Rocky Brands, Inc., an Ohio
corporation (the “Company”) and _________________ (the “Grantee”).


 


WHEREAS, the Company has adopted the
2014 Omnibus Incentive Plan (the “Plan”) pursuant to which PSUs may be granted; and


 


WHEREAS, the Committee has determined
that it is in the best interests of the Company and its shareholders to grant the award of PSUs provided for herein.


 


NOW, THEREFORE, the parties hereto, intending
to be legally bound, agree as follows:


 





 


1.   Grant
of Performance Share Units. Pursuant to Article X of the Plan, the Company hereby grants to the Grantee an Award for a maximum
of _______ Performance Share Units (the “PSUs”) 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 1 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
Goal(s).


 


3.1   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 I. All determinations of whether Performance Goals 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.


 


3.2   Promptly following completion
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 has/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 Performance Share Units. The PSUs are subject to forfeiture until they vest. Except as otherwise provided herein, the PSUs
will vest and become nonforfeitable on the date the Committee certifies the achievement of the Performance Goal(s) in accordance
with Section 3.2, subject to (a) the achievement of the minimum threshold Performance Goal(s) for payout set forth in Exhibit I
attached hereto, and (b) unless otherwise determined by the Committee in its sole discretion, the Grantee’s Continuous Service
from the Grant Date through the last day of the Performance Period. 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
I and shall be rounded to the nearest whole PSU.


 


5.   Termination
of Continuous Service . Except as otherwise expressly provided in this Agreement, and unless otherwise determined in the Committee’s
sole discretion, if the Grantee’s Continuous Service terminates for any reason at any time before all of his or her PSUs
have vested, the Grantee’s unvested PSUs shall be automatically forfeited upon such termination of Continuous Service and
neither the Company nor any Affiliate shall have any further obligations to the Grantee under this Agreement.


 


6.   Payment
of Performance Share Units. 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.


 


7.   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.


 


8.   Rights
as Shareholder.


 


8.1   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.


 


8.2   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).


 


9.   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.










 




    	2



    	 



    

  


10. 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 Section 4.4 of the Plan.


 


11. Tax
Liability and Withholding.


 


11.1 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. The Committee may permit the Grantee to satisfy any federal,
state or local tax withholding obligation by any of the following means, or by a combination of such means:


 


(a)    tendering a cash payment;


 


(b)    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


 


(c)    delivering to the Company previously owned
and unencumbered shares of Common Stock.


 


11.2 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.


 


12. Forfeiture
Conditions. Notwithstanding the foregoing, in the event of termination of Service for Cause, (i) any unvested Restricted
Stock Units shall be forfeited immediately, and (ii) if shares of Common Stock have been delivered to the Grantee in settlement
of Vested Units, then the shares of Common Stock so issued shall be forfeited and returned to the Company.


 


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.


 




    	3



    	 



    

  


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 Ohio 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. Performance
Share Units 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.


 




    	4



    	 



    

  


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.


 


[SIGNATURE PAGE FOLLOWS]


 




    	5



    	 



    

  


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


 


	 	ROCKY BRANDS, INC.
	 	 
	 	By:	 


 


	 	[GRANTEE]
	 	 
	 	 



 






    	6



    	 



    

 


Exhibit 1


 




    	7