Document:

Exhibit 10.19

 

YETI HOLDINGS, INC.

2018 EQUITY AND INCENTIVE COMPENSATION PLAN

 

NON-EMPLOYEE DIRECTOR DEFERRED STOCK UNIT AGREEMENT

 

This AGREEMENT (this “Agreement”) is made as of                   , 2018 (the “Date of Grant”), by and between YETI Holdings, Inc., a Delaware corporation (the “Company”), and                    (the “Grantee”).

 

1.                                      Certain Definitions. Capitalized terms used, but not otherwise defined, in this Agreement will have the meanings given to such terms in the Company’s 2018 Equity and Incentive Compensation Plan, as may be amended from time to time (the “Plan”).

 

2.                                      Grant of DSUs. Subject to and upon the terms, conditions and restrictions set forth in this Agreement and in the Plan, the Company hereby grants to the Grantee              deferred stock units (the “DSUs”). For purposes of this Agreement, the DSUs shall be considered Restricted Stock Units for purposes of the Plan. Each DSU shall represent the right of the Grantee to receive one share of Common Stock subject to and upon the terms and conditions of this Agreement.

 

3.                                      Restrictions on Transfer of DSUs. Neither the DSUs evidenced hereby nor any interest therein or in the shares of Common Stock underlying such DSUs shall be transferable prior to payment to the Grantee pursuant to Section 7 hereof, other than as described in Section 15 of the Plan.

 

4.                                      Vesting of DSUs. Subject to the terms and conditions of Sections 5 and 6  hereof, the DSUs covered by this Agreement shall become nonforfeitable and payable to the Grantee pursuant to Section 7 hereof with respect to one-hundred percent (100%) of the DSUs on the earlier of (a) the first anniversary of the Date of Grant or (b) immediately prior to the [first]/[next following] annual meeting of the Company’s Stockholders (either such date, the “Vesting Date”), if the Grantee continues to serve as a Director until the Vesting Date.

 

5.                                      Accelerated Vesting of DSUs. Notwithstanding the provisions of Section 4 hereof, the DSUs covered by this Agreement will become nonforfeitable and payable to the Grantee pursuant to Section 7 hereof earlier than the time provided in Section 4 hereof if any of the following circumstances apply at a time when the DSUs have not been forfeited (to the extent the DSUs have not previously become nonforfeitable):

 

(a)                                 Death or Disability. The DSUs subject to this Agreement shall become nonforfeitable and payable to the Grantee pursuant to Section 7 hereof upon the Grantee’s death or Disability that shall occur while the Grantee is a Director.

 

For purposes of this Agreement, the term “Disability” shall mean the Grantee’s medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months and which results in the Grantee being unable to engage in any

 

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substantial gainful activity, in any case, as determined by the members of the Board other than the Grantee.

 

(b)                                 Change in Control. The DSUs subject to this Agreement shall become nonforfeitable and payable to the Grantee pursuant to Section 7 hereof upon the occurrence of a Change in Control while the Grantee is a Director.

 

6.                                      Forfeiture of Awards. Except to the extent the DSUs covered by this Agreement have become nonforfeitable pursuant to Section 4 or 5  hereof, the DSUs covered by this Agreement shall be forfeited automatically, without the payment of consideration therefor and without further notice on the date that the Grantee ceases to be a Director.

 

7.                                      Form and Time of Payment of DSUs. Payment in respect of the DSUs, after and to the extent they have become nonforfeitable pursuant to Section 4 or 5  hereof, shall be made in the form of shares of Common Stock. Payment shall be made according to the election made by the Grantee on the initial election form provided by the Company to the Grantee, a copy of which is attached hereto as Exhibit A.

 

8.                                      Dividend Equivalents; Other Rights.

 

(a)                                 The Grantee shall have no rights of ownership in the shares of Common Stock underlying the DSUs and no right to vote the shares of Common Stock underlying the DSUs until the date on which the shares of Common Stock underlying the DSUs are issued or transferred to the Grantee pursuant to Section 7 hereof.

 

(b)                                 From and after the Date of Grant and until the earlier of (i) the time when the DSUs become nonforfeitable and are paid to the Grantee in accordance with Section 7 hereof or (ii) the time when the Grantee’s right to receive the shares of Common Stock in payment of the DSUs is forfeited in accordance with Section 6 hereof, on the date that the Company pays a cash dividend (if any) or other cash distribution to holders of shares of Common Stock generally, the Grantee shall be entitled to a number of additional DSUs determined by dividing (A) the product of (x) the dollar amount of such cash dividend or other cash distribution paid per share of Common Stock on such date and (y) the total number of DSUs (including dividend equivalents credited thereon) previously credited to the Grantee pursuant to this Agreement as of such date, by (B) the Market Value per Share on such date. Such dividend equivalents (if any) shall be subject to the same applicable terms and conditions (including vesting, forfeitability, dividend equivalents and payment) as apply to the DSUs as to which the dividend equivalents were credited.

 

(c)                                  The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver shares of Common Stock in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

 

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9.                                      Adjustments. The number of shares of Common Stock issuable for each DSU and the other terms and conditions of the grant evidenced by this Agreement are subject to adjustment as provided in Section 11 of the Plan.

 

10.                               Compliance With Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue any of the shares of Common Stock pursuant to this Agreement if the issuance thereof would result in violation of any such law.

 

11.                               Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that (a) no amendment shall adversely affect the rights of the Grantee under this Agreement without the Grantee’s written consent, and (b) the Grantee’s consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code.

 

12.                               Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

 

13.                               Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with this Agreement.

 

14.                               Successors and Assigns. Without limiting Section 3 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.

 

15.                               Governing Law. This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Delaware, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.

 

16.                               Notices. Any notice to the Company provided for herein shall be in writing (including electronically) to the Company, marked Attention: General Counsel, and any notice to the Grantee shall be addressed to the Grantee at the Grantee’s address on file with the Company at the time of such notice. Except as otherwise provided herein, any written notice shall be deemed to be duly given if and when delivered personally or deposited in the United States mail, postage and fees prepaid, and addressed as aforesaid. Any party may change the address to which notices are to be given hereunder by written notice to the other party as herein specified (provided that for this purpose any mailed notice shall be deemed given on the third business day following deposit of the same in the United States mail).

 

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17.                               Electronic Delivery. The Company may, in its sole discretion, deliver any documents related to the DSUs and the Grantee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

 

18.                               No Right to Future Awards or Board Membership. The grant of the DSUs under this Agreement to the Grantee is a voluntary, discretionary award being made on a one-time basis and it does not constitute a commitment to make any future awards. Nothing contained in this Agreement shall confer upon the Grantee any right to continued service as a member of the Board.

 

19.                               Compliance With Section 409A of the Code. To the extent applicable, it is intended that any amounts payable under this Agreement and the Plan, and the Company’s and the Grantee’s exercise of authority or discretion hereunder, are exempt from or comply with the provisions of Section 409A of the Code so as to not subject the Grantee to the payment of the additional tax, interest and any tax penalty which may be imposed under Section 409A of the Code. In furtherance of this intent, to the extent that any provision hereof would result in the Grantee being subject to payment of the additional tax, interest and tax penalty under Section 409A of the Code, the parties agree to amend this Agreement in order to bring this Agreement into compliance with Section 409A of the Code; and thereafter interpret its provisions in a manner that complies with Section 409A of the Code. Each payment under this Agreement shall be considered a separate payment and not one of a series of payments for purposes of Section 409A of the Code. Notwithstanding the foregoing, no particular tax result for the Grantee with respect to any income recognized by the Grantee in connection with this Agreement is guaranteed, and the Grantee shall be responsible for any taxes, penalties and interest imposed on the Grantee under or as a result of Section 409A of the Code in connection with this Agreement.

 

20.                               Interpretation. Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to Section 409A of the Code by the U.S. Department of the Treasury or the Internal Revenue Service. Except as expressly provided in this Agreement, capitalized terms used herein will have the meaning ascribed to such terms in the Plan.

 

21.                               Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

 

[SIGNATURES ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its behalf by its duly authorized officer and the Grantee has executed this Agreement, as of the Date of Grant first written above.

 

	
 
    	
YETI HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
GRANTEE’S SIGNATURE
    
	
 
    	
 
    
	
 
    	
Print Name:
    	
 
    
				

 

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Exhibit A

 

YETI Holdings, Inc.

Form of Non-Employee Director Compensation Election Form

 

The undersigned (“Director”), a non-employee member of the Board of Directors (the “Board”) of YETI Holdings, Inc. (the “Company”) hereby elects to receive his/her Director fees for the 20  -20   term of office in the forms as provided below.

 

Please check only one box for each of Items 1 through 3 and enter desired amounts.

 

1.              o                                    $[               ] annual retainer payable in cash

or

o                                    In lieu of $[               ] cash, the $[               ] shall be payable in deferred stock units

 

I elect to receive the shares of the Company’s common stock in settlement of the deferred stock units on the earlier of (1)                , 20      or (2) the six month anniversary of the cessation of my service as a Director on the Board, subject to my vesting in the deferred stock units pursuant to the terms of the deferred stock unit agreement.

 

2.              o                                    $[               ] committee membership or chair fees payable in cash

or

o                                    In lieu of $ [               ] cash, the $ [               ] shall be payable in deferred stock units

 

I elect to receive the shares of the Company’s common stock in settlement of the deferred stock units on the earlier of (1)                  , 20      or (2) the six month anniversary of the cessation of my service as a Director on the Board, subject to my vesting in the deferred stock units pursuant to the terms of the deferred stock unit agreement.

 

3.              o                                    Restricted stock units with a value of $[               ], payable in shares of the Company’s common stock upon vesting

or

o                                    In lieu of $[               ] in value of such restricted stock units, the $[               ] in value shall be payable in deferred stock units (subject to vesting and payable as elected below)

 

I elect to receive the shares of the Company’s common stock in settlement of the deferred stock units on the earlier of (1)                  , 20       or (2) the six month anniversary of the cessation of my service as a Director on the Board, subject to my vesting in the deferred stock units pursuant to the terms of the deferred stock unit agreement.

 

If a signed, completed copy of this election form is not received by the Company prior to [               ], your compensation will be payable as if the first box of each of Items 1 through 3 had been checked. If neither box of a particular Item is checked, the compensation will be paid in the form provided in the first box of the Item. If the second box of a particular Item is checked, and if you have not completed a payment date in clause (1) of the applicable Item, then the deferred stock units will be settled as provided in clause (2) of the applicable Item.

 

I understand, acknowledge and agree that this election for my Director compensation in respect of my 20  -20   term of office will become effective [               ] and is irrevocable after such date.

 

	
Date:
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Director Name
    	
 
    

 

1Exhibit 10.20

 

YETI HOLDINGS, INC.

NON-EMPLOYEE DIRECTOR COMPENSATION POLICY

 

Approved:             , 2018 (the “Adoption Date”)

 

This YETI Holdings, Inc. Non-Employee Director Compensation Policy shall be effective as of the Company’s initial public offering of its common stock (“IPO”). Following the IPO, each member of the Board of Directors (the “Board”) of YETI Holdings, Inc. (the “Company”) who is not also serving as an employee of the Company or any of its subsidiaries (each such non-employee member, a “Director”) will receive the following compensation for his or her Board service in the period that begins on the later of (i) the date of an IPO or (ii) the date the Director is elected or appointed to the Board and ends on the date of the first annual meeting of the Company’s stockholders at which directors are elected (the “First Annual Meeting”) following such date. Unless and until changed by the Board, this policy will also apply to periods of Director service after the First Annual Meeting.

 

Unless otherwise determined by the Board, Directors who are compensated by Cortec Management V, LLC, a Delaware limited liability company, will not receive compensation (other than reimbursement of expenses and discount on Company Products as described in this policy) for their participation on the Board or any of the committees of the Board.

 

Annual Cash Compensation

 

Absent a deferral election (described below in “Deferral of Director Compensation”), the cash compensation amounts set forth below are payable in equal quarterly installments, in arrears on the last day of each fiscal quarter in which the service occurred (each, a “Quarter”). For any partial Quarter of service, the applicable quarterly amount will be pro-rated based on days in service. All amounts are vested at payment.

 

1.                                      Annual Board Service Retainer:

 

a.                                           All Directors: $75,000

 

2.                                      Annual Chair Service Fee:

 

a.                                           Non-Executive Chair of Board: $60,000

b.                                           Lead or Presiding Director of the Board (if any): $40,000

c.                                            Chair of the Audit Committee: $20,000

d.                                           Chair of the Compensation Committee: $15,000

e.                                            Chair of the Nominating & Governance Committee: $10,000

f.                                             Chair of Special Committee (e.g., strategic transactions, investigations, key employee searches): to be determined when Special Committee established

 

3.                                      Annual Committee Member (non-Chair members) Service Fee:

 

a.                                           Audit Committee: $10,000

b.                                           Compensation Committee: $7,500

c.                                            Nominating & Governance Committee: $5,000

d.                                           Special Committee: $7,500

 

Equity Compensation

 

Any equity compensation granted to Directors will be granted under the Company’s 2018 Equity and Incentive Compensation Plan, as may be amended from time to time (the “Plan”). Any equity granted will be subject to the limitation in the Plan on the number of awards that can be granted in a calendar year to any one individual or director and the terms of the applicable award agreement between the applicable Director and the Company.

 

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IPO Restricted Stock Unit Grant: Absent a deferral election (described below in “Deferral of Director Compensation”), each Director serving on the Board on the date that the Company prices its common stock (the “Pricing Date”) will be granted, automatically and without further action by the Board, on the later to occur of (i) the Pricing Date and (ii) the date that the Form S-8 registration statement related to the Plan becomes effective, an award of restricted stock units for a number of shares equal to (1) $120,000, divided by (2) the price at which a share of the Company’s common stock is initially offered to the public in the IPO, rounded down for any partial shares (the “IPO Grant”). The IPO Grant will vest in full in one installment on the earlier to occur of (i) the first anniversary of the date of the IPO, and (ii) immediately prior to the Company’s First Annual Meeting, subject to the Director’s continued service through such vesting date.

 

Annual Restricted Stock Unit Grant: Absent a deferral election (described below in “Deferral of Director Compensation”), as of the date of each annual meeting of the Company’s stockholders following the IPO (including the First Annual Meeting, each an “Annual Meeting”), or on a pro-rata basis as of a Director’s initial election or appointment to the Board following the IPO, each Director will be granted, automatically and without further action by the Board, an award of restricted stock units for a number of shares equal to (1) $120,000, divided by (2) the Market Value per Share (as defined in the Plan) on the date of grant, rounded down for any partial share (the “Annual Grant”). The Annual Grant will vest in full in one installment on the earlier to occur of (i) the first anniversary of the grant date, and (ii) immediately prior to the Company’s next following Annual Meeting, subject to the Director’s continued service through such vesting date.

 

Deferral of Director Compensation

 

Directors may elect to defer all or part of the compensation provided hereunder into deferred stock units, which will be issued and will vest as described below. Deferred stock units will be settled in shares of the Company’s common stock on the earlier of (1) the date specified in the Director’s deferral election form and (2) the six-month anniversary of the Director’s cessation of service on the Board. The definitive terms regarding any deferred stock units described herein will be set forth in a deferred stock unit award agreement and an accompanying deferral election form completed by the Director. Deferral elections described in this policy shall be made in such manner as prescribed by the Company in compliance with Section 409A of the Internal Revenue Code of 1986, as amended. During any period of deferral, Directors will accrue dividend equivalents on their deferred stock units as dividends are paid on shares of the Company’s common stock.

 

Deferral of Annual Cash Compensation by Directors in Service on the Pricing Date: Directors serving on the Board on the Pricing Date may elect to defer all or part of the annual cash retainer, or chair or committee cash fees, that would be earned between the Pricing Date and the next Annual Meeting into deferred stock units. Such deferred stock units (if any) shall be issued on the later to occur of (i) the Pricing Date and (ii) the date that the Form S-8 registration statement related to the Plan becomes effective. As a result of such Director’s election to defer all or part of such cash compensation into deferred stock units, the deferred stock units will vest, subject to the Director’s continued service on the Board through the applicable vesting date, on the earlier to occur of (1) the first anniversary of the IPO, and (2) immediately prior to the Company’s First Annual Meeting, and will be settled in shares of the Company’s common stock in accordance with the Director’s deferral election, as noted above. The number of deferred stock units any such Director is entitled to receive will be determined based upon the dollar amount of the fees elected to be received in deferred stock units and the price at which a share of the Company’s common stock is initially offered to the public in the IPO, rounded down for any partial shares.

 

Deferral of Annual Cash Compensation by Directors Following the Pricing Date: As of the date of each Annual Meeting, or on a pro rata basis as of the date of a Director’s initial election or appointment to the Board, Directors may elect to defer all or part of the annual cash retainer, or chair or committee cash fees, that would be earned between such date and the next Annual Meeting (the “Service Period”) into deferred stock units. Such deferred stock units would be issued on the first day of the Service Period on the basis of the Market Value per Share on the date of grant, rounded down for any partial shares. The deferred stock units will vest at the earlier of (i) the first anniversary of the date of grant or (ii) at the next following Annual Meeting, subject to the Director’s continued service on the Board through the applicable vesting date, and will be settled in shares of the Company’s common stock in accordance with the Director’s deferral election, as noted above.

 

Deferral of Equity Compensation: Directors may elect to defer all or part of the grant of restricted stock units, including any grant of restricted stock units made in connection with the IPO, into deferred stock units, which will vest on the same basis as the applicable Director’s restricted stock unit would vest, and will be settled in shares of the Company’s common stock in accordance with the Director’s deferral election, as noted above.

 

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Expense Reimbursement

 

All of our Directors are reimbursed for their reasonable out-of-pocket expenses related to their service as a member of the Board or any of the committees of the Board.

 

Company Products

 

Similar to employees, directors are entitled to a discount to the suggested retail price of certain Company products. The Company believes that providing directors access to this program serves a business purpose by expanding the directors’ knowledge of the Company’s business and providing a branding opportunity.

 

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