What is the quorum requirement?TABLE OF CONTENTS
WHAT IS THE QUORUM REQUIREMENT?
A quorum of stockholders is necessary to hold a valid stockholder meeting. A quorum will be present if stockholders holding at least a majority of the outstanding shares entitled to vote
in the election of directors are represented by virtual presence online or by proxy at the Annual Meeting. On the Record Date, there were
202,409,176203,162,565 shares outstanding and entitled to vote.
Your shares will be counted
towardstoward the quorum only if you submit a valid proxy by mail, over the phone, or through the internet (or one is submitted on your behalf by your broker, bank, or other nominee) or if you vote at the Annual Meeting. Abstentions, votes to “Withhold,” and broker non-votes will be counted toward the quorum requirement.
How can
HOW CAN I
find out the results of the voting at the Annual Meeting?FIND OUT THE RESULTS OF THE VOTING AT THE ANNUAL MEETING?
Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results will be published in a Current Report on Form 8-K that we expect to file with the SEC within four business days after the Annual Meeting.
Who is paying for this proxy solicitation?
WHO IS PAYING FOR THIS PROXY SOLICITATION?
The accompanying proxy is solicited on behalf of the Board for use at the Annual Meeting. Accordingly, the Company will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our
directorsDirectors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees of the Company will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks, and other nominees for the cost of forwarding proxy materials to beneficial owners.
How can
HOW CAN I
access the list of stockholders entitled to vote at the Annual Meeting?ACCESS THE LIST OF STOCKHOLDERS ENTITLED TO VOTE AT THE ANNUAL MEETING?
A complete list of stockholders of record on the Record Date will be available during the Annual Meeting by following the instructions on the virtual platform.
What does it mean if
WHAT DOES IT MEAN IF I
receive more than one Notice?RECEIVE MORE THAN ONE NOTICE?
If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the voting instructions on each Notice to ensure that all your shares are voted.
LiveWire Group, Inc. | 5 | 2023 Proxy Statement |
Table of Contents
WHEN ARE STOCKHOLDER PROPOSALS FOR INCLUSION IN THE COMPANY’S PROXY STATEMENT FOR NEXT YEAR’S ANNUAL MEETING DUE?When are stockholder proposals for inclusion in the Company’s proxy statement for next year’s annual meeting due?
Stockholders wishing to present proposals for inclusion in our proxy statement for the
20242025 annual meeting of stockholders (the
“2024“2025 Annual Meeting”) pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must submit their proposals so that they are received by us at our principal executive offices no later than December
8, 2023.6, 2024. Proposals should be sent to our Corporate Secretary at 3700 West Juneau Avenue, P.O. Box 653, Milwaukee, Wisconsin 53208.
When are other proposals and stockholder nominations for the 2024 Annual Meeting due?
WHEN ARE OTHER PROPOSALS AND STOCKHOLDER NOMINATIONS FOR THE 2025 ANNUAL MEETING DUE?
With respect to proposals and nominations not to be included in our Proxy Statement pursuant to Rule 14a-8 of the Exchange Act, our Amended and Restated Bylaws (our “Bylaws”) provide that stockholders who wish to nominate a
directorDirector or propose other business to be brought before the stockholders at an annual meeting of stockholders must notify our Secretary by a written notice, which notice must be received at our principal executive offices not less than 90 days nor more than 120 days prior to the anniversary date of the immediately preceding year’s annual meeting of stockholders.
Stockholders wishing to present nominations for directorDirector or proposals for consideration at the 20242025 Annual Meeting under these provisions of our Bylaws must submit their nominations or proposals so that they are received at our principal executive offices not earlier than January 19, 202416, 2025 and not later than February 18, 202415, 2025 to be considered. In the event that the 20242025 Annual Meeting is to be held on a date that is not within 30 days before or 60 days after the one-year anniversary of the Annual Meeting, then a stockholder’s notice must be received by the Secretary no later than 90 days prior to such annual meeting, or if later, the tenth day
LiveWire Group, Inc. 6 2024 Proxy Statement
TABLE OF CONTENTS
following the day on which we make a public announcement of the date of the
20242025 Annual Meeting. In addition to satisfying the foregoing requirements, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of
directorDirector nominees other than the Board’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Securities Exchange Act of 1934 no later than March
19, 2024.17, 2025.
Nominations or proposals should be sent in writing to our Corporate Secretary at 3700 West Juneau Avenue, P.O. Box 653, Milwaukee, Wisconsin 53208. A stockholder’s notice to nominate a
directorDirector or bring any other business before the Annual Meeting or the
20242025 Annual Meeting must set forth certain information, which is specified in our Bylaws.
LiveWire Group, Inc. | 6 | 2023 Proxy Statement |
LiveWire Group, Inc. 7 2024 Proxy Statement
Table of ContentsTABLE OF CONTENTS
Emerging Growth Company Explanatory Note Emerging Growth Company
Explanatory Note |
On September 26, 2022, the Company consummated a business combination pursuant to which it spun off from Harley-Davidson, Inc. (“H-D”) and combined with AEA-Bridges Impact Corp. (“ABIC”), a special purpose acquisition company (the “Business Combination”). In connection with the Business Combination, H-D retained a controlling interest in the Company. Following the Business Combination, we are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies but not to “emerging growth companies,” including, but not limited to:
| • | not being required to comply with the auditor attestation requirements in the assessment of our internal control over
financial reporting under Section 404 of the Sarbanes-Oxley Act; |
| • | not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (“PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional
information about the audit and the financial statements; |
| • | reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and |
| • | exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. |
not being required to comply with the auditor attestation requirements in the assessment of our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act;
not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board (“PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements;
reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and
exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We could be an emerging growth company until the last day of the fiscal year following October 1, 2025, the fifth anniversary of the closing of ABIC’s initial public offering, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1,235,000,000, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would require, among other things, that we have been a public company for at least 12 months and would occur at the end of the fiscal year during which the market value of our common stock held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three-year period. Under Section 107(b) of the JOBS Act, emerging growth companies may delay adopting new or revised accounting standards until such time as those standards apply to private companies.
Because we have elected to take advantage of certain reduced disclosure obligations and may elect to take advantage of other reduced reporting requirements in future filings, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.
LiveWire Group, Inc. | 7 | 2023 Proxy Statement |
LiveWire Group, Inc. 8 2024 Proxy Statement
TableTABLE OF CONTENTS
Election of ContentsDirectors
PROPOSAL NO. 1:
Election of Directors |
The Board is presently comprised of
sevennine members and, pursuant to the terms of the Company’s Amended and Restated Certificate of Incorporation, the Board has set the number of directors that will constitute the Board as of the Annual Meeting at
seven.nine. The
directorsDirectors are elected by the stockholders at each annual meeting to serve from the time of their election until the next annual meeting of stockholders following their election and until their successor is duly elected and qualified. The
directorDirector nominees, with terms expiring at the Annual Meeting, consist of Jochen Zeitz, William L. Cornog, John Garcia,
Gina Goetter, Kjell Gruner, Glen Koval,
Paul Krause, Luke Mansfield, Hiromichi Mizuno, and
Edel O’Sullivan.Jonathan Root.
The Nominating and Corporate Governance Committee has recommended, and the Board has approved, the nomination of the
seven directornine Director nominees for re-election for one-year terms expiring at the
20242025 Annual Meeting and until their respective successors are duly elected and qualified, or, if sooner, until the director’s death, resignation, disqualification, or removal. Each nominee is currently a
directorDirector of the Company.
Paul Krause, Luke Mansfield, Hiromichi Mizuno, and Jonathan Root are each standing for election by the stockholders for the first time at the Annual Meeting and were each identified as a possible Director candidate to the Nominating and Corporate Governance Committee by the Chairman of the Board.
Proxies cannot be voted for a greater number of persons than the number of nominees named in this Proxy Statement. If any nominee should become unavailable to serve for any reason, it is intended that votes will be cast for a substitute nominee designated by the Nominating and Corporate Governance Committee and approved by the Board. We have no reason to believe that any nominee named will be unable to serve if elected.
Director Nominee Information
DIRECTOR NOMINEE INFORMATION
The names and ages of the director nominees and their length of service with the Company and Board committee memberships are set forth in the table below.
Director Nominees | DIRECTOR NOMINEES | | | | | | | |
| | Jochen Zeitz | 60 | | 60 | | | September 2022 | No | — | —No | — | — | — | | | — | | | — | | | — | | | — | |
| | William L. Cornog | 58 | | 59 | | | September 2022 | Yes | | Yes | | | F, C | — | C | M— | | | C | | | M | | | M | |
| | Dr. John Garcia(1)Garcia* | 66 | | 67 | | | September 2022 | Yes | M | —Yes | M | C | M | | | — | | | M | | | C | | | — | |
Gina Goetter | 46 | September 2022 | No | — | — | — | M | — |
Dr. Kjell Gruner | 56 | | 57 | | | September 2022 | Yes | M | CYes | M | — | M | | | C | | | M | | | — | | | M | |
| | Glen Koval | 48 | | 49 | | | September 2022 | No | — | MNo | — | — | — | | | M | | | — | | | — | | | — | |
Edel O’Sullivan | 43Paul Krause | September 2022 | No | —46 | M | — | —June 2023 | | | No | | | __ | | | __ | | | __ | | | M | | | C | |
| | Luke Mansfield | | | 47 | | | February 2024 | | | No | | | __ | | | M | | | __ | | | __ | | | M | |
| | Hiromichi Mizuno | | | 58 | | | June 2023 | | | Yes | | | M | | | M | | | __ | | | __ | | | __ | |
| | Jonathan Root | | | 50 | | | July 2023 | | | No | | | __ | | | __ | | | __ | | | M | | | M | |
1.*
| Dr. Garcia is the Independent Lead Director. |
C: | | | Committee Chair | | | M: | | | Member | | | F: | | | Financial Expert | |
C:AFC: | Committee Chair | M: | Member | F: | Financial Expert |
AFC: | Audit and Finance Committee | BSC: | | BSC: | | | Brand, Sustainability and SustainabilitySafety Committee | CC: | | CC: | | | Conflicts Committee | |
HRC: | | | Human Resources Committee | NCG: | | NCG: | | | Nominating and Corporate Governance Committee | | | | | | | |
A brief biography of each directorDirector nominee is set forth below, which includes information, as of the Record Date, regarding specific and particular experience, qualifications, attributes, or skills of each nominee that led the Nominating and Corporate Governance Committee and the Board to believe that the nominee should serve as a directorDirector on the Board.
LiveWire Group, Inc. 9 2024 Proxy Statement
Table of ContentsTABLE OF CONTENTS
Director Nominees
Jochen
Zeitz
| | | Age: 60 | Director since: 2022 |
| | Jochen Zeitzis our Chairman of the Board and served as our Chief Executive Officer and Chairman of the Board.from September 2022 until June 2023. Mr. Zeitz has been a director of Harley-Davidson (“H-D”) since 2007 and served as its Acting President and Chief Executive Officer from February 2020 until May 2020, when he was appointed as H-D’s President and Chief Executive Officer. Mr. Zeitz has served as H-D’s Chairman of the Board since February 2020. Mr. Zeitz served as Chairman and Chief Executive Officer of the sporting goods company PUMA AG from 1993 to 2011. He was also PUMA’s Chief Financial Officer from 1993 to 2005. Mr. Zeitz served as a director of luxury goods company Kering (formerly PPR) from 2012 to 2016. He was a member of Kering’s Executive Committee and Chief Executive Officer of its Sport & Lifestyle division from 2010 to 2012. Mr. Zeitz is an Advisor and Board Member of the Cranemere Group Limited and co-founded The B Team with Sir Richard Branson. He is also the Founder and Chairman of the ZEITZ foundation, Founder of Segera Conservancy and The Long Run, and Co-Founder of the Zeitz Museum of Contemporary Art Africa (Zeitz MOCAA) in Cape Town, which preserves and exhibits contemporary art from Africa and its diaspora. |
| | We believe Mr. Zeitz is qualified to serve as Chair and a Director due to his extensive leadership experience as a public director and leader in the motorcycle and lifestyle brand industries.
|
| | |
| | |
William L.
Cornog
| | | Age: 5859 | Director since: 2022 |
| | William L. Cornog has served on the Board since September 2022 and is the former head of KKR Capstone, (2002-2022), the portfolio operations team of KKR & Co., a global investment company, having served at KKR from 2002 until December 2022. In addition to leading Capstone, Mr. Cornog chaired KKR’s Portfolio Management Committees for the Americas, Europe, Asia, Infrastructure, Impact & Technology Growth from 2013 to 2022 and was a member of the Investment & Distribution and Valuation Committees.Committees from 2017 to 2022. Prior to joining KKR, Mr. Cornog was with Williams Communications Group as the Senior Vice President and General Manager of Network Services. Before that, Mr. Cornog was a partner at The Boston Consulting Group and worked at Age Wave Communications and SmithKline Beckman Corporation (GSK). Since 2022, Mr. Cornog currently ishas served as a board member at Channel Control Merchants, which is a KKR portfolio company, and Brightview Holdings, Inc. (NYSE: BV), a publicly traded company controlled by KKR. Mr. Cornog is Chairman of the Board at Channel Control Merchants and is Chairman of the audit committeeAudit and Finance Committee and the conflicts committeeConflicts Committee of LiveWire. Private company and philanthropic boards include Griffin Highline since 2022, Blue Crow Sports Group since 2022, and The Knight Campus at the University of Oregon.Oregon since 2022. |
| | Mr. Cornog earned a B.A. from Stanford University and an M.B.A. from Harvard Business School. We believe Mr. Cornog is qualified to serve as a directorDirector due to his expansive experience in financial reporting and monitoring as well as his global portfolio experiences.experience. |
LiveWire Group, Inc. 10 2024 Proxy Statement
TABLE OF CONTENTS
LiveWire Group, Inc. | 9 | 2023 Proxy Statement |
Dr. John
Garcia | | | Age: 6667 | Director since: 2022 |
| | Dr. John Garcia has served on the Board since September 2022 and is the Executive Chairman of AEA Investors LP.LP, a private equity firm. Dr. Garcia joined AEA in 1999 as a Partner and Head of AEA Investors LP’sInvestors’ then newly formed European operations based in London. In 2002, Dr. Garcia became President of AEA Investors LP while continuing to head European operations and lead AEA Investors LP’sInvestors’ global Value-Added Industrial Products and Specialty Chemicals teams. In 2006, Dr. Garcia also became Chief Executive Officer of AEA Investors, LP, during which time he was responsible for all operational aspects of AEA Investors including fundraising, investment review process, growth and strategy and operations. Dr. Garcia was also named Chairman of AEA Investors LP in 20122012. and in 2019, in connection with relinquishing the title of Chief Executive Officer, he became the Executive Chairman. As Executive Chairman, Dr. Garcia remains responsible for AEA’sAEA Investors’ investment review process. Since 1999, under his leadership, AEA Investors has made over 90 private equity investments totaling over $11 billion of invested capital. Dr. Garcia was also instrumental in the creation of the AEA Private Debt Funds in 2005 and the AEA Small Business Funds in 2004. Dr. Garcia has served on the board of numerous AEA Investors portfolio companies in addition to various other companies. Dr. Garcia serves as the chairman or member of the investment committee for the various private equity and private debt funds. Dr. Garcia has a long history of working together with family owned and entrepreneur-led businesses and investors to help them maximize their potential and meet their long-term needs. |
| | Dr. Garcia earned a B.Sc. from the University of Kent, an M.A. and Ph.D. in Organic Chemistry from Princeton University, and an MBA from Wharton School of the University of Pennsylvania. We believe Dr. Garcia is qualified to serve as a directorDirector due to his significant management, financial, and business experiences with private and public companies. |
Dr. Kjell
Gruner | | |
| | | |
Gina
Goetter
| | Age: 4657 | Director since: 2022 |
| | Dr. Kjell GrunerGina Goetter has served on the Board since September 2022. Ms. Goetter has been2022 and is the Chief FinancialCommercial Officer and President, Business Growth of H-DRivian since September 2020. Ms. Goetter served as Senior Vice President Finance of the Prepared Foods Segment of multinational food company Tyson Foods, Inc. from 2019 to September 2020. From 2008 to 2018, Ms. Goetter held several leadership positions at multinational consumer foods manufacturer and marketer General Mills, Inc., including serving as Vice President, Financial Operations of the Meals & Baking Operating Unit from 2017 to 2019, Senior Finance Director of the Baking Operating Unit from 2015 to 2016, and CFO of the General Mills Canada segment from 2011 to 2015.Ms. Goetter holds a Bachelors of Applied Science from the University of Wisconsin-La Crosse and an MBA from Boston College. We believe Ms. Goetter is qualified to serve as a director due to her qualifications in business, finance and accounting, as well as to her extensive experience and leadership in a wide range of public companies.
|
LiveWire Group, Inc. | 10 | 2023 Proxy Statement |
Dr. Kjell Gruner
| | Age: 56 | Director since: 2022
Dr. Kjell Gruner has served on the Board since September 2022.2023. Previously, Dr. Gruner has beenwas the President and Chief Executive Officer of Porsche Cars North America sincefrom November 2020.2020 to July 2023. Dr. Gruner served as the global Chief Marketing Officer of Porsche from September 2010 to October 2020. Dr. GrunerHe served as Director of Strategy Mercedes-Benz Cars during his tenure at Daimler AG from 2004 to 2010. Prior to that time, he worked for Porsche and for the Boston Consulting Group (BCG).
|
| | Dr. Gruner earned a MastersMaster’s Degree from Karlsruhe Institute of Technology and a PhD scl in Marketing from WHU–Otto Beisheim School of Management. We believe Dr. Gruner is qualified to serve as a directorDirector due to his extensive automotive and brand strategy experience. |
LiveWire Group, Inc. 11 2024 Proxy Statement
TABLE OF CONTENTS
Glen
Koval | | |
| | | |
Glen
Koval
| | Age: 4849 | Director since: 2022 |
| | Glen Koval has served on the Board since September 2022. Mr. Koval has held several leadership positions at H-D since August 2001, including serving as Vice President of Engineering since January 2021, General Manager of Engineering from May 2020 to December 2020, Chief Engineer of EV Platform from January 2019 to April 2020 and Chief Engineer of Current Products from January 2017 to January 2019. |
| | Mr. Koval holds a Bachelor of Engineering from Marquette University and an MBA from Concordia University-Wisconsin. We believe Mr. Koval is qualified to serve as a directorDirector due to his decades of experience at H-D, his motorcycle product and engineering expertise, and his extensive knowledge of the motorcycle industry. |
Paul
Krause | | |
| | | |
Edel
O’Sullivan
| | Age: 4346 | Director since: 20222023 |
| | Paul Krause Edel O’Sullivanhas served on the Board since September 2022. Ms. O’SullivanJune 2023 and is the Chief Legal Officer, Chief Compliance Officer, and Corporate Secretary of H-D. He has been in this role since March 2020 and oversaw the Chief Commercial Officerseparation of LiveWire from H-D and the process of establishing LiveWire as a separate public company. He is also responsible for leading the global legal support for H-D in all areas including public company operations, corporate governance, global compliance, manufacturing, sales, dealer support, litigation, trademarks, and intellectual property. Mr. Krause has been with H-D since March 2021. From 20072016 serving in various roles, including Interim Chief Legal Officer and Assistant General Counsel. Prior to March 2021 Ms. O’Sullivan held several positions at Bain & Company, including serving as partnerjoining H-D, Mr. Krause was an attorney for ArcelorMittal, a global steel manufacturer, and the law firm of Littler Mendelson. |
| | Mr. Krause graduated from 2016 to 2021. Ms. O’Sullivan servedMarquette University Law School in the Financial Planning2004 and Analysisfrom Drake University, with a Bachelor of Procter & Gamble from 2002 to 2005.Ms. O’Sullivan holds a Bachelor’s degreeScience in Chemical Engineering from the Universidad Simon Bolivar and an MBA from Harvard Business School.Administration, in 2000. We believe Ms. O’SullivanMr. Krause is qualified to serve as a directorDirector due to her significant managementhis global compliance and business experiences.
corporate governance experience, and his leading role in the Company’s IPO. |
Luke
Mansfield | | | Age: 47 | Director since: 2024 |
| | Luke Mansfield has served on the Board since February 2024 and is the Chief Commercial Officer of H-D. Since joining H-D in 2018, Mr. Mansfield has held various leadership roles at H-D, including Vice President – Chief Strategy Officer from 2018 to 2020 and most recently Vice President – Motorcycle Management from 2020 to his current appointment as CCO. Mr. Mansfield has over 20 years of experience leading growth, product, strategy, and innovation for some of the world’s most iconic companies. Additionally, Mr. Mansfield has held and succeeded in global leadership roles within automotive, consumer electronics, and FMCG companies. |
| | Mr. Mansfield graduated from University of Oxford in 1999 with a Master’s Degree in Chemistry. We believe Mr. Mansfield is qualified to serve as a Director due to his extensive global leadership roles across industries. |
LiveWire Group, Inc. 12 2024 Proxy Statement
TABLE OF CONTENTS
Hiromichi
Mizuno | | | Age: 58 | Director since: 2023 |
| | Hiromichi Mizuno has served as an Independent Board Member since June 2023 and is the Founder and CEO of Good Steward Partners, LLC. He currently serves as Special Advisor to CEO of MSCI, Inc. and Mission Committee Member of Danone S.A. He is the former Special Envoy of U.N. Secretary General on Innovative Finance and Sustainable Investments, the former Non-Executive Board Member of Tesla, Inc., and the former Special Advisor to the Minister of Economy, Trade and Industry of Japan. He previously served as Executive Managing Director and Chief Investment Officer of Government Pension Investment Fund of Japan (GPIF), the largest pension fund in the world with AUM $1.5 trillion. Prior to joining GPIF, Hiro was a partner at Coller Capital, a London-based private equity firm after working for Sumitomo Trust & Banking Co., Ltd. in Japan. His involvements with academic institutions include Executive Fellow of Harvard Business School, Harvard University, Executive in Residence and Global Leadership Council Member of Said Business School, Oxford University, Visiting Fellow of Cambridge Judge Business School, University of Cambridge, Senior Fellow of Kellogg School of Management, Northwestern University, Guest Professor of Osaka University Graduate School of Medicine, Advisor, and CiRA (Center for iPS Cell Research and Application, Kyoto University) Foundation. |
| | Mr. Mizuno graduated from Kellogg School of Management with an MBA in 1995 and from Osaka City University with a Bachelor of Arts in 1988. We believe Mr. Mizuno is qualified to serve as a Director because of his extensive international financial experience and electric vehicle sector expertise. |
Jonathan
Root | | | Age: 50 | Director since: 2023 |
| | Jonathan Root has served on the Board since July 2023 and is the Chief Financial Officer of H-D. He previously served as the SVP of Harley-Davidson Financial Services (“HDFS”) where he oversaw the global HDFS business as President of Eaglemark Savings Bank, President of Harley-Davidson Insurance, and President of all other HDFS subsidiaries. Mr. Root has been responsible for both strategy and execution of Harley-Davidson’s motorcycle retail lending, branded credit card partnerships, commercial lending, and retail/commercial/insurance operations. Root has over 25 years of financial services and corporate finance experience. Mr. Root joined HDFS in 2011 and has held multiple roles across Harley-Davidson including VP, Insurance. Prior to HDFS, Mr. Root held a variety of roles at Ally Financial, Inc., GMAC Financial Services, Inc., and General Motors, Inc. |
| | Mr. Root holds an MBA from the University of Detroit Mercy and a Bachelor of Science in Corporate Finance from Wayne State University. We believe Mr. Root is qualified to serve as a Director due to his financial acumen, global experience, and operational background. |
| | The Board of Directors recommends a vote “FOR” each of the sevennine named Director Nominees. |
LiveWire Group, Inc. | 11 | 2023 Proxy Statement |
LiveWire Group, Inc. 13 2024 Proxy Statement
Board Matters and Corporate Governance |
Corporate Governance Guidelines
CORPORATE GOVERNANCE GUIDELINES
This section describes key corporate governance guidelines and practices that the Board has adopted in accordance with the corporate governance rules of the NYSE, as applicable, which serve as a flexible framework within which the Board and its committees operate. Complete copies of our Corporate Governance Guidelines, the charters of the Board committees, and our Code of Business Conduct and Ethics, described below, are available under “Governance Documents” on the Governance & Leadership page of the Investors section of our website at investor.livewire.com/governance-leadership/governance-documents. Alternatively, you can request a copy of any of these documents free of charge by writing to our Corporate Secretary at 3700 West Juneau Avenue, P.O. Box 653, Milwaukee, Wisconsin 53208. Information on or accessible through our website is not incorporated by reference in this Proxy Statement.
Independence of Directors
INDEPENDENCE OF DIRECTORS
We adhere to the rules of the NYSE in determining whether a director is independent. The Board consults with its counsel to ensure that the Board’s determinations are consistent with those rules and all relevant securities and other laws and regulations regarding the independence of
directors.Directors. The NYSE listing standards define an “independent director” as a person that, in the opinion of the issuer’s
boardBoard of
directors,Directors, has no material relationship with the listed company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the company). The Board has determined that William Cornog, John Garcia,
and Kjell Gruner,
and Hiromichi Mizuno are considered our independent
directors.Directors. Our independent
directors willDirectors may have regularly scheduled meetings at which only independent
directorsDirectors are present.
Controlled Company Exception
As described in the “Policies and Procedures for Related Person Transactions” and “Certain Transactions” sections of this Proxy Statement, H-D continues to beneficially own more than 50% of our common stock and voting power. As a result, the Company is a “controlled company” within the meaning of the NYSE corporate governance standards. As a “controlled company,” we may elect not to comply with certain NYSE corporate governance requirements, including:
| • | that a majority of the Board of Directors consists of independent directors; |
| • | that the Board of Directors has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; |
| • | that the Board of Directors has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and |
| • | for an annual performance evaluation of the nominating and corporate governance committee and compensation committee. |
that a majority of the Board of Directors consists of independent Directors;
that the Board of Directors has a nominating and corporate governance committee that is composed entirely of independent Directors with a written charter addressing the committee’s purpose and responsibilities;
that the Board of Directors has a compensation committee that is composed entirely of independent Directors with a written charter addressing the committee’s purpose and responsibilities; and
for an annual performance evaluation of the nominating and corporate governance committee and compensation committee.
We currently utilize certain of these exemptions. As a result, we do not have a nominating and corporate governance committee or compensation committee that consists entirely of independent
directorsDirectors and such committees may not be subject to annual performance evaluations. We may also elect to utilize additional exemptions for so long as we remain a “controlled company.” Accordingly, you will not have the same protections afforded to stockholders of companies subject to all NYSE corporate governance requirements.
In the event that we cease to be a controlled company within the meaning of these rules, we will be required to comply with these provisions after specified transition periods, including having at least a majority of independent members on each committee within 90 days of the date of our status change and fully independent committees within one year of the date of our status change.
LiveWire Group, Inc. | 12 | 2023 Proxy Statement |
LiveWire Group, Inc. 14 2024 Proxy Statement
Table of ContentsTABLE OF CONTENTS
BOARD LEADERSHIP STRUCTURE AND ROLE IN RISK OVERSIGHT
Board Leadership Structure and Role in Risk Oversight
The Board believes that it is important to retain the flexibility to allocate the responsibilities of the offices of Chairman of the Board and Chief Executive Officer and/or to appoint an Independent Lead Director in any manner that it determines to be in the best interest of the Company and its stockholders at any point in time. The Board reviews its leadership structure periodically as part of its annual self-assessment process and monitors developments in corporate governance. The Company’s Corporate Governance Guidelines provide that at any time when the Board is not led by an independent
directorDirector serving as Chairman of the Board, the independent
directorsDirectors may elect an independent
directorDirector to serve as Independent Lead Director.
The
From January 1, 2023 through June 11, 2023, the Board
has combined the roles of Chairman of the Board and Chief Executive Officer, which
arewere held by
Mr.Jochen Zeitz. Beginning June 12, 2023, with the appointment of Karim Donnez as the Company’s new Chief Executive Officer, Jochen Zeitz
and has appointed Dr.only held the role of Chairman of the Board. During 2023, John Garcia
continued to serve as Independent Lead Director. The Board has determined that
combiningseparating the roles of Chairman of the Board and Chief Executive Officer will serve the best interests of the Company and its
stockholders because Mr. Zeitz is best situatedstockholders. The separation of these roles allows each individual to
serve as Chairman as he is the director most familiar with the Company’s business and industry and is most capable of effectively identifying strategic priorities and leading the consideration and execution of the Company’s strategy.devote sufficient time to their respective position. The Board believes that the current Board leadership structure provides effective independent oversight of management and streamlines accountability and direction for Company performance because the Board’s independent
directorsDirectors bring experience, oversight, and expertise from outside of the Company
while the rest of the Board, including Karim Donnez, bring Company and
Mr. Zeitz brings Company-specificindustry-specific experience, expertise, and leadership.
The Board oversees the risk management activities designed and implemented by our management. The Board does not anticipate having a standing risk management committee, but rather executes its oversight responsibility both directly and through its standing committees. The Board also considers specific risk topics, including risks associated with our strategic initiatives, business plans and capital structure. Our management, including our executive officers, are primarily responsible for managing the risks associated with the operation and business of the Company and provide appropriate updates to the Board and the Audit and Finance Committee. The Board delegates to the Audit and Finance Committee oversight of its risk management process, and our other Board committees also consider risks as they perform their respective committee responsibilities. All
boardBoard committees report to the Board as appropriate, including when a matter rises to the level of a material or enterprise risk.
Meetings of the Board of Directors
MEETINGS OF THE BOARD OF DIRECTORS
The Board oversees the Company’s business. It establishes overall policies and standards and reviews the performance of management.
From the date of the Business Combination through December 31, 2022,During 2023, the Board held
twoseven meetings. Each Board member attended 75% or more of the aggregate meetings of the Board and of the committees on which they served held during the period for which they were a
directorDirector or committee member. The Company’s
directorsDirectors are encouraged to attend our annual meetings of stockholders, but we do not currently have a policy relating to
directorDirector attendance.
For the Company’s 2023 annual meeting of stockholders, there were four Directors in attendance.
The independent
directorsDirectors meet from time to time in executive session without non-independent
directorsDirectors or management present at
mostcertain regularly scheduled Board meetings or more often as determined appropriate by the independent
directors.Committees of the Board of Directors
Directors.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board has a number of committees that perform certain functions for the Board. The current standing committees of the Board are the Audit and Finance Committee, the Brand,
Sustainability, and
SustainabilitySafety Committee, the Conflicts Committee, the Human Resources Committee, and the Nominating and Corporate Governance Committee. The Board has adopted a written charter for each committee, all of which are available under “Governance Documents” on the Governance & Leadership page of the Investors section of our website at investor.livewire.com/governance-leadership/governance-documents. Below is a description of each committee of the Board. Each of the committees has authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry out its responsibilities.
The current Board committee structure was formalized in connection with the Business Combination in September 2022. Accordingly, the newly formed Brand and Sustainability Committee and Conflicts Committee did not meet in 2022.LiveWire Group, Inc. | 13 | 2023 Proxy Statement |
LiveWire Group, Inc. 15 2024 Proxy Statement
Audit and Finance Committee
The Audit and Finance Committee is responsible for, among other things:
| • | appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm; |
| • | discussing with our independent registered public accounting firm their independence from management; |
| • | reviewing, with our independent registered public accounting firm, the scope and results of their audit; |
| • | approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm; |
| • | overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the quarterly and annual financial statements that we file with the SEC; |
| • | overseeing our financial and accounting controls and compliance with legal and regulatory requirements; |
| • | reviewing our policies on risk assessment and risk management; |
| • | reviewing related person transactions; |
| • | reviewing our Code of Business Conduct and Ethics; |
| • | establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters; |
| • | overseeing the Company’s internal audit function; and |
| • | reviewing with management the Company’s capital structure and liquidity, hedging, risk management, and tax strategy. |
appointing, compensating, retaining, evaluating, terminating, and overseeing our independent registered public accounting firm;
discussing with our independent registered public accounting firm their independence from management;
reviewing, with our independent registered public accounting firm, the scope, and results of their audit;
approving all audit and permissible non-audit services to be performed by our independent registered public accounting firm;
overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the quarterly and annual financial statements that we file with the SEC;
overseeing our financial and accounting controls and compliance with legal and regulatory requirements;
reviewing our policies on risk assessment and risk management;
reviewing related person transactions;
reviewing our Code of Business Conduct and Ethics;
establishing procedures for the confidential anonymous submission of concerns regarding questionable accounting, internal controls or auditing matters;
overseeing the Company’s internal audit function; and
reviewing with management the Company’s capital structure and liquidity, hedging, risk management, and tax strategy.
The Audit and Finance Committee consists of William Cornog, John Garcia,
and Kjell Gruner,
and Hiromichi Mizuno, with William Cornog serving as the committee chair. Rule 10A-3 of the Exchange Act and the NYSE rules require that our Audit and Finance Committee be composed entirely of independent members. The Board has affirmatively determined that William Cornog, John Garcia,
and Kjell Gruner,
and Hiromichi Mizuno each meet the definition of “independent director” for purposes of serving on the audit committee under Rule 10A-3 of the Exchange Act and the NYSE rules. Each member of our Audit and Finance Committee also meets the financial literacy requirements of NYSE listing standards. In addition, the Board has determined that William Cornog qualifies as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K. The Board has adopted a written charter for the Audit and Finance Committee, which is available on our corporate website. The information contained on our website is not incorporated by reference into this Proxy Statement. During
2022,2023, the Audit and Finance Committee
met three times.held five meetings.
Brand,
Sustainability, and
SustainabilitySafety Committee
The Brand,
Sustainability, and
SustainabilitySafety Committee is responsible for, among other things:
| • | monitoring consumer, market, industry, and macroeconomic trends, issues and concerns that could affect our brand relevance and its retail and go-to-market models, processes, resources, activities, strategies, and other capabilities, and making recommendations to the Board and management regarding how we should respond to such trends, issues, and concerns; |
| • | monitoring the social, political, environmental, public policy, legislative, and regulatory trends, issues, and concerns that could affect our brand and sustainability models, processes, resources, activities, strategies, and other capabilities, and making recommendations to the Board and management regarding how we should respond to social and environmental trends, issues, and concerns to achieve its brand and sustainability goals more effectively; |
| • | considering and advising management on high-leverage aspects of our brand and our go-to-market strategies to rapidly improve its brand relevance, retail prowess, and new customer creation in the near term, while building strong leadership and company capabilities in these areas for the long term; |
LiveWire Group, Inc. | 14 | 2023 Proxy Statement |
monitoring consumer, market, industry, and macroeconomic trends, issues and concerns that could affect our brand relevance and its retail and go-to-market models, processes, resources, activities, strategies, and other capabilities, and making recommendations to the Board and management regarding how we should respond to such trends, issues, and concerns;
monitoring the social, political, environmental, public policy, legislative, and regulatory trends, issues, and concerns that could affect our brand and sustainability models, processes, resources, activities, strategies, and other capabilities, and making recommendations to the Board and management regarding how we should respond to social and environmental trends, issues, and concerns to achieve its brand and sustainability goals more effectively;
monitoring the Company’s safety performance, initiatives, policies, processes, general safety trends, issues, and concerns that could affect our brand’s customers, employees, or other stakeholders, and make recommendations to the Board and management regarding how we should address these matters;
LiveWire Group, Inc. 16 2024 Proxy Statement
TableTABLE OF CONTENTS
considering and advising management on high-leverage aspects of Contentsour brand and our go-to-market strategies to rapidly improve its brand relevance, retail prowess, and new customer creation in the near term, while building strong leadership and company capabilities in these areas for the long term;
| • | assisting management in setting strategy, establishing goals, and integrating brand, social, and environmental shared value creation and inclusion into daily business activities across our business, consistent with sustainable growth; |
| • | reviewing recent technologies and other innovations that will permit us to achieve sustainable growth without growing our environmental impact; and |
| • | considering the impact that our sustainability policies, practices and strategies have on employees, customers, dealers, suppliers, the environment, and the communities in which we operate. |
assisting management in setting strategy, establishing goals, and integrating brand, social, and environmental shared value creation, and inclusion into daily business activities across our business, consistent with sustainable growth;
reviewing recent technologies and other innovations that will permit us to achieve sustainable growth without growing our environmental impact; and
considering the impact that our sustainability policies, practices, and strategies have on employees, customers, dealers, suppliers, the environment, and the communities in which we operate and where our customers ride.
The Brand,
Sustainability, and
SustainabilitySafety Committee is composed of Kjell Gruner, Glen Koval,
Luke Mansfield, and
Edel O’Sullivan,Hiromichi Mizuno, with Kjell Gruner serving as chair. The Board has adopted a written charter for the Brand,
Sustainability, and
SustainabilitySafety Committee, which is available on our corporate website. The information contained on our website is not incorporated by reference into this Proxy Statement.
During 2023, the Brand, Sustainability, and Safety Committee held three meetings.
The Conflicts Committee is responsible for, among other things, reviewing and approving:
| • | new material arrangements and transactions between the Company and H-D; |
| • | changes to our organizational documents that involve conflicts between the Company and H-D; |
| • | resolution of material disputes related to agreements between the Company and H-D, including any material amendment, waiver, or enforcement action relating to any such agreements and any other material operational matters between the Company and H-D; and |
| • | any sales of shares of the Company’s common stock by H-D that are subject to an early price-based release under a Registration Rights Agreement between the Company and H-D. |
new material arrangements and transactions between the Company and H-D;
changes to our organizational documents that involve conflicts between the Company and H-D;
resolution of material disputes related to agreements between the Company and H-D, including any material amendment, waiver, or enforcement action relating to any such agreements and any other material operational matters between the Company and H-D; and
any sales of shares of the Company’s common stock by H-D that are subject to an early price-based release under a Registration Rights Agreement between the Company and H-D.
The Conflicts Committee is composed of William Cornog, John Garcia, and Kjell Gruner, with William Cornog serving as chair. The Conflicts Committee is composed entirely of independent
directorsDirectors that the Board determined meet the independence requirements of the NYSE. The Board has adopted a written charter for the Conflicts Committee, which is available on our corporate website. The information contained on our website is not incorporated by reference into this Proxy Statement.
During 2023, the Conflicts Committee held four meetings.
Human Resources Committee
The Human Resources Committee operates under a written charter and is responsible for, among other things:
reviewing and approving corporate goals and objectives with respect to the compensation of the Chief Executive Officer, evaluating the Chief Executive Officer’s performance in light of these goals and objectives, and setting compensation for the Chief Executive Officer. Notwithstanding the above, during the time that Jochen Zeitz held the role of Chief Executive Officer, his compensation was paid by H-D;
reviewing and setting or making recommendations to the Board regarding the compensation of the Company’s other executive officers;
reviewing and making recommendations to the Board regarding Director compensation;
reviewing and approving or making recommendations to the Board regarding the Company’s incentive compensation and equity-based plans and arrangements;
reviewing and discussing with management the Company’s Compensation Discussion and Analysis to be included in the Company’s Annual Report on Form 10-K or annual proxy statement and considering whether to recommend to the Board that the Company’s Compensation Discussion and Analysis should be included in such filing; and
preparing the annual compensation committee report.
LiveWire Group, Inc. 17 2024 Proxy Statement
TABLE OF CONTENTS
| • | reviewing and approving corporate goals and objectives with respect to the compensation of the Chief Executive Officer, evaluating the Chief Executive Officer’s performance in light of these goals and objectives, and setting compensation for the Chief Executive Officer. Notwithstanding the above, for so long as Mr. Zeitz’s compensation is paid by H-D, his compensation will be set by the independent compensation committee of H-D; |
| • | reviewing and setting or making recommendations to the Board regarding the compensation of the Company’s other executive officers; |
| • | reviewing and making recommendations to the Board regarding director compensation; |
| • | reviewing and approving or making recommendations to the Board regarding the Company’s incentive compensation and equity-based plans and arrangements; |
| • | reviewing and discussing with management the Company’s Compensation Discussion and Analysis to be included in the Company’s Annual Report on Form 10-K or annual proxy statement and considering whether to recommend to the Board that the Company’s Compensation Discussion and Analysis should be included in such filing; and |
| • | preparing the annual compensation committee report. |
The Human Resources Committee consists of William Cornog, John Garcia,
Paul Krause, and
Gina GoetterJonathan Root, with John Garcia serving as chair. John Garcia and William Cornog each qualify as “independent
directors”Directors” under the NYSE rules. The Board has adopted a written charter for the Human Resources Committee, which is available on our corporate website. The information contained on our website is not incorporated by reference into this Proxy Statement. During
2022,2023, the Human Resources Committee
met two times.LiveWire Group, Inc. | 15 | 2023 Proxy Statement |
held four meetings.Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is responsible for, among other things:
| • | identifying individuals qualified to become members of the Board, consistent with criteria approved by the Board as set forth in the Company’s Corporate Governance Guidelines; |
| • | recommending to the Board the nominees for election to the Board at annual meetings of the Company’s stockholders; |
| • | annually reviewing the committee structure of the Board and recommending to the Board the directors to serve as
members of each committee; |
| • | Periodically reviewing the Board leadership structure and recommending to the Board for its approval changes to the leadership structure; |
| • | reviewing and assessing the Company’s Corporate Governance Guidelines and recommending any proposed changes to the Board for approval; and |
| • | making recommendations to the Board regarding governance matters, including but not limited to, the Company’s
certificate of incorporation, bylaws, and the charters of the Board’s other committees. |
identifying individuals qualified to become members of the Board, consistent with criteria approved by the Board as set forth in the Company’s Corporate Governance Guidelines;
recommending to the Board the nominees for election to the Board at annual meetings of the Company’s stockholders;
annually reviewing the committee structure of the Board and recommending to the Board the Directors to serve as members of each committee;
periodically reviewing the Board leadership structure and recommending to the Board for its approval changes to the leadership structure;
reviewing and assessing the Company’s Corporate Governance Guidelines and recommending any proposed changes to the Board for approval; and
making recommendations to the Board regarding governance matters, including but not limited to, the Company’s certificate of incorporation, bylaws, and the charters of the Board’s other committees.
The Nominating and Corporate Governance Committee consists of William Cornog, Kjell Gruner,
Paul Krause, Luke Mansfield, and
Edel O’SullivanJonathan Root, with
Edel O’SullivanPaul Krause serving as chair. William Cornog and Kjell Gruner each qualify as “independent
directors”Directors” under the NYSE rules. The Board has adopted a written charter for the Nominating and Corporate Governance Committee, which is available on our corporate website. The information contained on our website is not incorporated by reference into this Proxy Statement. During
2022,2023, the Nominating and Corporate Governance Committee
met one time.Human Resources Committee Processes and Procedures
held four meetings.
HUMAN RESOURCES COMMITTEE PROCESSES AND PROCEDURES
The implementation of the Company’s compensation philosophy is carried out under the supervision of the Human Resources Committee. Members of the Company’s management, in addition to the Human Resources Committee’s independent advisors
and the Chairman, may attend portions of the Human Resources Committee meetings for the purpose of providing analysis and information to assist in making recommendations on various compensation matters. However, the Company’s management does not participate in executive sessions of the Human Resources Committee.
In connection with the Business Combination, the Human Resources Committee engaged Mercer as an independent advisor to the Human Resources Committee. The Human Resources Committee, taking into account the various factors prescribed by the NYSE regarding the independence of compensation consultants, has confirmed the independence of Mercer as a compensation advisor and determined that retaining Mercer does not result in any conflict of interest.
Guidelines for Selecting Director Nominees
GUIDELINES FOR SELECTING DIRECTOR NOMINEES
The Nominating and Corporate Governance Committee considers persons identified by its members, management, stockholders, investment bankers, and others. The guidelines for selecting nominees, which are specified in the Nominating and Corporate Governance Committee charter, generally provide
that personsthose individuals to be nominated:
| • | should have demonstrated notable or significant achievements in business, education or public service; |
| • | should possess the requisite intelligence, education and experience to make a significant contribution to the Board and bring a range of skills, diverse perspectives and backgrounds to our deliberations; and |
| • | should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders. |
should have demonstrated notable or significant achievements in business, education, or public service;
should possess the requisite intelligence, education, and experience to make a significant contribution to the Board and bring a range of skills, diverse perspectives and backgrounds to our deliberations; and
should have the highest ethical standards, a strong sense of professionalism and intense dedication to serving the interests of the stockholders.
The Nominating and Corporate Governance Committee considers several qualifications relating to management and leadership experience, background and integrity and professionalism in evaluating a person’s candidacy for membership on the Board. The Nominating and Corporate Governance Committee may require certain skills or attributes, such as financial or accounting
LiveWire Group, Inc. | 16 | 2023 Proxy Statement |
LiveWire Group, Inc. 18 2024 Proxy Statement
experience, to meet specific Board needs that arise from time to time and will also consider the overall experience and makeup of its members to obtain a broad and diverse mix of board members. The Nominating and Corporate Governance Committee does not distinguish among nominees recommended by stockholders and other persons.
All
directorDirector nominees have been recommended to the Board by the Nominating and Corporate Governance Committee for re-election as
directorsDirectors at the Annual Meeting, and the Board has approved such recommendations.
Stockholders Recommendations to the Board of Directors
STOCKHOLDERS RECOMMENDATIONS TO THE BOARD OF DIRECTORS
Stockholders who wish to recommend individuals to the Nominating and Corporate Governance Committee for consideration as potential
directorDirector candidates may submit the names of the recommended individuals, together with appropriate biographical information and background materials as required by the Company’s Bylaws, to the Corporate Secretary, 3700 West Juneau Avenue, P.O. Box 653, Milwaukee, Wisconsin 53208. In the event there is a vacancy, and assuming that appropriate biographical and background material has been provided on a timely basis, the Nominating and Corporate Governance Committee will evaluate stockholder-recommended candidates by following substantially the same process, and applying substantially the same criteria, as it follows for candidates submitted by others.
Human Resources Committee Interlocks and Insider Participation
None of our executive officers currently serves, and in the past year has served, as a member of the compensation committee of any entity that has one or more executive officers serving on the Board.
Stockholder Communications with the Board of Directors
STOCKHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
The Board has a process for stockholders and others to send communications to the Board or any
director.Director. All such communications should be sent by mail addressed to the Board or any particular
directorDirector at c/o Corporate Secretary, LiveWire Group, Inc., 3700 West Juneau Avenue, P.O. Box 653, Milwaukee, Wisconsin 53208. All appropriate communications received by the Company’s Corporate Secretary will be sent directly to the Board or the
director.Director. The Board also communicates with stockholders and other stakeholders through various media, including the Company’s annual report and SEC filings, proxy statement, news releases, and website.
Code of Business Conduct and Ethics
CODE OF BUSINESS CONDUCT AND ETHICS
We have adopted a written code of business conduct and ethics, which applies to all
of our
directors,Directors, officers, and employees, including our principal executive officer, our principal financial officer, our principal accounting officer, and other persons performing similar finance functions. Our Code of Business Conduct and Ethics is available under “Governance Documents” on the Governance & Leadership page of the Investors section of our website at investor.livewire.com/governance-leadership/governance-documents. In addition, we intend to post on our website all disclosures that are required by law or listing rules of the
New York Stock ExchangeNYSE concerning any amendments to, or waivers from, any provision of our Code of Business Conduct and Ethics. Information on or accessible through our website is not incorporated by reference in this Proxy Statement.
Anti-Hedging and Anti-Pledging Policy
ANTI-HEDGING AND ANTI-PLEDGING POLICY
The
BoardCompany has
approved an Insider Trading Policy that applies to all employees, officers, and
directorsDirectors of the Company. Under this policy, all employees, officers, and
directorsDirectors and their family members are prohibited from engaging in short-sales, transactions in put or call options or other derivative transactions, hedging transactions or other inherently speculative transactions in
LiveWirethe Company’s stock or pledging
LiveWireCompany stock in any circumstance, including by purchasing
LiveWireCompany stock on margin or holding
LiveWireCompany stock in a margin account.
LiveWire Group, Inc. | 17 | 2023 Proxy Statement |
CLAWBACK POLICY
We have adopted a Clawback Policy which applies to all employees, including covered officers of the Company. Covered Officers are the Company’s Chief Executive Officer, Chief Financial Officer, Controller, or any employee at a level equivalent to Vice President or higher in charge of a principle business unit, division, or function, and any person who performs significant policy-making functions. This policy ensures that in the event of an accounting restatement due to material non-compliance with financial reporting requirements, the Company can recover excessive Incentive-Based Compensation received by certain covered officers as required by the Securities and Exchange Commission.
LiveWire Group, Inc. 19 2024 Proxy Statement
Our
directorsDirectors play a critical role in guiding the Company’s strategic direction and in overseeing the Company’s management. The many responsibilities and risks and the substantial time commitment of being a
directorDirector require the Company to provide adequate compensation commensurate with the
directors’Directors’ workload and opportunity costs. During
2022, directors2023, Directors who were not employees of the Company or H-D received annual cash retainers
and a restricted stock unit award, as well an option to receive
a portion of the cash retainers in the form of
restrictedfully vested stock units, as set forth below in respect of their service on the Board during
2022.2023. Directors who are employees of the Company or H-D do not receive any additional compensation for their service on the Board.
Cash Compensation. The following table is a summary of the annual cash retainers that were approved in September 2022 for the non-employee directors.Directors. In 2022,2023, non-employee directorsDirectors received a pro-rated retainer feefees based on their roles on the Board and the time period from when we went public throughduring which they served. The retainer fees are paid promptly following the end ofAnnual Meeting for service for the year.ensuing year and are subject to adjustment or recoupment by the Company if a non-employee Director leaves the Board or changes a committee position. Those amounts are disclosed below.
| | Non-Employee Board Member | | 60,000 | 60,000 | |
| | Committee Chair | | | | |
| | Audit and Finance | | 10,000 | 10,000 | |
| | Human Resources | | 7,500 | 7,500 | |
| | Nominating and Corporate Governance | | 6,500 | 6,500 | |
| | Committee Member | | | | |
| | Audit and Finance | | 8,000 | 8,000 | |
| | Human Resources | | 5,000 | 5,000 | |
| | Nominating and Corporate Governance | | 5,000 | 5,000 | |
| | Independent Lead Director | | 20,000 | 20,000 | |
Equity Compensation. In December 2022,August 2023, in recognition of LiveWire becoming a public company, all non-employee directorshis membership on the Board, Mr. Hiromichi received a one-time restricted stock unit award with a grant date fair value of $375,000, which is scheduled to vest on the earlier of the next Annual Meeting of Stockholders or the anniversary of the grant date, subject to the Director’s continued service through such date. This one-time grant aligns with the one-time restricted stock unit awards granted to all the then-serving non-employee Directors in December 2022 when the first grants were made following the Business Separation In addition, non-employee Directors receive an annual restricted stock unit award on the date following the Annual Meeting of Stockholders, with a grant date fair value of $125,000, which vests on December 21, 2023. This award was only grantedthe earlier of the next Annual Meeting of Stockholders or the anniversary of the grant date, subject the Director’s continued service through such date. Non-employee Directors may also elect to directors who servedreceive their annual cash retainers in the form of fully vested shares of the Company’s common stock.
Other Benefits. Non-employee Directors are also eligible to receive an annual clothing allowance of $500 to purchase the Company’s apparel and accessories, use of a Company motorcycle to further Company business objectives and the same discount on the Board at the time the Company became publicly traded.products that is provided to all Company employees.
LiveWire Group, Inc. 20 2024 Proxy Statement
TABLE OF CONTENTS
2022 Director Compensation Table
2023 DIRECTOR COMPENSATION TABLE
The following table sets forth information for the year ended December 31, 2022,2023, regarding the compensation awarded to, earned by or paid to the non-employee directorsDirectors who served on the Board during 2022.2023. Mr. Zeitz, the former Chief Executive Officer of the Company, Ms. Gina Goetter, the former Chief Financial Officer of H-D, Mr. Koval, the Vice President of Engineering of H-D, Mr. Krause, the Chief Legal Officer, Chief Compliance Officer, and Corporate Secretary of H-D, Ms. Edel O’Sullivan, the former Chief Commercial Officer of H-D, and Mr. Root, the Chief Financial Officer of H-D, do not receive additional compensation for their service as a director,Director, and therefore, are not included in the Director Compensation table below. Ms. Goetter and Ms. O’Sullivan ceased serving as Directors of the Company on July 7, 2023 and January 23, 2024, respectively. All compensation paid to Mr. Zeitz is reported below in the “Summary Compensation Table.”
| | William Cornog | | | 80,007 | | | 125,003 | | | 205,009 | |
| | John Garcia | | | 95,504 | | | 125,003 | | | 220,507 | |
| | Kjell Gruner | | | 73,000 | | | 125,003 | | | 198,003 | |
| | Hiromichi Mizuno | | | 60,009 | | | 375,002 | | | 435,011 | |
Director Compensation in 2022
| Director Name | | Fees Earned
or Paid in
Cash
($)(1) | | Stock
Awards
($)(2)(3) | | Total
($) |
| William Cornog | | 21,336 | | 375,000 | | 396,336 |
| John Garcia | | 25,469 | | 375,000 | | 462,276 |
| Kjell Gruner | | 19,469 | | 375,000 | | 394,469 |
1.
| Amounts reflect the pro-rated annual cash retainers for the portion of the year from the Business Combination throughended December 31, 2022.2023. Non-employee directorsDirectors have the option of receiving all or a portion of their cash retainers in the form of stock. Mr. Garcia and Mr. Cornog elected to receive histheir annual cash retainer payment made in 20222023 in the form of stock. |
2.
| Amounts reflect the aggregate grant date fair value of stock awards computed in accordance with the provisions of FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in Note 15 to our financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.2023. |
3.
| As of December 31, 2022,2023, the non-employee directors held outstanding restricted stock units to acquire the following number of shares of the Company’s common stock (Ms.(Mr. Zeitz, Ms. Goetter, Mr. Koval, Mr. Krause, Mr. Root, and Ms. O’Sullivan, as employees of H-D, do not hold any awards to acquire the Company’s common stock): |
| | William L. Cornog | | 54,506 | 18.302 | |
| | John Garcia | | 54,506 | 18,302 | |
| | Kjell Gruner | | 54,506 | 18,302 | |
| | Hiromichi Mizuno | | | 36,801 | |
2023 Director Compensation Program
2024 NON-EMPLOYEE DIRECTOR COMPENSATION PROGRAM
For
2023,2024, the non-employee
directorDirector compensation program
remains the same as 2023 and includes the same annual cash retainers described
above for 2022, which amounts will be paid promptly following the Annual Meeting for service for the ensuing year and subject to adjustment or recoupment by the Company if a non-employee director leaves the Board or changes a committee position. Non-employee directors may continue to elect to receive their annual cash retainers in the form of fully vested shares of the Company’s common stock. Non-employee directors will also receive an annual restricted stock unit award on the date of each annual meeting of stockholders, with a grant date fair value of $125,000 that vests on the earlier of the next annual meeting of stockholders or the anniversary of the grant date, subject the director’s continued service through such date.Non-employee directors are also eligible to receive an annual clothing allowance of $500 to purchase the Company’s apparel and accessories, use of a Company motorcycle to further Company business objectives and the same discount on Company products that is provided to all Company employees.
Stock Ownership Guidelines
above.
NON-EMPLOYEE DIRECTOR STOCK OWNERSHIP GUIDELINES
In February 2023, the Board approved stock ownership guidelines for each
directorDirector who is not an employee of
oursthe Company or H-D. Under the guidelines, the non-employee
directorsDirectors have five years from his or her election to the Board or February 13, 2023,
the date the Human Resources Committee approved the stock ownership guidelines, whichever is longer, to accumulate the minimum ownership requirements of five times the retainer fee. Restricted stock, restricted stock units, shares held in 401(k) accounts, deferred stock units, and shares of common stock directly held by the
directorDirector count toward satisfying the guidelines.
LiveWire Group, Inc. | 19 | 2023 Proxy Statement |
LiveWire Group, Inc. 21 2024 Proxy Statement
Ratification of the Selection
of Ernst & Young LLP as Our
Independent Registered Public
Accounting Firm for the Fiscal Year
Ending December 31, 20232024
The Audit and Finance Committee has selected Ernst & Young LLP (“Ernst & Young”) as the Company’s independent registered public accounting firm for the fiscal year ending December 31,
2023,2024, and the Board is submitting this selection to our stockholders for ratification at the Annual Meeting. Ernst & Young has served as the Company’s independent registered public accounting firm since
2021.2022. Representatives of Ernst & Young plan to attend the Annual Meeting and will be available to answer appropriate questions from stockholders. They will have the opportunity to make a statement if they desire to do so.
Neither our Bylaws nor other governing documents or law require stockholder ratification of the appointment of Ernst & Young as the Company’s independent registered public accounting firm. However, the Board is submitting the selection of Ernst & Young to the stockholders for ratification as a matter of good corporate governance practice. If the stockholders fail to ratify the selection, the Audit and Finance Committee will reconsider whether to retain Ernst & Young. Even if the selection is ratified, the Audit and Finance Committee in its discretion may direct the appointment of different independent registered public accounting firm at any time during the year if the Audit and Finance Committee determines that such a change would be in the best interest of the Company and its stockholders.
| | The Board of Directors recommends a vote “For” the ratificationRatification of Ernst & Young as the Company’s Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2023.2024. | |
LiveWire Group, Inc. | 20 | 2023 Proxy Statement |
LiveWire Group, Inc. 22 2024 Proxy Statement
Independent Registered
Public Accountants
Fees
FEES
The following is a summary of the fees and services provided by Ernst & Young to the Company for fiscal year ended December 31,
20222023 and
2021,2022, which includes services provided by Ernst & Young to H-D related to the audit of the financial services of our business prior to the Business Combination:
Description of Services Provided
by Ernst & Young | | 2022
($) | | 2021
($) |
| Audit Fees(1) | | $1,547,263 | | $1,082,971 |
| Audit Related Fees(2) | | – | | – |
| Tax Fees(3) | | – | | – |
| All Other Fees(4) | | – | | – |
| TOTAL | | $1,547,263 | | $1,082,971 |
| | Audit Fees(1) | | | $690,025 | | | $1,547,263 | |
| | Audit Related Fees(2) | | | – | | | – | |
| | Tax Fees(3) | | | – | | | – | |
| | All Other Fees(4) | | | – | | | – | |
| | TOTAL | | | $690,025 | | | $1,547,263 | |
1.
| Audit Fees include fees for the audit of our consolidated financial statements. This category also includes fees for services that generally only the principal auditor can reasonably provide to a client, such as comfort letters, consents, and reviews of documents that we file with the SEC. |
2.
| Audit Related Fees included consultation on accounting and internal control matters. |
3.
| Tax Fees included tax advice, planning, compliance, and transaction consulting. |
4.
| All Other Fees consists of the aggregate fees for all services other than those described above. |
As set forth in the Audit and Finance Committee Charter, the Audit and Finance Committee pre-approves the scope of the audit, audit-related, and tax services provided by the independent registered public accounting firm, as well as all associated fees and terms, pursuant to pre-approval policies and procedures established by the Audit and Finance Committee. The Audit and Finance Committee evaluates the independent registered public accounting firm’s qualifications, performance, and independence, and presents its conclusions to the full Board
on at least
on an annual basis.
All the services provided by Ernst & Young during
2022,2023, and fees for such services, were pre-approved by the Audit and Finance Committee in accordance with these standards.
LiveWire Group, Inc. | 21 | 2023 Proxy Statement |
LiveWire Group, Inc. 23 2024 Proxy Statement
Change in Independent Registered
Public Accounting Firm
For accounting purposes, the transactions contemplated as part of the Business Combination were treated as a reverse acquisition and, as such, the historical financial statements of the accounting acquirer, LiveWire, which have been audited by Ernst & Young, will become the historical financial statements of the Company. In a reverse acquisition, a change of accountants is presumed to have occurred unless the same accountant audited the pre-transaction financial statements of both the legal acquirer and the accounting acquirer, and such change is generally presumed to occur on the date the reverse acquisition is completed.
Previous Independent Registered Public Accounting Firm
PREVIOUS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On September 30, 2022, the Audit and Finance Committee dismissed WithumSmith+Brown, PC (“Withum”), ABIC’s independent registered public accounting firm prior to the Business Combination, as the Company’s independent registered public accounting firm effective following the completion of the Company’s review of the quarter ended September 25, 2022, which consists only of the accounts of the pre-Business Combination special purpose acquisition company, ABIC.
The report of Withum on ABIC’s, the Company’s legal predecessor, financial statements as of December 31, 2021 and December 31, 2020, and the year ended December 31, 2021 and for the period from October 5, 2020 (inception) to December 31, 2020, did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainties, audit scope or accounting principles.
During the period from October 5, 2020 (inception) to December 31, 2020, the year ended December 31, 2021, and the subsequent interim period through September 30, 2022, there were no disagreements between the Company and Withum on any matter of accounting principles or practices, financial disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Withum, would have caused it to make reference to the subject matter of the disagreements in its reports on ABIC’s financial statements for such period.
During the period from October 5, 2020 (inception) to December 31, 2020, the year ended December 31, 2021, and the subsequent interim period through September 30, 2022, there were no “reportable events” (as defined in Item 304(a)(1)(v) of Regulation S-K under the Exchange Act).
New Independent Registered Public Accounting Firm
NEW INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
On September 30, 2022, the Board approved the engagement of Ernst & Young as the Company’s independent registered public accounting firm to audit the Company’s consolidated financial statements for the year ended December 31, 2022. Ernst & Young served as
the independent registered public accounting firm of LiveWire EV, LLC prior to the Business Combination. During the period from October 5, 2020 (inception) to December 31, 2020, the year ended December 31, 2021, and the subsequent period through September 30, 2022, neither the Company nor anyone on the Company’s behalf consulted with Ernst & Young with respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, the type of audit opinion that might be rendered on our financial statements, and no written report or oral advice was provided to us by Ernst & Young that was an important factor considered by us in reaching a decision as to any accounting, auditing or financial reporting issue, or (ii) any other matter that was either the subject of a disagreement or a reportable event as that term is defined in Item 304(a)(1)(v) of Regulation S-K of the Exchange Act.
LiveWire Group, Inc. | 22 | 2023 Proxy Statement |
LiveWire Group, Inc. 24 2024 Proxy Statement
Report of the Audit and Finance
Committee of the Board of Directors
The Audit and Finance Committee reviews the Company’s financial reporting process on behalf of the Board. The Company’s management has the primary responsibility for the preparation and integrity of the consolidated financial statements and the reporting process, including establishing and monitoring the system of internal financial controls. In this context, during fiscal year
2022,2023, the Audit and Finance Committee met and held discussions with management and Ernst & Young, the Company’s independent registered public accounting firm. The Company’s management has represented to the Audit and Finance Committee that the Company’s consolidated financial statements for the fiscal year ended December 31,
2022,2023, were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit and Finance Committee has reviewed and discussed the audited financial statements of the Company with management of the Company and
with Ernst & Young.
In addition, the Audit and Finance Committee has reviewed and discussed with Ernst & Young: (i) the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (the “PCAOB”)
, and the SEC; and (ii) the written disclosures and the letter received from Ernst & Young required by applicable requirements of PCAOB regarding Ernst & Young’s communications with the Audit and Finance Committee concerning independence and the independence of Ernst & Young from the Company and its management.
Based on the review and discussion referred to above, the Audit and Finance Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
20222023 for filing with the SEC.
Respectfully submitted by the members of the Audit and Finance Committee of the Board of Directors:
William Cornog, Chair
John Garcia
Kjell Gruner
LiveWire Group, Inc. | 23 | 2023 Proxy Statement |
Hiromichi Mizuno
LiveWire Group, Inc. 25 2024 Proxy Statement
Common Stock Ownership of Certain
Beneficial Owners and Management
Except as otherwise noted, the following table sets forth certain information known to the Company regarding beneficial ownership of the Company’s common stock as of March 20, 20232024 by:
each person whom we know to own beneficially more than 5% of our common stock;
each of the Company’s directors,Directors, nominees, and named executive officers individually; and
all the Company’s directorsDirectors and named executive officers as a group.
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days after that date through (a) the exercise of any option, warrant or right, (b) the conversion of a security, (c) the power to revoke a trust, discretionary account or similar arrangement, or (d) the automatic termination of a trust, discretionary account or similar arrangement. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options or other rights (as set forth above) held by that person that are currently exercisable, or will become exercisable within 60 days thereafter, are deemed outstanding, while such shares are not deemed outstanding for purposes of computing percentage ownership of any other person.
The beneficial ownership of our Common Stock is based on
202,409,176203,162,565 shares of common stock issued and outstanding on March 20,
2023.2024.
Unless otherwise indicated, we believe that all persons named in the table below have sole voting and investment power with respect to the voting securities beneficially owned by them. To our knowledge, no shares of our common stock beneficially owned by any executive officer or
directorDirector have been pledged as security.
LiveWire Group, Inc. | 24 | 2023 Proxy Statement |
LiveWire Group, Inc. 26 2024 Proxy Statement
Table of ContentsTABLE OF CONTENTS
| | | Shares Beneficially Owned |
| Name of Beneficial Owner(1) | | Number | | Percent |
| Greater than 5% Stockholders | | | | |
| Legacy LiveWire Equityholder(2) | | 181,000,000 | | 89.42% |
| AEA-Bridges Impact Sponsor LLC(3) | | 18,450,000 | | 8.67% |
| Directors and Named Executive Officers | | | | |
| Jochen Zeitz | | 0 | | * |
| William L. Cornog | | 0 | | * |
| John Garcia(4) | | 3,756,288 | | 1.76% |
| Gina Goetter | | 0 | | * |
| Kjell Gruner | | 0 | | * |
| Glen Koval | | 0 | | * |
| Edel O’Sullivan | | 0 | | * |
| Ryan Morrissey | | 0 | | * |
| Tralisa Maraj | | 0 | | * |
| All current executive officers and directors as a group (12 persons)(5) | | 3,756,288 | | 1.76% |
| | GREATER THAN 5% STOCKHOLDERS | |
| | Legacy LiveWire Equityholder(3) | | | 181,000,000 | | | 89.09% | |
| | AEA-Bridges Impact Sponsor LLC(4) | | | 18,450,000 | | | 8.64% | |
| | DIRECTORS AND NAMED EXECUTIVE OFFICERS | |
| | Jochen Zeitz | | | 0 | | | * | |
| | William L. Cornog | | | 84,522 | | | * | |
| | John Garcia(5) | | | 3,826,727 | | | 1.87% | |
| | Kjell Gruner | | | 72,808 | | | * | |
| | Glen Koval | | | 0 | | | * | |
| | Paul Krause | | | 0 | | | * | |
| | Luke Mansfield | | | 0 | | | * | |
| | Hiromichi Mizuno | | | 6,105 | | | * | |
| | Jonathan Root | | | 0 | | | * | |
| | Karim Donnez | | | 0 | | | * | |
| | Ryan Morrissey | | | 66,192 | | | * | |
| | Tralisa Maraj | | | 35,639 | | | * | |
| | All current executive officers and Directors as a group (14 persons)(6) | | | 4,138,076 | | | 1.92% | |
1.
| Unless otherwise indicated, the mailing address of each of the stockholders listed in the table above is c/o LiveWire Group, Inc., 3700 West Juneau Avenue,
P.O. Box 653, Milwaukee, Wisconsin 53208. |
2.
| Includes the following shares not currently outstanding but deemed beneficially owned because of the right to acquire them pursuant to restricted stock units that vest within 60 days or have vested but have not yet been distributed: 30,016 shares for Mr. Cornog, 32,285 shares for Dr. Garcia, 18,302 shares for Dr. Gruner, and 6,105 shares for Mr. Mizuno. |
3.
| The Legacy LiveWire Equityholder is the record holder of such shares of Common Stock. The Legacy LiveWire Equityholder is a direct, wholly owned subsidiary of HDMCG, which, in turn, is a wholly owned subsidiary of H-D. By reason of their relationships, HDMCG and H-D may be deemed to share the power to vote or to direct the vote and to dispose or direct the disposition of the shares of Common Stock held by the Legacy LiveWire Equityholder and may be deemed to have shared beneficial ownership of the shares of Common Stock held directly by the Legacy LiveWire Equityholder. |
3.4.
| Based solely on a Form 13G filed with the SEC on February 10, 2023. AEA-Bridges Impact Sponsor LLC (the “Sponsor”) directly holds (i) 7,950,000 shares of common stock and (ii) 10,500,000 private placement warrants that are currently exercisable into an equal number of shares of common stock. The Sponsor is governed by a three-member board of managers. Each manager has one vote, and the approval of a majority of the managers is required to approve an action of our sponsor. Under the so-called “rule of three,” if voting and dispositive decisions regarding an entity’s securities are made by three or more individuals, and a voting and dispositive decision requires the approval of a majority of those individuals, then none of the individuals is deemed a beneficial owner of the entity’s securities. This is the situation with regard to the Sponsor. Based upon the foregoing analysis, no individual manager of the Sponsor exercises voting or dispositive control over any of the securities held by the Sponsor, even those in which such manager directly holds a pecuniary interest. The business address for the Sponsor is 520 Madison Avenue, 40th40th Floor, New York, NY 10022. |
4.5.
| Reflects (i) 2,500,000 shares of common stock directly held and (ii)Includes 1,250,000 warrants that are currently exercisable into an equal number of shares of common stoc.stock. The business address for Mr. Garcia is 520 Madison Avenue, 40th40th Floor, New York, NY 10022. |
5.6.
| See footnotefootnotes 4 and 5 for certain private placement warrants included in this total. |
LiveWire Group, Inc. | 25 | 2023 Proxy Statement |
LiveWire Group, Inc. 27 2024 Proxy Statement
This section describes the material components of the Company’s executive compensation program for the executive officers who are named in the “Summary Compensation Table” below. In
2022,2023, our named executive officers (“NEOs”) and their positions were as follows:
| • | Jochen Zeitz, our Chief Executive Officer |
| • | Ryan Morrissey, our President |
| • | Tralisa Maraj, our Chief Financial Officer |
Karim Donnez, Chief Executive Officer
Ryan Morrissey, President, Ventures & Investments
Tralisa Maraj, Chief Financial Officer
Jochen Zeitz, Former Chief Executive Officer
As an “emerging growth company” within the meaning of the JOBS Act, we have opted to comply with the reduced executive compensation disclosure requirements available to emerging growth companies pursuant to the JOBS Act, which require compensation disclosure for
each person who served as our principal executive officer
in 2023 and the two most highly compensated executive officers other than our principal executive
officer.officer for 2023.
2023 EXECUTIVE TRANSITIONS
Effective June 12, 2023, the Board appointed Mr. Donnez as the Chief Executive Officer to succeed Mr. Zeitz, whose term as Chief Executive Officer ended on June 11, 2023. Mr. Zeitz remained as Chairman of the Board. In connection with organizational changes made following Mr. Donnez’s appointment, Mr. Morrissey assumed the position of President, Ventures & Investments, effective August 11, 2023.
2023 COMPENSATION OVERVIEW
Below is a summary of the actions taken with respect to the key elements of NEO compensation in 2023:
2022 Compensation OverviewBase SalaryAs described: Mr. Donnez’s annual base salary was set at $600,000 in connection with his appointment as Chief Executive Officer in June 2023. No changes were made to the annual base salaries for Ms. Maraj or Mr. Morrissey for 2023. Mr. Zeitz’s base salary was set by the H-D Human Resources Committee and paid entirely by H-D.
Short-Term Incentive Plan: In February 2023, the Human Resources Committee approved the 2023 Short Term Incentive Plan and metrics discussed in further detail below under “2023 Short-Term Incentive Plan.” The NEOs, except for Mr. Zeitz, were eligible to participate. Mr. Zeitz participated in the “Certain Relationships and Related Party Transactions — Related Party Transactions” section of this Proxy Statement,H-D Short-Term Incentive Plan during 2023.
Long-Term Incentive Plan: In February 2023, the
Company completedHuman Resources Committee approved annual equity awards under the
Business Combination on September 26, 2022. Prior to that time, the business conducted by the Company was part of H-D, and thus, H-D employed Mr. Zeitz as its Chairman, President, and Chief Executive OfficerLiveWire Group, Inc. 2022 Incentive Award Plan for Ms. Maraj and Mr. Morrissey
in the form of restricted stock units, which vest on each of the first three anniversaries of the date of the grant. In June 2023, in connection with his appointment as
its Chief Electric Vehicle Officer. In connection the
Business Combination, Mr. Zeitz remained the Chairman, President, and Chief Executive Officer of H-D and also became the Chairman andnew Chief Executive Officer of the Company,
andthe Human Resources Committee approved an initial grant to Mr.
Morrissey became the PresidentDonnez of restricted stock units, valued at $3,000,000, which vest on each of the
Company.first three anniversaries of the date of the grant. Mr. Zeitz did not receive any equity awards from the Company, but did participate in the H-D Long-Term Incentive Plan for 2023.
Mr. Zeitz received no compensation from the Company in
2022.2023. Due to H-D’s large majority ownership of the Company and Mr. Zeitz’s dual leadership roles at the Company and H-D, his compensation was set by the H-D Human Resources Committee and paid or accounted for entirely by H-D. Because Mr. Zeitz’s compensation was not apportioned between the Company and H-D, as required by applicable regulations, the Company has listed all the compensation paid or allocated to him for his services to those entities in
2022,2023, even though none of it was paid or accounted for by the Company.
For Mr. Morrisey and Ms. Maraj, because the Business Combination occurred so late in 2022, most compensation and benefits described below were provided by H-D and most decisions as to the compensation during 2022 were made by H-D. Even after the Business Combination, the compensation of the Company’s NEOs remained aligned to H-D’s compensation practices and programs for the remainder of 2022.
Below is a summary of the actions taken with respect to the key elements of NEO compensation in 2022:
| • | Base Salary: Mr. Zeitz’s base salary was set by the H-D Human Resources Committee and paid entirely by H-D. For Mr. Morrisey and Ms. Maraj, payment obligations of base salary at the time of the Business Combination were transferred from H-D to LiveWire. No changes were made to base salaries following the Business Combination. |
| • | Short-Term Incentive Plan: All eligible employees of the Company, including the NEOs, remained on the H-D Short-Term Incentive Plan through the end of 2022. |
| • | Long-Term Incentive Plan: Mr. Zeitz and Mr. Morrissey received an equity grant under H-D’s equity program; however, as described below, in connection with the Business Combination, Mr. Morrissey’s unvested H-D RSU awards were modified to provide for settlement in cash instead of H-D stock upon vesting in accordance with their original terms and his unvested performance shares were forfeited. Following the Business Combination, the Human Resources Committee awarded all employees of the Company, excluding Mr. Zeitz, a one-time equity award to recognize their efforts in connection with the Business Combination and to align employee and stockholder interests. Mr. Zeitz did not receive such one-time Company equity award from either H-D or the Company in connection with the Business Combination. |
LiveWire Group, Inc. | 26 | 2023 Proxy Statement |
LiveWire Group, Inc. 28 2024 Proxy Statement
Table of ContentsTABLE OF CONTENTS
SUMMARY COMPENSATION TABLE
2023 Compensation Program
Commencing in 2023, the compensation programs and decisions for our NEOs, other than Mr. Zeitz, will be determined by our Human Resources Committee. Due to Mr. Zeitz’s dual role with the Company and H-D, his compensation will continue to be set by the H-D compensation committee and paid by H-D.
Summary Compensation Table
The following table discloses compensation paid to our NEOs
(Ms. Maraj first became an NEO in
2022).2021, 2022, and 2023, as applicable. For Mr. Zeitz, the compensation reflected in the table was set by the Human Resources Committee of H-D and fully paid
and/or accounted for by H-D. Other than the compensation Mr. Zeitz received from H-D, he received no additional compensation from the Company in
2022.Name and
Principal Position | | Year | | Salary
($)(1) | | Bonus
($) | | Stock
Awards
($)(2) | | Option
Awards
($) | | Non-Equity
Incentive Plan
Compensation
($)(3) | | All Other
Compensation
($)(4) | | Total
($) |
Jochen Zeitz Chief
Executive Officer | | 2022 | | 1,900,000 | | — | | 38,407,535 | | — | | 2,738,400 | | 278,929 | | 43,324,864 |
| | 2021 | | 2,500,000 | | — | | 6,000,030 | | 6,435,000 | | 3,000,000 | | 170,538 | | 18,105,568 |
Ryan Morrissey President | | 2022 | | 475,000 | | — | | 3,888,574 | | — | | 930,778 | | 28,267 | | 5,322,619 |
| | 2021 | | 357,877 | | 500,000 | | 347,275 | | — | | 1,144,178 | | 8,221 | | 2,357,551 |
Tralisa Maraj Chief Financial Officer | | 2022 | | 199,904 | | — | | 1,667,644 | | — | | 176,015 | | 7,996 | | 2,051,559 |
| | Karim Donnez
Chief Executive Officer(5) | | | 2023 | | | 323,077 | | | — | | | 3,000,000 | | | 250,291 | | | — | | | — | | | 3,573,368 | |
| | Tralisa Maraj
Chief Financial Officer(6) | | | 2023 | | | 385,000 | | | — | | | 462,007 | | | 216,563 | | | — | | | — | | | 1,063,570 | |
| | 2022 | | | 199,904 | | | — | | | 1,667,644 | | | 176,015 | | | — | | | 7,996 | | | 2,051,559 | |
| | Ryan Morrisey
President, Ventures & Investments | | | 2023 | | | 475,000 | | | — | | | 950,000 | | | 320,625 | | | — | | | — | | | 1,745,625 | |
| | 2022 | | | 475,000 | | | — | | | 3,888,574 | | | 930,778 | | | — | | | 28,267 | | | 5,322,619 | |
| | 2021 | | | 357,877 | | | 500,000 | | | 347,275 | | | 1,144,178 | | | — | | | 8,221 | | | 2,357,551 | |
| | Jochen Zeitz
Former Chief Executive Officer(7) | | | 2023 | | | 1,948,000 | | | — | | | 6,500,029 | | | 3,093,600 | | | — | | | 411,651 | | | 11,953,280 | |
| | 2022 | | | 1,900,000 | | | — | | | 38,407,535 | | | 2,738,400 | | | — | | | 278,929 | | | 43,324,864 | |
| | 2021 | | | 2,500,000 | | | — | | | 6,000,030 | | | 3,000,000 | | | 6,435,000 | | | 170,538 | | | 18,105,568 | |
| 1.(1)
| Amounts reflect the base salary earned by our NEOs. Ms. Maraj commenced employment with LiveWire in June of 2022, and her earned salary reflects her partial year of employment with LiveWire. |
| 2.(2)
| Amounts shown for 2023 reflect the aggregate grant date fair value of each restricted stock unit H-D Aspirational share award and performance share award granted, in the relevant year, computed in accordance with Accounting Standards Codification Topic 718 (“ASC 718”). The grant date fair value of restricted stock unit awards is based on the market price of the underlying stock as of the date of grant (which considers the value of dividend equivalents that the holder is entitled to receive). The grant date fair values ofFor additional detailed on Mr. Zeitz’s grants, please refer to the performance and H-D Aspirational share awards were determined using a Monte Carlo simulationHarley-Davidson proxy statement filed on the date of grant pursuant to ASC 718. Key assumptions used to value the standard performance and H-D Aspirational share awards at the date of grant in 2022 were as follows.April 5, 2024. |
| Award | Expected Volatility | Risk-free rate |
| H-D Aspirational shares | 54.5% | 3.23% |
| H-D Performance shares | 55.0% | 1.58% |
| LiveWire Performance shares | 76.8% | 3.89% |
The value of the H-D performance shares granted to Mr. Morrisey during 2022 included in the table above represents the grant date fair value of one-third of the total 2022 and one-third of the total 2021 performance share awards. Under ASC 718, shares are not considered granted until the grantor and grantee reach a mutual understanding of the key terms and conditions of the award. Therefore, under ASC 718, the total award is considered granted in three equal amounts on the dates the annual performance goals for each fiscal year are communicated. The value included in the Summary Compensation Table is based on achieving the performance objectives at target. The maximum H-D performance share award value for 2022 grants, based on the grant date fair value per performance share granted to Mr. Morrisey was $462,903. Mr. Zeitz and Ms. Maraj did not receive an H-D Performance share award. For additional detailed on Mr. Zeitz’s grants, please refer to the Harley-Davidson proxy statement filed on April 6, 2023.
| 3.(3)
| The amounts reported in this column for 2022 includes2023 include the amounts each NEO earned under his or her STIP award for 2022,2023, which waswere paid during 2023.2024. For each year in this table, this column shows compensation for the year in which it was earned, even if the amount was paid during the following year. In addition, this column includes a one-time payment to Mr. Morrissey in 2022 based on the date of the Business Combination, as previously negotiated as part of his offer of employment, which is described in more detail below under “2022 Funding Payment.”employment. |
LiveWire Group, Inc. | 27 | 2023 Proxy Statement |
| 4. | Amounts reported in the All Other Compensation column for 20222023 consisted of the following: |
| Name | 401(K) PLAN
CONTRIBUTION
($) | DEFERRED
COMPENSATION
PLAN
CONTRIBUTIOn
($) | HEALTHCARE
ACCOUNT
CONTRIBUTION
($) | AIRCRAFT
USAGE
($)(A) | Total
($) | |
| Jochen Zeitz | 25,325 | 149,975 | — | 103,629 | 278,929 | |
| Ryan Morrissey | 25,836 | 2,431 | — | — | 28,267 | |
| Tralisa Maraj | 7,996 | — | — | — | 7,996 | |
| | Karim Donnez | | | 14,769 | | | 0 | | | 0 | | | — | | | 14,769 | |
| | Tralisa Maraj | | | 22,500 | | | 0 | | | 1,700 | | | — | | | 24,200 | |
| | Ryan Morrissey | | | 22,500 | | | 0 | | | 0 | | | — | | | 22,500 | |
| | Jochen Zeitz | | | 27,050 | | | 185,912 | | | — | | | 198,689 | | | 411,651 | |
| A.
| Compensation for executive aircraft usage is based on the incremental cost to H-D. Incremental cost is calculated based on an annual average cost per flight hour which includes costs for fuel, landing/hanger fees, crew travel costs, catering, and other variable flight expenses. This annual average cost per flight hour is then multiplied by the hours flown in connection with executive aircraft usage, including any flight hours necessary to reposition the aircraft. Since H-D uses its aircraft primarily for business travel, we do not include costs that H-D would have incurred regardless of executive aircraft usage, such as depreciation, pilot salaries, and maintenance costs. In addition, compensation for executive aircraft usage also includes approximately $58,000 related to the cost of chartering an aircraft during maintenance of H-D’s aircraft. |
(5)
| Mr. Donnez was appointed to the position of Chief Executive Officer on June 12, 2023. |
(6)
| Ms. Maraj first became an NEO in 2022. |
(7)
| Mr. Zeitz’s employment with the Company ended on June 11, 2023, but he remains the Chairman of the Board. |
LiveWire Group, Inc. 29 2024 Proxy Statement
NarrativeTABLE OF CONTENTS
NARRATIVE TO SUMMARY COMPENSATION TABLE
2023 Base Salaries
Mr. Donnez, Ms. Maraj and Mr. Morrissey received a base salary to
Summary Compensation Table2022 Base Salaries
compensate them for services rendered to the Company. The base salary payable to each of these NEOs is intended to provide a fixed component of compensation reflecting the NEO’s skill set, experience, role, responsibilities and market data. Mr. Zeitz’s base salary was set by the H-D Human Resources Committee and paid entirely by H-D for his services to both H-D and the Company. Mr. Zeitz was not paid any base salary by the Company. Mr. Morrisey and Ms. Maraj received a base salary to compensate them for services rendered to H-D and then the Company. The base salary payable to each NEO is intended to provide a fixed component of compensation reflecting the NEO’s skill set, experience, role, responsibilities and market data. Base salaries for our NEOs for 20222023 are set forth below. The actual base salaries earned by our NEOs for services to H-D and the Company in 20222023 are set forth in the “Salary” column of the “Summary Compensation Table” above.
Jochen Zeitz | 1,900,000Karim Donnez | | | 600,000 | |
Ryan Morrissey | 475,000Tralisa Maraj | | | 385,000 | |
Tralisa Maraj | 385,000Ryan Morrissey | | | 475,000 | |
| | Jochen Zeitz | | | 1,950,000 | |
Commencing in
2023 we will evaluate the base salaries of our executive officers, including our NEOs, annually in consultation with ourCash Incentives
LiveWire Short-Term Incentive Plan
In February 2023, based upon input from independent compensation consultant
for approval byto the Human Resources
Committee.2022 Cash Incentives
H-DCommittee, Mercer LLC (“Mercer”), the Human Resources Committee approved the LiveWire Short-Term Incentive Plan
In 2022, (“STIP”), in which all our NEOs, except for Mr. Zeitz, were eligible to participate in H-D’s short-term incentive plan, under whichparticipate. Under the LiveWire Short-Term Incentive Plan, annual cash incentives were targeted at a percentage of base salary and earned based onupon metrics tied to Company performance: (1) unit sales, (2) gross margin, and (3) operating expense. Unit sales is defined as the sales of H-D’s STACYC electric bicycle and the Company’s LiveWire ONE and Del Mar motorcycles in the United States and Europe. Gross margin is defined as net sales less cost of goods sold. Operating expense is defined as selling, administrative, and engineering expenses incurred in operating the Company. The Human Resources Committee selected these metrics, which yield the Company’s operating income, as that is a priority measure of the health of the business and demonstrates progress against the Company’s strategy. In February 2023, the Human Resources Committee approved STIP metrics tied to publicly provided guidance of unit sales and operating loss also noting Board discretion was to be applied. In July 2023, the Company publicly revised its unit sales guidance. In Febraury 2024, the Human Resources Committee determined that the revised metrics were achieved, when taking into account the exclusion of a one-time end-of-life write-off, but utilized Board discretion to provide a 75% payout of STIP for NEOs.
H-D Short-Term Incentive Plan
In February 2023, the H-D Human Resources Committee approved the H-D Short-Term Incentive Plan, in which only Mr. Zeitz was eligible to participate. Under the H-D Short-Term Incentive Plan, annual cash incentives were targeted at a percentage of base salary and earned based upon one metric tied to H-D’s performance: operating income. Under the H-D Short-Term Incentive Plan, if H-D did not achieve a minimum level of performance, the threshold payout was 50% of the target opportunity, and if performance at or above the upper end of the performance goal would result in a payout of 200% of the target opportunity. There was also a threshold level of operating income required to achieve a payout. In addition, for 2023, the H-D Human Resources Committee approved a supplemental H-D Short-Term Incentive Plan component and award value for Mr. Zeitz of $1.5 million to recognize his leadership at LiveWire and his assistance to the Board in identifying and integrating a new Chief Executive Officer. In February 2024, the H-D Human Resources Committee determined that each of the metrics was achieved. All amounts paid out to Mr. Zeitz under the H-D Short-Term Incentive Plan were paid by H-D.
LiveWire Group, Inc. 30 2024 Proxy Statement
TABLE OF CONTENTS
The annual target incentive opportunities (expressed as a percentage of base salary) under
H-D’s short-term incentive plan for 2022the 2023 Short-Term Incentive Plan for our NEOs and the actual amounts paid to our NEOs based on their respective performance results are set forth below:
| Name | Annual Target Incentive
% of Base Salary(1) | Actual
Award Paid
($) |
| Jochen Zeitz | 126% | 2,738,400 |
| Ryan Morrissey | 90% | 487,778 |
| Tralisa Maraj | 75% | 176,015 |
| | Karim Donnez | | | 100 | | | 250,291 | |
| | Tralisa Maraj | | | 75 | | | 216,563 | |
| | Ryan Morrissey | | | 90 | | | 320,625 | |
| | Jochen Zeitz | | | 123 | | | 3,093,600 | |
(1)
| 1. | Ms. Maraj’s short-term incentive payoutMr. Donnez’s Short-Term Incentive Payout was prorated for 20222023 based on herhis partial year of employment with H-D.LiveWire.
|
The actual awards paid are set forth in the “Non-Equity Incentive Plan” column of the “Summary Compensation Table” above.
LiveWire Group, Inc. | 28 | 2023 Proxy Statement |
For 2023, a separate Company-specific short-term incentive plan will be implemented based on input from our independent compensation consultant and with the approval of the Human Resources Committee.
2022 Funding Payment for Mr. Morrissey
In 2022, as part of the terms of his offer to commence employment with the Company, Mr. Morrissey received a one-time cash Funding Payment of $443,000 tied to the amount of funding secured for the Company in connection with the Business Combination, as described below under “Executive Employment Arrangements.” Mr. Morrissey’s Funding Payment is set forth in the “Non-Equity Incentive Plan” column of the “Summary Compensation Table” above.
Equity Compensation
2022
On February 9,
2022,2023, Mr. Zeitz was granted an award of
138,473135,927 H-D restricted stock units, which
vestedvests in
fullequal installments on the first,
second and third anniversary of the grant date, subject to Mr. Zeitz’s continued employment with H-D through such
date.dates. If Mr. Zeitz’s employment with H-D had terminated other than for cause prior to such date, then the restricted stock units would have vested in full upon such termination. Additionally, if Mr. Zeitz’s employment with H-D had terminated due to his death or “disability” (as defined in the H-D Stock Plan), then a pro rata portion of the restricted stock units would have vested upon such termination based on the length of his employment between the grant date and the date of termination. Mr. Zeitz’s dual role serving both H-D and the Company qualifies as continued employment with H-D for purposes of this award.
On February
9, 2022, Mr. Morrissey was granted 5,262 H-D restricted stock units, which would have vested as to one-third of the restricted stock units on each of the first three anniversaries of the grant date, subject to Mr. Morrissey’s continued employment with H-D through such date. However, when Mr. Morrissey terminated employment with H-D and commenced employment with the Company, all unvested restricted stock units were modified to provide for settlement in cash, instead of H-D shares, upon vesting in accordance with their original terms.On February 9, 2022, Mr. Morrissey was awarded 7,893 H-D performance shares (based on the target level of performance). A number of such performance shares ranging from 0% to 200% of the target level were eligible to vest and be paid in shares of H-D common stock based on H-D’s attainment of annual performance goals for each year within the overall three-year performance period that commenced on January 1, 2022 and would have ended December 31, 2024. The awards were also subject to Mr. Morrissey’s continued employment with H-D through the vesting date. The performance goals for the 2022 annual period included return on invested capital, revenue, diversity, and employee engagement. At the conclusion of the three-year performance period, the number of earned performance shares could have increased or decreased by up to 15% based on H-D’s total stockholder return relative to certain peer group companies over the performance period. The peer group companies selected for this purpose consisted of publicly-traded non-automotive original equipment manufacturers consumer discretionary companies. To the extent performance shares would have vested, Mr. Morrissey would have also received the accumulated dividends that accrued over the performance period, in direct proportion to the number of performance shares that actually vested. However, when Mr. Morrissey terminated employment with H-D and commenced employment with the Company, all of his unvested H-D performance shares were forfeited.
On August 19, 2022, Mr. Zeitz was awarded 1,500,000 H-D Aspirational Performance Shares as part of H-D’s 2022 Aspirational Incentive Stock Plan (the “Aspirational Award”). Achievement of the Aspirational Award will require the share price of H-D shares to increase from the grant date value of $41.20 to $70.00 at the entry level, a near doubling of the stock price, to $130.00 at the high end, or more than triple the stock price. Mr. Zeitz has until December 31, 2025 to earn these shares.
On December 2, 2022,13, 2023, Mr. Morrissey and Ms. Maraj were awarded 165,698129,959 and 80,58263,202 LiveWire restricted stock units, respectively, and on June 12, 2023, Mr. Donnez was awarded 294,407 LiveWire restricted stock units, all of which vest as to one-third of the restricted stock units on each of the first three anniversaries of the grant date, subject to Mr. Morrissey, Ms. Maraj and Ms. Maraj’sMr. Donnez’s continued employment with the Company through such date.
LiveWire Group, Inc. | 29 | 2023 Proxy Statement |
dates.On December 2, 2022, Mr. Morrisey and Ms. Maraj were awarded 248,547 and 120,873 LiveWire performance shares, respectively. The number of performance shares earned will be based on LiveWire’s achievement of share price thresholds during the performance period that runs from the date that is nine months after the grant date through the third anniversary of the grant date. Below are the approved stock price thresholds and corresponding percent of achievement.
Highest Average Share Price During
Performance Period | Eligible to Vest at End of Performance Period
(% of Target Performance Shares) |
| $10.00 | 0% |
| $12.50 | 50% |
| $15.00 | 100% |
| $20.00 | 200% |
Other Elements of Compensation
Retirement, Health and Welfare Plans
Mr.
Zeitz participates in the H-D qualified section 401(k) savings plan, andDonnez, Mr. Morrissey, and Ms. Maraj participate in the LiveWire
qualified section 401(k) savings plan, and Mr. Zeitz participates in the H-D qualified section 401(k) savings plan. We believe both plans are competitive with plans of other similar companies.
Mr. Zeitz is eligible to participate in the H-D non-qualified Deferred Compensation Plan for salaried employees in which a group of highly compensated employees (as defined by the Internal Revenue Code) is eligible to participate. Under the terms of this plan, participants can defer a portion of their base salary and a portion of their annual short-term incentive plan payment. Mr.
Donnez, Mr. Morrissey, and Ms. Maraj are not eligible for this plan nor is there currently a non-qualified Deferred Compensation Plan for LiveWire salaried employees.
In 2022,2023, the NEOs participated in health and welfare plans including:
medical, dental and vision benefits;
dependent care flexible spending accounts;
short-term and long-term disability insurance; and
basic life and accidental death and dismemberment insurance.
For the NEOs other than Mr. Zeitz, the health and welfare plans were maintained by H-D, including:LiveWire, and for Mr. Zeitz, the health and welfare plans were maintained by H-D.
LiveWire Group, Inc. 31 2024 Proxy Statement
TABLE OF CONTENTS
| • | medical, dental and vision benefits; |
| • | dependent care flexible spending accounts; |
| • | short-term and long-term disability insurance; and |
| • | basic life and accidental death and dismemberment insurance. |
During
2022,2023, H-D provided
Mr. Zeitz with limited
perquisites to the NEOs, which consisted solely of Mr. Zeitz’spersonal use of H-D’s corporate aircraft,
to occasionally commute between Wisconsin and New Mexico, and the Company did not provide any perquisites to the
other NEOs.
During
2022,2023, neither the Company nor H-D made gross-up payments to cover the NEOs’ personal income taxes pertaining to any of the compensation or perquisites paid or provided by the Company or H-D.
EXECUTIVE EMPLOYMENT ARRANGEMENTS
The following section addresses the key elements of the compensation arrangements with each of our NEOs, including the key terms of any letter agreements or employment agreements between the NEO and the Company. Ms. Maraj does not have an individual compensatory agreement with the Company.
Mr. Donnez Employment Arrangement
On May 16, 2023, the Company entered into a letter agreement with Mr. Donnez (the “Donnez Agreement”) appointing him as Chief Executive Officer of the Company. Under the Donnez Agreement, pursuant to his offer, and subject to review of the Human Resource Committee, Mr. Donnez is entitled to receive an annual base salary, a target annual cash incentive of 100% of base salary (with the payout prorated for the portion of the year during which he served as Chief Executive Officer) for 2023, and, commencing in 2024, a target long-term equity incentive of 300% of base salary. In connection with his hire, Mr. Donnez received an initial grant of restricted stock units, valued at $3,000,000, which vest in three equal installments on each of the first, second and third anniversaries of the grant date, so long as Mr. Donnez remains employed by the Company, subject to certain accelerated vesting provisions in the award agreement.
Mr. Morrissey Employment
ArrangementsArrangement
Prior to the Business Combination, H-D was party to employment arrangementsarrangement with Messrs.Mr. Morrissey. On February 27, 2021, H-D entered into a letter agreement with Mr. Morrissey (the “Morrissey Agreement”) pursuant to which Mr. Morrissey was appointed as Chief Electric Vehicle Officer of H-D. Under the Morrissey Agreement, Mr. Morrissey was entitled to an annual base salary, eligibility to participate in H-D’s short-term and long-term incentive plans with annual grants targeted at 90% and 120% of his base salary, respectively, eligibility to receive a performance bonus of up to $500,000 based on the achievement of certain performance goals determined by H-D and Mr. Morrissey, and eligibility to participate in H-D’s employee benefit plans. The Morrissey Agreement required Mr. Morrissey to acquire and hold H-D stock with a value equal to 300% of his annual base salary within five years after commencing employment with H-D. The Morrissey Agreement provided for participation in H-D’s Executive Severance Plan but did not provide for enhanced payments or benefits in connection with a change in control.
In addition, pursuant to the Morrissey Agreement, for the year in which external investor funding was secured for us, Mr. Morrissey was eligible to receive a cash incentive bonus of up to $1 million based on our success in securing external investor funding (the “Funding Payment”). If we secured any external investor funding, then his minimum Funding Payment would equal $250,000. If external funding that valued our company between $1 billion and $4 billion was secured, then Mr. Morrissey’s Funding Payment would be prorated between $250,000 and $1 million (for example, if the valuation was $3 billion, then Mr. Morrissey’s Funding Payment would equal $750,000). The amount of the Funding Payment was determined to equal $443,000 and was paid to Mr. Morrissey following the closing of the Business Combination.
Mr. Zeitz and Morrissey,Employment Arrangements
Prior to the Business Combination, H-D was party to employment arrangement with Mr. Zeitz, which
continuecontinued in effect for Mr. Zeitz for his dual role with the Company and H-D, as described below. All of Mr. Zeitz’s compensation and benefits
arewere provided by, and paid for by, H-D, even after the Business Combination.
Going forward, the Human Resource Committee will evaluate whether to enter into new or updated employment arrangements with our other executive officers from time to time.Mr. Zeitz Employment Arrangements
Pursuant to a letter agreement between H-D and Mr. Zeitz, dated March 1, 2020 (the “March 2020 Zeitz Agreement”), Mr. Zeitz served as H-D’s Acting President and Chief Executive Officer. Under the March 2020 Zeitz Agreement, Mr. Zeitz was entitled to an annual base salary, the grant of H-D equity awards in the form of restricted stock units and eligibility to participate in H-D’s deferred compensation plan and other employee benefit plans. The March 2020 Zeitz Agreement also described H-D’s stock ownership guidelines, which require Mr. Zeitz to acquire and hold H-D stock with a value equal to 600% of his annual base salary within five years after commencing employment with H-D.
LiveWire Group, Inc. | 30 | 2023 Proxy Statement |
LiveWire Group, Inc. 32 2024 Proxy Statement
On May 6, 2020, H-D and Mr. Zeitz entered into a new letter agreement pursuant to which H-D appointed Mr. Zeitz as its President and Chief Executive Officer (previously Mr. Zeitz served in such positions on an interim basis) (the “May 2020 Zeitz Agreement”). The May 2020 Zeitz Agreement contains substantially similar terms to the March 2020 Zeitz Agreement. Although the May 2020 Zeitz Agreement did not provide for severance,
or payments or benefits in connection with a change in control, it provided for Mr. Zeitz’s continued participation in H-D’s Executive Severance Plan and entitlement to a Transition Agreement, each as described below.
On December 1, 2021, H-D entered into a separate letter agreement with Mr. Zeitz (the “2021 Zeitz Agreement”), setting forth certain terms of his continued employment as Chief Executive Officer of H-D. The 2021 Zeitz Agreement provides for a reduction in Mr. Zeitz’s base salary from $2.5 million to $1.9 million and a target annual bonus opportunity of $2.4 million, in each case, effective January 1, 2022. In addition, the 2021 Zeitz Agreement provides for the grant to Mr. Zeitz during 2021 of the option to purchase 500,000 shares of H-D common stock and states that Mr. Zeitz would receive, during calendar year 2022, a grant by H-D of restricted stock units with a target grant date value of $6 million. The 2021 Zeitz Agreement also states that, subject to approval by H-D’s Human Resources Committee, Mr. Zeitz’s 2023 and future long-term incentive grants are expected to have a target grant date value of no less than $6 million annually and are expected to be delivered entirely in the form of restricted stock units. Although the 2021 Zeitz Agreement does not provide for severance or payments or benefits in connection with a change in control, it does provide for Mr. Zeitz’s continued participation in H-D’s Executive Severance Plan and entitlement to a Transition Agreement, each of which is described below.
Executive Severance Plan
Each of the NEOs, except for Mr.
Morrissey Employment ArrangementOn February 27, 2021, H-D entered into a letter agreement with Mr. Morrissey (the “Morrissey Agreement”) pursuant to which Mr. Morrissey was appointed as Chief Electric Vehicle Officer of H-D. Under the Morrissey Agreement, Mr. Morrissey was entitled to an annual base salary, eligibilityZeitz, is eligible to participate in H-D’s short-term and long-term incentive plans with annual grants targeted at 90% and 120% of his base salary, respectively, eligibility to receive a performance bonus of up to $500,000 based on the achievement of certain performance goals determined by H-D and Mr. Morrissey, and eligibility to participate in H-D’s employee benefit plans. The Morrissey Agreement required Mr. Morrissey to acquire and hold H-D stock with a value equal to 300% of his annual base salary within five years after commencing employment with H-D. The Morrissey Agreement provided for participation in H-D’sCompany’s Executive Severance Plan but did not provide for enhanced payments or benefits in connection with a change in control.
In addition, pursuant to the Morrissey Agreement, for the year in which external investor funding was secured for us, Mr. Morrissey was eligible to receive a cash incentive bonus of up to $1 million based on our success in securing external investor funding (the “Funding Payment”). If we secured any external investor funding, then his minimum Funding Payment would equal $250,000. If external funding that valued our company between $1 billion and $4 billion was secured, then Mr. Morrissey’s Funding Payment would be prorated between $250,000 and $1 million (for example, if the valuation was $3 billion, then Mr. Morrissey’s Funding Payment would equal $750,000). The amount of the Funding Payment was determined to equal $443,000 and was paid to Mr. Morrissey following the closing of the Business Combination.
Executive Severance Plan
Messrs. Zeitz and Morrissey participated in H-D’s Executive Severance Plan while employed by H-D, and Mr. Zeitz continues to participate in his dual role.Plan. The Executive Severance Plan provides that, upon a termination of the applicable NEO’s employment (other than for cause or due to death or disability), H-Dthe Company will pay such NEO severance consisting of (i) a lump sum payment equal to 12 months’ base salary for the CEO and President and a lump sum payment equal to 6 months’ base salary for all other NEO’s, (ii) a prorated short-term incentive plan payment for the year of termination (based on actual performance, calculated pursuant to the Executive Severance Plan), (iii) a lump sum payment equal to 12 months of certain employee benefits, such as medical, dental and vision benefits for the CEO and President and a lump sum payment equal to 6 months of certain employee benefits, such as medical, dental, and vision benefits and (iv) a lump sum cash payment of $10,000 for use in securing outplacement services. The receipt of such severance is conditioned upon the applicable NEO’s agreement to certain restrictive covenants as permitted under applicable law, including a confidentiality agreement, an agreement regarding non-solicitation of other employees, a non-compete agreement, a non-disparagement agreement and execution of a general release of claims in favor of LiveWire.
The Company’s Executive Severance Plan provides that, to the extent payments under such plan would be considered “excess parachute payments” as defined in Section 280G of the Internal Revenue Code, such payments will be reduced to a point at which they are no longer considered excess parachute payments (solely if the after-tax value of such payments to the NEO, had such reduction not been applied, would be 110% or less of the after-tax value of the reduced payments).
Mr. Zeitz is eligible to participate in H-D’s Executive Severance Plan while employed by H-D, including while previously in his dual role with the Company. The H-D Executive Severance Plan provides that, upon Mr. Zeitz’s termination of employment (other than for cause or due to death or disability), H-D will pay Mr. Zeitz severance consisting of (i) a lump sum payment equal to 24 months’ base salary, (ii) a prorated short-term incentive plan payment for the year of termination (based on actual performance, calculated pursuant to the
H-D Executive Severance Plan), (iii) up to 18 months’ continuation of certain employee benefits, such as life insurance, medical, dental and vision benefits, (iv) a lump sum cash payment of $10,000 for use in securing outplacement services, and (v) a lump sum cash payment of $10,000 for use in securing financial planning assistance. The receipt of such severance is conditioned upon
the applicable NEO’sMr. Zeitz’ agreement to certain restrictive covenants, including 12-month post-termination non-competition and non-solicitation covenants, 24-month post-termination employee non-solicitation covenants and execution of a general release of claims in favor of H-D.
The
H-D Executive Severance Plan provides that, to the extent payments under such plan would be considered “excess parachute payments” as defined in Section 280G of the Internal Revenue Code, such payments will (i) be reduced to a point at which they are no longer considered excess parachute payments (solely if the after-tax value of such payments to
the NEO,Mr. Zeitz, had such reduction not been applied, would be 110% or less of the after-tax value of the reduced payments) or (ii) be paid in full to
the named executive officerMr. Zeitz with
the named executive officerMr. Zeitz being personally liable for the excise tax.
LiveWire Group, Inc. | 31 | 2023 Proxy Statement |
LiveWire Group, Inc. 33 2024 Proxy Statement
During 2022, H-D was party to a transition agreement with Mr. Zeitz. The transition agreement provides for certain employment terms that will apply to Mr. Zeitz following a change of control of H-D. In addition, the transition agreement provides that, upon a termination of Mr. Zeitz’s employment (i) by H-D (other than for cause) or (ii) due to a resignation by Mr. Zeitz for good reason, in either case, within two years after a change of control of H-D, then Mr. Zeitz will receive severance consisting of (a) two times the sum of his highest base salary during the five years preceding termination, plus his target short-term incentive opportunity for the year in which the change of control occurs, payable in lump sum on the first business day of the month following the six-month anniversary of the date of termination, (b) full vesting of all then-outstanding H-D equity awards (with any performance-based awards vesting based on the target level of performance) and any account balance under H-D’s pension, savings or other retirement programs, (c) a prorated short-term incentive plan payment based on the greater of the target performance for the fiscal year in which the termination occurs or the bonus received for the year prior to the change of control, payable in lump sum on the first business day of the month following the six-month anniversary of the date of termination, (d) up to 24 months’ continuation of certain employee benefits, such as life insurance, medical, dental and vision benefits, (e) a lump sum cash payment of $20,000 for use in securing outplacement services and (f) a lump sum payment of $20,000 for use in securing financial planning assistance. The receipt of such severance is conditioned upon Mr. Zeitz’s compliance with certain restrictive covenants and execution of a general release of claims in favor of H-D.
The transition agreement provides that, to the extent payments under such agreement would be considered “excess parachute payments” as defined in Section 280G of the Internal Revenue Code, such payments will be reduced to a point at which they are no longer considered excess parachute payments or Mr. Zeitz will receive the full payment and be personally liable for the excise tax, whichever produces the larger after-tax benefit to Mr. Zeitz.
Outstanding Equity Awards at 2022 Fiscal Year-End
OUTSTANDING EQUITY AWARDS AT 2023 FISCAL YEAR-END
The following table presents information regarding outstanding equity awards held as of December
31, 202229, 2023, closing price $11.31 by our NEOs.
| | | Option Awards | | Stock Awards |
| Name | Underlying Stock(1) | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | Option
Exercise Price
($) | Option
Expiration
Date | | Number of
Shares
or Units of Stock That Have Not
Vested
(#)(3)(5) | Market
Value
of Shares
or Units of
Stock That
Have Not
Vested
($) | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested
(#)(4)(5) | Equity
Incentive
Plan Awards:
Market or Payout Value of Unearned
Shares, Units
or Other Rights That
Have Not
Vested
($)(4) |
Jochen
Zeitz | H-D | | 148,850(2) | 351,150 | 36.63 | 12/31/2026 | | | | | |
| H-D | | | | | | | 138,473 | $5,760,477 | | |
| H-D | | | | | | | | | 375,000 | 15,600,000 |
Ryan
Morrissey | H-D | | | | | | | 10,023 | 416,957 | | |
| LiveWire | | | | | | | 165,698 | 803,635 | | |
| LiveWire | | | | | | | | | 124,274 | 602,729 |
Tralisa
Maraj | LiveWire | | | | | | | 80,582 | 390,823 | | |
| LiveWire | | | | | | | | | 60,437 | 293,119 |
| | Karim Donnez | | | LiveWire | | | | | | | | | | | | | | | | | | 294,407 | | | 3,329,743.17 | | | | | | | |
| | Tralisa Maraj | | | LiveWire | | | | | | | | | | | | | | | | | | 116,924 | | | 1,322,410.44 | | | | | | | |
| | LiveWire | | | | | | | | | | | | | | | | | | | | | | | | 60,437 | | | 683,542.474 | |
| | Ryan Morrissey | | | LiveWire | | | | | | | | | | | | | | | | | | 240,425 | | | 2,719,206.75 | | | | | | | |
| | LiveWire | | | | | | | | | | | | | | | | | | | | | | | | 124,274 | | | 1,405,538.94 | |
| | Jochen Zeitz | | | H-D | | | 124,950(2) | | | 64,400(2) | | | 310,650 | | | 36.63 | | | 12/31/2026 | | | | | | | | | | | | | |
| | H-D | | | | | | | | | | | | | | | | | | 147,466 | | | 5,432,647 | | | | | | | |
| | H-D | | | | | | | | | | | | | | | | | | | | | | | | 375,000 | | | 13,815,000 | |
| 1.
| H-D indicates the equity award is based on H-D common stock and LiveWire indicates the equity award is based on LiveWire common stock. |
| 2.
| H-D granted Mr. Zeitz stock options on December 1, 2021. These stock options will vest only if stock price performance goals and continued service thresholds are met. Any portion of the stock options that are not vested based on continued service at the time of Mr. Zeitz’s termination of employment will be forfeited, except that, if Mr. Zeitz’s employment is terminated by H-D without cause prior to December 31, 2023, then he will be deemed to have satisfied the continuous employment requirement with respect to a pro rata portion of 66% of the stock options that were tied to his continuous employment through December 31, 2023. Any portion of the stock options that are not exercisable based on the stock price goals by December 31, 2026, will be forfeited as of such date, and any unexercised portion of the stock options will be immediately forfeited if Mr. Zeitz’s employment with H-D is terminated for cause. Finally, to provide a further incentive for performance and continued service, a voluntary termination before December 31, 2024 will reduce the stock option term from 10 years to six years. |
LiveWire Group, Inc. 34 2024 Proxy Statement
TABLE OF CONTENTS
| 3.
| The amounts in this column consist of unvested restricted stock units and, if applicable, earned but unvested performance shares. The value of the awards in this column is based on the closing price of the underlying common stock on December 31, 2022.29, 2023. |
LiveWire Group, Inc. | 32 | 2023 Proxy Statement |
| 4. | The amounts in this column consist of unearned performance shares and Aspirational performance shares. The value disclosed was based on threshold performance as threshold performance had not been achieved as of December 31, 2022.Threshold2023.Threshold performance represents the shares that would be earned at the first share-price goal level that was not yet achieved as of December 31, 2022.2023. The value of shares was based on the closing price of the underlying common stock on December 31, 2022.29, 2023. |
| 5.
| Restricted stock units (“RSUs”) and performance shares vest as follows: |
Jochen Zeitz | H-DKarim Donnez | | February 2023 | LiveWire | 69,236 | | June 2024 | | | 98,135 | | | | | | | |
| | H-DLiveWire | | March 2023 | June 2025 | 5,770 | | 98,136 | | | | | | | |
| | H-DLiveWire | | April 2023 | June 2026 | 5,770 | | 98,136 | | | | | | | |
| | H-DTralisa Maraj | | May 2023 | LiveWire | 5,769 | | December 2024 | | | 26,861 | | | | | | | |
| | H-DLiveWire | | June 2023 | December 2025 | 5,770 | | 26,861 | | | | | | | |
| | H-DLiveWire | | July 2023 | February 2024 | 5,770 | | 21,067 | | | | | | | |
| | H-DLiveWire | | August 2023 | February 2025 | 5,770 | | 21,067 | | | | | | | |
| | H-DLiveWire | | September 2023 | February 2026 | 5,769 | | 21,068 | | | | | | | |
| | H-DLiveWire | | October 2023 | | 5,770 | | | | | December 2025
| | | 120,873 | |
| | H-DRyan Morrissey | | November 2023 | H-D | 5,770 | | February 2024 | | | 1,754 | | | | | | | |
| | H-D | | December 2023 | May 2024 | 5,770 | | 2,381 | | | | | | | |
| | H-D | | January 2024 | February 2025 | 5,769 | | 1,754 | | | | | | | |
| | H-DLiveWire | | February | December 2024 | | 5,770 | 55,233 | | | | | | | |
| | H-DLiveWire | | | December 2025 | | | (A)55,233 | | 375,000 | | | | | |
Ryan Morrissey | H-DLiveWire | | | February 20232024 | | 1,754 | 43,319 | | | | | | | |
| | H-DLiveWire | | May 2023 | February 2025 | 2,380 | | 43,320 | | | | | | | |
| | H-DLiveWire | | | February 20242026 | | 1,754 | 43,320 | | | | | | | |
| | H-DLiveWire | | May 2024 | | 2,381 | | | | | December 2025
| | | 248,547 | |
| | H-DJochen Zeitz | | February 2025 | H-D | 1,754 | | January 2024 | | | 5,769 | | | | | | | |
| | LiveWireH-D | | December 2023 | February 2024 | 55,232 | | 51,078 | | | | | | | |
| | LiveWireH-D | | December 2024 | February 2025 | 55,233 | | 45,309 | | | | | | | |
| | LiveWireH-D | | December 2025 | February 2026 | 55,233 | | 45,310 | | | | | | | |
| | LiveWireH-D | | | | | | December 2025 | | 124,274 | |
Tralisa Maraj(A)
| LiveWire | | December 2023375,000 | | 26,860 | | | | | |
| LiveWire | | December 2024 | | 26,861 | | | | | |
| LiveWire | | December 2025 | | 26,861 | | | | | |
| LiveWire | | | | | | December 2025 | | 60,437 | |
| A.
| Aspirational performance sharesPerformance Shares allow H-D NEOs to earn shares of H-D common stock if a share price goals arethreshold is achieved by December 31, 2025. If the stocka share price criteria arethreshold is met, then 50% of the associated performance shares will be deemed vested immediately upon H-D’sthe Human Resources Committee's determination that the stockshare price threshold has been achieved and the remaining 50% will be deemed vested on the one-year anniversary of the date on which the share price threshold was achieved, subject to certain conditions. |
LiveWire Group, Inc. | 33 | 2023 Proxy Statement |
LiveWire Group, Inc. 35 2024 Proxy Statement
Equity Compensation Plan Information
The following table provides certain information with respect to all the Company’s equity compensation plans as of December 31,
2022:| Plan Category | Number of
Securities to
be Issued
Upon Exercise
of Outstanding
Options,
Warrants,
and Rights
(a) | Weighted
Average
Exercise
Price of
Outstanding
Options,
Warrants,
and Rights
(b) | Number of
Securities
Remaining
Available for
Future
Issuance Under
Equity
Compensation
Plans
(Excluding
Securities
Reflected in
Column (a))
(c) |
| Equity compensation plans approved by stockholders | 2,494,623(1) | –(2) | | 26,798,886(3) |
| Equity compensation plans not approved by stockholders | – | – | | – |
| Total | 2,494,623 | – | | 26,798,886(3) |
| | Equity compensation plans approved by stockholders | | | 2,616,574 (1) | | | –(2) | | | 26,676,935(3) | |
| | Equity compensation plans not approved by stockholders | | | – | | | – | | | – | |
| | Total | | | 2,616,574 | | | – | | | 26,676,935(3) | |
1.
| Reflects shares of common stock issuable under awards outstanding under the LiveWire Group, Inc. 2022 Incentive Award Plan (the “2022 Plan”). |
2.
| As of December 31, 2022,2023, the Company has only issued restricted stock units and performance-based restricted stock units, which have no exercise price. |
3.
| Reflects shares of common stock available for future issuance under the 2022 Plan. |
LiveWire Group, Inc. | 34 | 2023 Proxy Statement |
LiveWire Group, Inc. 36 2024 Proxy Statement
TableTABLE OF CONTENTS
Approval of Contentsthe Issuance of Additional
Shares of Common Stock Necessary
to Effect a Full Conversion of the
Convertible Loan
BACKGROUND
On February 14, 2024, the Company entered into a Convertible Delayed Draw Term Loan Agreement (the “Convertible Loan”) with Harley-Davidson, Inc. (“H-D”) providing for term loans in one or more advances up to an aggregate principal amount of $100 million.
The Convertible Loan has a maturity date of the earlier of (i) 24 months from the date of the first draw on the loan or (ii) October 31, 2026. In the event that the Convertible Loan cannot be settled in cash by the Company at maturity, unless otherwise agreed between the Company and H-D, the Convertible Loan will be converted to equity at a conversion price per share of common stock of the Company (the “Common Stock”) equal to 90% of the volume weighted average price per share of Common Stock for the 30 trading days immediately preceding the conversion date. The Company and H-D anticipate that the timing of conversion will align with the maturity of the Convertible Loan unless the Company and H-D agree otherwise.
Because the Convertible Loan may be convertible into shares of Common Stock in excess of certain percentage thresholds of the voting power and/or shares of Common Stock outstanding before such conversion, each of which are discussed in more detail below, the listing standards of the NYSE require approval by the Company’s stockholders of the issuance of common stock upon conversion of the Convertible Note. Therefore, stockholders are being asked to approve the issuance of any additional shares of Common Stock as may be necessary to effect such conversion in full.
The Convertible Loan provides the Company with the right to pay its outstanding obligations under the Convertible Loan in cash at or prior to maturity. If the Company does not pay such obligations in cash at or prior to maturity, it provides for a procedure by which the outstanding debt will be converted into shares of Common Stock, but the Company will not be able to convert the debt into Common Stock if the required stockholder approval has not been obtained. Therefore, absent such approval, the Convertible Loan will only be convertible into, in the aggregate, the number of shares of Common Stock issuable pursuant to the applicable NYSE rules and regulations, with the remainder to be paid in cash pursuant to the Convertible Loan. The Company may not have sufficient cash on hand to settle the Convertible Loan in cash. If the Company is unable to settle any outstanding balance of the Convertible Loan in cash, it risks being in default under the Convertible Loan. Even if the Company is able to settle the Convertible Loan in cash, its liquidity and financial condition could be materially and adversely impacted by such a settlement.
In accordance with the rules and regulations of the NYSE, the stockholders are being asked to approve the issuance of additional shares of Common Stock as may be necessary to effect any such conversion in full.
The affirmative vote of a majority of the votes cast on the proposal and entitled to vote is required for approval of the issuance of additional shares of Common Stock necessary to effect a full conversion of the Convertible Loan into Common Stock. For purposes of determining the vote regarding this proposal, abstentions and broker non-votes will have no impact on the vote.
The Board of Directors recommends a vote “For” the approval of the issuance of additional shares Common Stock necessary to effect a full conversion of the Convertible Loan.
LiveWire Group, Inc. 37 2024 Proxy Statement
TABLE OF CONTENTS
The descriptions of the Convertible Loan contained in this Proxy Statement do not purport to be complete and are qualified in their entirety by reference to the Convertible Loan, which was filed with the SEC as Exhibit 10.1 to our Current Report on Form 8-K on February 16, 2024, and is incorporated by reference in this Proxy Statement. Stockholders are urged to read the Convertible Loan in its entirety prior to deciding how to vote with respect to this proposal.
NYSE STOCKHOLDER APPROVAL REQUIREMENTS
Because our Common Stock is listed on the NYSE, we are subject to NYSE’s rules and regulations.
Rule 312.03(b) of the NYSE Listed Company Manual (“NYSE Rule 312.03(b)”) requires stockholder approval prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, in any transaction or series of related transactions, to a Director, officer or substantial security holder of the company (each, a “Related Party”) if the number of shares of common stock to be issued, or if the number of shares of common stock into which the securities may be convertible or exercisable, exceeds either 1% of the number of shares of common stock or 1% of the voting power outstanding before the issuance.
As described in further detail in the “Common Stock Ownership of Certain Beneficial Owners and Management” section of this Proxy Statement, the Legacy LiveWire Equityholder is the record holder of 181,000,000 shares of Common Stock representing 89.09% of the voting power and number of shares of Common Stock currently outstanding. The Legacy LiveWire Equityholder is a direct, wholly owned subsidiary of HDMCG, which, in turn, is a wholly owned subsidiary of H-D. By reason of their relationships, HDMCG and H-D may be deemed to share the power to vote or direct the vote and to dispose or direct the disposition of the shares of Common Stock held by the Legacy LiveWire Equityholder and may be deemed to have shared beneficial ownership of the shares of Common Stock held directly by the Legacy LiveWire Equityholder, and as such, H-D would likely be deemed to be a substantial security holder and thus, a Related Party, under NYSE Rule 312.03(b).
Further, Rule 312.03(c) of the NYSE Listed Company Manual (“NYSE Rule 312.03(c)”) requires stockholder approval prior to the issuance of common stock, or of securities convertible into or exercisable for common stock, in any transaction or series of related transactions if (i) the common stock has, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such stock or of securities convertible into or exercisable for common stock, or (ii) the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the common stock or of securities convertible into or exercisable for common stock.
Depending on the price per share of Common Stock at the time of conversion, it is possible that the incremental increase of shares of Common Stock required to convert the Convertible Loan could result in the issuance of (i) more than 1% of the voting power and/or shares of Common Stock outstanding prior to such issuance, which, as described above, requires stockholder approval under NYSE Rule 312.03(b), and/or (ii) more than 20% of the voting power and/or shares of Common Stock outstanding prior to such issuance, which, as described above, requires stockholder approval under NYSE Rule 312.03(c).
LiveWire Group, Inc. 38 2024 Proxy Statement
TABLE OF CONTENTS
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors,Directors, executive officers, and persons who own more than ten percent of a registered class of our equity securities to file with us, the SEC, and the NYSE initial reports of ownership and reports of changes in ownership of any of the Company’s equity securities. Based on a review of the copies of such forms furnished to the Company and the company’s officers’ and directors’Directors’ written representations, the Company believes that all required Section 16 reports were filed on a timely basis, withexcept the exception offollowing Form 4s were filed late due to the Company’s administrative errors: one Form 4 for Dr. Garcia reporting an issuance of shares to him in lieu of his directorDirector cash compensation and a related forfeiture of shares to cover taxes.taxes on April 4, 2023, one Form 4 for each Ms. Parker, Mr. Donnez, Mr. Morrisey, Mr. Strader, and Ms. Maraj reporting a grant of restricted stock units on February 27, 2024, and one Form 4 for Mr. Mizuno reporting an issuance of shares to him in lieu of his Director cash compensation on March 5, 2024.
LiveWire Group, Inc. 39 2024 Proxy Statement
TABLE OF CONTENTS
LiveWire Group, Inc. | 35 | 2023 Proxy Statement |
Certain Transactions and Relationships
Policies and Procedures for Related Party Transactions
POLICIES AND PROCEDURES FOR RELATED PARTY TRANSACTIONS
The Board has adopted a Related Person Transactions Policy that sets forth the Company’s policies and procedures regarding the identification, review, consideration, and oversight of “related person transactions.” For purposes of this policy, a “related person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we or any of our subsidiaries are participants involving an amount that exceeds $120,000, in which any “related person” has a material interest.
Transactions involving compensation for services provided to us as an employee, consultant, or
directorDirector will not be considered related person transactions under this policy. A related person is any executive officer,
director,Director, or
directorDirector nominee to become a director or a holder of more than 5% of any class of our voting securities (including common stock), including any of their immediate family members and affiliates, including entities owned or controlled by such persons. Under the policy, the related person in question or, in the case of transactions with a holder of more than 5% of any class of our voting securities, an officer with knowledge of a proposed transaction, must present information regarding the proposed related person transaction to the Audit and Finance Committee (or, where review by the Audit and Finance Committee would be inappropriate, to another independent body of the Board) for review. To identify related person transactions in advance, we will rely on information supplied by our executive officers,
directorsDirectors and certain significant stockholders. In considering related person transactions, our Audit and Finance Committee takes into account the relevant available facts and circumstances, which may include, but are not limited to: (i) the risks, costs, and benefits to us; (ii) the impact on a
director’sDirector’s independence in the event the related person is a
director,Director, immediate family member of a
directorDirector or an entity with which a
directorDirector is affiliated; (iii) the terms of the transaction; (iv) the availability of other sources for comparable services or products; and (v) the terms available to or from, as the case may be, unrelated third parties.
The Audit and Finance Committee will approve only those transactions that it determines are fair to us and in our best interests.
Related Party Transactions
RELATED PARTY TRANSACTIONS
The following is a description of transactions to which we were a party since January 1, 2022 in which the amount involved exceeded or will exceed $120,000, and in which any of our executive officers,
directors,Directors, or holders of more than 5% of any class of our voting securities, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest.
ABIC RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
On July 29, 2020, the Sponsor paid $25,000 to cover certain offering and formation costs of ABIC in consideration for 11,500,000 Class B Ordinary Shares of ABIC. On August 4, 2020, ABIC effected a share dividend resulting in 14,375,000 Class B Ordinary Shares being issued and outstanding. On September 14, 2020, the Sponsor irrevocably surrendered to ABIC for cancellation and for nil consideration 2,875,000 Class B Ordinary Shares resulting in the Sponsor holding 11,500,000 Class B Ordinary Shares. The founder shares originally issued to the Sponsor (the “Founder Shares”) included an aggregate of up to 1,500,000 shares that were subject to forfeiture depending on the extent to which the underwriters’ over-allotment option is exercised, so that the number of Founder Shares will equal, on an as-converted basis, approximately 20% of the issued and outstanding ABIC shares after the the Company’s initial public offering (the “IPO”).
On November 16, 2020, the underwriters’ election to exercise their over-allotment option expired unexercised, resulting in the forfeiture of 1,500,000 shares. Accordingly, as of March 31, 2022, there were 10,000,000 Founder Shares issued and outstanding. The Founder Shares are identical to the Class A Ordinary Shares included in the ABIC Units, except that (i) the Founder Shares are subject to certain transfer restrictions; (ii) the ABIC initial shareholders, officers and directors of ABIC have entered into a letter agreement with ABIC, pursuant to which they have agreed, for no additional consideration, (a) to waive their redemption rights with
LiveWire Group, Inc. 40 2024 Proxy Statement
TABLE OF CONTENTS
respect to their Founder Shares and Public Shares owned in connection with the completion of an initial business combination, (b) to waive their rights to liquidating distributions from the ABIC trust account with respect to their Founder Shares if ABIC fails to complete an initial business combination by October 5, 2022 (although they will be entitled to liquidating distributions from the
LiveWire Group, Inc. | 36 | 2023 Proxy Statement |
ABIC trust account with respect to any Public Shares they hold if ABIC fails to complete its initial business combination within such time period) and (c) to vote their Founder Shares and any Public Shares purchased during or after the IPO in favor of an initial business combination; and (iii) the Founder Shares are automatically convertible into Class A Ordinary Shares at the time of the Business Combination on a one-for-one basis, subject to adjustment pursuant to the anti-dilution provisions contained in the ABIC organizational documents.
The ABIC initial shareholders initially agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares
until the earliest of (A) one year after the completion of a Business Combination; and (B) subsequent to a Business Combination,
(x) if the closing price of the Class A Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share sub-divisions, share dividends, rights issuances, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after a Business Combination, or (y) the date on which ABIC completes a liquidation, merger, share exchange or other similar transaction that results in all of the Public Shareholders having the right to exchange their Class A Ordinary Shares for cash, securities or other property.
In connection with the Business Combination, the Sponsor forfeited an aggregate of 2,000,000 Class B ordinary shares of ABIC in accordance with the Investor Support Agreement. In connection with the Business Combination, each of the remaining 8,000,000 Founder Shares converted on a one-for-one basis into one share of common stock.
Registration and Shareholders Rights
Pursuant to the ABIC Registration and Shareholders Rights Agreement entered into on October 1, 2020 (the “ABIC Registration and Shareholder Rights Agreement”), the holders of the Founder Shares, Private Placement Warrants and any warrants that may be issued upon conversion of Working Capital Loans (as defined below) (and any Class A Ordinary Shares issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans) are entitled to registration rights. The holders of these securities well be entitled to make up to three demands, excluding short-form demands, that ABIC register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. However, the ABIC Registration and Shareholders Rights Agreement provides that ABIC will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period, which occurs (i) in the case of the Founder Shares, in accordance with the Insider Letter Agreement, as amended, and (ii) in the case of shares issued pursuant to the Private Placement Warrants, 30 days after the completion of ABIC’s initial business combination. The ABIC Registration and Shareholders Rights Agreement does not contain liquidated damages or other cash settlement provisions resulting from delays in registering ABIC securities. ABIC will bear the expenses incurred in connection with the filing of any such registration statements.
In connection with the Business Combination, the ABIC Registration and Shareholders Rights Agreement was terminated upon the execution of the Registration Rights Agreement.
Administrative Services Agreement
ABIC entered into an agreement, commencing on October 5, 2020, to pay an affiliate of the Sponsor up to $10,000 per month for office space, secretarial and administrative support services. For the three months ended June 30, 2022 and 2021, ABIC
incurred $30,000incurred$30,000 and $30,000 in fees for these services, respectively, of which $30,000 and $30,000 are included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021, respectively. Upon the completion of the Business Combination, ABIC ceased paying these monthly fees.
In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of ABIC’s officers and
directorsDirectors could, but were not obligated to enter into Working Capital Loans (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of notes may be converted upon completion of a Business Combination into warrants at a price of $1.00 per warrant. Such warrants would be identical to the Private Placement Warrants. As of June 30, 2022, December 31, 2021, and December 31, 2020, ABIC had no outstanding borrowings under the Working Capital Loans.
LiveWire Relationships and Related Party TransactionsGroup, Inc. 41 2024 Proxy Statement
TABLE OF CONTENTS
LIVEWIRE RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Throughout this section, unless otherwise noted, “Legacy LiveWire,” “Company,” “we,” “us,” “our” and similar terms refer to LiveWire EV, LLC and its subsidiaries prior to the consummation of the Business Combination.
LiveWire Group, Inc. | 37 | 2023 Proxy Statement |
Registration Rights Agreement
On September 26, 2022, LiveWire entered into the Registration Rights Agreement, with Legacy LiveWire, the Sponsor, Legacy LiveWire Equityholder, John Garcia, John Replogle and George Serafeim (the “Registration Rights Agreement”). Pursuant to the terms of the Registration Rights Agreement, Legacy LiveWire, the Sponsor, Legacy LiveWire Equityholder, John Garcia, John Replogle and George Serafeim are entitled to certain piggyback registration rights and customary demand registration rights.
The Registration Rights Agreement provides that, as soon as practicable, and in any event within 30 calendar days after the Closing, LiveWire will use commercially reasonable efforts to file with the SEC a shelf registration statement. LiveWire will use its commercially reasonable efforts to have such shelf registration statement declared effective as soon as practicable after the filing thereof, but no later than the earlier of (i) sixty calendar days after the filing thereof (or ninety calendar days after the filing thereof if the SEC notifies LiveWire that it will “review” the registration statement) and (ii) five business days after the date LiveWire is notified (orally or in writing, whichever is earlier) by the SEC that the registration statement will not be “reviewed” or will not be subject to further review; and LiveWire will not be subject to any form of monetary penalty for its failure to do so.
The Registration Rights Agreement also provides for certain lock-up restrictions on the shares of common stock and any other equity securities convertible into or exercisable or exchangeable for shares of common stock (including any Private Placement Warrants) held by the Sponsor, Legacy LiveWire Equityholder, Mr. Garcia, Mr. Replogle and Mr. Serafeim (the “Lock-up Shares”). Pursuant to the Registration Rights Agreement, (i) Legacy LiveWire Equityholder (together with its respective successors and any permitted transferees) agreed to be subject to a seven year lock-up from the Closing Date, (ii) the Sponsor, John Replogle and George Serafeim (together with their respective successors and any permitted transferees) agreed to be subject to a 365-day lock-up from the Closing Date and (iii) John Garcia (together with his respective successors and any permitted transferees) agreed to be subject to an eighteen month lock-up from the Closing Date. Such lock-up restrictions are subject to certain customary exceptions, and an early-release provision if the volume- weighted average of the shares of common stock is greater than or equal to $18.00 for any 20 trading days within a 30-trading day period; however, with respect to Lock-up Shares held by Company Equityholder, such early release provision commences at least 18 months after the Closing Date and any sales pursuant to such early release provision is subject to the review of the Conflicts Committee. In addition, the Lock-up Shares held by Legacy LiveWire Equityholder are subject to early release when written notice of termination is given by LiveWire (or its permitted assigns or successor), pursuant to
Section 13.3Section13.3 of the Contract Manufacturing Agreement.
On September 26, 2022, we entered into a Separation Agreement with H-D (the “Separation Agreement”).
The Separation Agreement sets forth our agreements with H-D regarding the Separation.
Transfer of Assets and Assumption of Liabilities
. The Separation Agreement identifies the assets to be transferred, liabilities to be retained or assumed (as applicable) and contracts to be assigned or retained (as applicable) to each of Legacy LiveWire and H-D (and its applicable subsidiaries) as part of the Separation. The Separation Agreement provides for when and how such transfers, assumptions, and assignments will occur (to the extent that such transfers, assumptions and assignments have not already occurred prior to the parties’ entry into the Separation Agreement).The Separation Agreement further sets forth the basis on which specified assets or liabilities (or any part thereof), the transfer of which is subject to a third-party consent, approval, permission or waiver, which has not been obtained by the date on which implementation of the Separation occurs in the relevant jurisdiction, will continue to be held by the relevant transferor for the account, risk and economic benefit of, and at the cost of, the relevant transferee.
Intercompany Arrangements. All agreements, arrangements, commitments, and understandings, including most intercompany accounts, between us, on the one hand, and H-D or any of its subsidiaries, on the other hand, terminate effective as of the completion of the Separation, except specified agreements and arrangements that are intended to survive completion of the Separation that are either transactional in nature or at arms’-length terms.
LiveWire Group, Inc. 42 2024 Proxy Statement
TABLE OF CONTENTS
Representations and Warranties
. Except as expressly set forth in the Separation Agreement or any ancillary agreement, neither we nor H-D make any representation or warranty as to the assets, business or liabilities transferred or assumed as part of the Separation, or as to the legal sufficiency of any assignment, document or instrument delivered to convey title to any asset or thingLiveWire Group, Inc. | 38 | 2023 Proxy Statement |
of value transferred in connection with the Separation. Except as expressly set forth in the Separation Agreement and certain other ancillary agreements, all assets are transferred on an “as is,” “where is” basis.
IndemnificationIndemnification. We and H-D each agree to indemnify the other and each of the other’s shareholders, stockholders, directors,Directors, partners, managers, managing members, officers, agents or employees for losses incurred that arise out of or result from (i) liabilities of us or
H-D, as applicable, resulting, directly or indirectly, from liabilities assumed or retained (as applicable) by the other party; and (ii)and(ii) liabilities of us or H-D, as applicable, resulting, directly or indirectly, from the operations of the Legacy LiveWire business or the H-D business, as applicable, from and after the effective time of the Separation.
Release of Claims
. We and H-D each agree to release the other and its affiliates, successors and assigns, and all persons that, prior to completion of the Separation, have been the other’s shareholders, stockholders, directors,Directors, officers, agents or employees, and their respective heirs, executors, administrators, successors and assigns, from any claims against any of them that arise out of or relate to our and H-D’s respective businesses, provided that such release will not be effective with respect to (i) any liability provided in or resulting from certain existing agreements between us and H-D to the extent such liability is specified as not to terminate as of the effective time of the Separation; (ii) any liability provided in or resulting from any of the ancillary agreements or any contract or understanding entered into after the effective time of the Separation between us and H-D and our and their respective affiliates; (iii) any liability assumed, transferred, assigned or allocated to us and our affiliates or H-D and its affiliates in accordance with the Separation Agreement; or (iv) any liability that we or H-D have with respect to indemnification or contribution pursuant to the Separation Agreement or otherwise for claims brought against us or H-D by third parties that are governed by terms of the Separation Agreement.
Mutual non-solicitation undertaking
. Subject to certain customary exceptions, each of us and H-D agree to a three-year mutual non-solicitation undertaking regarding the other party’s employees.
Other matters governed by the Separation Agreement
. Other matters governed by the Separation Agreement include, without limitation, shared contracts and permits, termination, assignment, insurance arrangements, guarantees and letters of credit, confidentiality, mutual assistance, and information sharing and retention after completion of the Separation, and transfer of and post-Separationpost- Separation access to certain books and records.Transition Services Agreement
On September 26, 2022, we entered into a Transition Services Agreement with H-D (the “Transition Services Agreement”) in connection with the separation of the Legacy LiveWire business from H-D pursuant to the terms of the Separation Agreement entered into by Legacy LiveWire and H-D at the Closing (the “Separation”), pursuant to which H-D provides to us various services and support on a transitional basis to give us some time to develop the capability to provide the relevant services and support to ourselves or to engage a third-party provider to provide those services and support. The services and support provided by H-D to us include IT, administration, human resources, supply chain management, engineering, customer, and dealer support, ESG support, financial reporting and accounting services and marketing support.
H-D provides us services and support under the Transition Services Agreement with substantially the same standard of care, quality, priority, timeliness, and skill as provided to its own businesses or to our business during the one-year period prior to the Separation. The charges for the services are on a cost-plus basis (with a mark-up to reflect the management and administrative cost of providing the services). The services generally commenced on the date of the Separation and are intended to terminate between six and twelve months of the date of the Separation. We generally have the ability to (i) extend the term that a service is provided for by up to six months, subject to a maximum aggregate service term of 18 months; and (ii) terminate any or all services early subject to a 45-day notice period. H-D has the right to terminate the Transition Services Agreement for our non-payment of charges.
As of December 31, 2023, the parties have extended certain of the services from the original termination date, which will now terminate in 2024, and may, in the future, convert a minimal number of these services to longer term under the Master Service Agreement, if needed.
Each party is liable to the other party for any third-party claim or cause of action arising from the indemnifying party’s fraud, gross negligence, or willful misconduct in connection with the Transition Services Agreement. H-D’s maximum liability to us under the Transition Services Agreement is $2,000,000.
LiveWire Group, Inc. 43 2024 Proxy Statement
TABLE OF CONTENTS
Master Services Agreement
On September 26, 2022, we entered into a Master Services Agreement with H-D (the “Master Services Agreement”) in connection with the Separation, pursuant to which H-D provides us with certain services that we do not yet have the capability to perform for ourselves, including services related to testing and development, product regulatory support, color materials, finishes, paint and
LiveWire Group, Inc. | 39 | 2023 Proxy Statement |
graphics, technical publication, application support and maintenance, service desk support, warehousing support, safety investigation, and marketing vehicle and fleet center, as we may request from time to time. The Master Services Agreement contemplates that each of the services is set forth in a separate statement of work, which is agreed to by H-D and us. This agreement has an initial term of seven years and will be renewable upon mutual agreement. The agreement or any statement of work may be terminated by either party upon the other party’s material, uncured breach. H-D may also terminate the agreement upon Legacy LiveWire’s change of control, or, at the end of a calendar year, in the event that Legacy LiveWire failed to engage H-D to manufacture at least forty percent of Legacy LiveWire’s production during that calendar year.
A joint steering committee composed of senior executives and/or designees of each party meets annually to formulate a forecast and plan for our anticipated service needs, and oversees the progress of the services and address any disputes. H-D provides the services and deliverables under the Master Services Agreement in accordance with agreed specifications. Acceptance of any deliverables is subject to testing by us to determine whether they meet the agreed acceptance criteria. As our sole remedy for H-D’s failure to meet the acceptance criteria, H-D will re-perform the services or, at our option, issue a refund after three attempts at correction. The charges for the services are on a cost-plus basis (with a mark-up of eight percent to reflect the management and administrative cost of providing the services). Unless we agree otherwise for a particular project, we will own the intellectual property rights in the deliverables that H-D creates on our behalf, excluding H-D’s background intellectual property and improvements thereof. We have a non-exclusive, royalty-free license to use H-D’s background intellectual property in connection with our exploitation of our deliverables.
Each party indemnifies the other for any third-party claim arising from the indemnifying party’s breach of the Master Services Agreement, violation of applicable law or tortious conduct resulting in death or personal injury, or any destruction of real or personal property for which the indemnifying party is legally responsible. In addition, each party indemnifies the other party for third-party claims alleging IP infringement. Specifically, H-D indemnifies us with respect to third-party infringement claims arising from our use of H-D’s intellectual property in accordance with the agreement, and we indemnify H-D with respect to third-party infringement claims arising from H-D’s use of our specifications, designs, and other materials that we provide to H-D pursuant to the Master Services Agreement. Except for claims for indemnification, or liability arising from a party’s fraud, gross negligence or willful misconduct, neither party’s aggregate liability to the other in connection with a statement of work entered under the Master Services Agreement will exceed the total amount of fees paid or payable by us to H-D for the services under that statement of work in the 12-month period preceding the claim giving rise to liability.
Contract Manufacturing Agreement
On September 26, 2022, we entered into a Contract Manufacturing Agreement with H-D (the “Contract Manufacturing Agreement”) in connection with the Separation, pursuant to which H-D provides contract manufacturing and procurement services to us for the products in our LiveWire platform, as well as our anticipated Speed and SpeedWire platforms.
Under the original agreement, H-D is our exclusive manufacturer for these platforms for five years from the date that H-D begins manufacturing the relevant platform (and five years from the Separation for the LiveWire platform).
On February 14, 2024, the parties entered into an amendment of the Contract Manufacturing Agreement extending the exclusivity provision for an additional one year. Following this exclusivity period, we may terminate the agreement for one or more products within the relevant platform upon two years’ notice, subject to payment of certain termination charges (which are intended to compensate H-D for its capital investment and other sunken costs). The agreement may also be terminated, in whole or part, by either party upon the other party’s material, uncured breach, inability to perform its obligations for more than six months due to a force majeure event, bankruptcy or insolvency, or change of control.
Under the Contract Manufacturing Agreement, we are subject to a minimum annual volume commitment for each product and pay a deficit fee for failure to meet the minimum. The products that H-D manufactures for us are priced on a cost-plus basis, with a mark-up of six percent of H-D’s cost for manufacturing the relevant product. An operational committee consisting of designated employees of each party will meet quarterly for administrative purposes, including for the review of changes to pricing, minimum volumes and other terms H-D will procure, on our behalf, equipment and materials that are used in both H-D’s and our products, and we will procure all other equipment and materials, as well as tooling, needed to manufacture the products.
LiveWire Group, Inc. 44 2024 Proxy Statement
TABLE OF CONTENTS
The Contract Manufacturing Agreement contains a limited warranty by H-D that the products it delivers to us will conform to our specifications, and that they will be free from defects in workmanship, liens, and encumbrances. The warranty extends for a period of five years from delivery to us for batteries, two years from delivery to our end customer for motorcycles (including parts and accessories sold with the motorcycle) and one year from the date of delivery to our end customer for separately sold motorcycle parts and accessories. In the event of warranty breach (other than as a result of materials or items owned or furnished by us or failure of a third-party supplier to comply with its supply contract), H-D will either repair or replace the non-conforming products
LiveWire Group, Inc. | 40 | 2023 Proxy Statement |
at its expense. The warranty period for a repaired or replaced product will be the balance of the warranty period for the original non-conforming product remaining from the date we notified H-D of the warranty claim.
Each party indemnifies the other party for any third-party claim arising from the indemnifying party’s gross negligence, willful misconduct, material breach of the Contract Manufacturing Agreement or breach of its confidentiality or data privacy and security obligations. In addition, we indemnify H-D for any third-party claim alleging that use of our specifications, technical manufacturing documents or materials infringes a third party’s intellectual property rights, and H-D indemnifies us for any third-party claim alleging that H-D’s manufacturing processes or other actions taken by H-D in its provision of manufacturing services infringe a third party’s intellectual property rights (unless we direct H-D to take such actions). Except for liability arising from a party’s fraud, gross negligence, willful misconduct, violation of law, a product recall or indemnification obligations, neither party’s aggregate liability to the other in connection with the Contract Manufacturing Agreement will exceed the total amount of fees paid or payable by us to H-D under the Contract Manufacturing Agreement in the 12-month period preceding the claim giving rise to liability.
KYMCO Long Term Collaboration Agreement
On December 12, 2021, we entered into a
Long TermLong-Term Collaboration Agreement with KYMCO (the
“Long Term“Long-Term Collaboration Agreement”) in connection with the Business Combination. The
Long TermLong-Term Collaboration Agreement become effective upon the Closing and the initial term will be ten years.
We will collaborate with KYMCO to accelerate development of two-wheel and other electric vehicles and to explore further business opportunities in electric vehicles markets by leveraging the parties’ capability in the design, development, manufacturing, and distribution of electric vehicles products. Under the terms of the
Long TermLong-Term Collaboration Agreement, we agree to work with KYMCO in various capacities including the engagement of contract manufacturing by KYMCO for our Slayer powertrains and all two-wheel products that leverage Slayer powertrains (currently the “Covered Products”). KYMCO is our exclusive manufacturer for these Covered Products for five years from the date that KYMCO begins manufacturing the relevant product. KYMCO also has a right of first offer to manufacture any products, parts and components of LiveWire branded “side by side” electric vehicles and all terrain electric vehicles. KYMCO and LiveWire will also explore on an ongoing basis further business opportunities in the electric vehicle industry when such collaboration would create a competitive advantage. The
Long TermLong-Term Collaboration Agreement provides a framework for such optional joint development or other collaboration projects between the parties. Other contemplated areas of collaboration include jointly-led expansion of KYMCO’s Ionex integrated solutions, LiveWire leveraging KYMCO’s software capabilities, including its Noodoe platform and Noodoe resources, joint development and/or deployment of charging infrastructure, service and technical support and distribution of certain other electric vehicles products. Either party may terminate the
Long TermLong-Term Collaboration Agreement if the other party is in material breach of its obligations thereunder if the other party enters into liquidation or becomes insolvent or if a change of control event has occurred to the other party.
Under the
Long TermLong-Term Collaboration Agreement, the parties agree to separately in good faith agree on the minimum quantities per year for Covered Products to be manufactured by KYMCO. The products that KYMCO manufactures for us are priced at a fixed margin. A steering committee consisting of designated employees of each party will meet quarterly for advisory and administrative purposes to discuss
the matters related to the collaboration and development between the parties. Costs related to tooling and equipment that are used in both KYMCO’s and our products will be split, with KYMCO paying for all costs related to exclusively KYMCO equipment and materials, including tooling, and us paying for all costs related to exclusively our equipment and materials, including tooling.
KYMCO Contract Manufacturing Agreement
On September 26, 2022, we and KYMCO entered into the KYMCO Contract Manufacturing Agreement (the “KYMCO Contract Manufacturing Agreement”). Pursuant to the KYMCO Contract Manufacturing Agreement, KYMCO will provide contract manufacturing and procurement services to us for our Slayer powertrains and all two-wheel products that leverage Slayer powertrains. KYMCO will be our exclusive manufacturer for these products for five years from the date that KYMCO begins manufacturing the relevant product. Following this exclusivity period, we may terminate the agreement for one or more products
LiveWire Group, Inc. 45 2024 Proxy Statement
TABLE OF CONTENTS
within the relevant platform upon two years’ notice, subject to payment of certain termination charges (which are intended to compensate KYMCO for its capital investment and other sunken costs). The agreement may also be terminated, in whole or part, by either party upon the other party’s material, uncured breach, inability to perform its obligations for more than six months due to a force majeure event, bankruptcy or insolvency, or change of control.
LiveWire Group, Inc. | 41 | 2023 Proxy Statement |
Under the KYMCO Contract Manufacturing Agreement, we will be subject to a minimum annual volume commitment for each product and pay a deficit fee for failure to meet the minimum. The products that KYMCO manufactures for us will be priced on a cost-plus basis, with a mark-up for KYMCO’s cost for manufacturing the relevant product. The parties will meet quarterly to review changes to pricing and annually to review of changes to minimum volumes and other terms. KYMCO will procure, on our behalf, equipment and materials that are used in our products, and we will procure all other equipment and materials, as well as tooling, needed to manufacture the products.
The KYMCO Contract Manufacturing Agreement contains a limited warranty by KYMCO that the products it delivers to us will conform to our specifications, and that they will be free from defects in workmanship, liens and encumbrances. Additionally, the KYMCO Contract Manufacturing Agreement contains customary provisions relating to indemnification, consistent with those included in the KYMCO Contract Manufacturing Agreement.
Intellectual Property License Agreement
On September 26, 2022, we entered into an Intellectual Property License Agreement with H-D (the “Intellectual Property License Agreement”) in connection with the Separation, pursuant to which each party granted to the other party a license to certain intellectual property on a perpetual, non-exclusive basis for the purpose of making and selling such party’s products.
H-D perpetually licenses to us all H-D intellectual property (other than marks) used in our business as of the Separation and certain additional specified intellectual property, as well as all improvements to the foregoing (but excluding (i) any H-D manufacturing intellectual property and (ii) intellectual property relating to motorcycle riding apparel and related general merchandise). We perpetually license to H-D all intellectual property that we own as of the Separation, and all improvements thereto. If either party makes improvements to the other party’s IP, such improvements will be jointly owned by the parties.
The licenses are generally royalty-free. However, if either party desires to exercise its license with respect to improvements introduced by the other party in next-generation vehicles (rather than a “carry over” or a “model refresh”), then the parties will mutually agree in good faith on a reasonable royalty to be paid. In addition, if H-D desires to sell any products that incorporate our intellectual property outside of the Large Cruiser, Touring and Adventure Touring markets during the seven-year period following the Separation, the parties will mutually agree in good faith on a reasonable royalty to be paid on such sales (but not on sales relating to LiveWire- branded H-D motorcycles or related LiveWire parts and accessories).
Each party owns improvements that it creates to its own intellectual property, and the parties jointly own improvements that one party creates to the other party’s intellectual property, without a right of accounting.
Trademark License Agreement
On September 26, 2022, we entered into a Trademark License Agreement with H-D (the “Trademark License Agreement”) in connection with the Separation, pursuant to which H-D granted to us a royalty-free license to use certain H-D trademarks with respect to our products. The Trademark License Agreement has an initial term of two years, and automatically renews for successive two-year periods unless either party gives notice of non-renewal at least 60 days prior to the end of the then-current term.
Other than certain specified pre-approved uses that exist today, all uses by us of H-D marks require H-D’s prior, written approval, which may be withheld in H-D’s sole discretion. We are required to comply with H-D branding guidelines and quality control procedures. The Trademark License Agreement has an initial term of two years, and renews for successive two-year periods unless either party elects not to renew. H-D may terminate the agreement earlier upon our breach of any of the provisions related to ownership, protection, or use of the licensed marks or any of the quality requirements, our bankruptcy or insolvency, or our unpermitted assignment of the agreement. H-D indemnifies us against any third-party claim alleging that our use of the licensed marks infringes any third party’s intellectual property. We indemnify H-D against any third-party claim arising from our breach of the agreement, our use of the licensed marks, or our manufacture, marketing, advertising, distribution, or sale of products under those marks.
LiveWire Group, Inc. 46 2024 Proxy Statement
TABLE OF CONTENTS
Joint Development Agreement
On September 26, 2022, we entered into a Joint Development Agreement with H-D (the “Joint Development Agreement”) in connection with the Separation, pursuant to which the parties may agree to engage in joint development projects, which would be set forth in one or more mutually agreed project work statements. The Joint Development Agreement remains in effect until we and H-D mutually agree to terminate it and can be terminated earlier by either party upon the other party’s material, uncured breach.
LiveWire Group, Inc. | 42 | 2023 Proxy Statement |
Under the Joint Development Agreement, H-D is required to notify us of any development projects for H-D’s business that are primarily related to electric vehicles, and we have the right to make a proposal with respect to the joint development of such a project. The parties will discuss in good faith whether or not it’s beneficial for the parties to enter into a joint development project with respect to such project. If H-D engages in any development projects that are primarily related to electric vehicles and fails to consult with us so that we can make a proposal with respect such potential project, then the intellectual property developed pursuant to such H-D development project will be owned and licensed in accordance with the default intellectual property terms of the agreement (described below). Unless we and H-D agree otherwise for a particular project, each party bears its own costs and expenses in connection with each project under the Joint Development agreement.
Unless otherwise mutually agreed for a particular project under the Joint Development Agreement, we own project intellectual property relating exclusively to electric vehicles and H-D owns all other project intellectual property. Each party is granted a perpetual license to use the project intellectual property in connection with that party’s products, which, for us, are limited to two-, three- or four-wheeled electric vehicles, related parts and accessories and electric vehicle systems.
Each party indemnifies the other party against any third-party claims arising from or related to the indemnifying party’s breach of the agreement, death or bodily injury caused by negligence of the indemnifying party, or damage, loss or destruction of any property or third-party claims alleging that the indemnified party’s use of the indemnifying party’s background intellectual property in accordance with the Joint Development Agreement violates the intellectual property rights of a third party.
Employee Matters Agreement
On September 26, 2022, we entered into an Employee Matters Agreement with H-D (the “Employee Matters Agreement”). The Employee Matters Agreement allocated the liabilities and responsibilities between H-D and us relating to employee claims, compensation and benefit plans and programs, including the treatment of retirement, health and welfare plans and equity and other incentive plans and awards. The key provisions of the Employee Matters Agreement include the following:
Equity Award Treatment
. In connection with the Separation, each H-D restricted stock unit award (each, an “RSU”) that was outstanding and held by one of our employees was converted into the right to receive cash payments, subject to applicable withholding taxes and deductions (each, an “RSU Payment”), payable on or within thirty (30) days after the date(s) on which the RSU award would have otherwise become vested in accordance with the vesting schedule that applied to the RSU award immediately prior to the Separation, subject to and conditioned upon the applicable employee’s continued employment or service with us through the applicable vesting date. The amount of each RSU Payment will equal (x) the number of shares of H-D common stock subject to such RSU that would have otherwise become vested on the applicable vesting date in accordance with the applicable H-D RSU vesting schedule multiplied by (y) the closing trading price of a share of H-D common stock on the RSU vesting date. In addition, in connection with the Separation we established the 2022 Incentive Award Plan in which directors,Directors, employees, (including our named executive officers) andour consultants of us and certain of our affiliates are eligible to participate.
Cash Incentive Compensation.Compensation. Prior to the Separation, our employees and H-D employees participated in a cash incentive program maintained by H-D under which they were eligible to earn performance-based cash incentives.
2022 Cash Incentives. With respect to each of our employees that, prior to the Separation, participated in H-D’s cash incentive plan for calendar year 2022 and remains employed with us through December 31, 2022, H-D will pay such employees the cash incentive payments that such employees would have earned under the H-D cash incentive plan for calendar year 2022 had the Separation not occurred, prorated based on the portion of calendar year 2022 during which such employees participated in the H-D cash incentive plan, as and when payments are made generally for calendar year 2022 under (and subject to the terms and conditions of) the H-D cash incentive plan.
LiveWire Cash Incentives. In connection with the Separation, our employees ceased to participate in H-D’s cash incentive plan for calendar year 2022 and we adopted a cash incentive program for the benefit of our eligible employees.
LiveWire Group, Inc. 47 2024 Proxy Statement
TABLE OF CONTENTS
| • | 2022 Cash Incentives. With respect to each of our employees that, prior to the Separation, participated in H-D’s cash incentive plan for calendar year 2022 and remains employed with us through December 31, 2022, H-D will pay such employees the cash incentive payments that such employees would have earned under the H-D cash incentive plan for calendar year 2022 had the Separation not occurred, prorated based on the portion of calendar year 2022 during which such employees participated in the H-D cash incentive plan, as and when payments are made generally for calendar year 2022 under (and subject to the terms and conditions of) the H-D cash incentive plan. |
| • | LiveWire Cash Incentives. In connection with the Separation, our employees ceased to participate in H-D’s cash incentive plan for calendar year 2022 and we adopted a cash incentive program for the benefit of our eligible employees. |
Health and Welfare
Plans.Plans. Generally, our employees were eligible to participate in health and welfare plans sponsored by us immediately prior to the Separation, including but not limited to medical, dental, life insurance, cafeteria and health reimbursement plans, and continued to be eligible to participate in such plans following the Separation.
401(k) Plan
. On March 1, 2022, we established a 401(k) plan for the benefit of our employees. In connection with the establishment of our 401(k) plan, H-D made all employer contributions to its 401(k) plan on behalf of our employees as if the Separation had not occurred, prorated for the portion of the plan year ending March 1, 2022. Upon the establishment of our 401(k) plan, each of ourLiveWire Group, Inc. | 43 | 2023 Proxy Statement |
employees then-participating in the H-D 401(k) plan became fully vested in his or her account balance under the H-D 401(k) plan and their account balances under the H-D 401(k) plan were transferred in cash to our 401(k) plan.
Non-Qualified Deferred Compensation Plan
. Certain of our employees participated in a non-qualified deferred compensation plan sponsored by H-D prior to the Separation. In connection with the Separation, such employees ceased to be eligible make additional deferrals under such plan. Distributions of their account balances will continue to be made in accordance with the H-D non-qualified deferred compensation plan.
Pension Plan
. Certain of our employees participated in a pension plan maintained by H-D prior to the Separation. Following the Separation, each such employee continued to be an active participant in such H-D pension plan and will remain entitled to his or her benefits under the H-D pension plan in accordance with the terms of the pension plan through December 31, 2022 or, if earlier, the date that such participant’s payments commence under the pension plan or such participant’s service terminates (the earliest such date, the participant’s “service end date”). From and after each such participant’s service end date, H-D will recognize our employees’ service for purposes of determining eligibility for early retirement benefits and/or retirement-type subsidies under the pension plan.
Employment Law Liabilities
. In connection with the Separation, employment-related liabilities for our employees and H-D’s employees were allocated between us and H-D. Any liabilities for employment-related claims and liabilities relating to H-D employees and/or prospective H-D employees, whether the basis for a claim arose before, on or after the Separation, and any employment-related claims and liabilities relating to our employees, the basis for which arose on or before the Separation, were allocated to H-D. Any liability for employment-related claims and liabilities relating to LiveWire employees and/or prospective employees, the basis for which arose after the Separation, were allocated to LiveWire. Any employment-related claims and liabilities relating to any shared employee providing services to both us and H-D as a result of the Separation were allocated between H-D and us in accordance with the allocation methodology mutually agreed upon by H-D and us.Investor Support Agreements
On December 12, 2021, the Sponsor, H-D, Legacy LiveWire, the Company and certain ABIC officers and
directorsDirectors entered into the Investor Support Agreement, pursuant to which the Sponsor and certain ABIC officers and
directorsDirectors agreed to, among other things, (i) vote all of their ABIC shares held of record or thereafter acquired in favor of each of the shareholder proposals to be voted upon at the general meeting shareholders, including approval of the Business Combination Agreement and the transactions contemplated thereby, (ii) waive any adjustment to the conversion ratio set forth in ABIC’s organizational documents or any other anti-dilution or similar protection with respect to Class B Ordinary Shares (and any other equity securities of ABIC or the Company for which Class B Ordinary Shares are exchanged or converted), including in connection with the issuance of shares in connection with Business Combination or otherwise, including the PIPE Financings, (iii) be bound by certain transfer restrictions with respect to their ABIC shares and ABIC public warrants and ABIC private placement warrants prior to the Closing and (iv) forfeit and/or transfer up to an aggregate of 2,000,000 Founder Shares pursuant to the Investor Support Agreement, in each case, under certain circumstances and on the terms and subject to the conditions set forth in the Investor Support Agreement. In addition, the Investor Support Agreement provides that H-D may be obligated to transfer a certain number of shares of common stock owned by the Legacy LiveWire Equityholder, under certain circumstances and on the terms and subject to the conditions set forth in the Investor Support Agreement.
In connection with the Business Combination, the Sponsor forfeited an aggregate of 2,000,000 Class B ordinary shares of ABIC in accordance with the Investor Support Agreement.
LiveWire Group, Inc. 48 2024 Proxy Statement
TABLE OF CONTENTS
On September 26, 2022, the Company entered into a Tax Matters Agreement with H-D (the “Tax Matters Agreement”). The Tax Matters Agreement sets forth the principles and responsibilities regarding the allocation of taxes, adjustments with respect to taxes, preparation of tax returns, tax audits and certain other tax matters that affect LiveWire and H-D in the event LiveWire or any of its subsidiaries become members of any of H-D’s consolidated, combined, unitary and other similar groups for federal, state or local income tax purposes (or the Company has certain income, gain, loss and deduction included in the tax returns of such groups).
Under the Tax Matters Agreement, to the extent that the Company or any of its subsidiaries are required to be included in any consolidated or combined income tax return required to be filed by H-D, H-D will prepare and file (or cause to be prepared and filed) each such tax return and will pay or cause to be paid all taxes due in respect thereof. We will be required to make payments to H-D for its share of taxes reflected on such tax returns. With respect to U.S. federal income tax returns for any taxable period in
LiveWire Group, Inc. | 44 | 2023 Proxy Statement |
which we (or any of its subsidiaries) are included in H-D’s consolidated group for U.S. federal income tax purposes, the amount of taxes to be paid by us is generally determined, subject to certain adjustments, as if the Company and each of its subsidiaries filed its own separate consolidated federal income tax return (LiveWire’s “separate federal tax liability”). With respect to state and local income tax returns for any taxable period in which LiveWire or any of its subsidiaries are included in H-D’s combined, consolidated or unitary group for state or local income tax purposes, the amount of taxes to be paid by LiveWire is determined, subject to certain adjustments using principles analogous to the principles used to compute LiveWire’s separate federal tax liability, as if LiveWire and each of its subsidiaries included in such combined, consolidated or unitary group filed its own combined, consolidated or unitary group state or local income tax return.
LiveWire’s inclusion in H-D’s consolidated group may result in H-D utilizing certain tax attributes that LiveWire generates, including net operating losses, and LiveWire will receive no compensation from H-D for the use of such attributes.
The Tax Matters Agreement applies as of the initial date upon which H-D’s ownership of LiveWire meets the applicable minimum threshold required to file either a combined return or a consolidated return and will remain in effect unless the parties agree in writing to terminate the agreement. Notwithstanding any termination of the Tax Matters Agreement, the agreement will continue in effect with respect to any payment or indemnification due for all taxable periods prior to the termination during which the Tax Matters Agreement was in effect.
LiveWire Group, Inc. | 45 | 2023 Proxy Statement |
Convertible Loan
As previously disclosed in our Current Report on Form 8-K on February 16, 2024, on February 14, 2024, the Company entered into a Convertible Delayed Draw Term Loan Agreement with H-D providing for term loans in one or more advances up to an aggregate principal amount of $100 million (the “Convertible Loan”). As discussed under “Proposal No. 3: Approval of the Issuance of Additional Shares of Common Stock Necessary to Effect a Full Conversion of the Convertible Loan,” the Company is seeking approval from its stockholders for the issuance of additional shares of Common Stock upon conversion of the Convertible Loan.
LiveWire Group, Inc. 49 2024 Proxy Statement
The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote on such matters in accordance with their best judgment.
A copy of the Company’s Annual Report on Form 10-K for the year ended December 31,
2022,2023, as filed with the SEC on
March 6, 2023,February 23, 2024, is available without charge upon written request to LiveWire Investor Relations, 3700 West Juneau Avenue, P.O. Box 653, Milwaukee, Wisconsin 53208 or by accessing a copy on the Company’s website under “Financials” on the Investors section of our website at investor.livewire.com/investors. Information on or accessible through the Company’s website is not incorporated by reference in this Proxy Statement.
LiveWire Group, Inc. | 46 | 2023 Proxy Statement |
LiveWire Group, Inc. 50 2024 Proxy Statement
