UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): July 16, 2020

MasterCraft Boat Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)

(423) 884-2221

(Registrant’s telephone number, including area code)

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company            ☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑

Performance Stock Unit Awards

On July 16, 2020, the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of MasterCraft Boat Holdings, Inc. (the “Company”) granted performance stock units (“PSUs”) under the Company’s 2015 Incentive Award Plan (the “2015 Plan”) to certain of the Company’s officers, including its named executive officers, effective July 16, 2020 (the “Supplemental PSUs”).

The Committee granted the Supplemental PSUs to attract and motivate key employees at a time when existing PSUs granted in fiscal 2019 and fiscal 2020 (the “Existing PSUs”) are not currently projected to achieve minimum performance goals due to the unprecedented effects of the current and ongoing COVID-19 pandemic.  The Committee believes that the loss of two years of PSU awards could harm motivation, morale and performance, which would not be beneficial to the Company or its shareholders.  In addition, this supplemental grant aligns management with the objectives of shareholders and importantly acts as a retention incentive.  It further believes that setting forward-looking targets aligns with its pay-for-performance strategy and would incentivize performance better than alternatives such as applying positive discretion and increasing awards pursuant to the Existing PSUs or in granting new one-time restricted stock awards to key employees.  

The Committee’s commitment to sound and shareholder-friendly practice was important when designing the Supplemental PSUs.  To that end, the Supplemental PSUs are capped at 90% of the Existing PSUs original fair value.  In addition, the number of shares issuable upon satisfaction of the performance criteria set forth below will be capped at 100% of target and reduced for any shares issuable upon satisfaction of the performance criteria pursuant to the Existing PSUs.

As described further below, the Supplemental PSUs can be earned based upon performance, over a two-year period, of specified key strategic initiatives that should drive long term shareholder value; market share, Customer Satisfaction Index (“CSI”) results and dealer inventory turnover metrics, as well as a total shareholder return (“TSR”) modifier during the performance period.

After consulting with outside compensation advisors and outside legal counsel, reviewing market data and benchmarking expected relative compensation to the market data, the Committee believes that the foregoing approach effectively achieves the important goals of attracting and motiving key employees in the face of unprecedented uncertainty and increased workload created by COVID-19, cultivating a pay-for-performance culture, and aligning the Company’s leadership with the goal of increasing shareholder value.  

The number of PSUs that a grantee earns for the performance period will be determined by multiplying the target award by the product of (i) the Composite Payout Percentage and (ii) the Relative TSR Modifier. The “Composite Payout Percentage” is calculated based on the Company’s Total Market Share Percentage, Total CSI Percentage and Total Dealer Inventory Turnover Percentage (each as defined in the award agreement, a form of which is attached hereto as Exhibit 10.1 (the “Award Agreement”)). Following the determination of the Company’s achievement with respect to the Composite Payout Percentage for the Performance Period, the vesting of each award will be subject to adjustment based upon the application of Relative TSR Modifier. Depending on Company TSR relative to Performance Comparison Group TSR (as defined in the Award Agreement), the number of PSUs subject to vesting pursuant to each award can be modified as follows:

The “Performance Period” for the Supplemental PSUs is a two-year period commencing July 1, 2020 and ending June 30, 2022.

The table below sets forth the number of PSUs awarded to the Company’s named executive officers by the Committee:

The foregoing summary of the Award Agreement is not complete and is subject to, qualified in its entirety by, and should be read in conjunction with, the full text of the Award Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

(d) Exhibits.

The following exhibits are being furnished as part of this report:

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.