| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On May 25, 2022, Callaway Golf Company (the “Company”) held its 2022 annual meeting of shareholders (the “Annual Meeting”), at which the Company’s shareholders approved, among other items, the Callaway Golf Company 2022 Incentive Plan (the “2022 Incentive Plan”). The 2022 Incentive Plan was approved by the Company’s Board of Directors (the “Board”) on March 15, 2022, and it became effective on the date of the Annual Meeting. In connection with adopting the 2022 Incentive Plan, the Company ceased granting awards under the Callaway Golf Company Amended and Restated 2004 Incentive Plan (the “2004 Incentive Plan”), the Callaway Golf Company 2021 Employment Inducement Plan and the Callaway Golf Company 2013 Non-Employee Directors Stock Incentive Plan. The purpose of the 2022 Incentive Plan is to promote the Company’s interests and those of its shareholders by using investment interests in the Company to attract, motivate and retain highly qualified key personnel, encourage equity ownership among this group, and enhance a mutuality of interest between such group and the Company’s shareholders to improve the long-term performance of the Company and the value of the Company’s common stock.
The terms of the 2022 Incentive Plan provide for the grant of stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance shares, performance units, dividend equivalents, cash-based awards and other incentives payable in cash or shares of the Company’s common stock. Subject to certain adjustments, as set forth in the 2022 Incentive Plan, the 2022 Incentive Plan provides for the issuance of up to 16,000,000 shares of common stock. Additionally, subject to certain limitations, the share reserve may be increased by the number of shares subject to awards granted under the 2022 Incentive Plan and certain outstanding awards under the 2004 Incentive Plan that, in each case, expire or lapse, or are forfeited by the holder or repurchased by the Company at a price no greater than the price paid by the participant, or tendered by the holder or withheld by the Company to satisfy any tax withholding obligation. Shares issued under the 2022 Incentive Plan may be authorized but unissued shares, issued shares reacquired by the Company or treasury shares, or shares held in trust for issuance under the 2022 Incentive Plan. In no event will more than 16,000,000 shares of common stock be issuable pursuant to the exercise of incentive stock options under the 2022 Incentive Plan during its ten-year term.
The 2022 Incentive Plan will be administered by the Compensation and Management Succession Committee (the “Compensation Committee”) (or by the Board or another Board committee as may be determined by the Board or the Compensation Committee from time to time). The administrator of the 2022 Incentive Plan (the “Administrator”) or its delegate will have the authority to, among other things, determine which service providers receive awards and to set the terms and conditions applicable to the award within the confines of the terms of the 2022 Incentive Plan. The Administrator will have the authority to interpret and administer the 2022 Incentive Plan or any agreement entered into under the 2022 Incentive Plan, to establish rules and regulations under the 2022 Incentive Plan, and to make any determination or take any other action as it deems necessary or advisable for the administration of the 2022 Incentive Plan.
The 2022 Incentive Plan contains a minimum vesting requirement, subject to limited exceptions, that awards made pursuant to the 2022 Incentive Plan may not vest earlier than the date that is one year following the grant date of the award.
The 2022 Incentive Plan also contains provisions with respect to payment of exercise or purchase prices, vesting and expiration of awards, adjustments and treatment of awards upon certain corporate transactions, including stock splits, recapitalizations and mergers, transferability of awards and tax withholding requirements.
The 2022 Incentive Plan may be amended or terminated by the Board at any time, subject to certain limitations requiring stockholder consent or the consent of the participant. In addition, the Administrator may not, without the approval of the Company’s stockholders, authorize certain re-pricings of any outstanding option or stock appreciation right granted under the 2022 Incentive Plan. The 2022 Incentive Plan will expire on March 14, 2032.
A more detailed description of the 2022 Incentive Plan is set forth in the section entitled “Proposal No. 4 – Approval of the Callaway Golf Company 2022 Incentive Plan” in the Company’s definitive proxy statement on Schedule 14A, which was filed with the Securities and Exchange Commission (the “Commission”) on April 8, 2022 (the “Proxy Statement”). The foregoing description of the 2022 Incentive Plan does not purport to be complete and is qualified in its entirety by reference to the complete text of the 2022 Incentive Plan, which is filed as Appendix B to the Proxy Statement and is incorporated herein by reference.
