Document:

Exhibit 10.58

 

 

Form of Director Deferred Stock Unit Agreement

 

This Director Deferred Stock Unit Agreement (the “Agreement”), by and between HD Supply Holdings, Inc., a Delaware corporation (the “Company”), and                          (the “Director”) is being entered into pursuant to the HD Supply Holdings, Inc. 2013 Omnibus Incentive Plan (the “Plan”).  Capitalized terms that are used but not defined herein shall have the respective meanings given to them in the Plan.

 

WHEREAS, the Board authorized Director’s annual compensation for service as a member of the Board, a portion of which is to be paid in cash (the “Annual Cash Retainers”);

 

WHEREAS, Director has submitted to Company a deferral election form (the “Deferral Election Form”) whereby Director has elected to receive the Annual Cash Retainers in the form of Deferred Stock Units subject to the terms and conditions set forth herein.

 

NOW, THEREFORE, Company and Director hereby agree as follows:

 

Section 1.                                           Grant of Deferred Stock Units.  Company hereby evidences and confirms its grant to Director of the number of Deferred Stock Units specified in the most recent account balance statement provided to Director by Company. The number of Deferred Stock Units credited to Director’s account and subject to this Agreement shall be determined by dividing the dollar amount of the Annual Cash Retainers being converted to Deferred Stock Units for any calendar year (as evidenced by the Deferral Election Form submitted by Director) by the Fair Market Value of the Common Stock on the date the Annual Cash Retainers would otherwise have been payable to Director as provided in Company’s Director Compensation Policy (plus any dividend equivalents credited to Director’s account in accordance with Section 5(b)). Such Deferred Stock Units are being granted in lieu of, and in full satisfaction of Company’s obligation to pay to Director the Annual Cash Retainers. This Agreement is entered into, and the terms and conditions of the Deferred Stock Units are subject to the terms and conditions of the Plan, which are incorporated by reference herein.  If there is any inconsistency between any express provision of this Agreement and any express term of the Plan, the express term of the Plan shall govern.  All Deferred Stock Units are fully vested upon grant.

 

Section 2.                                           Settlement of Deferred Stock Units.

 

(a)                                 Timing of Settlement.  Deferred Stock Units shall be settled at the time(s) set forth in the Deferral Election Form (such date, the “Settlement Date(s)”).

 

(b)                                 Mechanics of Settlement.  On the Settlement Date(s), Company shall electronically issue to Director one whole share of Common Stock for each Deferred Stock Unit, and, upon such issuance, Director’s rights in respect of such Deferred Stock Unit shall be extinguished.  In the event that there is any fractional Deferred Stock Unit, such fractional Deferred Stock Unit shall be settled through a cash payment equal to the portion of Deferred Stock Unit multiplied by the Fair Market Value of the Common Stock on the Settlement Date.  No fractional shares of Common Stock shall be issued.

 

Section 3.                                           Securities Law Compliance.  Notwithstanding any other provision of this Agreement, Director may not sell the shares of Common Stock acquired upon settlement of the Deferred Stock Units unless such shares are registered under the Securities Act of 1933, as amended (the “Securities Act”), or, if such shares are not then so registered, such sale would be exempt from the registration requirements of the Securities Act.  The sale of such shares must also comply with other applicable laws and regulations governing the Common Stock, and Director may not sell the shares of Common Stock if Company determines that such sale would not be in material compliance with such laws and regulations.

 

 

Section 4.                                           Restriction on Transfer; Non-Transferability of Deferred Stock Units.  The Deferred Stock Units are not assignable or transferable, in whole or in part, and they may not, directly or indirectly, be offered, transferred, sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or encumbered (including, but not limited to, by gift, operation of law or otherwise) other than by will or by the laws of descent and distribution to the estate of Director upon Director’s death.  Any purported transfer in violation of this Section 4 shall be void ab initio.

 

Section 5.                                           Miscellaneous.

 

(a)                                 Withholding.  Upon the settlement of Deferred Stock Units and (if applicable) delivery of cash in respect of any Deferred Stock Units, Director shall be obligated to satisfy any applicable U.S. federal, state and local and non-U.S. tax withholding or other similar charges or fees that may arise in connection therewith.

 

(b)                                 Dividend Equivalents.  In the event that Company pays a dividend on a share of Common Stock following the applicable grant date and prior to the applicable Settlement Date, there shall be credited to the account of Director in respect of each outstanding Deferred Stock Unit an amount equal to the amount of such dividend.  The amount so credited shall be deferred (without interest, unless the Board determines otherwise) until the settlement of such related Deferred Stock Unit and shall be forfeited upon the forfeiture of such related Deferred Stock Unit.  The Board may, in its discretion, determine, in connection with any such crediting, whether such crediting will be in cash, additional Deferred Stock Units or other notional instrument; provided, that in the absence of any such determination, such crediting will be in the form of additional Deferred Stock Units.

 

(c)                                  Authorization to Share Personal Data.  Director authorizes Company or any Affiliate of the Company that has or lawfully obtains personal data relating to Director to divulge or transfer such personal data to Company or to a third party, in each case in any jurisdiction, if and to the extent reasonably appropriate in connection with this Agreement or the administration of the Plan.

 

(d)                                 No Rights as Stockholder; No Voting Rights.  Director shall have no rights as a stockholder of the Company with respect to any shares of Common Stock covered by the Deferred Stock Units prior to the issuance of such shares of Common Stock.

 

(e)                                  No Right to Continued Service on Board. Nothing in this Agreement shall be deemed to confer on Director any right to continue in the service of the Company or any Subsidiary, or to interfere with or limit in any way the right of the Company or any Subsidiary to terminate such service at any time.

 

(f)                                   Interpretation.  The Board shall have full power and discretion to construe and interpret the Plan (and any rules and regulations issued thereunder) and this Award.  Any determination or interpretation by the Board under or pursuant to the Plan or this Award shall be final and binding and conclusive on all persons affected hereby.

 

(g)                                  Forfeiture of Awards.  The Deferred Stock Units (and gains earned or accrued in connection therewith) shall be subject to such generally applicable policies as to forfeiture and recoupment (including, without limitation, upon the occurrence of material financial or accounting errors, financial or other misconduct or Competitive Activity) as may be adopted by the Administrator or the Board from time to time and communicated to Director, and is otherwise subject to forfeiture or disgorgement of profits as provided by the Plan.

 

(h)                                 Consent to Electronic Delivery.  By entering into this Agreement and accepting the Deferred Stock Units evidenced hereby, Director hereby consents to the delivery of information (including, without limitation, information required to be delivered to Director pursuant to applicable securities laws) regarding the Company and its Subsidiaries, the Plan, this Agreement and the Deferred Stock Units via Company web site or other electronic delivery.

 

(i)                                     Binding Effect; Benefits.  This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns.  No provision of this Agreement, express or implied, is intended or shall be construed to give any person other than the parties to this Agreement or their respective successors

 

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or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

 

(j)                                    Amendment.  This Agreement may not be amended, modified or supplemented orally, but only by a written instrument executed by Director and Company.

 

(k)                                 Assignability.  Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by Company or Director without the prior written consent of the other party.

 

(l)                                     Applicable Law.  This Agreement shall be governed in all respects, including, but not limited to, as to validity, interpretation and effect, by the internal laws of the State of Delaware, without reference to principles of conflict of law that would require application of the law of another jurisdiction.

 

(m)                             Waiver of Jury Trial.  Each party hereby waives, to the fullest extent permitted by applicable law, any right he, she or it may have to a trial by jury in respect of any suit, action or proceeding arising out of this agreement or any transaction contemplated hereby.  Each party (i) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (ii) acknowledges that he, she or it and the other party hereto have been induced to enter into the Agreement by, among other things, the mutual waivers and certifications in this Section 5(m).

 

(n)                                 Limitations of Actions. No lawsuit relating to this Agreement may be filed before a written claim is filed with the Administrator and is denied or deemed denied as provided in the Plan and any lawsuit must be filed within one year of such denial or deemed denial or be forever barred.

 

(o)                                 Section and Other Headings, etc.  The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

 

(p)                                 Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, Company and Director have executed this Agreement as of the date first above written.

 

	
 
    	
HD SUPPLY HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Ricardo J. Nuñez
    
	
 
    	
 
    	
SVP, General   Counsel and Corporate Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
Date Signed:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DIRECTOR
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Date Signed:
    	
 
    
				

 

3Exhibit 10.59

 

 

 

BOARD OF DIRECTORS COMPENSATION POLICY

(Effective on closing date of Company’s initial public offering)

 

1.              ANNUAL BOARD RETAINER 

 

Each non-employee director who is elected at the annual shareholders meeting to serve a one-year term is paid an annual fee for service of $160,000, of which $60,000 is paid in quarterly cash installments and $100,000 is paid in the form of restricted stock units (“RSUs”) under the Company’s 2013 Omnibus Incentive Plan. The number of RSUs is determined by dividing the dollar amount of the fee to be granted as RSUs by the closing stock price of a share of Company common stock on the grant date. The RSUs cliff vest on the earlier of the first anniversary of the grant date or the next annual shareholders meeting after the grant date, although directors who stop serving on the board during the year due to death, permanent disability or retirement at age 75 receive a pro-rata number of shares based on the number of days of service during the year. RSUs are credited with dividends during the one-year vesting period. As the RSUs vest, dividends credited to the RSUs similarly vest. If any RSUs are forfeited, dividends related to the forfeited shares are also forfeited.

 

2.              ANNUAL COMMITTEE RETAINER

 

Each non-employee director appointed to serve as a member of a standing board committee other than the Audit Committee receives an annual cash retainer of $7,500 for service on each such committee. Audit Committee members receive an annual cash committee retainer of $10,000. The committee retainer is in addition to the board retainer. Committee Chairs are not eligible to receive the committee retainer, but instead receive the committee chair retainer described in Section 3.

 

3.              ANNUAL COMMITTEE CHAIR RETAINER 

 

Each non-employee director appointed to serve as chairperson of a standing board committee other than the Audit Committee receives an annual cash retainer of $15,000 for service as chair of each such committee. The chairperson of the Audit Committee receives an annual cash committee chair retainer of $20,000. The committee chair retainer is in addition to the board retainer.

 

4.              PRO RATA RETAINERS FOR NEW DIRECTORS

 

Director compensation is paid for the twelve-month period commencing with each annual shareholders meeting. Directors appointed to board service after the date of the annual shareholders meeting receive a pro rata portion of cash and equity retainers based on the remaining number of days during such compensation year.

 

 

5.              PAYMENT OF RETAINERS

 

Cash retainers are paid to directors in four equal installments payable within 30 days of each quarterly board meeting, provided that the director’s service has not ended before such date. No remaining quarterly installments are payable once the director leaves board service for reasons other than death, permanent disability or retirement at age 75. The grant date for the annual equity retainer is the date of the annual shareholders meeting. Shares in payment of vested equity awards will be delivered within 30 days of the vesting date. Payment of equity is in whole shares and any fractional share is paid in cash. If the director elects to defer all or any portion of the cash and equity retainers, payment is governed by the terms of the applicable deferral arrangement, as discussed below.

 

6.              DEFERRAL OPTION FOR EQUITY RETAINER

 

Directors may choose to defer receipt of all or a portion of their vested RSUs to separation from board service by timely completing a deferral election form pursuant to the terms and conditions of the RSU award agreement under the Company’s 2013 Omnibus Incentive Plan. Deferred RSUs are paid at the director’s election in a lump sum or equal annual installments over a period not to exceed three years. The lump sum or first installment payment will be made within 30 days of separation from board service in the form of shares of Company common stock. During the deferral period, deferred RSUs are credited with dividends, which are paid along with the deferred RSUs at the end of the deferral period in the form of shares of Company common stock.

 

7.              OPTION TO CONVERT CASH RETAINERS TO COMPANY STOCK

 

Directors may choose to convert all or a portion of their cash retainers to deferred stock units (“DSUs”) payable in shares of Company common stock on separation from board service by timely completing an election form pursuant to the terms and conditions of a DSU agreement under the Company’s 2013 Omnibus Incentive Plan. The number of DSUs is determined by dividing the cash being converted to DSUs by the closing stock price of a share of Company common stock on the date the cash retainers are otherwise payable. DSUs are fully vested at all times and are paid at the director’s election in a lump sum or equal annual installments over a period not to exceed three years. The lump sum or first installment payment will be made within 30 days of separation from board service in the form of shares of Company common stock. During the deferral period, deferred DSUs are credited with dividends, which are paid along with the deferred DSUs at the end of the deferral period in the form of shares of Company common stock.

 

8.              TRAVEL REIMBURSEMENT

 

Directors are reimbursed for reasonable travel expenses incurred in connection with attending board and committee meetings, as well as travel on other board business at the request of the Company or the board (such as branch visits or other Company function). Reimbursement is subject to any maximum reimbursement as may be established by the board from time to time.

 

9.              STOCK OWNERSHIP GUIDELINES

 

Directors are obliged to own shares of Company common stock valued at three times the annual cash board retainer, pursuant to the terms of the Stock Ownership Guidelines adopted by the Compensation Committee (copy attached).

 

10.       MODIFICATION

 

The Board reserves the right to amend or terminate, in its discretion, any component of director compensation as it deems appropriate, including the underlying plans providing such compensation.

 

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