Skyline Champion Corporation Performance Stock Unit Agreement
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Skyline Champion Corporation
2018 Equity Incentive Plan
2022 Grant
Performance Stock Unit Agreement
This Performance Stock Unit Agreement (this “Agreement”), is made, effective as of January 13, 2022 (the “Date of Grant”), between Skyline Champion Corporation (the “Company”), and the individual named above (the “Participant”), pursuant to and subject to the terms of the Company’s 2018 Equity Incentive Plan (as amended from time to time, the “Plan”).
1. Performance Stock Unit Award. The Participant is hereby awarded a Performance Award (the “Award”) consisting of the target number of performance stock units identified above (such performance stock units, the “PSUs”). Each PSU represents the conditional right to receive, without payment but subject to the terms, conditions and limitations set forth in this Agreement and in the Plan, one share of Stock (a “Share”), subject to adjustment pursuant to Section 7 of the Plan in respect of transactions occurring after the date hereof. The percentage of the PSUs that become vested will be determined in accordance with Section 3 and Exhibit A hereto. For the avoidance of doubt, the term “PSUs” used throughout this Agreement refers to the PSUs granted pursuant to this Agreement and not to performance stock units that may or have been granted pursuant to a separate document.
2. Meaning of Certain Terms. Except as otherwise defined herein, all capitalized terms used herein shall have the same meaning as provided in the Plan. The following terms shall have the following meanings:
(a) “Change in Control” means (i) any transaction or series of related transaction in which any Person (or group of Persons acting together) acquires more than fifty percent (50%) of all of the Shares or more than fifty percent (50%) of all the voting power of the Shares, whether by reason of merger, consolidation or recapitalization or any other transaction (including the issuance of new Shares), whether or not the Company is a party thereto; or (ii) a sale, lease or other disposition of all or substantially all of the assets of the Company to any Person (or group of Persons acting together).
(b) “Dividend Equivalent” means a dividend equivalent received in connection with (x) any regular dividend declared on Shares that is payable in cash or (y) any regular dividend declared on Shares that is payable in Shares, for each Share deliverable in respect of a PSU.
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(c) “Good Reason” shall have the same meaning as set forth in the Participant’s employment, severance-benefit or other similar agreement with the Company or a subsidiary that contains a definition of “Good Reason.” The Good Reason-related provisions of this Agreement shall cease to apply in the event that the agreement identified in the immediately preceding sentence ceases to be in effect.
(d) “Person” means any natural person, corporation, limited liability company, partnership, trust, joint stock company, business trust, unincorporated association, joint venture, governmental authority or other legal entity of any nature whatsoever.
3. Vesting Eligibility; Cessation of Employment. Unless earlier terminated, forfeited, relinquished or expired, the PSUs will become eligible to vest on the Vesting Date and as set forth in this Section 3, subject to the Participant remaining in continuous Employment from the Date of Grant through such eligibility date.
(a) Except as otherwise provided in Section 3(b) below or as otherwise determined by the Administrator in connection with the final sentence of this Section 3(a), if the Participant’s Employment terminates for any reason prior to the Vesting Date, the Award and the PSUs will immediately and automatically terminate and be forfeited upon such termination of Employment with no consideration due to the Participant. For the avoidance of doubt, the Administrator shall have discretion to determine vesting treatment of any then-unvested PSUs in the event the Participant’s Employment terminates due to retirement, including establishing a policy permitting vesting based on the Participant’s age and years of service.
(b) If prior to the Vesting Date the Participant’s Employment is terminated by the Company or one of its subsidiaries without Cause or if the Participant terminates his or her Employment for Good Reason (each such termination of Employment, a “Qualifying Termination”), and to the extent that any PSUs are outstanding immediately prior to such Qualifying Termination but not then vested, a percentage of such unvested PSUs shall remain outstanding and eligible to vest, such percentage equal to the quotient of (A) divided by (B), where (A) equals the number of days from the first day of the Performance Period through the date of such Qualifying Termination, and (B) equals the total number of days in the Performance Period. The PSUs described in the immediately preceding sentence shall become “Qualifying PSUs.” Any Qualifying PSUs that have not vested by the one-year anniversary of such Qualifying Termination will at such time immediately and automatically terminate and be forfeited with no consideration due to the Participant.
4. Restrictive Covenants. The Participant acknowledges and agrees that he or she shall be bound by the Covenants Regarding Competition, Solicitation and Confidentiality set forth in Exhibit B attached hereto.
5. Delivery of Shares and Dividend Equivalents.
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6. Forfeiture; Recovery of Compensation. The Administrator may cancel, rescind, withhold or otherwise limit or restrict this Award at any time if the Participant is not in compliance with all applicable provisions of this Agreement and the Plan. By accepting, or being deemed to have accepted, this Award, the Participant expressly acknowledges and agrees that his or her rights, and those of any permitted transferee of this Award, under this Award, including the right to any Shares acquired under this Award or proceeds from the disposition thereof, are subject to Section 6(a)(5) of the Plan (including any successor provision). Nothing in the preceding sentence shall be construed as limiting the general application of Section 11 of this Agreement.
7. Dividends; Other Rights. This Award may not be interpreted to bestow upon the Participant any equity interest or ownership in the Company or any subsidiary prior to the date on which the Company delivers Shares to the Participant. The Participant is not entitled to vote any Shares by reason of the granting of this Award. The Participant will have the rights of a shareholder only as to those Shares, if any, that are actually delivered under this Award. The Participant will be entitled to receive Dividend Equivalents with respect to unvested PSUs in accordance with this Section 7. Any such Dividend Equivalents will entitle the Participant to receive, subject to the terms of this Agreement, a payment equal to the amount that the Participant would have received as a regular dividend had the Participant held the Shares deliverable in respect of such PSUs at the time such dividend was paid. Any Dividend Equivalents with respect to an unvested PSU will be paid, if at all, in cash, in the case of a cash dividend, or in cash and/or Shares, as determined by the Administrator, in the case of a distribution of Shares, in either case, in accordance with Section 5 of this Agreement.
8. Nontransferability. This Award may not be transferred except as expressly permitted under Section 6(a)(3) of the Plan.
9. Taxes.
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[Signature page follows.]
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The Company, by its duly authorized officer, and the Participant have executed this Agreement as of the date first set forth above.
SKYLINE CHAMPION CORPORATION
By: ______________________________
Name: Xxxx Xxxx
Title: CEO
Agreed and Accepted:
By [Signed Electronically]
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EXHIBIT A
PERFORMANCE CRITERIA
The terms set forth below, as used in this Exhibit A, shall the following meanings:
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3. Vesting of PSUs
(a) With respect to the Peer Group TSR, which represents sixty percent (60%) of the PSU award, and other than as set forth in the final sentence of this Paragraph 3, no portion of the PSUs for Peer Group TSR performance shall become vested unless the TSR Percentile Rank is at or above the 25th percentile. If (i) the TSR Percentile Rank Performance Criteria described in the previous sentence has been met as of the Performance Period End Date, and (ii) the PSUs are eligible to vest pursuant to Section 3 of this Agreement, the number of PSUs that vest shall be equal to the number of PSUs multiplied by the “Applicable Percentage” set forth in the table below. In the event that TSR Percentile Rank falls between two of the percentiles listed in the table below, the Applicable Percentage shall be interpolated on a straight line basis and the percentage of the number of PSUs vested (subject to the satisfaction of the vesting eligibility criteria set forth in Section 3 of this Agreement) shall be based on such interpolated percentage. If TSR Percentile Rank is at or above the 80th percentile, the Applicable Percentage shall be 200%.
TSR Percentile Rank |
Applicable Percentage |
80th percentile |
200% |
55th percentile |
100% |
25th percentile |
50% |
(b) With respect to the SFC Market Share, which represents forty percent (40%) of the PSU award and other than as set forth in the final sentence of this Paragraph 3, no portion of the PSUs for SFC Market Share performance shall become vested unless the SFC Market Share is at or above 2.50%. If (i) the SFC Market Share described in the previous sentence has been met as of the Performance Period End Date, and (ii) the PSUs are eligible to vest pursuant to Section 3 of this Agreement, the number of PSUs that vest shall be equal to the number of PSUs multiplied by the “Applicable Percentage” set forth in the table below. In the event that SFC Market Share falls between two of the percentiles listed in the table below, the Applicable Percentage shall be interpolated on a straight line basis and the percentage of the number of PSUs vested (subject to the satisfaction of the vesting eligibility criteria set forth in Section 3 of this Agreement) shall be based on such interpolated percentage. If SFC Market Share is at or above 3.00%, the Applicable Percentage shall be 200%.
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SFC Market Share |
Applicable Percentage |
3.00% |
200% |
2.75% |
100% |
2.50% |
50% |
(c) Notwithstanding anything in this Paragraph 3 to the contrary, (i) while the Participant remains Employed the PSUs shall vest upon a Change in Control, at the greater of one hundred percent (100%) or performance measured as of the close of the month prior to the effective date of the Change in Control, and (ii) the Qualifying PSUs shall vest upon a Change in Control that occurs prior to the one-year anniversary of the Qualifying Termination described in the final sentence of Section 3(b) of this Agreement.
4. Determinations by Administrator
At the end of the Performance Period, the Administrator shall determine the extent to which, if any, the Performance Criteria has been met, the vesting eligibility provisions in Section 3 of this Agreement have been satisfied, and the number of PSUs, if any, that are vested hereunder. No PSUs shall be vested until the Administrator certifies that the Performance Criteria has been met and the vesting eligibility provisions in Section 3 of this Agreement have been satisfied and certifies the extent to which such Performance Criteria and provisions have so been met. The Administrator shall make such determination and certification no later than the Vesting Date. PSUs that are vested shall be settled as set forth in Section 5 of this Agreement. Any vested PSUs shall be rounded down to the nearest whole number of Shares and any fractional vested PSUs shall be disregarded. All determinations under this Exhibit A shall be made by the Administrator and will be final and binding on the Participant.
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EXHIBIT B
Covenants Regarding Competition, Solicitation and Confidentiality
Restricted Activities. The Participant agrees that some restrictions on his or her activities during and after his or her Employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its Affiliates.
1. Non-compete, Non-solicitation, Non-disclosure. During Employment and for eighteen (18) months after the Participant terminates Employment (the “Restricted Period”), the Participant shall not, directly or indirectly, whether as owner, partner, investor, consultant, agent, employee, co-venturer or otherwise, compete with the Company or any of its Affiliates within any geographic area in which the Company or any of its Affiliates do business or undertake any planning for any business competitive with the Company or any of its Affiliates in the United States, the United Kingdom or Canada. Specifically, but without limiting the foregoing, the Participant agrees not to engage in any manner in any activity that is directly or indirectly competitive or potentially competitive with the business of the Company or any of its Affiliates as conducted or under consideration at any time during the Participant’s Employment by the Company or any of its Affiliates, and further agrees not to work or provide services, in any capacity, whether as an employee, independent contractor or otherwise, whether with or without compensation, to any Person who is engaged in any business that is competitive with the business of the Company or any of its Affiliates for which the Participant has provided services, as conducted or in planning during his or her Employment. For the purposes of this Exhibit B, the business of the Company and its Affiliates shall be defined to include all Products and the Participant’s undertaking shall encompass all items, products and services that may be used in substitution for Products. The foregoing, however, shall not prevent the Participant’s passive ownership of two percent (2%) or less of the equity securities of any publicly traded company.
The Participant agrees that, during Employment, he or she will limit his or her outside activity, whether or not competitive with the business of the Company or any of its Affiliates, so that it does not and, could not reasonably be expected to, give rise to a conflict of interest or otherwise unreasonably interfere with his or her duties and obligations to the Company or any of its Affiliates.
The Participant agrees that, during the Restricted Period, the Participant will not directly or indirectly (a) solicit or encourage any customer of the Company or any of its Affiliates to terminate or diminish its relationship with them; or (b) seek to persuade any such customer or prospective customer of the Company or any of its Affiliates to conduct with anyone else any business or activity which such customer or prospective customer conducts or could conduct with the Company or any of its Affiliates; provided that these restrictions shall apply (y) only with respect to those Persons who are or have been a customer of the Company or any of its Affiliates at any time within the immediately preceding two year period or whose business has been solicited on behalf of the Company or any of its Affiliates by any of their officers, employees or agents within said two year period, other than by form letter, blanket mailing or published advertisement, and (z) only if the Participant has performed work for such Person during his or her Employment or been introduced to, or otherwise had contact with, such Person
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as a result of his or her Employment or his or her consultancy with the Company or any of its Affiliates or has had access to Confidential Information which would assist in the Participant’s solicitation of such Person.
The Participant agrees that during the Restricted Period, the Participant will not, and will not assist any other Person to, (a) hire or solicit for hiring any employee of the Company or any of its Affiliates or seek to persuade any employee of the Company or any of its Affiliates to discontinue employment or (b) solicit or encourage any independent contractor providing services to the Company or any of its Affiliates to terminate or diminish its relationship with them. For the purposes of this Exhibit B, an “employee” of the Company or any of its Affiliates is any person who was such at any time within the preceding twelve (12) months.
The Participant agrees that during the Restricted Period, the Participant will not provide information about the Company or any of its Affiliates, their business or the industries in which they are engaged to any Person (including without limitation, any organization), whether as an employee, an independent contractor or otherwise, without the advance written consent of the Company, except disclosure that is required by law.
Until forty-five (45) days after the conclusion of the Restricted Period, the Participant shall give notice to the Company of each new business activity he or she plans to undertake, at least ten (10) days prior to beginning any such activity. Such notice shall state the name and address of the Person for whom such activity is undertaken and the nature of the Participant’s business relationship(s) and position(s) with such Person. The Participant shall provide the Company with such other pertinent information concerning such business activity as the Company may reasonably request in order to determine the Participant’s continued compliance with his or her obligations under this Exhibit B.
The Participant acknowledges that the Company and its Affiliates continually develop Confidential Information (as defined herein); that the Participant may have developed or had access to Confidential Information through his or her Employment and other associations with the Company and its Affiliates. The Participant agrees that he or she shall not disclose to any Person or use any Confidential Information, other than as required for the proper performance of the services or as required by applicable law after notice to the Company and a reasonable opportunity for it to seek protection of the Confidential Information prior to disclosure. For avoidance of doubt, “reasonable opportunity” shall be determined under the circumstances, provided that the Participant shall make every effort to provide notice as expeditiously as is reasonably possible to the Company. The Participant understands and agrees that this restriction is in addition to any restrictions to which he or she is bound as a result of his or her prior Employment and that this restriction, as well as any earlier agreed restrictions, shall continue to apply both during Employment and thereafter, regardless of the reason for its termination.
All documents, records, disks and other media of every kind and description containing Confidential Information, and all copies, (the “Documents”), whether or not prepared by the Participant, shall be the sole and exclusive property of the Company. The Participant shall return to the Company no later than the date on which his or her Employment terminates, and at such
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earlier time or times as the Company may specify, all Documents as well as all other property of the Company and its Affiliates, then in the Participant’s possession or control.
During Employment and thereafter, the Participant shall not give any statement or make any announcement, directly or indirectly, orally or in writing, publicly or to the media (electronic, print or otherwise) about the Company or any of its Affiliates, without the prior written consent of the Board or its expressly authorized representative.
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