| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Appointment of Directors
In connection with the Merger and pursuant to that certain Stockholders Agreement, dated as of October 27, 2020, by and among Callaway and each of PEP TG Investments LP (“Providence”), TGP Investors, LLC, TGP Investors II, LLC and TGP Advisors, LLC (together, “WestRiver”) and DDFS Partnership, LP and Dundon 2009 Gift Trust (together, “Dundon”), at the effective time of the Merger, each of Erik J Anderson, Thomas G. Dundon and Scott M. Marimow were appointed directors of Callaway. Mr. Anderson will serve as Vice Chairman of the Board. As a result, effective as of the effective time of the Merger, the Board consisted of a total of thirteen directors, each with a term to expire at the 2021 annual meeting of stockholders.
Pursuant to the Stockholders Agreement, each of Providence, WestRiver and Dundon have the right to designate one person (for a total of three persons) to be appointed or nominated, as the case may be, for election to the Board for so long as such stockholder maintains beneficial ownership of 50% or more of the shares of Callaway common stock owned by them on the closing date of the Merger. Mr. Marimow is affiliated with, and was nominated by, Providence, Mr. Anderson is affiliated with, and was nominated by, WestRiver and Mr. Dundon is affiliated with, and was nominated by, Dundon.
Mr. Anderson, Mr. Dundon and Mr. Marimow each received an initial award of restricted stock units with a market value of approximately $16,667, effective as of the closing date of the Merger concurrent with each person’s appointment to the Board. The award is scheduled to vest on the earlier of the first anniversary of the grant date or the date of the next annual meeting of Callaway’s stockholders if such person does not stand for re-election, provided such person is serving on the Board on such vesting date. Mr. Anderson, Mr. Dundon and Mr. Marimow will also receive annual cash compensation in accordance with Callaway’s standard compensation program for non-employee directors. In addition, each of Mr. Anderson, Mr. Dundon and Mr. Marimow entered into Callaway’s standard form of indemnification agreement for non-employee directors, copies of which are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively, and incorporated herein by reference.
Biographical information for each of the newly appointed directors of Callaway is included in the Registration Statement and is incorporated herein by reference.
There are no other arrangements or understandings between Mr. Anderson, Mr. Dundon and Mr. Marimow and any other person pursuant to which such person was selected to serve on the Board. Each of Mr. Anderson, Mr. Dundon and Mr. Marimow has no family relationship (within the meaning of Item 401(d) of Regulation S-K) with any director, executive officer or person nominated or chosen by Callaway to become a director or executive officer. Other than the information disclosed in the Registration Statement under the heading “Certain Relationships and Related Party Transactions of the Combined Company,” which is incorporated by reference herein, and the receipt of Merger Consideration by entities affiliated with each of Providence, WestRiver and Dundon, there are no transactions in which Callaway is or was a participant and in which Mr. Anderson, Mr. Dundon or Mr. Marimow or any of such persons’ immediate family members (within the meaning of Item 404 of Regulation S-K) had or will have a direct or indirect material interest subject to disclosure under Item 404(a) of Regulation S-K.
The foregoing description of the Stockholders Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Stockholders Agreement, which was filed with the SEC as Exhibit 10.2 to the Signing 8-K, and is incorporated herein by reference.
Adoption of the Callaway Golf Company 2021 Employment Inducement Plan
Effective immediately prior to the closing of the Merger, the Board approved the Callaway Golf Company 2021 Employment Inducement Plan (the “Inducement Plan”). The terms of the Inducement Plan are substantially similar to the terms of the Callaway Golf Company Amended and Restated 2004 Incentive Plan except that (i) incentive stock options may not be granted under the Inducement Plan and (ii) certain other changes were made in order to comply with the New York Stock Exchange Listed Company Manual rules. The Inducement Plan was adopted by the Board without stockholder approval pursuant to Rule 303A.08 of the New York Stock Exchange Listed Company Manual (“NYSE Rule 303A.08”).
The Board has initially reserved 1,300,000 shares of Callaway common stock for issuance pursuant to awards granted under the Inducement Plan. In accordance with NYSE Rule 303A.08, awards under the Inducement Plan may only be made to an employee who is being hired by Callaway or a parent or subsidiary, including as a result of a merger or acquisition, or being rehired
