Document:

azek-ex1022_504.htm

Exhibit 10.22

THE AZEK COMPANY INC.
2020 OMNIBUS INCENTIVE COMPENSATION PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

This Restricted Stock Unit Award Agreement (this “Award Agreement”) evidences an award of restricted stock units (“RSUs”) by The AZEK Company Inc., a Delaware corporation (“AZEK”) under The AZEK Company Inc. 2020 Omnibus Incentive Compensation Plan (the “Plan”).  Capitalized terms not defined in the Award Agreement have the meanings given to them in the Plan.

Name of Grantee:[Participant Name] (the “Grantee”).

Grant Date:[Grant Date] (the “Grant Date”).

Number of RSUs:[Number of Awards Granted]

	
Vesting Dates:
	
The RSUs shall vest to the extent earned in accordance with Annex A attached hereto (the date on which the RSUs vest, the “Vesting Date”).

The RSUs will vest only if the Grantee is, and has been, continuously employed by AZEK from the Grant Date through the Vesting Date, and any unvested RSUs will be forfeited upon any termination of Employment for any reason.

Notwithstanding the foregoing and any provision in the Plan:

	
 
	
A.
	
Upon a termination of Employment due to death or Disability, a pro rata portion of the RSUs (based on the time elapsed from the beginning of the vesting period in Annex A through the Grantee’s date of termination) will remain outstanding and be eligible to vest on the Vesting Date as if the Grantee had remained Employed through the Vesting Date; 

	
 
	
B.
	
Upon an involuntary termination of Employment by AZEK without Cause or by the Grantee for Good Reason (as may be defined in the Employment Agreement), and subject to the Grantee’s continued compliance with any restrictive covenants in any employment or other agreement with AZEK, a pro rata portion of the RSUs (based on the time elapsed from the beginning of the vesting period in Annex A through the Grantee’s date of termination) will remain outstanding and be eligible to vest on the Vesting Date as if the Grantee had remained Employed through the Vesting Date; and

	
 
	
C.
	
Upon a termination of Employment by AZEK without Cause or by the Grantee for Good Reason (as may be defined in the 

 

 

	
 
		
Employment Agreement), on or within 24 months following a Change in Control, any outstanding, unvested RSUs will immediately vest as of the date of such termination.

	
Delivery Date:
	
No later than 30 days after the Vesting Date (or, if earlier, the date of the Grantee’s termination of Employment without Cause or for Good Reason, as may be defined in the Employment Agreement, on or within 24 months following a Change in Control), AZEK will issue to the Grantee one share of common stock, par value $0.001 per share (each, a “Share”), of AZEK for each vested RSU, subject to applicable tax withholding as provided in Section 3.2 of the Plan (the date on which the Shares are so issued, the “Delivery Date”).

	
Dividend Equivalents
	

	
and Voting:
	
On the Delivery Date, AZEK will pay to the Grantee a cash amount equal to the product of (x) all cash dividends or other distributions (other than cash dividends or other distributions pursuant to which the RSUs were adjusted pursuant to Section 1.6.3 of the Plan), if any, paid on a Share from the Grant Date to the Delivery Date and (y) the number of Shares delivered to the Grantee on the Delivery Date (including for this purpose any Shares which would have been delivered on the Delivery Date but for being withheld to satisfy tax withholding obligations). The Grantee will have no voting rights with respect to any of the Shares underlying any RSUs until such Shares are issued and delivered to the Grantee and the Grantee’s name is entered as a stockholder of record on the books of AZEK.

	
Section 409A: 
	
Payments under this Award Agreement are intended to be exempt from or comply with Section 409A of the Internal Revenue Code (“Section 409A”) to the extent applicable, and this Award Agreement shall be administered accordingly. Notwithstanding anything to the contrary contained in this Award Agreement or any employment agreement the Grantee has entered into with AZEK (“Employment Agreement”), to the extent that any payment under this Award Agreement is determined by AZEK to constitute “non-qualified deferred compensation” subject to Section 409A and is payable to the Grantee by reason of termination of the Grantee’s Employment, then (a) such payment shall be made to the Grantee only upon a “separation from service” as defined for purposes of Section 409A under applicable regulations and (b) if the Grantee is a “specified employee” (within the meaning of Section 409A and as determined by AZEK), such payment shall not be made before the date that is six months after the date of the Grantee’s separation from service (or the Grantee’s earlier death). 

 

 

		
Each payment under this Award Agreement shall be treated as a separate payment for purposes of Section 409A.

	
Tax Representations; 
	
The Grantee is advised to review with his/her own tax advisors the 

	
Withholding:
	
federal, state and local tax consequences of receiving the RSUs. The Grantee hereby represents to AZEK that he/she is relying solely on such advisors and not on any statements or representations of AZEK, its Affiliates or any of their respective agents. If, in connection with the RSUs, AZEK is required to withhold any amounts by reason of any federal, state or local tax, such withholding shall be effected in accordance with Section 3.2 of the Plan. If the RSUs vest prior to payment, then the Grantee agrees to cooperate with AZEK to satisfy any tax withholding obligations, in such manner as determined by the Compensation Committee (“Committee”) in its sole discretion.

	
Transfer Restrictions:
	
The Grantee may not sell, exchange, transfer, assign, pledge, hypothecate or otherwise encumber the RSUs or the Shares underlying the RSUs, other than to the extent provided in Section 3.5 of the Plan.

	
Clawback:
	
The RSUs will be subject to any clawback or recapture policy that the Company may adopt from time to time to the extent provided in such policy and, in accordance with such policy, may be subject to the requirement that the RSUs be repaid to the Company after they have been distributed to the Grantee.

	
Amendment: 
	
The Committee reserves the right at any time to amend the terms and conditions set forth in this Award Agreement, except that the Committee shall not make any amendment in a manner unfavorable to the Grantee (other than if immaterial), without the Grantee’s consent. Any amendment of this Award Agreement shall be in writing and signed by an authorized member of the Committee or a person or persons designated by the Committee.

	
Governing Law:
	
This Award Agreement shall be deemed to be made under, and in all respects be interpreted, construed and governed by and in accordance with, the laws of the State of Delaware without regard to conflict of law principles.

All Other Terms:As set forth in the Plan.

The Plan is incorporated herein by reference.  Except as otherwise set forth in the Award Agreement, the Award Agreement and the Plan constitute the entire agreement and understanding of the parties with respect to the RSUs.  In the event that any provision of the Award Agreement is inconsistent with the Plan, the terms of the Plan will control.  Except as specifically provided herein, in the event that any provision of this Award Agreement is 

 

 

inconsistent with any Employment Agreement, the terms of the Employment Agreement will control.  By accepting this Award Agreement, the Grantee agrees to be subject to the terms and conditions of the Plan.

This Award Agreement may be executed in counterparts, which together will constitute one and the same original.

 

 

IN WITNESS WHEREOF, the parties have caused this Award Agreement to be duly executed and effective as of the Grant Date.

THE AZEK COMPANY INC.

By:

 

Name:Paul J. Kardish
Title:Chief Legal Officer

 

 

 

[Participant Name]

 

 

Exhibit 10.22

 

ANNEX A

Vesting Period:  A percentage of the number of RSUs set forth in the Award Agreement (ranging from 0-200% of the RSUs) will be earned to the extent that the Performance Measures (set forth below) are achieved for the three fiscal years from October 1, 2020 through September 30, 2023, and the earned RSUs will vest, subject to the continued employment conditions set forth in the Award Agreement, on the date on which the Committee certifies the level at which the Performance Measures were achieved.

Performance Measures:

					
	
 
	
Weighting
	
Threshold
(50% of RSUs)
	
Target
(100% of RSUs)
	
Maximum
(200% of RSUs)

	
Cumulative Net Sales
	
45%
	
$[•]
	
$[•]
	
$[•]

	
Cumulative Adjusted EBITDA
	
45%
	
$[•]
	
$[•]
	
$[•]

	
3-Year Average RONTA
	
10%
	
 
	
[•]%
	
 

 

No portion of the RSUs in respect of a Performance Measure will be earned for performance below the threshold level.  In the event of performance above threshold and between levels shown in the table above, the level at which a Performance Measure is achieved will be determined based on straight-line interpolation.  For the avoidance of doubt, the maximum number of RSUs that may be earned for any Performance Measure equals 200% of the number of RSUs subject to that Performance Measure.

Definitions:  For purposes of the Performance Measures:

	
 
	
•
	
“Average Net Tangible Assets” means the Company’s reported total assets less intangible assets less liabilities.  The quarterly balances will be used to determine a yearly average for each year in the Vesting Period.

	
 
	
•
	
“Cumulative Adjusted EBITDA” means the Company’s cumulative earnings before interest, taxes, depreciation and amortization, and adjustments as deemed appropriate in the Company’s annual public filings with the Securities and Exchange Commission (“Adjusted EBITDA”) for the Vesting Period.

	
 
	
•
	
 “Cumulative Net Sales” means the Company’s cumulative net sales as reported in the Company’s public filings with the Securities and Exchange Commission for the Vesting Period.

	
 
	
•
	
“RONTA” means the Company’s Adjusted EBITDA less depreciation divided by Average Net Tangible Assets.

 

 

	
 
	
•
	
“3-Year Average RONTA” means the average of the Company’s RONTA for each year during the Vesting Period.azek-ex1023_503.htm

Exhibit 10.23

THE AZEK Company INC.  
2020 OMNIBUS INCENTIVE COMPENSATION PLAN

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

This Nonqualified Stock Option Award Agreement (this “Award Agreement”) evidences an award of nonqualified stock options (“Options”) by The AZEK Company Inc., a Delaware corporation (“AZEK”) under The AZEK Company Inc. 2020 Omnibus Incentive Compensation Plan (the “Plan”).  Capitalized terms not defined in the Award Agreement have the meanings given to them in the Plan. 

	
Name of Grantee:
	
[Participant Name] (the “Grantee”).

	
Grant Date:
	
[Grant Date] (the “Grant Date”). 

	
Number of Options:
	
[Number of Awards Granted]

 

Each Option represents the right to purchase one share of common stock, par value $0.001 (each, a “Share”), of AZEK at the Exercise Price set forth below on the terms and conditions set forth herein.   

	
Exercise Price:
	
The Exercise Price will be $[Grant Price] (the “Exercise Price”).

	
Vesting Dates:
	
A number of Options equal to one-third of the Options (rounded to the nearest whole number) shall vest on each of the first two anniversaries of the Grant Date, and the remaining Options will vest on the third anniversary of the Grant Date (each such anniversary, a “Vesting Date”). 

The Options will vest only if the Grantee is, and has been, continuously employed by AZEK from the Grant Date through the applicable Vesting Date, and any unvested Options will be forfeited upon any termination of Employment for any reason.

 

Notwithstanding the foregoing, and any provision in the Plan:

 

A.Upon a termination of Employment due to death or Disability, any unvested Options scheduled to vest within 12 months of the Grantee’s date of termination will immediately vest as of the date of such termination;

B.Upon an involuntary termination of Employment by AZEK without Cause or, if applicable, by the Grantee for Good Reason (as defined in the Employment Agreement), and subject to the Grantee’s continued compliance with any restrictive covenants in any employment or other agreement with AZEK, any unvested Options scheduled to vest within 12 months of the Grantee’s date of termination will remain outstanding and continue to vest on the applicable Vesting Date as if the Grantee had remained Employed through such applicable Vesting Date; and

C.Upon a termination of Employment by AZEK without Cause or, if Grantee has an Employment Agreement containing the right to resign for Good Reason, by the Grantee for Good Reason (as defined in the Employment Agreement) on or within 24 months following a Change in Control, any outstanding, unvested Options will immediately vest as of the date of such termination.

 

 

	
Term:
	
The latest date the Option will expire is on the tenth anniversary of the Grant Date (the “Expiration Date”).  However, in the event the Grantee’s Employment terminates for any reason prior to the Expiration Date, vested Options shall remain exercisable for the period as set forth below, unless the Board determines otherwise:  

•Upon a termination of Employment for any reason other than for Cause, Disability or death, the Grantee may exercise the Options until the date that is 90 days following the later of the date of the termination of Employment or the date the Options vest in accordance with the terms of this Award Agreement, but in no event later than the Expiration Date.  

•Upon a termination of Employment for Cause, the Options shall expire and immediately cease to be exercisable upon the date of the termination of Employment.    

•Upon a termination of Employment due to death or Disability, the Options shall expire one year after the date of the termination of Employment, but in no event later than the Expiration Date.

	
Exercise of Option: 
	
Each election to exercise the Option shall be made, in the manner prescribed by the Company, with the third party stock plan administrator appointed by the Company, by the Participant or the Participant's executor, administrator, or legally appointed representative (in the event of the Participant’s incapacity) or the person or persons to whom the Option is transferred by will or the applicable laws of descent and distribution (collectively, the “Option Holder”) and received and approved by the Company and third party stock plan administrator, accompanied by this Agreement and payment in full as provided in the Plan. The purchase price shall be paid to the third party stock plan administrator appointed by the Company by either (i) delivery of cash or check; (ii) wire transfer; or (iii) through a broker-assisted cashless exercise program implemented in connection with the Plan. In the event that the Option is exercised by an Option Holder other than the Participant, the Company will be under no obligation to deliver Shares hereunder unless and until it is satisfied as to the authority of the Option Holder to exercise the Option. 

As soon as reasonably practicable following AZEK’s determination that the Option has been validly exercised, AZEK will issue the relevant number of Shares to be allocated to the Grantee, subject to applicable tax withholding as provided in Section 3.2 of the Plan.

 

 

	
Section 409A: 
	
It is AZEK’s intent that payments under this Award Agreement are exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and that the Award Agreement be administered accordingly.

	
Tax Representations; Withholding: 
	
The Grantee is advised to review with his/her own tax advisors the federal, state and local tax consequences of receiving and exercising the Options. The Grantee hereby represents to AZEK that he/she is relying solely on such advisors and not on any statements or representations of AZEK, its Affiliates or any of their respective agents. If, in connection with the exercise of the Options, AZEK is required to withhold any amounts by reason of any federal, state or local tax, such withholding shall be effected in accordance with Section 3.2 of the Plan.

	
Transfer Restrictions:
	
The Grantee may not sell, exchange, transfer, assign, pledge, hypothecate or otherwise encumber the Options or the Grantee’s right under the Options to receive Shares, other than to the extent provided in Section 3.5 of the Plan.

	
Clawback
	
The Options will be subject to any clawback or recapture policy that the Company may adopt from time to time to the extent provided in such policy and, in accordance with such policy, may be subject to the requirement that the Options be repaid to the Company after they have been distributed to the Grantee.

	
Amendment: 
	
The Compensation Committee (“Committee”) reserves the right at any time to amend the terms and conditions set forth in this Award Agreement, except that the Committee shall not make any amendment in a manner unfavorable to the Grantee (other than if immaterial), without the Grantee’s consent. Any amendment of this Award Agreement shall be in writing and signed by an authorized member of the Committee or a person or persons designated by the Committee.

 

 

	
Governing Law: 
	
This Award Agreement shall be deemed to be made under, and in all respects be interpreted, construed and governed by and in accordance with, the laws of the State of Delaware without regard to conflict of law principles.

	
All Other Terms:
	
As set forth in the Plan.

 

The Plan is incorporated herein by reference.  Except as otherwise set forth in the Award Agreement, the Award Agreement and the Plan constitute the entire agreement and understanding of the parties with respect to the Options.  In the event that any provision of the Award Agreement is inconsistent with the Plan, the terms of the Plan will control.  Except as specifically provided herein, in the event that any provision of this Award Agreement is inconsistent with any Employment Agreement, the terms of the Employment Agreement will control.  By accepting this Award Agreement, the Grantee agrees to be subject to the terms and conditions of the Plan.

This Award Agreement may be executed in counterparts, which together will constitute one and the same original.

 

 

IN WITNESS WHEREOF, the parties have caused this Award Agreement to be duly executed and effective as of the Grant Date.

THE AZEK COMPANY INC.

By:

Name:Paul J. Kardish
Title:Chief Legal Officer

 

 

 

[Participant Name]

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