Document:

Exhibit

Exhibit 4.1        
DESCRIPTION OF CAPITAL STOCK OF MALIBU BOATS, INC.
General 
The following is a summary of the rights of Malibu Boats, Inc.’s (“our” or “we”) Class A Common Stock, Class B Common Stock and preferred stock and of certain provisions of our certificate of incorporation and bylaws. For more detailed information, please see our certificate of incorporation and bylaws, which are filed as exhibits to reports we file with the Securities and Exchange Commission (“SEC”). 
Our certificate of incorporation provides for two classes of common stock. In addition, our certificate of incorporation authorizes shares of undesignated preferred stock, the rights, preferences and privileges of which may be designated from time to time by our Board of Directors. 
Authorized Capitalization 
Our authorized capital stock consists of shares, all with a par value of $0.01 per share, of which: 
		
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	100,000,000 shares are designated as Class A Common Stock; 

		
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	25,000,000 shares are designated as Class B Common Stock; and 

		
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	25,000,000 shares are designated as preferred stock.

Common Stock 
Voting Rights 
Holders of our Class A Common Stock and our Class B Common Stock have voting power over Malibu Boats, Inc., the sole managing member of Malibu Boats Holdings, LLC (the “LLC”), at a level that is consistent with their overall equity ownership of our business. Pursuant to our certificate of incorporation and bylaws, each share of Class A Common Stock entitles the holder to one vote with respect to each matter presented to our stockholders on which the holders of Class A Common Stock are entitled to vote. Each holder of Class B Common Stock is entitled to the number of votes equal to the total number of units of the LLC (“LLC Units”) held by such holder multiplied by the exchange rate specified in the exchange agreement with respect to each matter presented to our stockholders on which the holders of Class B Common Stock are entitled to vote. Accordingly, the holders of LLC Units collectively have a number of votes that is equal to the aggregate number of LLC Units that they hold. Subject to any rights that may be applicable to any then outstanding preferred stock, our Class A and Class B Common Stock vote as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise provided in our certificate of incorporation or bylaws or required by applicable law. Holders of our Class A Common Stock and Class B Common Stock do not have cumulative voting rights. Except in respect of matters relating to the election and removal of directors on our Board of Directors and as otherwise provided in our certificate of incorporation, our bylaws, or as required by law, all matters to be voted on by our stockholders must be approved by a majority of the shares present in person or by proxy at the meeting and entitled to vote on the subject matter. 
Dividends 
Subject to preferences that may apply to any shares of preferred stock outstanding at the time, the holders of our Class A Common Stock are entitled to share equally, identically and ratably in any dividends that our Board of Directors may determine to issue from time to time. Holders of our Class B Common Stock do not have any right to receive dividends. 
Liquidation Rights 
In the event of any voluntary or involuntary liquidation, dissolution or winding up of our affairs, holders of our Class A Common Stock would be entitled to share ratably in our assets that are legally available for distribution 
to stockholders after payment of our debts and other liabilities. If we have any preferred stock outstanding at such time, holders of the preferred stock may be entitled to distribution and/or liquidation preferences. In either such case, we must pay the applicable distribution to the holders of our preferred stock before we may pay distributions to the holders of our Class A Common Stock. Holders of our Class B Common Stock do not have any right to receive a distribution upon a voluntary or involuntary liquidation, dissolution or winding up of our affairs. 
Other Rights 

Holders of our Class A Common Stock have no preemptive, conversion or other rights to subscribe for additional shares. The rights, preferences and privileges of the holders of our Class A Common Stock will be subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future. 
Preferred Stock 
Though we currently have no plans to issue any shares of preferred stock, our Board of Directors has the authority, without further action by our stockholders, to designate and issue up to 25,000,000 shares of preferred stock in one or more series. Our Board of Directors may also designate the rights, preferences and privileges of the holders of each such series of preferred stock, any or all of which may be greater than or senior to those granted to the holders of common stock. Though the actual effect of any such issuance on the rights of the holders of common stock will not be known until our Board of Directors determines the specific rights of the holders of preferred stock, the potential effects of such an issuance include:  
		
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	diluting the voting power of the holders of common stock; 

		
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	reducing the likelihood that holders of common stock will receive dividend payments; 

		
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	reducing the likelihood that holders of common stock will receive payments in the event of our liquidation, dissolution, or winding up; and 

		
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	delaying, deterring or preventing a change-in-control or other corporate takeover. 

There are no outstanding shares of preferred stock. 
Warrants 
There are no outstanding warrants to purchase our Class A Common Stock. 
Anti-Takeover Provisions 
Set forth below is a summary of the relevant provisions of our certificate of incorporation and bylaws and certain applicable sections of the General Corporation Law of the State of Delaware. For additional information we refer you to the provisions of our certificate of incorporation, our bylaws and such sections of the General Corporation Law of the State of Delaware. 
Certificate of Incorporation and Bylaws 
Our certificate of incorporation provides for our Board of Directors to be divided into three classes with staggered three-year terms. Only one class of directors is elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. Because our stockholders do not have cumulative voting rights, our stockholders holding a majority of the shares of common stock outstanding is able to elect all of our directors. Our certificate of incorporation provides that all stockholder actions must generally be effected at a duly called meeting of stockholders and not by a consent in writing, and that only the chair of the board or a majority of our Board of Directors may call a special meeting of stockholders. 
Our certificate of incorporation and bylaws require a 66 2/3% stockholder vote for the amendment or repeal of the bylaws or the provisions in our certificate of incorporation relating to the election and classification of directors. The combination of the classification of our Board of Directors, the lack of cumulative voting and the 66 2/3% stockholder voting requirements makes it more difficult for our existing stockholders to replace our Board of Directors as well as for another party to obtain control of us by replacing our Board of Directors. Because our Board of Directors has the power to retain and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in management. In addition, the authorization of undesignated preferred stock makes it possible for our Board of Directors to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change our control. 
These provisions may have the effect of deterring hostile takeovers or delaying changes in our control or management. These provisions are intended to enhance the likelihood of continued stability in the composition of our Board of Directors and its policies and to discourage certain types of transactions that may involve an actual or threatened acquisition of us. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. Such provisions could have the effect, however, of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our stock that could result from actual or rumored takeover attempts. 

Section 203 of the Delaware General Corporation Law 
We are subject to Section 203 of the Delaware General Corporation Law, which prohibits a Delaware corporation from engaging in any business combination with any interested stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:  
		
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	before such date, the Board of Directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; 

		
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	upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (1) by persons who are directors and also officers and (2) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or 

		
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	on or after such date, the business combination is approved by the Board of Directors and authorized at an annual or special meeting of the stockholders, and not by written consent, by the affirmative vote of at least 66 2/3% of the outstanding voting stock that is not owned by the interested stockholder. 

In general, Section 203 defines business combination to include the following:  
		
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	any merger or consolidation involving the corporation and the interested stockholder; 

		
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	any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder; 

		
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	subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; 

		
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	any transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series of the corporation beneficially owned by the interested stockholder; or 

		
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	the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through the corporation. 

In general, Section 203 defines an “interested stockholder” as an entity or person who, together with the person’s affiliates and associates, beneficially owns, or within three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation. 
The overall effect of the foregoing provisions may be to deter a future tender offer. Stockholders might view such an offer to be in their best interest should the offer include a substantial premium over the market price of our common stock at that time. In addition, these provisions may have the effect of assisting our management to retain its position and place it in a better position to resist changes that the stockholders may want to make if dissatisfied with the conduct of our business. 
Limitations of Liability and Indemnification Matters 
We have adopted provisions in our certificate of incorporation that limit or eliminate the liability of our directors for monetary damages for breach of their fiduciary duties, except for liability that cannot be eliminated under the Delaware General Corporation Law. Accordingly, our directors will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except with respect to any of the following:  
		
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	any breach of their duty of loyalty to us or our stockholders; 

		
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	acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law; 

		
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	unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; or 

		
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	any transaction from which the director derived an improper personal benefit. 

This limitation of liability does not apply to liabilities arising under the federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission. If Delaware law is amended to authorize the further elimination or limiting of director liability, then the liability of our directors will be eliminated or limited to the fullest extent permitted by Delaware law as so amended. 

Our certificate of incorporation and our bylaws also provide that we shall indemnify our directors and executive officers and shall indemnify our other officers and employees and other agents to the fullest extent permitted by law. We believe that indemnification under our bylaws covers at least negligence and gross negligence on the part of indemnified parties. Our bylaws also permit us to secure insurance on behalf of any officer, director, employee or other agent for any liability arising out of his or her actions in this capacity, regardless of whether our bylaws would permit indemnification. 
We have entered into indemnification agreements with each of our directors and executive officers that are, in some cases, broader than the specific indemnification provisions provided by Delaware law and our governing documents, and may provide additional procedural protection. These agreements require us, among other things, to:  
		
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	indemnify officers and directors against certain liabilities that may arise because of their status as officers and directors; 

		
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	advance expenses, as incurred, to officers and directors in connection with a legal proceeding subject to limited exceptions; and 

		
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	cover officers and directors under any general or directors’ and officers’ liability insurance policy maintained by us. 

We believe that these provisions and agreements are necessary to attract and retain qualified persons as directors and executive officers. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Securities Act”) may be permitted to directors, officers or persons controlling our company pursuant to the foregoing provisions, the opinion of the SEC is that such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. 
In addition, we maintain standard policies of insurance under which coverage is provided to our directors and officers against loss arising from claims made by reason of breach of duty or other wrongful act, and to us with respect to payments which may be made by us to such directors and officers pursuant to the above indemnification provisions or otherwise as a matter of law. 
Transfer Agent and Registrar 
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC. 
Exchange Listing 
Our Class A Common Stock is listed on the Nasdaq Global Select Market under the symbol “MBUU.”Exhibit

Exhibit 10.16
MALIBU BOATS, INC.
DIRECTORS’ COMPENSATION POLICY
(As Amended November 2, 2017)
Directors of Malibu Boats, Inc., a Delaware corporation (the “Company”), who are not employed by the Company or one of its subsidiaries (“Outside Directors”) are entitled to the compensation set forth below for their service as a member of the Board of Directors (the “Board”) of the Company. The Board has the right to amend this policy from time to time.
	
		
	Cash Compensation
	 

	Annual Retainer
	$65,000

	Board Chairperson Retainer
	$20,000

	Additional Committee Chair Retainers
	 

	Audit Committee Chair
	$15,000

	Compensation Committee Chair
	$15,000

	Nominating and Governance Committee Chair
	$  5,000

	Equity Compensation
	 

	Annual Equity Award
	$75,000

Cash Compensation
Each Outside Director will be entitled to an annual cash retainer while serving on the Board in the amount set forth above (the “Annual Retainer”). An Outside Director who serves as the Chairperson of the Board or the Chair of the Audit Committee, the Compensation Committee or the Nominating and Governance Committee of the Board will be entitled to an additional annual cash retainer while serving in that position in the applicable amount set forth above (an “Additional Board and Committee Chair Retainer”).
The amounts of the Annual Retainer and Additional Board and Committee Chair Retainers reflected above are expressed as annualized amounts. These retainers will be paid on a quarterly basis, at the end of each quarter in arrears, and will be pro-rated if an Outside Director serves (or serves in the corresponding position, as the case may be) for only a portion of the quarter (with the proration based on the number of calendar days in the quarter that the director served as an Outside Director or held the particular position, as the case may be).  The Annual Retainer and Additional Board and Committee Chair Retainers set forth above are effective October 1, 2017.
Equity Awards
Annual Equity Awards for Continuing Board Members
On the date of each annual meeting of the Company’s stockholders, each Outside Director then in office following the meeting will automatically be granted an annual equity award consisting of either fully vested shares of the Company’s common stock or fully vested stock units payable on a deferred basis, as determined in accordance with each Outside Director’s election made in accordance with the Company’s Outside Director Stock-For-Fees Program below (and if no such election is made, the Outside Director’s award will consist of fully vested shares of the Company’s common stock). The number of shares of common stock or stock units granted as each Outside Director’s annual equity award shall be determined by dividing (1) the Annual Equity Award grant value set forth above by (2) the per-share closing price of the Company’s common stock on the date of such annual meeting, with the result rounded down to the nearest whole unit. In the event that more than one annual meeting of the Company’s stockholders occurs during a given fiscal year, annual equity awards will be made only in connection with the first such meeting to occur in that year.
For each new Outside Director appointed or elected to the Board other than on the date of an annual meeting of the Company’s stockholders, on the date that the new Outside Director first becomes a member of the Board, the new Outside Director will automatically be entitled to a pro-rata portion of the annual equity award (a “Pro-Rata Annual Award”) determined by dividing (1) a pro-rata portion of the Annual Equity Award grant value set forth above by (2) the per-share closing price of the Company’s common stock on the date the new Outside Director first became a member of the Board. The pro-rata portion of the Annual Equity Award grant value for purposes of a Pro-Rata Annual Award will equal the Annual Equity Award grant value set forth above multiplied by a fraction (not greater than one), the numerator of which is 12 minus the number of whole months that as of the particular grant date had elapsed since the Company’s last annual meeting of 

stockholders at which annual equity awards were granted by the Company to Outside Directors, and the denominator of which is 12, with the result to be rounded down to the nearest whole unit. Each Pro-Rata Annual Award will be fully vested on the grant date, and will consist of either fully vested shares of the Company’s common stock or fully vested stock units payable on a deferred basis, as determined in accordance with each Outside Director’s election made in accordance with the Company’s Outside Director Stock-For-Fees Program below (and if no such election is made, the Outside Director’s Pro-Rata Annual Award will consist of fully vested shares of the Company’s common stock).
Provisions Applicable to All Outside Director Equity Awards
Each equity award will be made under and subject to the terms and conditions of the Company’s Long-Term Incentive Plan (the “Plan”) or any successor equity compensation plan approved by the Company’s stockholders and in effect at the time of grant.
Expense Reimbursement
All Outside Directors will be entitled to reimbursement from the Company for their reasonable travel (including airfare and ground transportation), lodging and meal expenses incident to meetings of the Board or committees thereof or in connection with other Board related business.
Elective Grants of Equity Awards
The Company has established the following Outside Director Stock-For-Fees Program (the “Program”) effective as of the first business day following the date of the closing of the Company’s initial public offering. Pursuant to the Program, Outside Directors may elect that their Annual Retainer and Additional Board and Committee Chair Retainers be converted into either (1) shares of the Company’s common stock or (2) rights to receive an award of stock units under the Plan that will be paid on a deferred basis. Pursuant to the Program, Outside Directors may also elect to receive any annual equity award described above in stock units under the Plan that will be paid on a deferred basis.
The Program is an Appendix to the Plan, and any shares of common stock issued under the Program under the Plan shall be charged against the applicable share limits of the Plan. Except as otherwise expressly provided herein, the provisions of the Plan shall govern all stock units credited and shares issued pursuant to the Program.
An Outside Director may elect to exchange the right to receive payment of all or a portion of his or her Annual Retainer and Additional Board and Committee Chair Retainers payable with respect to a particular calendar year for the right to receive either a grant of (1) shares of common stock or (2) stock units under the Program in lieu of such retainers (or portion thereof, as applicable). An Outside Director may also elect to receive all or a portion of his or her annual equity award described above in stock units under the Plan that will be paid on a deferred basis pursuant to the terms of the Program. Such election shall be made by completing the election form as the Board may prescribe from time to time (an “ Election Form “), and filing such completed form with the Company by the deadline determined below. Once an Election Form is validly filed with the Company, it shall automatically continue in effect for future calendar years unless the Outside Director changes or revokes his or her Election Form prior to the beginning of any such future calendar years.
With respect to any calendar year, except as otherwise provided below for new directors, an Outside Director may file an Election Form with the Company on or before December 31 immediately preceding the start of such calendar year or any earlier deadline that may be established with respect to the particular year. Such Election Form shall become irrevocable as of such December 31 and shall be effective with respect to the Annual Retainer and Additional Board and Committee Chair Retainers for the calendar year commencing on the January 1 that next follows such December 31.
Notwithstanding anything to the contrary in the Program, to the extent permissible under Section 409A of the Code, any individual who first becomes an Outside Director after the date hereof and during the first three (3) quarters of a particular calendar year may file an Election Form with the Company no later than thirty (30) days after such individual first becomes an Outside Director. Such Election Form shall be irrevocable and shall be effective with respect to the director’s Annual Retainer and Additional Board and Committee Chair Retainers paid for services rendered during the calendar year in which the Election Form is filed for any quarter in such calendar year that commences after such Election Form is filed with the Company. Such Election Form may also defer payment of the portion of the Outside Director’s annual equity award attributable to services performed after the date the Election Form is filed.
The Annual Retainer and Additional Board and Committee Chair Retainers are paid by the Company on a quarterly basis. Upon the last business day of each quarter of a calendar year for which an Outside Director has made a valid and timely election to receive either shares of common stock or stock units under the Program in lieu of all or a portion of his or her Annual Retainer and Additional Board and Committee Chair Retainers for that quarter (each, a “Crediting Date”), the Company shall automatically grant the Outside Director a number of shares of common stock or stock units, as applicable, determined by dividing (i) the amount of the Exchanged Retainer, by (ii) the per-share closing price of the Company’s common stock on that Crediting Date, with the result rounded down to the nearest whole share or unit. The “Exchanged Retainer” is that portion of 

the Outside Director’s Annual Retainer and Additional Board and Committee Chair Retainers that would have otherwise been paid in cash to the Outside Director for his or her service on the Board during that quarter but for his or her election pursuant to the Program. Any fractional amount less than the price of a share of the common stock as of such Crediting Date shall be paid in cash. 
Stock units shall be used solely as a device for the determination of the number of shares of common stock eventually to be delivered to an Outside Director upon payment of such stock units. Stock units shall not be treated as property or as a trust fund of any kind. Stock units granted to an Outside Director pursuant to the Program shall be credited to an unfunded bookkeeping account maintained by the Company on behalf of each Outside Director to which the Outside Director’s stock units shall be credited. Not less frequently than annually, the Company shall provide each Outside Director with a current statement of his or her account reflecting all credits of stock units as of such date.
An Outside Director shall have no rights as a stockholder of the Company, no dividend rights (except as expressly provided below with respect to dividend equivalent rights) and no voting rights with respect to stock units credited under the Program and any shares of common stock underlying or issuable in respect of such stock units until such shares are actually issued to and held of record by the Outside Director. No assets have been secured or set aside by the Company with respect to the stock units and, if amounts become payable to an Outside Director pursuant to the Program, the Outside Director’s rights with respect to such amounts shall be no greater than the rights of any general unsecured creditor of the Company.
As of any date that the Company pays an ordinary cash dividend on its Common Stock, the Company shall credit the Outside Director’s account with an additional number of stock units equal to (a) the amount of the ordinary cash dividend paid by the Company on a single share of common stock on that date, multiplied by (b) the number of stock units credited to the Outside Director’s account as of the record date for such ordinary cash dividend (including any stock units previously credited as dividend equivalents and with such total number subject to adjustment pursuant to Section 3.3 of the Plan), divided by (c) the closing price of a share of common stock on that date. No such payment shall be made with respect to any stock units which, as of the record date for such ordinary cash dividend, have been paid pursuant to the payment terms below.
Any stock units credited to an Outside Director’s account under the Program shall be fully vested at all times, and shall be payable in an equivalent number of shares of common stock (either by delivering one or more certificates, registered in the name of the Outside Director, for such shares or by entering such shares in the name of the Outside Director in book-entry form, as determined by the Company in its discretion) upon or as soon as practicable, and in all events within 30 days, following the first to occur of (A) the date of the Outside Director’s Separation from Service or (B) the occurrence of a change in control under the Plan that constitutes a “change in the ownership,” a “change in the effective control,” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of the Treasury Regulations promulgated under Section 409A of the Code.
As used herein, a “Separation from Service” occurs when an Outside Director dies, retires, or otherwise has a termination of service with the Company that constitutes a “separation from service” within the meaning of Treasury Regulation Section 1.409A-1(h), without regard to the optional alternative definitions available thereunder. Notwithstanding the foregoing, in the event the Outside Director is a “specified employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the date of the Outside Director’s Separation from Service, the Outside Director shall not be entitled to payment of any stock units credited under the Program that would otherwise be paid in connection with his or her Separation from Service until the earlier of (A) the date which is six (6) months after his or her Separation from Service with the Company for any reason other than death, or (ii) the date of the Outside Director’s death (and, in either case, payment will be made within thirty (30) days following that event); provided that this six-month delay shall apply only to the extent such delay in payment is required to comply with, and avoid the imputation of any tax, penalty or interest under, Section 409A of the Code.
Shares issued under the Program and stock units credited under the Program shall be subject to the terms of the Plan. Shares of common stock issued with respect to the Program may be issued under the Plan or may be issued under any other authority of the Company. Notwithstanding the foregoing provisions, in the event that the Company is not able to issue shares of Common Stock in payment of any stock units credited under the Program, such stock units shall be settled by payment in cash equal to the applicable number of stock units not eligible to be paid in shares, multiplied by the fair market value of a share of common stock on the date the stock units are paid.
Notwithstanding anything contained in the Program or in the Plan to the contrary, prior to the time the stock units are paid, neither the stock units nor any interest therein or amount payable in respect thereof may be sold, assigned, transferred, pledged or otherwise disposed of, alienated or encumbered, either voluntarily or involuntarily, other than by will or the laws of descent and distribution. The Program, including any Election Forms filed hereunder, shall be construed and interpreted to comply with Section 409A of the Code.

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