Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
| Filed by the Registrant ☒ |
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Filed by a party other than the Registrant ☐ |
Check the appropriate box:
| ☐ |
Preliminary Proxy Statement |
| ☐ |
Confidential, for
Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ |
Definitive Proxy Statement |
| ☐ |
Definitive Additional
Materials |
| ☐ |
Soliciting Material under
§240.14a-12 |
HOLLEY INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
| ☒ |
No fee required |
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Fee paid previously with
preliminary materials |
| ☐ |
Fee computed on table
in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
2023
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS AND
PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
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DATE AND TIME
Tuesday, May 9, 2023
8:00 a.m. Central Time |
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WHO CAN VOTE
Stockholders of record as of the close of business on March 17, 2023, will be entitled to notice of, and to vote at, the Annual Meeting, or any adjournment thereof. |
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LOCATION
Online via live audiocast on
www.virtualshareholdermeeting.com/HLLY2023 |
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| VOTING
ITEMS |
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| PROPOSALS |
BOARD VOTE RECOMMENDATION |
FOR FURTHER DETAILS |
| 1. |
Election of two Class II directors named in this proxy statement |
“FOR” each director nominee |
Page 14 |
| 2. |
Advisory vote to ratify the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for 2023 |
“FOR” |
Page 18 |
Stockholders will also transact any other business that may be properly
presented at the Annual Meeting. This proxy statement is first being made available to our stockholders on March 28, 2023.
To maximize stockholder participation and
provide a consistent experience regardless of location, we are holding the Annual Meeting in a virtual-only format via live webcast
over the internet. We have designed the virtual Annual Meeting to ensure stockholders are afforded the same opportunity to
participate as they would have at an in-person meeting, including the right to vote and ask questions through the virtual meeting
platform. To attend the Annual Meeting online, vote, submit questions or view the list of registered stockholders during the
meeting, stockholders of record will need to go to the meeting website listed above and log in using their 16-digit control number
included on their proxy card. Beneficial owners should review these proxy materials and their voting instruction form for how to
vote in advance of and how to participate in the Annual Meeting.
In the event of a technical malfunction or other situation that the meeting
chair determines may affect the ability of the Annual Meeting to satisfy the requirements for a meeting of stockholders to be held by
means of remote communication under the Delaware General Corporation Law, or that otherwise makes it advisable to adjourn the Annual Meeting,
the chair or secretary of the Annual Meeting will convene the meeting at 8:00 a.m. Central Time on the date specified above and at the
Company’s address specified below solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or
virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement
on the Investors page of the Company’s website at https://investor.holley.com.
As permitted by the Securities and Exchange Commission (the “SEC”),
we are providing access to our proxy materials online under the SEC’s “notice and access” rules. As a result, unless
you previously requested electronic or paper delivery on an ongoing basis, we are mailing to our stockholders a Notice of Internet Availability
of Proxy Materials (the “Notice”) instead of a paper copy of the proxy statement, our 2022 Annual Report and a form of proxy
card or voting instruction card (together, the “proxy materials”). This distribution process is more resource- and cost-efficient.
The Notice contains instructions on how to access the proxy materials online. The Notice also contains instructions on how stockholders
can receive a paper copy of our proxy materials. If you elect to receive a paper copy, our proxy materials will be mailed to you.
We encourage you to review these proxy materials and vote your shares before
the Annual Meeting.
By Order of the Board of Directors,
Michelle Gloeckler
Interim President and Chief Executive Officer
1801 Russellville Road
Bowling Green, KY 42101
March 28, 2023
| HOW TO VOTE |
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INTERNET
To vote before the meeting,
visit www.proxyvote.com.
To vote at the meeting, visit
www.virtualshareholdermeeting.com/HLLY2023.
You will need the control
number printed
on your Notice, proxy card or
voting instruction form. |
TELEPHONE
Dial toll-free
(1-800-690-6903)
or the telephone
number
on your voting
instruction form.
You will need the
control number
printed on your Notice,
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form. |
MAIL
If you received a paper
copy
of a proxy card by mail,
mark, sign, date and
promptly mail
the proxy card in the
postage-paid envelope |
QR CODE
Scan this QR code to
vote with your
mobile device.
You will need the control
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|
IMPORTANT NOTICE REGARDING
THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF
STOCKHOLDERS TO BE HELD ON MAY 9, 2023
The notice, proxy statement and 2022 Annual
Report on Form 10-K are available at www.proxyvote.com. |
TABLE
OF CONTENTS
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FORWARD-LOOKING
STATEMENTS AND
WEBSITE REFERENCES |
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This document includes forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current facts, including
statements regarding our environmental and other sustainability plans and goals, made in this document are forward-looking. We use words
such as anticipates, believes, expects, future, intends, and similar expressions to identify forward-looking statements. Forward-looking
statements reflect management’s current expectations and are inherently uncertain. Actual results could differ materially for a
variety of reasons. Risks and uncertainties that could cause our actual results to differ significantly from management’s expectations
are described in our 2022 Annual Report on Form 10-K. Website references throughout this document are provided for convenience only, and
the content on the referenced websites is not incorporated by reference into this document.
Unless the context otherwise requires, references in this proxy statement
to “Holley,” “we,” “us,” “our,” “our company” and “the Company”
refer to Holley Inc. |
|
PROXY STATEMENT SUMMARY
This summary highlights information contained elsewhere
in this Proxy Statement. This summary does not contain all the information that you should consider, and you should read the entire Proxy
Statement carefully before voting.
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DATE AND TIME
May 9, 2023 at 8:00 a.m.
Central Time |
LOCATION
Online at
www.virtualshareholdermeeting.com/HLLY2023 |
RECORD DATE
March 17, 2023 |
| VOTING
MATTERS |
|
BOARD’S
VOTE RECOMMENDATIONS |
|
FOR
FURTHER INFORMATION |
| PROPOSAL 1 |
Election of Directors |
|
“FOR” each director nominee |
|
Page
14 |
| PROPOSAL 2 |
Ratification of Independent Registered Public Accounting Firm |
|
“FOR” |
|
Page
18 |
Company Overview and Business Strategy
Founded in 1903, Holley has been a part of the automotive industry for
well over a century. We are a leading designer, marketer, and manufacturer of high-performance automotive aftermarket products for car
and truck enthusiasts. Our products span a number of automotive platforms and are sold across multiple channels. We attribute a major
component of our success to our brands, including “Holley”, “APR”, “MSD” and “Flowmaster”,
among others. In addition, we have recently added to our brand lineup through a series of strategic acquisitions, including our 2020 acquisitions
of Simpson Racing Products, Inc., Drake Automotive Group LLC, and Detroit Speed, Inc.; our 2021 acquisitions of substantially all the
assets of AEM Performance Electronics, Classic Instruments LLC, ADS Precision Machining, Inc., d.b.a. Arizona Desert Shocks, Baer, Inc,
d.b.a. Baer Brakes, Brothers Mail Order Industries, Inc., d.b.a. Brothers Trucks, Rocket Performance Machine, Inc., d.b.a. Rocket Racing
Wheels, and Speartech Fuel Injections Systems, Inc.; and our 2022 acquisitions of substantially all the assets of John’s Ind., Inc.
(“John’s”), Southern Kentucky Classics (“SKC”), and Vesta Motorsports USA, Inc., doing business as RaceQuip
(“RaceQuip”). Through these strategic acquisitions, we have increased our market position in the otherwise highly fragmented
performance automotive aftermarket industry.
We operate in the performance automotive aftermarket parts industry. We
believe there is ample opportunity to continue our expansion into new products and markets, such as exterior accessories and mobile electronics,
representing a natural progression for us to grow market share as these adjacencies are driven by passionate enthusiasts, consistent with
our core categories.
Our vision is to be the most compelling and inclusive platform for automotive
enthusiasts, to inspire and support enthusiasts’ transition to cleaner, more sustainable technologies, and to further accelerate
the automotive lifestyle. Our aim is to provide a platform where automotive enthusiasts can purchase aftermarket auto parts for both old
model restorations and new vehicle enhancements. We believe our consumers are enthusiastic and passionate about the performance and the
personalization of their classic and modern cars. We aim to provide the products and service they need to pursue that passion.
Business Combination and Corporate Structure
As previously disclosed, on July 16, 2021 (the “Closing Date”),
we consummated a business combination (“Business Combination”) pursuant to that certain Agreement and Plan of Merger dated
March 11, 2021 (the “Merger Agreement”), by and among Empower Ltd., (“Empower”), Empower Merger Sub I Inc., a
direct wholly owned subsidiary of Empower (“Merger Sub I”), Empower Merger Sub II LLC, a direct wholly owned subsidiary of
Empower (“Merger Sub II”), and Holley Intermediate Holdings, Inc. (“Holdings”). The Merger Agreement provided
for, among other things, the following transactions: (i) Merger Sub I merged with and into Holdings, the separate corporate existence
of Merger Sub I ceased and Holdings became the surviving corporation, and (ii) Holdings merged with and into Merger Sub II, the separate
corporate existence of Holdings ceased and Merger Sub II became the surviving limited liability company. Upon closing, Empower changed
its name to Holley Inc. and its trading symbol on the New York Stock Exchange (the “NYSE”) from “EMPW” to “HLLY.”
Directors
The following provides summary information about each current director
and director nominee.
| NAME
AND OCCUPATION |
|
AGE |
|
OTHER
PUBLIC
BOARDS |
|
COMMITTEE
MEMBERSHIPS |
| AC |
|
CTC |
|
NGC |
|
OWEN
M. BASHAM IND
Partner, Sentinel Capital Partners |
|
37 |
|
0 |
|
|
|
 |
|
|
|
GRAHAM
CLEMPSON IND
Co-Founder and Vice Chairman, MidOcean Partners |
|
61 |
|
0 |
|
 |
|
 |
|
|
|
JAMES
D. COADY IND
Partner, Sentinel Capital Partners |
|
53 |
|
0 |
|
|
|
|
|
|
|
MICHELLE
GLOECKLER
Interim Chief Executive Officer, Holley, Inc. |
|
56 |
|
2 |
|
|
|
|
|
|
|
GINGER
M. JONES IND
Former SVP and CFO, Cooper Tire & Rubber Company |
|
58 |
|
2 |
|
 |
|
|
|
|
|
MATTHEW
RUBEL
Executive Chairman, Holley Inc.; Chairman of Executive
Board, MidOcean Partners |
|
65 |
|
1 |
|
|
|
|
|
|
|
ANITA
SEHGAL** IND
SVP, Marketing & Communications, Houston Astros |
|
50 |
|
1 |
|
|
|
|
|
|
|
AC – Audit Committee
CTC – Compensation and Talent Committee
NGC – Nominating and Governance Committee
IND Independent |
Chair Member
✚ Audit Committee Financial Expert |
Board Snapshot*
*Reflects Board following the Annual Meeting,
assuming each of the director nominees is elected.
Corporate
Governance Highlights
| ● | Non-Employee Executive Chairman of the Board |
| ● | Five of seven directors are independent |
| ● | 100% independent Board committees |
| ● | Robust director search process, which requires that the pool of candidates includes women and minorities
and that the Nominating and Governance Committee interview at least one woman and one minority candidate |
| ● | Annual Board and committee self-evaluations |
| ● | Regular executive sessions where independent directors meet without management present |
| ● | Robust director onboarding practice, which includes facility tours, management team meetings, etc. |
| ● | Active Board oversight of strategy, risk management, and environmental, social, and governance matters |
| ● | Hedging/pledging prohibited |
BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
We believe that an effective board should be made up of individuals who
collectively provide an appropriate balance of diverse occupational and personal backgrounds and perspectives and who have a range of
skills and expertise sufficient to provide guidance and oversight with respect to the Company’s strategy and operations. As such,
our Board of Directors (the “Board”) expects directors to be open and forthright, to develop a deep understanding of the Company’s
business, to exercise sound judgment in fulfilling their oversight responsibilities, to embrace Holley’s values and culture, and
to possess the highest levels of integrity.
The evaluation and selection of director nominees is a key aspect of our
Nominating and Governance Committee’s regular evaluation of the composition of, and criteria for membership on, our Board. The Board
and the Nominating and Governance Committee also actively seek to achieve a diversity of occupational and personal backgrounds on the
Board, including diversity with respect to demographics such as gender, race, ethnic and national background, geography, age, and sexual
orientation. As part of the search process for each new director, the Nominating and Governance Committee includes women and minorities
in the pool of candidates (and instructs any search firm the Committee engages to include these candidates), and interviews at least one
woman and one minority candidate.
Board Composition
On the Closing Date, we entered into a stockholders’ agreement (the
“Stockholders’ Agreement”) with affiliates of Sentinel Capital Partners (“Sentinel”) and MidOcean Partners
(the “MidOcean Sponsor”) whereby, among other things, the parties agreed to certain matters relating to the Company’s
corporate governance.
The Stockholders’ Agreement provides that the authorized number of
directors for our Board be seven. Pursuant to the Stockholders’ Agreement, Sentinel and the MidOcean Sponsor have the right to nominate
for election to the Board the following number of directors for so long as the shares beneficially owned by Sentinel and the MidOcean
Sponsor as a percentage of the shares held by Sentinel or the MidOcean Sponsor, as applicable, immediately after the Closing Date is equal
to or greater than the percentage indicated in the left hand column of the table below:
| OWNERSHIP
PERCENTAGE |
|
DIRECTOR
DESIGNEES |
| Sentinel |
|
|
| 64%
or greater |
|
3 |
| 39%
or greater, up to but not including 64% |
|
2 |
| 14%
or greater, up to but not including 39% |
|
1 |
| Less
than 14% |
|
0 |
| MidOcean
Sponsor |
|
|
| 50%
or greater |
|
2 |
| 25%
or greater, up to but not including 50% |
|
1 |
| Less
than 25% |
|
0 |
Additionally, pursuant to the Stockholders’ Agreement, for so long
as Sentinel or the MidOcean Sponsor, as applicable, has the right to designate at least two directors for election to the Board, Sentinel
and the MidOcean Sponsor, severally, shall have the right to appoint one director designee to serve on each of the standing committees,
subject to applicable New York Stock Exchange (“NYSE”) listing standards.
Director Independence
Our Board has determined that each of Messrs. Basham, Coady, and Clempson
and Mses. Jones and Sehgal are independent as defined under the NYSE listing standards. In making these independence determinations, our
Board has reviewed and discussed information provided by the directors to us with regard to each director’s business and personal
activities and relationships as they may relate to us and our management, including Messrs. Basham’s and Coady’s affiliation
with Sentinel Capital Partners, which beneficially owns 46.2% of the Company’s Common Stock. With respect to Mr. Clempson, the Board
considered that Mr. Clempson serves as Vice Chairman of MidOcean Partners’ Executive Board, an advisory board that provides industry
insights to MidOcean Partners’ investment teams and portfolio companies. MidOcean beneficially owns 12.9% of the Company’s
Common Stock. In each case, the Board determined that such relationships did not impair such directors’ independence. In addition
to determining whether each director satisfies the director independence requirements set forth in the NYSE listing standards, in the
case of members of the Audit Committee, our Board has also made an affirmative determination that members satisfy separate independence
requirements under the SEC rules for such members.
Board Leadership Structure
The Board annually reviews its leadership structure to evaluate whether
the structure remains appropriate for the Company. The Board selects its Chairman and the Chief Executive Officer (the “CEO”)
in a way it considers in the best interests of the Company. The Board does not have a policy on whether the role of Chairman and CEO should
be separate or combined. Currently, the roles of Chairman of the Board and CEO are separate. In connection with Thomas Tomlinson’s
retirement effective February 6, 2023, the Board designated and appointed Mr. Rubel as the Company’s Executive Chairman of the
Board to reflect his more active role in the oversight of the Company while the Company is seeking a permanent CEO. Our Board believes
that our current structure, with an Executive Chairman who is well-versed in the needs of a complex business and has strong, well-defined
governance duties, gives our Board a strong leadership and corporate governance structure that best serves the needs of Holley and its
stockholders.
Director
Nominations
The Nominating and Governance Committee evaluates the composition of the
Board annually to assess whether the skills, experience, characteristics, and other criteria established by the Board are currently represented
on the Board as a whole, and in individual directors, and to assess the criteria that may be needed in the future in light of the Company’s
anticipated needs. The Board and the Nominating and Governance Committee also actively seek to achieve a diversity of occupational and
personal backgrounds on the Board, including diversity with respect to demographics such as gender, race, ethnic and national background,
geography, age, and sexual orientation. The Board will assess its effectiveness in this regard as part of the annual board and director
evaluation process. As part of the search process for each new director, the Nominating and Governance Committee includes women and minorities
in the pool of candidates (and instructs any search firm the Committee engages to include these candidates), and interviews at least one
woman and one minority candidate.
We have not formally established any specific, minimum qualifications that
must be met or skills that are necessary for directors to possess. The Nominating and Governance Committee reviews the qualifications
of director candidates and incumbent directors in light of the criteria established by Board, and any stockholder recommendations for
director are evaluated in the same manner as other candidates considered by the Nominating and Governance Committee. Stockholders that
wish to nominate a director for election to our Board should follow the procedures described below.
Candidates may come to the attention of the Nominating and Governance Committee
through current Board members, professional search firms, stockholders, or other persons.
Procedures for Recommending Individuals to Serve as Directors
The Nominating and Governance Committee also considers director candidates
recommended by our stockholders. Any stockholder who wishes to propose director nominees for consideration by the Nominating and Governance
Committee, but does not wish to present such proposal at an annual meeting of stockholders, may do so at any time by sending each proposed
nominee’s name and a description of his or her qualifications for board membership to the chair of the Nominating and Governance
Committee in writing to c/o Corporate Secretary at Holley Inc., 1801 Russellville Road, Bowling Green, KY 42101. The recommendation should
contain all of the information regarding the nominee required under the “advance notice” provisions of the Company’s
bylaws. The Nominating and Governance Committee evaluates nominee recommendations submitted by stockholders in the same manner in which
it evaluates other director nominees.
Board Qualifications and Diversity
The following chart shows how certain relevant and important skills, experience,
characteristics, and other criteria, including diversity of viewpoints, are represented on our Board. This chart is not intended to be
an exhaustive list for each director, but instead intentionally focuses on the primary skillsets each director contributes. We believe
the combination of the skills and qualifications shown below demonstrates how our board is well-positioned to provide effective oversight
and strategic advice to our management.
| |
BASHAM |
CLEMPSON |
COADY |
GLOECKLER |
JONES |
RUBEL |
SEHGAL |
| Corporate Strategy |
● |
● |
● |
● |
● |
● |
● |
| Automotive Industry |
● |
● |
● |
|
● |
|
|
| Mergers and Acquisitions |
● |
● |
● |
● |
● |
● |
|
| Senior Executive Leadership |
|
|
● |
● |
● |
● |
|
| Accounting / Financial Reporting |
● |
● |
● |
● |
● |
● |
|
| Human Capital Management |
|
● |
|
● |
● |
● |
● |
| Sales / Marketing |
|
● |
● |
● |
|
● |
● |
| Public Company Governance |
● |
● |
● |
● |
● |
● |
● |
| Legal / Regulatory |
|
● |
|
|
● |
● |
|
| Diversity (Gender) |
M |
M |
M |
F |
F |
M |
F |
Board Committees
Our Board has three standing committees: an Audit Committee, a Compensation and Talent Committee, and a Nominating and Governance Committee.
In accordance with our Corporate Governance Guidelines, the independent directors meet in executive session without management present
at every Board meeting. Ms. Jones will preside at such executive sessions.
During the fiscal year ended December 31, 2022, the Board held four meetings,
and there were four meetings of the Audit Committee, five meetings of the Compensation and Talent Committee, and four meetings of the
Nominating and Governance Committee. Each of our incumbent directors attended at least 95% of the meetings of our Board and the respective
committees of which he or she was a member held during the period such incumbent director was a director during the fiscal year ended
December 31, 2022.
Directors are expected to attend the annual
meeting of stockholders absent unusual circumstances. At our 2022 Annual Meeting of Stockholders, all of our then-serving directors
were in attendance.
| AUDIT COMMITTEE |
|
MEMBERS
Ginger M. Jones
(Chair)
Anita Sehgal,
Graham Clempson |
PRINCIPAL RESPONSIBILITIES:
The primary role of the Audit Committee is to exercise primary financial oversight on behalf of the Board. The Audit Committee
represents and assists the Board in discharging its oversight responsibility relating to: (a) the accounting and financial reporting processes
of the Company and its subsidiaries, including the audits of the Company’s financial statements and the integrity of the financial
statements; (b) the Company’s compliance with legal and regulatory requirements; (c) the outside auditor’s qualifications,
independence and performance; (d) the design and implementation of the Company’s internal audit function and (e) the performance
of the Company’s outside auditor. The Company’s management team is responsible for preparing financial statements, and the
Company’s independent registered public accounting firm is responsible for auditing those financial statements.
We have adopted a committee charter that details the principal
functions of the Audit Committee, including:
· the
appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered
public accounting firm engaged by us;
· pre-approving
all audit and permissible non-audit services to be provided by the independent auditors or any other registered public accounting firm
engaged by us, and establishing pre-approval policies and procedures;
· reviewing
and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence;
· reviewing
and discussing with management and the independent auditor our annual audited and quarterly financial statements, including management’s
discussion and analysis of financial condition and operations and the independent auditor’s reports related to the financial statements;
· receiving
reports from management and the independent auditors on, and review and discuss the adequacy and effectiveness of, our internal controls
and disclosure controls and procedures;
· reviewing
and discussing the Company’s practices with respect to risk assessment and risk management, and risks related to matters including
the Company’s financial statements and financial reporting processes, compliance, and information technology and cybersecurity;
and
· overseeing
the Company’s compliance program with respect to legal and regulatory requirements, including the Company’s code(s) of conduct
and the Company’s policies and procedures for monitoring compliance.
Under the NYSE listing standards and applicable SEC rules, we
are required to have at least three members of the audit committee, all of whom must be independent under the standards and rules applicable
to audit committee members. Each of Ms. Jones, Ms. Sehgal, and Mr. Clempson qualifies as an “independent” director for purposes
of the SEC rules and NYSE listing standards that are applicable to audit committee members. Each member of the Audit Committee is financially
literate, and our Board has determined that each of Ms. Jones and Mr. Clempson qualifies as an “audit committee financial expert”
as defined in applicable SEC rules.
The Audit Committee has established and oversees procedures for
handling reports of potential misconduct, and whereby complaints or concerns regarding accounting, internal accounting controls, auditing
or federal securities law matters may be submitted anonymously to the Audit Committee. The Audit Committee has the authority to retain
counsel and other advisers as it determines appropriate to assist in performance of its functions at our expense. |
| COMPENSATION AND TALENT COMMITTEE |
|
MEMBERS
Graham Clempson
(Chair)
Owen M. Basham
Ginger Jones |
PRINCIPAL RESPONSIBILITIES:
The Compensation and Talent Committee is responsible for approving, or recommending to the Board
for approval, the compensation payable to the executive officers of the Company and administering the Company’s equity compensation
plans.
The Compensation and Talent Committee acts on behalf of and in
conjunction with the Board to establish or recommend the compensation of our executive officers and to provide oversight of our overall
compensation philosophy, policies, and programs.
We have adopted a committee charter that details the principal
functions of the Compensation and Talent Committee, including:
· reviewing
and approving the corporate goals and objectives relevant to our CEO’s compensation, evaluating our CEO’s performance in light
of such goals and objectives, and recommending to the independent directors of the Board for approval the compensation of our CEO based
on such evaluation;
· overseeing
the evaluation of executive officers other than the CEO and reviewing and recommending to the Board for approval the compensation of
such other executive officers based upon the recommendation of the CEO;
· administering
and making recommendation to the Board with respect to our incentive compensation and equity-based compensation plans that are subject
to Board approval;
· approving
and amending or modifying the terms of other compensation and benefit plans;
· reviewing,
evaluating, and recommending changes, if appropriate, to the compensation for directors;
· overseeing
and reviewing succession planning and management development;
· overseeing
the Company’s engagement with stockholders on executive compensation; and
· overseeing
our strategies and policies related to human capital management, including with respect to matters such as talent development and retention,
workplace environment and culture and diversity and inclusion.
The Compensation and Talent Committee may delegate its duties
and responsibilities to one or more subcommittees, consisting of not less than two members of the Compensation and Talent Committee, as
it determines appropriate.
The Compensation and Talent Committee comprises at least three
directors, consisting entirely of independent directors who meet the NYSE independence requirements, and otherwise meet NYSE compensation
committee composition requirements. Additionally, at least two members of the Compensation and Talent Committee must qualify as “non-employee
directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934.
The Compensation and Talent Committee has the authority, in its
sole discretion, to retain or obtain the advice of a compensation consultant, legal counsel or other advisers, at our expense, and are
directly responsible for the appointment, compensation, and oversight of the work of any such advisers. However, before engaging or receiving
advice from a compensation consultant, external legal counsel, or any other adviser, the Compensation and Talent Committee considers the
independence of each such adviser, including the factors required by NYSE listing standards and the SEC.
The Compensation and Talent Committee engaged Korn Ferry in 2022
to serve as the compensation consultant for the Compensation and Talent Committee and to provide advice in connection with the Company’s
2022 compensation program for directors and executives. Korn Ferry did not provide any other services to the Company or management, and
only received fees from the Company for the services it provided to the Compensation and Talent Committee. The Compensation and Talent
Committee evaluated Korn Ferry’s independence under the applicable NYSE and SEC standards and concluded that Korn Ferry was independent
of the Company and that its services raised no conflicts of interest. |
| NOMINATING AND GOVERNANCE COMMITTEE |
|
MEMBERS
Anita Sehgal
(Chair)
Owen M. Basham
James D. Coady |
PRINCIPAL RESPONSIBILITIES:
The Nominating and Governance Committee assists the Board by identifying and recommending individuals
qualified to become members of the Board. The Nominating and Governance Committee is responsible for evaluating the composition, size,
and functioning of the Board and its committees and making recommendations regarding the appointment of directors to the committees, establishing
procedures for considering stockholder nominees to the Board, and reviewing the corporate governance principles and making recommendations
to the Board regarding possible changes.
We have adopted a committee charter, which details the purpose
and responsibilities of the Nominating and Governance Committee, including:
· reviewing
and recommending to the Board the skills, experience, characteristics, and other criteria for identifying and evaluating directors;
· identifying,
reviewing the qualifications of, and recruiting individuals qualified to serve as directors, consistent with criteria approved by the
Board, and recommending to our Board candidates for nomination for election or reelection at the annual meeting of stockholders or to
fill vacancies on our Board;
· developing
and recommending to our Board a set of corporate governance principles;
· annually
reviewing the Board’s leadership structure and recommending changes to the Board as appropriate;
· overseeing
succession planning for the Board and key leadership roles on the Board and its committees;
· overseeing
the annual self-evaluation of our Board, its committees, and individual directors;
· overseeing
our stockholder engagement program, and making recommendations to the Board regarding its involvement in stockholder engagement;
· overseeing
our environmental, social, and governance programs, policies, and activities, monitoring developments and emerging trends relating to
these issues, and reporting to the Board on such matters; and
· annually
evaluating the performance of the Nominating and Governance Committee and assessing the adequacy of the Nominating and Governance Committee’s
charter.
The Nominating and Governance Committee comprises at least three
directors, consisting entirely of independent directors under the NYSE independence requirements.
The Nominating and Governance Committee has the authority to
retain counsel and other advisers as it determines appropriate to assist in performance of its functions at our expense, including any
search firm to be used to identify director candidates, and to approve the fees and other retention terms of any such advisers. |
Risk Oversight
A core responsibility of the Board is to oversee the Company’s
processes for assessing and managing risk. The Board accomplishes this oversight through the regular reporting to the Board by the Audit
Committee. The Audit Committee represents the Board by periodically reviewing our accounting, reporting, and financial practices, including
the integrity of our financial statements, the surveillance of administrative and financial controls, and our compliance with legal and
regulatory requirements. Through its regular meetings with management, including the finance, legal, internal audit, and information technology
functions, the audit committee reviews and discusses significant areas of our business and summarizes for the Board areas of risk and
the appropriate mitigating factors. In addition, our Board receives periodic detailed operating performance reviews from management.
| BOARD |
| Oversees the Company’s processes for assessing and managing risk |
 |
|
|
|
| AUDIT COMMITTEE |
COMPENSATION AND TALENT
COMMITTEE |
NOMINATING AND GOVERNANCE
COMMITTEE |
| ● Reviews and discusses the Company’s practices with respect to risk assessment and risk management, and risks related to matters including the Company’s financial statements and financial reporting processes, compliance, and information technology and cybersecurity |
● Oversees the assessment of the risks related to the Company’s compensation policies and programs applicable to officers and employees, and reports to the Board on the results of this assessment |
● Oversees risks related to corporate governance as well as risks related to environmental, social, and governance matters relevant to the Company’s business |
 |
|
|
|
| MANAGEMENT |
| Chief Executive Officer and Chief Financial Officer and other members of management monitor and implement policies for managing the Company’s risks, including those related to legal, accounting, and financial matters, and report periodically on these matters to the Board and its Committees. |
Communications with Directors
The Board welcomes feedback from stockholders and other interested parties.
Stockholders and other interested parties may contact the Board by mailing correspondence to c/o Corporate Secretary at the Company’s
principal offices at 1801 Russellville Road, Bowling Green, KY 42101. Correspondence will be forwarded to the respective director, except
that the Corporate Secretary reserves the right not to forward advertisements or solicitations, customer complaints, obscene or offensive
items, communications unrelated to the Company’s affairs, business or governance, or otherwise inappropriate materials.
Governance Documents
The Audit Committee, Compensation and Talent Committee, and Nominating
and Governance Committee each operate pursuant to written charters adopted by the Board. These charters, along with the Corporate Governance
Guidelines and the Code of Business Conduct and Ethics, are available at the Company’s website. To access these documents from the
Company’s website, go to investor.holley.com and select “Governance” and “Governance Documents” from the
drop-down menu.
Our Board adopted a Code of Business Conduct and Ethics relating to the
conduct of our business by all of our employees, executive officers (including our principal executive officer and principal financial
officer/principal accounting officer (or persons performing similar functions)), and directors. This code satisfies the requirement that
we have a “code of conduct” under NYSE and SEC rules and is available on our website identified above. To the extent required,
we intend to disclose future amendments to certain provisions of this code, or waivers of such provisions, applicable to any of our executive
officers or directors, on our website identified above.
Hedging Policy
Our Insider Trading Policy prohibits all directors, officers, and employees,
as well as members of such persons’ immediate families and households (other than household employees) and such persons’ controlled
entities, from engaging in the following: (a) short-term trading; (b) short sales; (c) transactions involving publicly traded options
or other derivatives, such as trading in puts or calls; and (d) hedging transactions with respect to Company securities.
The Insider Trading Policy further prohibits holding Company securities
in a margin account or pledging Company securities as collateral for a loan.
Director Compensation
The chart below sets forth the fees paid to directors in 2022.
| Annual
Cash Retainer (other than the Chairman): |
|
$ |
70,000 |
| Chairman
of the Board of Directors |
|
$ |
110,000 |
| Committee
Chairperson Retainers: |
|
|
|
| Audit
Committee |
|
$ |
25,000 |
| Compensation
and Talent Committee |
|
$ |
15,000 |
| Nominating
and Governance Committee |
|
$ |
15,000 |
| Committee
Membership Retainers: |
|
|
|
| Audit
Committee |
|
$ |
10,000 |
| Compensation
and Talent Committee |
|
$ |
10,000 |
| Nominating
and Governance Committee |
|
$ |
10,000 |
The Compensation and Talent Committee believes directors’ incentives
should be to improve the long-term value of the Company and promote stockholder returns. Accordingly, in addition to the above fees, our
directors are also compensated with awards under the 2021 Plan. On September 23, 2021, the Company awarded each non-employee director
17,000 restricted stock units. The restricted stock units vested on July 16, 2022, (the first anniversary of the Closing Date). On May
11, 2022, the Company awarded each non-employee director 9,320 restricted stock units. The restricted stock units vest on May 11, 2023,
(the first anniversary of the date of grant), provided that the director remains on the Board through such date. In addition, the Company
has entered into an indemnification agreement with each of its Directors, which requires the Company to indemnify them against certain
liabilities that may arise as a result of their status or service as Directors of the Company. The Company also pays the premiums on the
directors’ and officers’ liability insurance policies. The Company also reimburses members of the Board of Directors for travel
expenditures related to their services to the Company.
The following table sets forth the compensation awarded to, earned by,
or paid to the Board of Holley during the fiscal year ended December 31, 2022:
| Director1 |
Fees Earned or Paid
in Cash ($) |
Stock
Awards
($)2 |
Total ($) |
| Owen Basham3 |
90,000 |
79,500 |
169,500 |
| Gina Bianchini |
40,000 |
— |
40,000 |
| James Coady3 |
85,000 |
79,500 |
164,500 |
| Michelle Gloeckler |
95,000 |
79,500 |
174,500 |
| Ginger M. Jones |
95,000 |
79,500 |
174,500 |
| Matthew Rubel |
120,000 |
79,500 |
199,500 |
| Anita Sehgal |
45,000 |
79,500 |
124,500 |
| (1) | Mr. Tomlinson, as an employee director, did not receive compensation for his service on the board of
directors of Holley. |
| (2) | On May 11, 2022, each director was issued 9,320 restricted stock units that vest in full on May 11, 2023.
Amounts in this column represent the aggregate grant date fair value of the restricted stock units granted during fiscal 2022, calculated
in accordance with FASB ASC Topic 718. For additional information regarding the assumptions underlying this calculation, please read Note
13 to our consolidated financial statements for the fiscal year ended December 31, 2022 located in our Annual Report on Form 10-K for
such fiscal year. |
| (3) | Director cash compensation attributable to Mr. Basham’s and Mr. Coady’s service was paid
to Sentinel Capital Partners. In addition, awards of restricted stock units attributable to Mr. Basham’s and Mr. Coady’s service
are held by Sentinel Capital Partners. |
| |
PROPOSAL 1 |
|
| |
Election of Directors
Our Board is divided into three classes with only one class of directors
being elected in each year and each class (except for those directors appointed prior to our first annual meeting of stockholders) serving
a three-year term. Class II directors, which consist of Ms. Jones and Mr. Coady, served for a term expiring at this Annual Meeting. Class
III directors, which consists of Messrs. Rubel, Clempson, and Basham, and Class I directors, which consists or Mses. Gloeckler and Sehgal,
will serve for a term expiring at the 2024 and 2025 annual meeting of stockholders, respectively. At each succeeding annual meeting of
stockholders, directors will be elected for a full term of three years to succeed the directors of the class whose terms expire at such
annual meeting of the stockholders. There will be no limit on the number of terms a director may serve on the Board.
There are two Class II directors whose term of office expires at the Annual
Meeting. Our Nominating and Governance committee has recommended, and our Board has approved, Ginger Jones and James Coady as nominees
for election as directors at the Annual Meeting. If elected at the Annual Meeting, each of these nominees would serve until the 2026 annual
meeting of stockholders or until his or her successor has been duly elected and qualified, or, if sooner, until his or her earlier death,
resignation removal, retirement, or disqualification.
Each of the nominees has consented to serve as a director, if elected.
We have no reason to believe that any of the nominees will be unavailable or, if elected, will decline to serve. If any nominee becomes
unable or unwilling to stand for election as a director, proxies will be voted for any substitute as designated by the Board, or alternatively,
the Board may reduce the size of the Board. |
|
| |
Our Board recommends a vote “FOR” the election of each nominee. |
|
Director Nominees
For each of the two director nominees standing for election, the following
describes certain biographical information and the specific experience, qualifications, attributes, or skills that qualify them to serve
as our directors and, as applicable, the Board committees on which they serve.
|
James D. Coady
| 53
Partner, Sentinel
Capital Partners
DIRECTOR SINCE: 2021 |
|
| |
| |
|
COMMITTEES
●
Nominating and Governance Committee |
OTHER PUBLIC COMPANY BOARDS
None |
BACKGROUND
Mr. Coady has served as a member of our Board since July 2021 and, prior to the Business Combination, previously served as a director
of Holley Intermediate since 2018. Mr. Coady is a partner of Sentinel Capital Partners. Prior to joining Sentinel in 1998, Mr. Coady spent
three years as an associate at First Chicago Equity Capital, the private equity division of First Chicago NBD, and two years as an analyst
at Alex. Brown & Sons. Mr. Coady holds an MBA from Northwestern University’s J.L. Kellogg Graduate School of Business and an
AB from Harvard University. He currently serves as a director of Sentinel portfolio companies American West Restaurant Group, Cabi, Empire
Auto Parts, and Newk’s Eatery. He also served as a director of Chase Doors, Checkers, Colson, Cottman, Engineered Controls, Falcon
Holdings, Fasloc, Huddle House, Interim Healthcare, Massage Envy, Metro Dentalcare, Midwest Wholesale, Nivel, NorSun Food Group, Pet Supplies
Plus, Quick Weight Loss Centers, RotoMetrics, Southern California Pizza, and Vintage Parts prior to Sentinel’s sale of these businesses.
Mr. Coady’s qualifications to serve on our Board include
his experience related to private equity and transactional matters and post-acquisition oversight of operational performance at portfolio
companies.
|
Ginger M. Jones
| 58
Former SVP and CFO, Cooper Tire & Rubber Company
DIRECTOR SINCE: 2021 |
|
| |
| |
|
COMMITTEES
●
Audit Committee (Chair)
·
Compensation and Talent Committee |
OTHER PUBLIC COMPANY BOARDS
●
Tronox Holdings plc
●
Nordson Corporation |
BACKGROUND
Ms. Jones has served as a member of our Board since July 2021.
Ms. Jones has been a member of the board of directors of Tronox Holdings plc (NYSE: TROX) since April 4, 2018, and currently serves as
its audit committee chair and member of the human resources and compensation committee. Since December 2019, Ms. Jones has served as a
member of the board of directors of Nordson Corporation (NASDAQ: NDSN), and currently serves on the audit committee. From October 2013
to October 2020, Ms. Jones was a member of the board of directors of Libbey Inc. (NYSE: LBY), where she chaired its audit committee. Prior
to her retirement in December 2018, Ms. Jones served as Vice President and Chief Financial Officer of Cooper Tire & Rubber Company
(NYSE: CTB) beginning in December 2014 and was promoted to Senior Vice President and Chief Financial Officer in February 2016. At Cooper,
Ms. Jones was responsible for Cooper’s financial operations, investor relations, business information systems, and corporate strategic
planning. Prior to joining Cooper, Ms. Jones served as Senior Vice President and Chief Financial Officer of Plexus Corp. (NASDAQ: PLXS)
from 2007 to 2014, and Vice President and Corporate Controller of Banta Corporation from 2002 to 2007 (formerly NYSE: BN). A certified
public accountant, Ms. Jones began her career with Deloitte & Touche. Ms. Jones holds a Master of Business Administration from The
Ohio State University and a Bachelor’s Degree in Accounting from the University of Utah.
Ms. Jones’ qualifications to serve on our Board include
her substantial experience in accounting and finance, along with her extensive experience in senior management.
Directors Continuing in Office Until the 2024 Annual Meeting
of Stockholders
|
Owen M. Basham
| 37
Partner, Sentinel Capital Partners
DIRECTOR SINCE: 2021 |
|
| |
| |
|
COMMITTEES
●
Compensation and Talent Committee
●
Nominating and Governance Committee |
OTHER PUBLIC COMPANY BOARDS
None |
BACKGROUND
Mr. Basham has served as a member of our Board of Directors since July 2021 and, prior to the Business Combination, previously served
as a director of Holley Intermediate since 2018. Mr. Basham is a partner of Sentinel Capital Partners. Prior to joining Sentinel in 2012,
he spent two years in the restructuring and special situations group of Macquarie Capital and two years at Nancy Creek Capital, a lower
middle market private equity and mezzanine debt firm. Mr. Basham holds a BS in Commerce from the University of Virginia’s McIntire
School. He currently serves as a director of Sentinel portfolio companies Empire Auto Parts, L2 Brands, and RefrigiWear. He previously
served as a director of Altima Dental, Fazoli’s, GSM Outdoors, MB2 Dental, and SONNY’S Enterprises prior to Sentinel’s
sale of these businesses.
Mr. Basham’s qualifications to serve on our Board include his strong strategic leadership, business development, and financial skills.
|
Matthew Rubel
| 65
Executive Chairman, Holley Inc.; Chairman of Executive Board, MidOcean Partners
DIRECTOR SINCE: 2020 |
|
| |
| |
|
COMMITTEES
None |
OTHER PUBLIC COMPANY BOARDS
●
The Joint Chiropractic |
BACKGROUND
Mr. Rubel is the Executive Chairman of our board of directors.
Prior to the Business Combination, Mr. Rubel served as Empower’s Chief Executive Officer and Chairman since August 2020. Mr. Rubel
serves as the Chairman of MidOcean Partners’ Executive Board since joining the firm in 2018, where he leads the Executive Board’s
efforts to provide industry insights to MidOcean Partners’ investment teams and portfolio companies.
Mr. Rubel is a renowned retail and brand Chief Executive Officer,
having led many successful global brands and businesses. Most recently, Mr. Rubel served as Chief Executive Officer, President, and Board
Member of Varsity Brands, a leader in sport, spirit, and achievement products, which he strategically focused and integrated. Previously,
Mr. Rubel served as Chairman, Chief Executive Officer and President of Collective Brands, Inc., which included Payless ShoeSource, Sperry
Topsider, Saucony, Stride Rite, and Keds. Prior to Collective Brands, Mr. Rubel was Chairman, Chief Executive Officer, and President of
Cole Haan LLC, from 1999 to 2005. Prior to Cole Haan, he served in senior management roles at J. Crew Group, Revlon, and Murjani International
Ltd.
Mr. Rubel has been a director of numerous multinational retail
and consumer branded companies. He currently serves as Executive Chairman of MidOcean’s portfolio company KidKraft, and also on
the Boards of The Joint Chiropractic and MidOcean’s portfolio company Image Skincare. He previously was an Independent Director
at Hudson’s Bay Company (“HBC”), where he served on the Special Committee for HBC’s going private transaction.
Mr. Rubel also served as an Independent Director of HSNi, the holding company of HSN and Cornerstone Brands. In addition, Mr. Rubel served
as an Independent Director at TreeHouse Foods, Inc., SUPERVALU, ELF Cosmetics, and Furniture Brands, and as an advisor to early stage
technology and retail companies, including Celect, Inc., Retail Next, First Insight, and AfterPay. Mr. Rubel has also worked closely as
a Senior Advisor with TPG Capital, TPG Growth, and Roark Capital. He was a presidential appointee to the White House Advisory Committee
for Trade Policy Negotiation from 2010 to 2018. Mr. Rubel holds a Bachelor of Science from Ohio University and an MBA from the University
of Miami.
Mr. Rubel’s qualifications
to serve on our Board include his extensive business and management experience, along with his extensive private and public company board
and committee experience.
|
Graham Clempson
| 61
Vice Chairman of Executive Board, MidOcean Partners
DIRECTOR SINCE: 2023 |
|
| |
| |
|
COMMITTEES
· Compensation
and Talent Committee (Chair)
· Audit
Committee |
OTHER PUBLIC COMPANY BOARDS
None |
BACKGROUND
Mr. Clempson has been an observer on the Board since the Business
Combination. Prior to the Business Combination, Mr. Clempson served as Empower’s President and was a member of Empower’s Board
of Directors. He is Vice Chairman of MidOcean, which he co-founded in 2003, and serves on MidOcean’s Executive Board with a focus
on the firm’s Investment Strategy, Portfolio Management, and Business Development functions based in New York. Previously, Mr. Clempson
was MidOcean’s European Managing Partner, based in London, from the firm’s inception until 2012. In addition to his role at
MidOcean, Mr. Clempson serves as Managing Partner at Quartic Capital LLP, which he founded in 2012. Quartic Capital LLP invests in and
manages complex portfolios of secondary private equity assets, in partnership with Coller Capital, a leading global secondary private
equity investment firm. Prior to co-founding MidOcean, Mr. Clempson held various leadership positions in the European finance and private
equity sectors, including CEO of Morgan Grenfell Private Equity, European Managing Partner of Deutsche Bank Capital Partners, and Co-Head
of European Investment Banking at Deutsche Bank, with particular responsibility for the bank’s Financial Sponsor Coverage, Leveraged
Finance, and High Yield departments. Mr. Clempson began his career at Bankers Trust Company in 1983. Mr. Clempson holds an MA in
Law from Oxford University.
Mr. Clempson’s qualifications to serve on our Board include
his strategic leadership, business development and financial skills.
Directors Continuing in Office Until the 2025 Annual Meeting
of Stockholders
|
Michelle Gloeckler
| 56
Interim Chief Executive Officer, Holley Inc.
DIRECTOR SINCE: 2021 |
|
| |
| |
|
COMMITTEES
None |
OTHER PUBLIC COMPANY BOARDS
●
BJ’s Wholesale Club
●
The Duckhorn Portfolio, Inc. |
BACKGROUND
Ms. Gloeckler has served as Interim Chief
Executive Officer since February 2023 and as a member of our Board since July 2021. In December 2021, Ms. Gloeckler was appointed as
an independent member of the board of directors of Pairwise. Ms. Gloeckler has been a member of the board of directors of BJ’s
Wholesale Club (NYSE: BJ) since September 2019, where she serves on the nominating and governance committee. In mid-May 2021, Ms.
Gloeckler was appointed as a member of the board of directors of The Duckhorn Portfolio, Inc. (NYSE: NAPA), where she serves on the
audit committee and nominating and corporate governance committee. Ms. Gloeckler is a former retail executive with more than thirty
years of experience in retail, consumer-packaged goods, merchandising, sourcing, manufacturing, and strategy. Ms. Gloeckler served
as an independent director on Benson Hill Biosystems, Inc.’s board and audit committee from 2019 to 2021, and was the Chief
Merchant & President International for Academy Sports & Outdoors, a sporting goods retailer, from August 2016 to January
2019. Ms. Gloeckler served as Executive Vice President, Consumables, Health and Wellness at Walmart Inc. (NYSE: WMT), from February
2009 to August 2016, where she led Walmart’s health and wellness unit and US manufacturing initiative. Prior to that, Ms.
Gloeckler held leadership roles at The Hershey Company, a global confectionary manufacturer. Ms. Gloeckler is an advisor for
Blendid, PEEP Performance - GO2 Devices. Ms. Gloeckler served on The University of Michigan Dean’s Advisory Council from 2015-2022. She
holds a Bachelor’s Degree in Communication and Psychology from the University of Michigan.
Ms. Gloeckler’s qualifications to serve on our Board include
her extensive business and management experience, along with her extensive private and public company board and committee experience.
|
Anita Sehgal
| 50
SVP, Marketing & Communications, Houston Astros
DIRECTOR NOMINEE |
|
| |
|
COMMITTEES
· Nominating
and Governance Committee (Chair)
· Audit
Committee |
OTHER PUBLIC COMPANY BOARDS
●
Reitmans (Canada) Limited (RET) |
BACKGROUND
Ms. Sehgal has served as Senior Vice President, Marketing &
Communications with the Houston Astros, a Major League Baseball team, since 2015. In her role, Ms. Sehgal provides strategic leadership
for the ballclub’s retail, advertising, marketing, communications, broadcasting, and alumni relations, including support for a broad
variety of sponsorship, ticket, special event, community, and the Astros Golf Foundation and Houston Open initiatives. Prior to joining
the Houston Astros, Ms. Sehgal spent over 20 years in various strategic marketing functions with several organizations, including FGL
Sports, Best Buy, and most recently Academy Sports + Outdoors. Ms. Sehgal received a Bachelor’s of Business Administration degree,
with a focus in marketing and human resources, from the University of Regina. She plays an active role in several Houston-based organizations,
including her position as an Executive Committee Board Member of the Boys and Girls Club of Greater Houston, and as a board member of
WISE Houston. She is also a Board Director for Reitmans (Canada) Limited, and an active Brand 50 member of World 50. In 2016, Ms. Sehgal
was honored as one of Houston’s Top 15 Business Women by the National Diversity Council. In 2018, Ms. Sehgal was honored again by
the National Diversity Council as the National Business Woman of the Year. She also received honors in 2018 as one of Texas Executive
Women’s Women on the Move. Most recently, Ms. Sehgal was recognized in 2021 by the National Diversity Council as a Power 50, for
her contributions and commitment to both business and community. In November 2021, Ms. Sehgal was celebrated as the 2021 Woman of Inspiration
by WISE Houston.
Ms. Sehgal’s qualifications to serve on our Board include
her extensive business and marketing experience.
| |
PROPOSAL 2 |
|
| |
Ratification of Appointment of Independent Registered
Public Accounting Firm
Grant Thornton LLP (“Grant Thornton”) has served as the Company’s
independent registered public accounting firm since 2021 and had served as principal accountants to Holley Intermediate and its subsidiaries
prior to the consummation of the Business Combination. Representatives of Grant Thornton are expected to be present at the Annual Meeting
online and will have an opportunity to make a statement if they wish and be available to respond to appropriate questions from stockholders.
As provided in the Audit Committee’s charter,
the Audit Committee is responsible for directly appointing, retaining, terminating, and overseeing our independent registered public accounting
firm. Our Audit Committee continuously evaluates the independence and effectiveness of Grant Thornton and its personnel, and the cost
and quality of its audit and audit-related services.
We are asking stockholders to ratify
the Audit Committee’s selection of Grant Thornton as our independent registered public accounting firm for the fiscal year ending
December 31, 2023. While such ratification is not required, the Board is submitting the selection of Grant Thornton to our stockholders
for ratification as a matter of good corporate practice. If stockholders do not ratify the selection of Grant Thornton as our independent
registered public accounting firm for the fiscal year ending December 31, 2023, our Audit Committee may reconsider the selection of Grant
Thornton as our independent registered public accounting firm. Even if the selection is ratified, the Audit Committee may, in its discretion,
select a different independent registered public accounting firm at any time during the year if it determines that such a change would
be in the best interests of the Company and our stockholders. |
|
| |
Our Board of Directors recommends a vote “FOR” the ratification of the selection by the Audit Committee of Grant Thornton as our independent registered public accounting firm. |
|
Independent Public Accountant
The following is a summary of fees paid or to be paid to Grant Thornton
for services rendered over the prior two fiscal years.
| |
|
FOR THE YEAR ENDED
DECEMBER 31, 2022* |
|
FOR THE YEAR ENDED
DECEMBER 31, 2021* |
| Audit Fees(1) |
|
$ |
1,134,000 |
|
$ |
1,305,000 |
| Audit-Related Fees(2) |
|
$ |
65,000 |
|
$ |
30,000 |
| Tax Fees |
|
$ |
51,659 |
|
$ |
35,930 |
| All Other Fees(3) |
|
$ |
58,257 |
|
$ |
153,119 |
| Total |
|
$ |
1,308,916 |
|
$ |
1,524,049 |
| (1) | Audit fees are the aggregate fees billed or expected to be billed for professional services rendered
by the principal accountant for the audit of our annual financial statements for fiscal 2022 and 2021 and review of quarterly financial
statements for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements
for those fiscal years. |
| (2) | Audit-related fees are the aggregate fees billed or expected to be billed for each of fiscal 2022 and
2021 for assurance and related services by the principal accountant that are reasonably related to the performance of the audit or review
of our financial statements. |
| (3) | All other fees are the aggregate fees billed or expected to be billed for each of fiscal 2022 and 2021
for products and services provided by the principal accountant, including a subscription fee for access to Grant Thornton’s professional
literature guide online. |
Pre-Approval Policy
The Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval
Policy, under which the Audit Committee annually reviews and pre-approves the services that are expected to be provided by the outside
auditor. Any engagement to provide audit or non-audit services that has not been pre-approved through that process must be specifically
pre-approved by the Audit Committee if it is to be provided by the outside auditor. All of the services provided by Grant Thornton to
us since their appointment were pre-approved by the Audit Committee.
Prior Independent Registered Public Accounting Firm
As previously disclosed in the Company’s Current Report on Form 8-K
filed on August 12, 2021, Marcum LLP (“Marcum”) served as the Company’s independent registered public accounting firm
until August 10, 2021, when the Audit Committee dismissed Marcum. The decision to change our independent registered public accounting
firm was recommended and approved by the Audit Committee.
Marcum’s reports on the Company’s (formerly Empower Ltd.’s)
consolidated financial statements as of December 31, 2020, and for the period from August 19, 2020 (inception) to December 31, 2020, did
not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting
principles, except for the emphasis of matter paragraph for the restatements related to complex financial instruments.
During the period from August 19, 2020 (inception) through December 31,
2020, and the subsequent interim period through August 10, 2021, there were: (i) no disagreements within the meaning of Item 304(a)(1)(iv)
of Regulation S-K and the related instructions between the Company and Marcum on any matters of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure which, if not resolved to Marcum’s satisfaction, would have caused Marcum’s
to make reference thereto in their reports; and (ii) no “reportable events” within the meaning of Item 304(a)(1)(v) of Regulation
S-K other than the material weakness in internal controls identified by the Company’s management related to Empower’s accounting
and reporting of complex financial instruments, which resulted in the restatement of the Company’s financial statements as set forth
in the Company’s Annual Report on Form 10-K/A (Amendment No. 2) for the year ended December 31, 2020, as filed with the SEC on February
4, 2022.
Representatives of Marcum are not expected to be present at the Annual
Meeting online.
During the period from August 19, 2020 (inception) through December 31,
2020, and the subsequent interim period through August 10, 2021, neither the Company nor anyone on its behalf has consulted with Grant
Thornton regarding: (i) the application of accounting principles to a specific transaction, either completed or proposed, or the type
of audit opinion that might be rendered on the Company’s financial statements, and neither a written report nor oral advice was
provided to the Company that Grant Thornton concluded was an important factor considered by the Company in reaching a decision as to any
accounting, auditing, or financial reporting issue; (ii) any matter that was the subject of a disagreement within the meaning of Item
304(a)(1)(iv) of Regulation S-K and the related instructions; or (iii) any reportable event within the meaning of Item 304(a)(1)(v) of
Regulation S-K.
Audit Committee Report*
The Audit Committee has reviewed and discussed our audited financial statements
with management, and has discussed with our independent registered public accounting firm the matters required to be discussed by applicable
requirements of the Public Company Accounting Oversight Board (the “PCAOB”) and SEC. Additionally, the Audit Committee has
received the written disclosures and the letter from our independent registered public accounting firm, as required by the applicable
requirements of the PCAOB, and has discussed with the independent registered public accounting firm the independent registered public
accounting firm’s independence. Based upon such review and discussion, the Audit Committee recommended to the Board that the audited
financial statements be included in our Annual Report on Form 10-K for the last fiscal year for filing with the SEC.
Submitted
by:
Audit
Committee of the Board of Directors
Ginger Jones
Anita Sehgal
Graham Clempson
| * | The information
contained in this Audit Committee Report shall not be deemed to be “soliciting material”
or “filed” or incorporated by reference in future filings with the SEC, or subject
to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), except to the extent that the Company specifically requests
that the information be treated as soliciting material or specifically incorporates it by
reference into a document filed under the Securities Act of 1933, as amended (the “Securities
Act”) or the Exchange Act. |
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
Below is a list of our executive officers, as of the date of this proxy statement, and their respective ages and a brief account of the
business experience of each of them.
| NAME |
AGE |
POSITION |
| Michelle Gloeckler* |
56 |
Interim Chief Executive Officer; Director |
| Jesse Weaver |
41 |
Chief Financial Officer |
| Sean Crawford |
40 |
Chief Marketing Officer |
| Terrill Rutledge |
54 |
Chief Information Officer |
| Vinod Nimmagadda |
30 |
EVP of Corporate Development & New Ventures |
| Jason Bruce |
52 |
Vice President, Business Development |
| Matthew Rubel** |
65 |
Executive Chairman; Director |
| Stephen Trussell |
55 |
Vice President, Finance |
| Patrick Lee Pierce |
42 |
Chief Human Resources Officer |
| Carly Kennedy |
41 |
EVP, General Counsel & Corporate Secretary |
| Brian Appelgate |
66 |
Interim Chief Operating Officer |
| * |
Please see “Directors Continuing in Office Until the 2025 Annual Meeting of Stockholders” for information regarding Ms. Gloeckler. |
| ** |
Please see “Directors Continuing in Office Until the 2024 Annual Meeting of Stockholders” for information regarding Mr. Rubel. |
Jesse Weaver currently serves as Chief
Financial Officer, a position he has held since December 2022. Mr. Weaver has nearly 20 years of experience in finance, strategy,
and data analytics. Most recently, he served as SVP of Finance at Smile Direct Club (NASDAQ:SDC) from January 2021 to December 2022,
where he was responsible for leading the Financial Planning and Analysis, Investor Relations, Strategy, Treasury, and Risk
functions. Prior to SDC, Mr. Weaver was VP of Financial Planning and Analysis at Dollar General (NYSE: DG) from August 2017 to
January 2021, where he was responsible for leading near-term and long-term strategic financial planning as well as driving the
company’s zero-based budgeting efforts. Before joining Dollar General, Mr. Weaver held multiple leadership positions in
finance at Yum Brands (NYSE: YUM) U.S. Pizza Hut division, including strategy, financial planning, and data analytics. Prior to
that, he was part of the M&A and capital advisory teams for a middle-market investment bank. He holds a Bachelor’s Degree
in Business Administration with a major in Finance from Belmont University and a Master of Business Administration with
concentrations in Finance, Strategy, and Entrepreneurship from the University of Chicago’s Booth School of Business.
Sean Crawford
currently serves as Chief Marketing Officer, and prior to the Business Combination, previously served as Chief Marketing Officer of
Holley Intermediate since May 2020. Mr. Crawford brings nearly 20 years of automotive aftermarket industry experience. During his
career, Mr. Crawford has led various marketing organizations for automotive aftermarket brand portfolios under both public and
private equity ownership. Most recently, he served as President of JE Pistons, a leading manufacturer of high-performance engine
parts from 2019 to 2020. Previously, Mr. Crawford held several leadership positions at Race Winning Brands, a portfolio of
high-performance automotive aftermarket brands, including Vice President of Marketing and Business Development from 2017 to 2019,
and Director of Marketing and Business Development from 2016 to 2017. Prior to that, Mr. Crawford led the automotive performance
brands marketing organization at Performance Motorsports International from 2013 to 2017 as Director of Marketing and Business
Development. His experience also includes leadership positions directing product and engineering organizations. Mr. Crawford is an
active and passionate automotive enthusiast and enjoys vehicles of all types and vintages. He holds a Bachelor’s Degree in
Business Administration with an emphasis in Marketing and Management and a Master of Business Administration (MBA) degree from
Concordia University Irvine.
Terrill Rutledge currently serves as Chief Information Officer, and prior to the Business Combination, previously served as Chief Information Officer of
Holley Intermediate since 2019. Mr. Rutledge has over 31 years of information systems and business operations experience across multiple
industries, including manufacturing, retail, software development, automotive, print media, and advertising. Most recently, he served
as Senior Vice President of Operations for Holley Performance from 2009 to 2019 prior to being promoted to CIO. Terrill also served as
Vice President of Materials and Director of Information Technology for Holley between 2003 and 2009. Previously, he worked for Accuride
Corporation as Director of Supply Chain Management, a tier 1 supplier to the heavy-duty automotive industry. Additionally, he held several
leadership positions at Accuride, including five years as the Director of Business Systems. Prior to Accuride, he worked for ZML, a software
development company, Helig Meyers, a furniture retail corporation, and R.R. Donnelley & Sons, a print media corporation. Mr. Rutledge
earned a Master’s Degree in Management and Bachelor’s Degree in Business Management from Brescia University.
Vinod Nimmagadda currently serves as Executive Vice President of
Corporate Development & New Ventures, and prior to the Business Combination, previously served as Executive Vice President of Corporate
Development & New Ventures of Holley Intermediate since July 2021. Mr. Nimmagadda has over 8 years of finance and investment banking
experience within the automotive aftermarket. Most recently, he served as a Vice President within Jefferies Group LLC from 2019 to 2021
and served in various other investment banking roles at Jefferies Group LLC since 2015. Previously, he served as an investment banking
analyst within BB&T’s investment banking division from 2014 to 2015. Vinod earned a Bachelor’s Degree in Financial Economics
from Columbia University.
Jason Bruce currently serves as Vice President of Business Development,
and prior to the Business Combination, previously served various capacities since joining Holley Intermediate in 1999. He has over 30
years of experience in the performance automotive aftermarket and has held leadership positions at Hooker Headers, Street Scene Equipment,
and Advanced Flow Engineering. Mr. Bruce is responsible for overseeing sales initiatives and relationships throughout the distribution
channel partners that includes E-Retailers, National Retailers, Performance Distributors, and Direct-To-Consumer. His experience also
includes marketing, advertising, product/brand management, merchandising, event planning, and forecasting. Mr. Bruce graduated from Platt
College of Graphic Design in Ontario, California.
Stephen Trussell currently serves as Vice President of Finance,
and prior to the Business Combination, previously served as Vice President of Finance of Holley Intermediate since January 2009. Mr. Trussell
previously served as Corporate Controller for Holley Intermediate from 2003 and 2009. He has over 30 years of accounting experience across
multiple industries, including retail, restaurant, manufacturing, and financial services. Prior to joining Holley, he was a senior manager
at KPMG, where he spent 12 years with KPMG in its audit group. Mr. Trussell earned a Bachelor’s Degree in Accounting from Virginia
Tech University.
Patrick Pierce has served as Holley’s Chief Human Resources
Officer since August 2021. He has over 15 years of human resource experience across multiple industries including industrial equipment,
consumer packaged goods, and retail. Prior to joining Holley, Mr. Pierce was employed by Treehouse Foods, Inc. (NYSE: THS), the largest
private label food and beverage manufacturer in the world, where he served in various leadership roles since 2009. Mr. Pierce most recently
served as Vice President, Corporate Human Resources from September 2019 to August 2021. Prior to assuming that role, Mr. Pierce served
as Senior Director, Corporate Human Resources from June 2018 to September 2019 and Director, Corporate Human Resources from December 2015
to June 2018. Prior to joining Treehouse Foods, Mr. Pierce held various human resource roles at Pepsi Bottling Group Inc. (NYSE: PEP)
from 2007 to 2009 as well as Case New Holland (NYSE: CNHI) from 2005 to 2007. Mr. Pierce earned his Bachelors in Psychology and Masters
in Industrial & Labor Relations degrees from Indiana University of Pennsylvania.
Carly Kennedy has served as Holley’s EVP, General Counsel, and Corporate
Secretary since April 2022. She has over 15 years of legal experience across multiple industries, including automotive manufacturing and
consumer products. Prior to joining Holley, Ms. Kennedy served as General Counsel of Pampered Chef, a Berkshire Hathaway Company, since
May 2021. Prior to joining Pampered Chef, Ms. Kennedy served as associate general counsel (from January 2019 to January 2021) and senior
corporate counsel (from November 2017 to January 2019) at Tenneco, a leading designer, manufacturer, and marketer of automotive products
for original equipment and aftermarket customers. As associate general counsel at Tenneco, Ms. Kennedy served as head of litigation, head
of labor & employment, and head of safety. Additionally, from September 2015 to October 2017, Ms. Kennedy served as corporate counsel
at Allison Transmission, a manufacturer of commercial duty automatic transmissions and hybrid propulsion systems. Ms. Kennedy holds a
Juris Doctor from Indiana University Robert H. McKinney School of Law, a Master of Public Administration from University of Colorado,
and a Bachelor of Arts from Indiana University Bloomington.
Brian Appelgate currently serves as the Interim Chief Operating
Officer. He assumed the role of Interim Chief Operating Officer on November 14, 2022. Mr. Appelgate has been with Holley since 2018. Prior
to his appointment as Interim Chief Operating Officer, Mr. Appelgate advised Holley as Head of Mergers & Acquisitions. He has over
30 years of operating and industry experience having served as President and Chief Executive Officer of Drive Performance Brands and a
former chairman of the Specialty Equipment Marketing Association (SEMA) prior to joining Holley. Mr. Appelgate earned a Bachelor’s
Degree in Mechanical Engineering from Northeastern University.
Number and Terms of Office of Officers
Our officers are appointed by the Board and serve at the discretion of
the Board, rather than for specific terms of office. Our Board is authorized to appoint persons to the offices set forth in our Bylaws
as it deems appropriate. Our Bylaws provide that our officers may consist of a Chairman of the Board, Chief Executive Officer, President,
Vice Presidents, Secretary, Assistant Secretaries, and such other officers as may be determined by the Board.
EXECUTIVE COMPENSATION
The following discussion and analysis of compensation arrangements of the named executive officers of Holley for the fiscal year ended
December 31, 2022, should be read together with the compensation tables and related disclosures provided below. Compensation information
included in the following discussion is presented in actual dollar amounts.
As an emerging growth company, Holley has opted to comply with the executive compensation rules applicable to “smaller reporting
companies,” when detailing the executive compensation of Holley’s executives, as such term is defined under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). This section discusses the material elements of compensation awarded
to, earned by, or paid to the principal executive officer of Holley and the two next most highly compensated executive officers of Holley.
Had Mr. Bardos continued to serve as Chief Financial Officer through December 31, 2022, he would have been one of the two most highly
compensated executive officers, and because Holley is an emerging growth company subject to the requirements for smaller reporting companies
under the Exchange Act, he is included in the below discussion. These individuals are referred to as Holley’s “Named Executive
Officers” or “NEOs.” The Company’s executive compensation program will continue to evolve to reflect its status
as a newly publicly-traded company, while still supporting the Company’s overall business and compensation objectives.
Summary Compensation Table
The following table presents information regarding the compensation of
Holley’s named executive officers for services rendered during the 2022 Fiscal Year:
NAME
AND PRINCIPAL
POSITION |
|
YEAR |
|
SALARY
($)(1) |
|
OPTION
AWARDS
($)(2)(3) |
|
|
STOCK
AWARDS
($)(4) |
NON-EQUITY
INCENTIVE
COMPENSATION
($) |
|
ALL
OTHER
COMPENSATION
($)(5) |
|
TOTAL
($) |
| Tom
Tomlinson(6) |
|
2022 |
|
|
$512,116 |
|
|
$1,623,406 |
|
|
$1,038,000 |
|
$ — |
|
|
$171,698 |
|
|
$3,345,220 |
Former
President and Chief
Executive Officer |
|
2021 |
|
|
$465,654 |
|
|
$6,296,244 |
|
|
$2,412,000 |
|
$454,478 |
|
|
$161,852 |
|
|
$9,790,201 |
Brian
Appelgate
Interim Chief Operating Officer |
|
2022 |
|
|
$200,000 |
|
|
$ 94,929 |
|
|
$ 853,800 |
|
$ — |
|
|
$ 7,128 |
|
|
$1,155,857 |
Carly
Kennedy
EVP,
General Counsel and
Corporate Secretary |
|
2022 |
|
|
$233,846 |
|
|
$ 146,677 |
|
|
$ 228,584 |
|
$ — |
|
|
$312,983 |
|
|
$ 922,090 |
Dominic
Bardos(7)
Former Chief Financial Officer |
|
2022 |
|
|
$322,481 |
|
|
$ 291,906 |
|
|
$ 319,184 |
|
$ — |
|
|
$ 13,214 |
|
|
$ 946,785 |
| |
|
2021 |
|
|
$283,846 |
|
|
$ 765,146 |
|
|
$1,706,490 |
|
$180,072 |
|
|
$ 6,095 |
|
|
$2,941,649 |
| (1) | During
2021, Mr. Tomlinson’s annual base salary post-Business Combination was $500,000 and
increased to $529,050 by the end of 2022. Mr. Bardos joined Holley in July
2021 and left Holley in September 2022, and his base salary reflects such partial years of
employment. During 2021, Mr. Bardos’ annual base salary was $410,000. Effective March
7, 2022, Mr. Bardos’ annual base salary was increased to $422,300. For 2021, base salaries
reflect both the pre- and post-Business Combination periods. Ms. Kennedy joined Holley in
April 2022, and her base salary reflects such partial year of employment. Ms. Kennedy’s
annual base salary is $320,000. |
| (2) | The
amounts reported in this column for 2021 include the aggregate grant date fair value of the
profit interest units granted by Holley Parent Holdings, LLC to Mr. Tomlinson and Mr. Bardos
in 2021, computed in accordance with FASB ASC Topic 718. The fair value of the profit interest
units is based on the probable outcome of the performance conditions as of the grant date.
The amounts reported in this column for 2022 include the incremental fair value of $674,115
associated with the modification in October 2022 of profit interest units previously awarded
to Mr. Tomlinson in 2018 computed in accordance with FASB ASC Topic 718. For additional information
regarding the assumptions used in determining these values, see Note 13 to our 2022 financial
statements located in our Annual Report on Form 10-K for such fiscal year. |
| (3) | The
amounts reported in this column include the grant date fair value computed in accordance
with FASB ASC Topic 718 with respect to each fiscal year for each named executive officer
related to grants of stock options pursuant to our 2021 Omnibus Incentive Plan and do not
reflect whether the recipient has actually realized a financial gain from such awards (such
as by exercising stock options). For additional information regarding the assumptions used
in determining these values, see Note 13 to our 2022 financial statements located in our
Annual Report on Form 10-K for such fiscal year. |
| (4) | The
amounts shown represent the grant date fair value computed in accordance with FASB ASC Topic
718 with respect to each fiscal year for each named executive officer related to grants of
restricted stock units pursuant to our 2021 Omnibus Incentive Plan and do not reflect whether
the recipient has actually realized a financial gain from such awards (such as a lapse in
a restricted stock award). For additional information regarding the assumptions used in determining
these values, see Note 13 to our 2022 financial statements located in our Annual Report on
Form 10-K for such fiscal year. |
| (5) | The 2022 amounts reported as earned by each named executive officer in this column represent: (i) for Mr. Tomlinson, $74,914 for use of
warehouse space, $10,675 in employer matching contributions made under the 401(k) plan, $8,551 paid for life and disability insurance
premiums, $3,853 paid for country club dues, and $73,705 in tax gross-up benefits, (ii) for Mr. Appelgate, $7,128 in employer matching
contributions made under the 401(k) plan, (iii) for Ms. Kennedy, $5,600 in employer matching contributions made under the 401(k) plan,
$4,452 paid for country club dues, $164,426 paid for relocation costs, and $138,505 in tax gross-up benefits, (iv) for Mr. Bardos, $9,062
in employer matching contributions made under the 401(k) plan and $4,152 paid for country club dues. The 2021 amounts reported as earned
by each named executive officer in this column represent: (i) for Mr. Tomlinson, $68,528 for use of warehouse space, $13,050 in employer
matching contributions made under the 401(k) plan, $8,551 paid for life and disability insurance premiums, $3,662 paid for country club
dues, and $68,034 in tax gross-up benefits and (ii) for Mr. Bardos, $2,750 in employer matching contributions made under the 401(k) plan
and $3,345 paid for country club dues. |
| (6) | Mr.
Tomlinson retired as our President and Chief Executive Officer and resigned from our board
of directors effective February 6, 2023, following our fiscal year end. Following his departure,
Michelle Gloeckler was appointed as Interim President and Chief Executive Officer. |
| (7) | Mr.
Bardos resigned as our Chief Financial Officer effective September 30, 2022. Following Mr.
Bardos’ departure, Stephen Trussell served as interim Chief Financial Officer and Jesse
Weaver was appointed as Chief Financial Officer on December 12, 2022. |
Narrative Disclosure to the Summary
Compensation Table
Executive Employment Agreements
Certain of the compensation paid to Mr. Tomlinson reflected in the summary
compensation table was provided pursuant to employment agreements with Holley’s predecessor, which are summarized below. For a discussion
of the severance pay and other benefits to be provided to Holley’s named executive officers in connection with a termination of
employment and/or a change in control under arrangements with each of Holley’s named executive officers, please see “Potential
Payments Upon Termination or Change In Control” below.
Tom Tomlinson. Mr. Tomlinson served as the President and Chief Executive
Officer of Holley pursuant to an employment agreement with Holley’s subsidiary, Holley Purchaser, Inc. dated September 14, 2018,
which provided for an initial term of five years with automatic one-year renewal periods thereafter unless terminated earlier. Under Mr.
Tomlinson’s employment agreement, Mr. Tomlinson was entitled to receive a base salary, $437,987, which was subject to annual review
and increase (but not decrease) as determined by the Board of Directors of Holley Parent Holdings, LLC (“Holley Stockholder”).
Pursuant to Mr. Tomlinson’s employment agreement, Mr. Tomlinson was also eligible to receive a target annual incentive bonus equal
to 100% of his base salary, based upon the achievement of pre-established performance objectives set by the Board of Directors of the
Holley Stockholder, subject to continued employment through the applicable payment date. Mr. Tomlinson’s employment agreement terminated
as of February 6, 2023.
Brian Appelgate. Mr. Appelgate has
served as Interim Chief Operating Officer since November 2022 pursuant to the terms contained in an offer letter dated November 8,
2022 (the “Offer Letter”), which includes an expected term of employment of twelve months with the option to renew for
one-month periods for up to 24 months. Under the Offer Letter, Mr. Appelgate’s annual salary was $200,000, which was increased
to $300,000 on February 26, 2023.
Carly Kennedy. Ms. Kennedy has served as
Executive Vice President, General Counsel, and Corporate Secretary since April 2022 pursuant to an employment agreement dated March
30, 2022, which provides for an initial term of five years with automatic one-year-renewal periods thereafter unless terminated
earlier. Under Ms. Kennedy’s employment agreement, she is entitled to receive a base salary, $320,000, subject to an annual
review and increase (but not decrease) as determined by the Board. Pursuant to Ms. Kennedy’s employment agreement, Ms. Kennedy
is also eligible to receive a target annual incentive bonus equal to 50% of her base salary and a maximum bonus opportunity of 100%,
based upon the achievement of pre-established performance objectives set by the Board, subject to the subject to continued
employment through the applicable payment date.
Dominic Bardos. Mr. Bardos served as Chief Financial Officer of
Holley pursuant to an employment agreement with a subsidiary of Holley’s predecessor, Holley Performance Products Inc. dated July
16, 2021, which provided for an initial term of five years with automatic one-year renewal periods thereafter unless terminated earlier.
Under Mr. Bardos’ employment agreement, Mr. Bardos was entitled to receive a base salary, $410,000 annually, which was subject to
annual review and increase (but not decrease) as determined by the Board of Directors of the Holley Stockholder. Pursuant to Mr. Bardos’
employment agreement, Mr. Bardos was also eligible to receive a target annual incentive bonus equal to 65% of his base salary, based upon
the achievement of pre-established performance objectives set by the Board of Directors of the Holley Stockholder, subject to continued
employment through the applicable payment date. Mr. Bardos’ employment agreement terminated as of September 30, 2022.
Annual Bonuses
2022 bonuses for Messrs. Tomlinson, Bardos, and Appelgate and Ms. Kennedy
in respect of service during the fiscal year ended December 31, 2022 were determined based on the achievement of the following performance
criteria: EBITDA and unlevered free cash flow, each given a weighting of 90% and 10%, respectively. Executive bonus payments are generally
subject to the executive remaining employed with Holley through the payment date. For the fiscal year ended December 31, 2022, based on
the actual level of achievement of the performance objectives, the bonus was funded at 0%.
The 2021 bonuses paid to Messrs. Tomlinson and Bardos in respect of service
during the fiscal year ended December 31, 2021, were paid in the first quarter of 2022 and were determined based on the achievement of
the following performance criteria: EBITDA and unlevered free cash flow, each given a weighting of 90% and 10%, respectively. Executive
bonus payments are generally subject to the executive remaining employed with Holley through the payment date. For the fiscal year ended
December 31, 2021, based on the actual level of achievement of the performance objectives, the bonus was funded at 97.6%, resulting in
payouts to Mr. Tomlinson and Mr. Bardos of $454,478 and $180,072, respectively.
Incentive Units and Option Awards
In 2021, the Holley Stockholder granted Class C Units, Class D-1 Units,
Class D-2 Units, and Class D-3 Units (collectively, the “Incentive Units”) pursuant to the amended and restated limited liability
company agreement of the Holley Stockholder (the “Holley Stockholder LLCA”) and those certain equity grant agreements of the
Holley Stockholder (collectively, the “Equity Grant Agreements”) to certain executive officers, including its then-current
named executive officers. The Incentive Units were intended to qualify as profits interests for federal income tax purposes, and as a
result, each named executive officer was a member of the Holley Stockholder and bound by all the terms and conditions stated in the Holley
Stockholder LLCA.
On July 13, 2021, the Holley Stockholder granted Class C Units, Class D-1
Units, Class D-2 Units, and Class D-3 Units to certain executive officers, including Mr. Tomlinson and Mr. Bardos. In October 2022, the
Holley Stockholder modified the terms of the awards to allow for immediate vesting of all Incentive Units. All Incentive Units are generally
subject to the terms and conditions of the Holley Stockholder LLCA, with the Class D-1 Units, Class D-2 Units, and Class D-3 Units only
participating in proceeds at such time that the Sentinel Investors achieve a return on their investment of 2.0 times, 2.5 times and 3
times, respectively.
On July 16, 2021, concurrent with the Closing and each executive’s
appointment as an executive officer of Holley, the Board approved option grants under the 2021 Omnibus Incentive Plan (the “Option
Awards”) to each of Mr. Tomlinson and Mr. Bardos exercisable for 584,622 and 179,771 shares of the Company’s Common Stock,
respectively. In 2022, the Board approved Option Awards to each of Mr. Tomlinson, Mr. Appelgate, Ms. Kennedy, and Mr. Bardos exercisable
for 202,840, 20,284, 33,953, and 62,373 shares of the Company’s Common Stock, respectively. Each Option Award vests in three equal
installments on each of the first three anniversaries of the date of grant, subject to the executive’s continued employment through
the applicable vesting date. Any unvested Option Awards attributed to Mr. Tomlinson and Mr. Bardos, were forfeited upon termination. Any
vested Options Awards expire 90 days from the date of termination.
Each of the Incentive Units and Option Awards held by Holley’s named
executive officers as of the last day of fiscal year ended December 31, 2022, is set forth in the “Outstanding Equity Awards
at Fiscal Year-End” table below. The Incentive Units are fully vested as of December 31, 2022.
Restricted Stock Units
The Company granted restricted stock units to certain of its executive officers, including certain of its named
executive officers, on September 23, 2021, pursuant to the 2021 Omnibus Incentive Plan. Grants were made to Mr. Tomlinson, Mr. Bardos,
and Mr. Appelgate for 200,000, 141,500, and 20,000 shares of restricted stock units, respectively. In 2022, restrictions lapsed on 66,666,
64,500, and 6,666 shares of the Company’s common stock for Mr. Tomlinson, Mr. Bardos, and Mr. Appelgate, respectively. All unvested
restricted stock units are forfeited upon termination unless otherwise approved by the Board. Effective upon his resignation on September
30, 2022, 102,971 restricted stock units were forfeited by Mr. Bardos. In connection with his retirement on February 6, 2023, Mr. Tomlinson
was offered a portion of the restricted stock units held by him that vested on February 15, 2023. As of the date of this proxy statement,
the Company and Mr. Tomlinson are in discussions regarding the terms of his separation. Mr. Appelgate’s restricted stock units
vest in equal, or nearly equal, installments on July 16 of each of 2022, 2023 and 2024, subject to the executive’s continuous employment
through such date.
The Company granted restricted stock units as long-term incentive awards
to certain of its executive officers, including its named executive officers, on February 15, 2022, pursuant to the 2021 Omnibus Incentive
Plan. Grants were made to Mr. Tomlinson, Mr. Bardos, and Mr. Appelgate for 84,459, 25,971, and 8,446 shares of restricted stock units,
respectively. In connection with her appointment as an executive officer of Holley, Ms. Kennedy received a long-term incentive grant of
12,923 restricted stock units on May 6, 2022. The annual long-term incentive restricted stock awards vest in equal, or nearly equal, installments
on each of the first three anniversaries of the grant date, subject to the executive’s continuous employment through such date.
The Company granted restricted stock units as
retention awards to certain of its executive officers on November 17, 2022, pursuant to the 2021 Omnibus Incentive Plan. Ms. Kennedy
received a retention award for 34,423 shares of restricted stock units. The retention restricted stock unit awards vest in equal, or
nearly equal, installments on each of the first two anniversaries of the grant date, subject to the executive’s continuous
employment through such date.
The Company granted restricted stock units to Mr. Appelgate in connection
with his appointment as Chief Operating Officer on November 17, 2022, pursuant to the 2021 Omnibus Incentive Plan. Mr. Appelgate received
a grant of 258,176 restricted stock units, which vest over the earlier of the completion of his duties or a period of 18 months with two-thirds
vesting on the one-year anniversary of the grant date and the remaining units vesting on May 17, 2024.
Each of the restrictive stock units held by Holley’s named executive
officers as of the last day of fiscal year ended December 31, 2022, is set forth in the “Outstanding Equity Awards at Fiscal
Year-End” table below.
Health and Welfare Plans
Holley’s named executive officers were eligible to participate in
its employee benefit plans, including its medical, dental, vision, life, disability, health, and dependent care flexible spending accounts
and accidental death and dismemberment benefit plans, in each case on the same basis as all of its other employees. Mr. Tomlinson was
also entitled to additional life and disability insurance paid for by Holley.
Retirement Plans
Holley sponsored a retirement plan intended to qualify for favorable tax
treatment under Section 401(a) of the Internal Revenue Code of 1986, as amended (the “Code”), containing a cash or deferred
feature that was intended to meet the requirements of Section 401(k) of the Code, for the benefit of its employees, including the named
executive officers. Participants could make pre-tax contributions to the plan from their eligible earnings up to the statutorily prescribed
annual limit on pre-tax contributions under the Code. Participants who were 50 years of age or older could contribute additional amounts
based on the statutory limits for catch-up contributions. All employee contributions were allocated to each participant’s individual
account and are then invested in selected investment alternatives according to the participant’s directions. Pre-tax contributions
by participants to the plan and the income earned on those contributions were generally not taxable to participants until withdrawn, and
participant contributions were held in trust as required by law. No minimum benefit was provided under the plan. An employee was 100%
vested in his or her pre-tax deferrals when contributed.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth restricted stock unit awards held by each
of Holley’s named executive officers as of December 31, 2022.
| Name |
|
Number
of Shares or
Units
of Stock That
Have
Not Vested (#) |
|
Market
Value of Shares
or Units of Stock That
Have Not Vested ($)(1) |
| Tom
Tomlinson(2) |
|
217,793 |
|
$461,721 |
| Brian
Appelgate(3) |
|
279,956 |
|
$593,507 |
| Carly
Kennedy(4) |
|
48,750 |
|
$103,350 |
| Dominic
Bardos(5) |
|
— |
|
— |
| (1) |
The value is based upon the closing price on the
Company’s Common Stock on the New York Stock Exchange on December 30, 2022 (the last trading day of the year) of
$2.12. |
| (2) | Mr. Tomlinson retired as our President and Chief Executive
Officer and resigned from our board of directors effective February 6, 2023, following our fiscal year end. All unvested restricted stock
units are forfeited upon termination unless otherwise approved by the Board. Includes 28,153 restricted stock units that Mr. Tomlinson
was offered in connection with his retirement on February 6, 2023. As of the date of this proxy statement, the Company and Mr. Tomlinson
are in discussions regarding the terms of his separation. |
| (3) | Mr. Appelgate’s September 23, 2021 award of 20,000 restricted
stock units vests in equal, or nearly equal, installments on July 16 of each of 2022, 2023 and 2024, subject to his continuous
employment through such date. Mr. Appelgate’s 2022 long-term incentive award for
8,446 restricted stock units will vest in equal, or nearly equal, installments on each of the first three anniversaries of the
February 15, 2022 grant date, subject to his continuous employment through such date. Mr. Appelgate’s November 17, 2022 award
for 258,176 restricted stock units made in connection with his appointment as interim Chief Operating Officer will vest over a
period of 18 months with two-thirds vesting on the one-year anniversary of the grant date and the remaining units vesting on May 17,
2024. |
| (4) | Ms. Kennedy’s 2022 long-term incentive award for 12,923 restricted stock units will vest in
equal, or nearly equal, installments on each of the first three anniversaries of the May 6, 2022, grant date, subject to her
continuous employment through such date. Ms. Kennedy’s retention award for 34,423 restricted stock units will vest in equal,
or nearly equal, installments on each of the first two anniversaries of the November 17, 2022, grant date, subject to her continuous
employment through such date. |
| (5) | Mr. Bardos resigned as our Chief Financial Officer effective September 30, 2022. His unvested restricted stock units were forfeited
upon his resignation. |
The following table sets forth outstanding option awards held by each of
Holley’s named executive officers as of December 31, 2022.
| |
|
Option
Awards(1) |
|
| Name |
|
Grant
Date |
|
|
Number
of
Securities
Underlying
Unexercised
Options (#)
Exercisable(2) |
|
|
Number
of
Securities
Underlying
Unexercised
Options (#)
Unexercisable(2)(3) |
|
|
Equity
Incentive Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#) |
|
|
Option
Exercise
Price
($)(3) |
|
|
Option
Expiration
Date |
|
| Tom
Tomlinson |
|
|
February
15, 2022 |
|
|
|
— |
|
|
|
202,840 |
|
|
|
— |
|
|
$ |
12.29 |
|
|
|
February
15, 2032 |
|
| |
|
|
July
16, 2021 |
|
|
|
194,874 |
|
|
|
389,748 |
|
|
|
— |
|
|
$ |
10.50 |
|
|
|
July
16, 2031 |
|
| |
|
|
July
13, 2021 |
|
|
|
3,077,149 |
|
|
|
— |
|
|
|
— |
|
|
|
N/A |
|
|
|
N/A |
|
| |
|
|
December
31, 2018 |
|
|
|
11,521,997 |
|
|
|
— |
|
|
|
— |
|
|
|
N/A |
|
|
|
N/A |
|
| Brian
Appelgate |
|
|
February
15, 2022 |
|
|
|
— |
|
|
|
20,284 |
|
|
|
— |
|
|
$ |
12.29 |
|
|
|
February
15, 2032 |
|
| |
|
|
July
16, 2021 |
|
|
|
19,487 |
|
|
|
38,975 |
|
|
|
— |
|
|
$ |
10.50 |
|
|
|
July
16, 2031 |
|
| |
|
|
July
13, 2021 |
|
|
|
516,840 |
|
|
|
— |
|
|
|
— |
|
|
|
N/A |
|
|
|
N/A |
|
| |
|
|
December
31, 2018 |
|
|
|
1,562,305 |
|
|
|
— |
|
|
|
— |
|
|
|
N/A |
|
|
|
N/A |
|
| Carly
Kennedy |
|
|
May
6, 2022 |
|
|
|
— |
|
|
|
33,953 |
|
|
|
— |
|
|
$ |
9.95 |
|
|
|
May
6, 2032 |
|
| Dominic
Bardos |
|
|
July
13, 2021 |
|
|
|
51,670 |
|
|
|
— |
|
|
|
— |
|
|
|
N/A |
|
|
|
N/A |
|
| (1) | The
Incentive Units granted December 31, 2018 and July 13, 2021 are intended to constitute profits
interests for federal income tax purposes. Even though the Incentive Units do not require
the payment of an exercise price, they are most similar economically to stock options due
to the fact that they only have value as the value of the underlying security appreciates.
Accordingly, they are classified as “options” under the definition provided in
Item 402(a)(6)(i) of Regulation S-K as an instrument with an “option-like feature.”
All Incentive Units are fully vested as of December 31, 2022. |
| (2) | The
July 16, 2021 and February 15, 2022 grants represent the grant of stock option awards under
the 2021 Omnibus Incentive Plan, which vest in three equal installments on each of the first
three anniversaries of the grant date, subject to the executive’s continued employment
through the applicable vesting date. |
| (3) | The
Incentive Unit awards are not traditional options, and therefore, there is no exercise price
or expiration date associated with them. |
Additional
Narrative Disclosure
Overview
Holley has an executive compensation program that is designed to align
compensation with Holley’s business objectives and the creation of stockholder value, while enabling Holley to attract, motivate,
and retain individuals who contribute to the long-term success of Holley.
Decisions regarding executive compensation reflect our belief that the
executive compensation program must be competitive in order to attract and retain our executive officers. The Compensation and Talent
Committee seeks to implement our compensation policies and philosophies by linking a significant portion of our executive officers’
cash compensation to performance objectives and by providing a portion of their compensation as long-term incentive compensation in the
form of equity awards. Compensation for our executive officers have three primary components: base salary, an annual cash incentive bonus,
and long-term incentive compensation in the form of restricted stock unit awards and options.
Base Salary
It has been Holley’s historical practice to assure that base salary
is fair to the executive officers, competitive within the industry and reasonable in light of Holley’s cost structure. Following
the Business Combination, our Compensation and Talent Committee determines base salaries and manage the base salary review process, subject
to existing employment agreements.
Annual Bonuses
Holley may use annual cash incentive bonuses for the executive officers
to tie a portion of their compensation to financial and operational objectives achievable within the applicable fiscal year. Annual cash
bonuses will be administered by the Compensation and Talent Committee and at beginning of each year, the Compensation and Talent Committee
will select the performance targets, target amounts, target award opportunities, and other term and conditions of annual cash bonuses
for the executive officers, subject to the terms of any employment agreement. Following the end of each year, the Compensation and Talent
Committee will determine the extent to which the performance targets were achieved and the amount of the award that is payable to the
executive officers.
Stock-Based Awards
Holley may use restricted stock unit awards and stock options to reward
long-term performance of the executive officers. Holley believes that providing a meaningful portion of the total compensation package
in the form of stock-based awards will align the incentives of its executive officers with the interests of its stockholders and serve
to motivate and retain the individual executive officers. Stock-based awards will be awarded under the 2021 Omnibus Incentive Plan.
Employment Agreements
Each of Messrs. Tom Tomlinson and Dominic Bardos and Ms. Carly Kennedy
entered into an executive employment agreement with Holley (each an “Employment Agreement”), and Mr. Brian Appelgate entered
into an offer letter (the “Offer Letter”). Each of Messrs. Tomlinson, Bardos, and Appelgate and Ms. Kennedy is an “Officer.”
Messrs. Tomlinson’s and Bardos’ Employment Agreements were effective as of the Closing Date. Mr. Bardos’ Employment
Agreement terminated as of September 30, 2022 and Mr. Tomlinson’s Employment Agreement terminated as of February 6, 2023. Ms. Kennedy’s
Employment Agreement was effective as of April 2022, and Mr. Appelgate’s Offer Letter was effective as of November 2022.
Term. The Employment Agreements of Messrs. Tomlinson and Bardos
and Ms. Kennedy provide for an initial term of five years, which will automatically renew for successive one-year terms thereafter unless
either party gives written notice of non-extension to the other party at least 90 days prior to such renewal date. Mr. Appelgate’s
Offer Letter provides for an expected term of approximately twelve months, which can be extended for one-month periods for up to a total
of 24 months, unless terminated earlier by either party upon 30 days’ written notice.
Compensation. Each Employment Agreement
provides for an annual base salary and eligibility to participate in the annual bonus plan, and eligibility to participate in
benefit plans. The Offer Letter provides for an annual base salary, eligibility to participate in incentive plans, and eligibility
to participate in benefit plans.
As of December 31, 2022, base salary for each of Mr. Tomlinson, Mr. Appelgate,
Ms. Kennedy, and Mr. Bardos was equal to $529,050, $200,000, $320,000, and $422,300, respectively, and each Officer (other than Mr. Appelgate)
was eligible to earn a target annual bonus based on performance (such target bonus equal to 100% of base salary for Mr. Tomlinson, 50%
of base salary for Ms. Kennedy, and 65% of base salary for Mr. Bardos). Mr. Appelgate was not eligible to earn a target annual bonus based
on performance for the fiscal year ended December 31, 2022.
Termination (For Cause). Under the Employment Agreements, in the
event that an Officer is terminated for cause (as defined in the Employment Agreements) or resigns for any reason, then such Officer shall
be entitled to, among other benefits, any unpaid base salary through the date of termination, reimbursement for any unreimbursed business
expenses incurred through the date of termination, any accrued but unused vacation time in accordance with Holley policy, and all accrued
benefits (e.g., benefits plans, equity awards, grants, in each case in accordance with their terms) (collectively, the “Accrued
Benefits”). Under the Offer Letter, Mr. Appelgate’s employment is at-will.
Termination (Without Cause) or Resignation
for Good Reason. Additionally, under the Employment Agreements, in the event that an Officer is terminated without cause, then such
Officer shall be entitled to, among other benefits, the Accrued Benefits, for Mr. Tomlinson, twelve months’ salary and for all other
Officers, six months’ salary paid in regular installments in accordance with Holley Inc.’s general payroll practice (as specified
in the Officer’s Employment Agreement), and an annual bonus, if any, that such Officer would have been entitled to for the year
in which termination occurs (on a pro-rated basis for any partial year) based on actual financial results for such year and on an assumed
target-level achievement by the executive of any personal performance objectives for such annual bonus.
Under the Offer Letter, Mr. Appelgate’s employment is at-will.
Separation Agreement
As previously disclosed, Mr. Tomlinson retired as President and Chief Executive Officer effective February 6, 2023. Pursuant to his separation
agreement, it is contemplated that he will receive those separation payments and benefits that he is entitled to receive under his employment
agreement in respect of a termination without cause, which agreement has previously been disclosed. As of the date of this proxy statement,
the Company and Mr. Tomlinson are in discussions regarding the terms of his separation.
Non-Competition; Non-Interference; Customer Non-Solicit. Each Officer
agreed during the term of the Employment Agreement and for one year thereafter (i) to not directly or indirectly compete with the business
in which Holley or any of its subsidiaries is engaged on the date of termination or in which they have actively planned, on or prior to
such date of termination, to be engaged in on or after such date, in any country in which Holley conducts business or actively plans to
conduct business, (ii) to not solicit any individual or entity that was a customer during the twelve-month period immediately prior to
such Officer’s termination of employment, and (iii) to not interfere or induce any other person or entity in interfering, with the
relationship between Holley or any of its subsidiaries and any of their respective vendors or licensors. Additionally, Holley may extend
the term of these non-competition provisions for up to an additional year by providing notice to the Officer at least nine months before
the end of the one-year period following such Officer’s employment with Holley, provided that Holley pay to such Officer his annual
base salary and, for Mr. Tomlinson only, reimbursements for expenses related to COBRA benefits not to exceed 18 months following the date
of such Officer’s termination, and 50% of the applicable target bonus amount for the year in which such Officer’s employment
was terminated.
Employee Non-Solicit. Additionally, during the employment term and
for two years thereafter, each Officer agreed to (i) not solicit any employee of Holley or any of its subsidiaries to leave such employment
or hire such employee or materially assist any other person in hiring any such employee and (ii) not interfere or induce any other person
or entity in interfering, with the relationship between Holley or any of its subsidiaries and any of their joint ventures.
Potential Payments Upon Termination or Change in Control
Severance Benefits
Other than as set forth below, Holley did not offer or have in place for
its named executive officers any formal retirement, severance, or similar compensation programs providing for additional benefits or payments
in connection with a termination of employment, change in job responsibility, or change in control as of December 31, 2022.
Tom Tomlinson. Pursuant to Mr. Tomlinson’s employment agreement,
if Mr. Tomlinson’s employment is terminated by Holley without cause or by Mr. Tomlinson for good reason (each, as defined in his
employment agreement), subject to Mr. Tomlinson’s execution and non-revocation of a general release of claims in favor of Holley
and its officers, directors, and agents, Mr. Tomlinson is entitled to (i) continued payment of his base salary as in effect on the date
of such termination for twelve months following the date of such termination, (ii) a monthly reimbursement for the costs of continued
health benefits for himself and his covered dependents under COBRA for twelve months following the date of such termination or such earlier
date on which COBRA coverage terminates, provided that Mr. Tomlinson was eligible for continued coverage under COBRA, and (iii) a pro-rated
annual bonus for the year in which the termination of employment occurs based on Mr. Tomlinson’s and Holley’s actual performance,
payable at the same time as such bonus would have otherwise been paid had his employment not terminated. Mr. Tomlinson is subject to certain
restrictive covenants under his employment agreement, including a one-year post-termination non-compete and non-solicit of customers and
suppliers of Holley and its subsidiaries, each with an option that Holley extend the restrictions for up to one additional year upon nine
months’ written notice and the continued payment of base salary through the extension period, the continued payment of COBRA premiums
through the extension period, but not to exceed 18 months from the termination date, and a payment of 50% of the target bonus for the
year in which the termination of employment occurred, and a two-year post-termination non-solicit of the employees and consultants of
Holley and its subsidiaries.
Dominic Bardos. Mr.
Bardos resigned from Holley, effective September 30, 2022. Under the terms of Mr. Bardos’ employment agreement, he did not receive
any separation payments and forfeited all unvested awards.
Carly Kennedy. Pursuant to Ms. Kennedy’s employment agreement,
if Ms. Kennedy’s employment is terminated by Holley without cause (as defined in her employment agreement), subject to Ms. Kennedy’s
execution and non-revocation of a general release of claims in favor of Holley and its officers, directors, and agents, Ms. Kennedy is
entitled to (i) continued payment of her base salary as in effect on the date of such termination for six months following the date of
such termination, and (ii) a pro-rated annual bonus for the year in which the termination of employment occurs based on Ms. Kennedy’s
and Holley’s actual performance, payable at the same time as the payment of annual bonuses to other senior executives of Holley.
Ms. Kennedy is subject to certain restrictive covenants under her employment agreement, including a one-year post-termination non-compete
and non-solicit of customers and suppliers of Holley and its subsidiaries, each with an option that Holley extend the restrictions for
up to one additional year upon nine months’ written notice and the continued payment of base salary through the extension period,
and a two-year post-termination non-solicit of the employees and consultants of Holley and its subsidiaries.
Change in Control
Incentive Units. Any Incentive Units are fully vested as of December
31, 2022, and will participate in their pro-rata share of any distributions made by the Holley Stockholder only if the Sentinel investors
have achieved a 2.0 times, 2.5 times or 3.0 times return, respectively.
Awards under the 2021 Omnibus Incentive Plan. Unless provided otherwise
in the applicable award agreement, the 2021 Omnibus Incentive Plan provides for the acceleration of outstanding awards that are not assumed
in a change in control (as such term is defined in the 2021 Omnibus Incentive Plan) upon certain termination events that occur following
such change in control. In the event that an Officer’s employment is terminated by us or a successor without cause or such Officer
resigns for good reason (each as defined in the 2021 Omnibus Incentive Plan) within the two (2) year period following such change of control,
then any outstanding unvested award will immediately vest as of the date of such Officer’s termination of employment or resignation.
Compensation Committee Interlocks and Insider Participation
Our Compensation and Talent Committee consists of Mr. Clempson, who serves
as the chair, along with Mr. Basham and Ms. Jones. None of our executive officers currently serves, or has served during the last year,
as a member of the board of directors or compensation committee of any entity that has one or more executive officers that will serve
as a member of our board of directors or Compensation Committee.
EQUITY COMPENSATION PLAN INFORMATION
The following table sets forth information about our Common Stock that
may be issued under equity compensation plans as of December 31, 2022. Our only equity compensation plan as of December 31, 2022, was
the Holley Inc. 2021 Omnibus Incentive Plan.
| |
|
(A) |
|
(B) |
|
(C) |
| |
|
NUMBER OF
SECURITIES TO
BE ISSUED UPON
EXERCISE OF
OUTSTANDING
OPTIONS, WARRANTS
AND RIGHTS(1) |
|
WEIGHTED-AVERAGE
EXERCISE PRICE
OF OUTSTANDING
OPTIONS,
WARRANTS AND
RIGHTS(2) |
|
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR
FUTURE ISSUANCE UNDER
EQUITY COMPENSATION
PLANS (EXCLUDING
SECURITIES REFLECTED IN
COLUMN (A))(3) |
| Equity Compensation Plans Approved by Security Holders |
|
3,033,295 |
|
$10.97 |
|
5,816,705 |
| Equity Compensation Plans Not Approved by Security Holders |
|
— |
|
— |
|
— |
| Total |
|
3,033,295 |
|
$10.97 |
|
5,816,705 |
| (1) | This column reflects restricted stock units and stock options granted under the 2021 Omnibus Incentive
Plan that were outstanding as of December 31, 2022. |
| (2) | The weighted-average exercise price is calculated based solely on the exercise prices of the outstanding
options and do not reflect the shares that will be issued upon the vesting of outstanding restricted stock units, which have no exercise
price. |
| (3) | This column reflects the total shares of our Common Stock remaining available for issuance under the
Holley Inc. 2021 Omnibus Incentive Plan as of December 31, 2022. |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Policies and Procedures for the Company’s Related
Person Transactions
Our Audit Committee charter provides that our Audit Committee must review
policies and procedures for the review and approval of related person transactions, as defined in applicable SEC rules, review related
person transactions, and oversee other related person transactions governed by applicable accounting standards.
Related Person Transaction Policy
We have adopted a written policy regarding the review and approval or disapproval
by our Audit Committee of transactions between us or any of our subsidiaries and any related person (defined to include our executive
officers, directors or director nominees, any stockholder beneficially owning in excess of 5% of our stock or securities exchangeable
for our stock, and any immediate family member of any of the foregoing persons) in which one or more of such related persons has a direct
or indirect interest. In approving or rejecting any such transaction, our Audit Committee will consider the relevant facts and circumstances
available and deemed relevant to the Audit Committee, including as applicable (1) the Company’s business rationale for entering
into the transaction, (2) the alternatives to entering into the transaction, (3) whether the transaction is on terms no less favorable
than terms generally available to an unaffiliated third party under the same or similar circumstances, (4) the extent of the related person’s
interest in the transaction, and (5) the potential for the transaction to lead to an actual or apparent conflict of interest. Any member
of the Audit Committee who is a related person with respect to a transaction under review will not be permitted to participate in the
deliberations or vote on approval or disapproval of the transaction.
Related Party Transactions
Holley
Management Services Agreement
On October 26, 2018, the Holley MSA Parties entered into the Management
Services Agreement with Sentinel Capital Partners. In connection with, and prior to, the Closing, the Management Services Agreement was
terminated. Pursuant to the Management Services Agreement, the Holley MSA Parties were collectively obligated to pay Sentinel Capital
Partners an annual $3.5 million management fee for certain consulting services, payable in four quarterly installments. Pursuant to the
Management Services Agreement, the management fee would have increased to $4.0 million and $5.0 million upon the achievement of certain
preset benchmarks with respect to EBITDA. In addition to the annual payment, the Holley MSA Parties paid a fee of $11.8 million to Sentinel
in connection with the acquisition by the Sentinel Investors of Holley in 2018 and $23.3 million to Sentinel in connection with the Business
Combination. The Holley MSA Parties also reimbursed Sentinel Capital Partners for reasonable out-of-pocket fees and expenses incurred
in connection with providing the consulting services. The Master Services Agreement terminated prior to the Closing. Mr. Coady and Mr.
Basham, members of our Board, are partners at Sentinel.
Holley Parent LLC Grants
The Holley Stockholder previously made grants of Incentive Units from time
to time pursuant to the Holley Stockholder LLCA and the Equity Grant Agreements to certain of its employees and other service providers,
including certain executive officers of Holley as described in the section entitled “Executive Compensation-Narrative Disclosure
to the Summary Compensation Table-Incentive Units.”
On July 13, 2021, the Holley Stockholder made certain grants of Incentive
Units to each of Messrs. Tomlinson, Bardos, Nimmagadda, Crawford, Rutledge, Trussell, and Bruce, which are fully vested as of December
31, 2022. The aggregate value of the Incentive Unit grants made to each of Messrs. Tomlinson, Bardos, Nimmagadda, Crawford, Rutledge,
Trussell, and Bruce on July 13, 2021 is set forth below. All of the Incentive Units are generally subject to the terms and conditions
of the Holley Stockholder LLCA, with the Class D-1 Units, Class D-2 Units, and Class D-3 Units only participating in proceeds at such
time that the Sentinel Investors achieve a return on their investment of 2.0 times, 2.5 times and 3 times, respectively.
| EXECUTIVE
OFFICERS: |
|
GRANT
DATE
FAIR VALUE OF
GRANT |
|
|
NUMBER
OF
C UNITS |
|
|
NUMBER
OF
D-1
UNITS |
|
|
NUMBER
OF
D-2
UNITS |
|
|
NUMBER
OF
D-3
UNITS |
| Tom
Tomlinson |
|
|
$4,027,910.53 |
|
|
|
688,476.90 |
|
|
|
811,834.33 |
|
|
|
874,830.61 |
|
|
|
702,007.45 |
| Dominic
Bardos |
|
|
$ 67,634.13 |
|
|
|
11,560.47 |
|
|
|
13,631.81 |
|
|
|
14,689.60 |
|
|
|
11,787.67 |
| Vinod
Nimmagadda |
|
|
$ 67,634.13 |
|
|
|
11,560.47 |
|
|
|
13,631.81 |
|
|
|
14,689.60 |
|
|
|
11,787.67 |
| Sean
Crawford |
|
|
$1,194,085.61 |
|
|
|
204,100.95 |
|
|
|
240,670.61 |
|
|
|
259,346.04 |
|
|
|
208,112.12 |
| Terrill
Rutledge |
|
|
$ 799,645,41 |
|
|
|
136,680.64 |
|
|
|
161,170.31 |
|
|
|
173,676.72 |
|
|
|
139,366.81 |
| Stephen
Trussell |
|
|
$ 898,387.07 |
|
|
|
153,558.21 |
|
|
|
181,071.91 |
|
|
|
195,122.64 |
|
|
|
156,576.08 |
| Jason
Bruce |
|
|
$ 865,782.63 |
|
|
|
147,985.25 |
|
|
|
174,500.41 |
|
|
|
188,041.21 |
|
|
|
150,893.58 |
Non-Disclosure Agreements
On August 10, 2021, the Company entered into (i) a Non-Disclosure Agreement
with Sentinel Capital Partners, and Owen Basham and James Coady, each of whom were nominated to serve as a director of the Company by
certain affiliates of Sentinel Capital Partners pursuant to the Stockholders’ Agreement and (ii) a Non-Disclosure Agreement with
MidOcean US Advisor, LP, Matthew Rubel, who was nominated to serve as a director of the Company by certain affiliates of MidOcean US Advisor,
LP pursuant to the Stockholders’ Agreement, and prior to his appointment as director, Graham Clempson, in his capacity as observer
of the board of directors of the Company. The Non-Disclosure Agreements provide that (i) Messrs. Basham and Coady may share certain confidential
information obtained in their capacity as directors of the Company with Sentinel Capital Partners and certain representatives of Sentinel
Capital Partners, and (ii) Messrs. Rubel and Clempson may share certain confidential information obtained in their capacity as directors
of the Company with MidOcean US Advisor, LP and certain representatives of MidOcean US Advisor, LP. Under the Non-Disclosure Agreements,
Sentinel Capital Partners and MidOcean US Advisor, LP have each agreed to keep all confidential information shared pursuant to their respective
Non-Disclosure Agreement strictly confidential and not disclose such information to any person other than certain representatives for
certain specified permissible uses, subject to the terms and conditions of the applicable Non-Disclosure Agreement.
Empower
Founder Shares
On August 21, 2020, the MidOcean Sponsor purchased 7,187,500 Founder Shares
for an aggregate price of $25,000. The MidOcean Sponsor agreed to forfeit up to 937,500 Founder Shares to the extent that the over-allotment
option was not exercised in full by the underwriters. The forfeiture was to be adjusted to the extent that the over-allotment option was
not exercised in full by the underwriters so that the Founder Shares would represent 20.0% of Empower’s issued and outstanding shares
after the initial public offering. The underwriters declined to exercise their 45-day over-allotment option in connection with our initial
public offering; thus, the 937,500 Founder Shares were forfeited by the MidOcean Sponsor.
Pursuant to the Sponsor Agreement, the MidOcean Sponsor agreed to (i) waive
certain of its anti-dilution and conversion rights with respect to the Founder Shares and (ii) an earn-out in respect of 2,187,500 Earn-Out
Shares vesting in two equal tranches. The first tranche of 1,093,750 Earn-Out Shares vested during 2022 when the closing price of Holley’s
Common Stock exceeded $13.00 per share for a twenty (20) trading day period within a thirty trading day period. The second tranche of
1,093,750 of Earn-Out Shares will vest the earlier of (x) the closing price of the Common Stock equals or exceeds $13.00 per share for
any twenty (20) trading days within any thirty trading day period or (y) the Company completes a liquidation, merger, capital stock exchange,
reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their
Common Stock at a price per share equal to or exceeding $15.00 per share. The Earn-Out Shares will be forfeited by the MidOcean Sponsor
if the applicable conditions are not satisfied before July 16, 2028 (seven years after the Closing Date).
Private Warrants
Simultaneously with the closing of the initial public offering, Empower
sold 4,666,667 Private Warrants to the MidOcean Sponsor at a price of $1.50 per Private Warrant, generating gross proceeds of $7,000,000.
Each Private Warrant is exercisable for one share of Common Stock at a price of $11.50 per share. A portion of the net proceeds from the
private placement was added to the proceeds from the initial public offering held in the trust account that became available following
the Closing. The Private Warrants are non-redeemable and exercisable on a cashless basis so long as they are held by the MidOcean Sponsor
or its permitted transferees.
The MidOcean Sponsor and Empower’s officers and directors agreed,
subject to limited exceptions, not to transfer, assign or sell any of their Private Warrants until August 15, 2021, the date that was
30 days after the Closing Date.
Registration Rights
At Closing, the MidOcean Sponsor, the Company and the Holley Stockholder,
amended and restated that certain Registration and Shareholder Rights Agreement, dated as of October 6, 2020. Under the A&R Registration
Rights Agreement, the Company agreed to register for resale, pursuant to Rule 415 under the Securities Act, certain shares of Common Stock
and other equity securities of the Company that are held by the MidOcean Sponsor and the Holley Stockholder from time to time. Under the
A&R Registration Rights Agreement, the Holley Stockholder and Sponsor are entitled within any twelve-month period to make four written
shelf takedown requests that the Company register the resale of any or all of their Common Stock on Form S-3 (or Form S-1 if the Company
is ineligible to use Form S-3), so long as such demand is for at least $30,000,000 in shares of Common Stock of all stockholders participating
in such shelf takedown, or all registrable securities held by the requesting party. Subject to certain customary exceptions, if the Company
proposes to file a registration statement under the Securities Act with respect to its securities, the Company will give notice to the
relevant security holders party to the A&R Registration Rights Agreement as to the proposed filing and offer such security holders
an opportunity to register the resale of such number of their Common Stock as requested by such stockholders, subject to customary cutbacks
in an underwritten offering. Any other stockholders of the Company with piggyback registration rights may also participate in any such
registrations, subject to customary cutbacks in an underwritten offering. The registration statement, of which this prospectus forms a
part, registers all of the shares of Common Stock and Warrants held by the Holley Stockholder and the MidOcean Sponsor. The Holley Stockholder
and the MidOcean Sponsor also each acknowledged it is subject to the lock-up restrictions under the Seller Lock-Up Agreement and the Letter
Agreement, respectively.
The registration statement of which this prospectus forms a part registers
6,250,000 shares of Common Stock and 4,666,667 Warrants held by the MidOcean Sponsor and 67,673,884 shares of Common Stock held by the
Holley Stockholder subject to these registration rights.
Stockholders’ Agreement
At the Closing, the Company and certain affiliates of Sentinel and the
MidOcean Sponsor entered into the Stockholders’ Agreement, pursuant to which Sentinel and the MidOcean Sponsor have the right to
designate nominees for election to the Company’s board of directors subject to certain beneficial ownership requirements.
A&R FPA
Concurrent with the execution of the Merger Agreement, Empower and the
A&R FPA Investor entered into the A&R FPA, pursuant to which the A&R FPA Investor agreed to purchase an aggregate of 5,000,000
Empower Units, or $50,000,000 in the aggregate. On July 9, 2021, Empower and A&R FPA Investor entered into that certain Assignment
and Assumption Agreement with the New FPA Purchasers, pursuant to which A&R FPA Investor assigned its right to purchase 4,975,000
Empower Units to MidOcean Partners V, L.P. and 25,000 Empower Units to MidOcean Partners V Executive, L.P., in each case pursuant to the
A&R FPA. Immediately prior to the domestication completed in connection with the Business Combination, the New FPA Purchasers were
issued 5,000,000 Empower Units for an aggregate purchase price of $50,000,000. Following the domestication completed in connection with
the Business Combination, each Empower Unit was subsequently separated into one share of Common Stock and one-third of one Public Warrant.
Pursuant to the A&R FPA, the New FPA Purchasers agreed that they will not exercise the underlying Warrants until October 9, 2021 (the
one-year anniversary of Empower’s initial public offering). The A&R FPA also removed the requirement that the MidOcean investment
committee approve the initial business combination prior to the sale and issuance of Empower Units.
PIPE Subscription Agreements
MidOcean Partners V, LP, an affiliate of the MidOcean Sponsor, entered
into a PIPE Subscription Agreement with the Company on March 11, 2021 to purchase up to 1,950,000 shares of Common Stock in connection
with the Business Combination for an aggregate purchase price of $19,500,000. The terms of the PIPE Subscription Agreement entered into
with MidOcean Partners V, LP are the same as other PIPE Investors. With the consent of Empower, MidOcean Partners V, LP assigned (i) 50,000
shares under its PIPE Subscription Agreement to a new PIPE Investor on March 17, 2021 and (ii) 100,000 shares under its PIPE Subscription
Agreement to another new PIPE Investor on May 11, 2021.]
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth information known to Holley regarding beneficial
ownership of shares of Common Stock as of March 17, 2023 by:
| ● | each person who is known by us to be the beneficial owner of more than five percent (5%) of the outstanding shares of Common Stock; |
| ● | each of our named executive officers and directors; and |
| ● | all current executive officers and directors as a group. |
Beneficial ownership is determined under the rules of the SEC and generally
includes voting or investment power over securities. Except in cases where community property laws apply or as indicated in the footnotes
to this table, we believe that each securityholder identified in the table possesses sole voting and investment power over all securities
shown as beneficially owned thereby. Shares of Common Stock subject to options and Warrants that are exercisable or will be exercisable
within 60 days of March 17, 2023 are considered outstanding and beneficially owned by the person holding the option or Warrant for the
purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage
ownership of any other person. The beneficial ownership percentages set forth in the table below are based on 117,993,139 shares of Common
Stock issued and outstanding as of March 17, 2023.
| NAME
AND ADDRESS OF BENEFICIAL OWNERS(1) |
|
NUMBER
OF
SHARES |
|
|
OWNERSHIP
PERCENTAGE (%) |
| 5%
Stockholders: |
|
|
|
|
|
| Holley
Parent Holdings, LLC(2) |
|
54,673,884 |
|
|
46.2% |
| MidOcean(3) |
|
15,957,917 |
|
|
12.9% |
| Kayne
Anderson Rudnick Investment Management LLC(4) |
|
14,145,829 |
|
|
11.4% |
| Named
Executive Officers, Directors and Director Nominees: |
|
|
|
|
|
| Matthew
Rubel(5) |
|
1,131,458 |
|
|
1.0% |
| Graham
Clempson |
|
433,333 |
|
|
** |
| Tom
Tomlinson(6)(7) |
|
266,059 |
|
|
** |
| Michelle
Gloeckler |
|
26,320 |
|
|
** |
| Ginger
M. Jones |
|
26,320 |
|
|
** |
| Anita
Sehgal |
|
9,320 |
|
|
** |
| Owen
M. Basham(6) |
|
9,320 |
|
|
** |
| James
D. Coady(6) |
|
9,320 |
|
|
** |
| Brian
Appelgate(6) |
|
29,063 |
|
|
** |
| Carly
Kennedy |
|
15,624 |
|
|
** |
| Dominic
Bardos(6) |
|
— |
|
|
** |
| All
directors and officers as a group (18 individuals) |
|
1,088,898 |
|
|
** |
| (1) | Unless
otherwise noted, the business address of each of the named executive officers and directors
of Holley is c/o Holley Inc., 1801 Russellville Rd, Bowling Green, Kentucky 42101. |
| (2) | Based
on Schedule 13D/A filed with the SEC on April 27, 2022 by Holley Parent Holdings, LLC. Consists
of shares of Common Stock that is held by the Holley Stockholder. The Holley Stockholder
is governed by the Holley Stockholder LLCA among the Sentinel Investors and the other members
party thereto. By virtue of (a) the ability of the Sentinel Investors under the Holley Stockholder
LLCA to appoint and remove a majority of the members of the board of directors of the Holley
Stockholder and (b) the ability of a majority of the board of directors of the Holley Stockholder
to control investment and voting power over the shares of Common Stock held by the Holley
Stockholder, the Sentinel Investors may be deemed to have beneficial ownership over the shares
of Common Stock held of record by the Holley Stockholder. The Sentinel Investors are controlled
by Sentinel Partners V, L.P. (“Sentinel Partners V”), their general partner,
which is controlled by Sentinel Managing Company V, Inc. (“Sentinel Managing Company”),
its general partner, which is controlled by David S. Lobel, its president and sole shareholder.
Accordingly, each of Sentinel Partners V, Sentinel Managing Company and Mr. Lobel may be
deemed to have beneficial ownership over the shares of Common Stock held by the Holley Stockholder.
Each of the Sentinel Investors, Sentinel Partners V, Sentinel Managing Company and Mr. Lobel
disclaims beneficial ownership of the shares of Common Stock held by the Holley Stockholder
other than to the extent of their pecuniary interest therein. The address for each of the
foregoing is c/o Sentinel Capital Partners, L.L.C., One Vanderbilt Avenue, 53rd
Floor, New York, NY 10017. |
| (3) | Based
on Schedule 13D/A filed with the SEC on August 8, 2022 by MidOcean. Amount includes 5,666,667
shares of Common Stock underlying 4,000,000 Private Placement Warrants and 1,666,667 Public
Warrants. The managing member of the MidOcean Sponsor is MidOcean Associates V, L.P., a Delaware
limited partnership (“Associates”). The general partner of MidOcean Partners
V, L.P., a Delaware limited partnership (“Partners”) and MidOcean Partners Executive
V, L.P., a Delaware limited partnership (“Executive”) is Associates. The general
partner of Associates is Ultramar Capital, Ltd, a Cayman Islands company (“Ultramar”),
which is controlled by James Edward Virtue (“Virtue”). Accordingly, (i) each
of Partners, Associates, Ultramar, and Virtue may be deemed to have beneficial ownership
of the securities held by Sponsor, and (ii) each of Associates, Ultramar, and Virtue may
be deemed to have beneficial ownership of the securities held by Partners and Executive,
and in each case, each of Sponsor, Partners, Executive, Associates, Ultramar and Virtue disclaims
beneficial ownership of such securities except to the extent of their pecuniary interest
therein. The business address of each of Sponsor, Executive, Partners, Associates, Ultramar
and Virtue is 245 Park Avenue, 38th Floor, New York, NY 10167. |
| (4) | Based
on Schedule 13G/A filed with the SEC on February 14, 2023 by Kayne Andersen Rudnick Investment
Management, LLC. Kayne Andersen Rudnick Investment Management, LLC is a registered investment
company under the Investment Company Act of 1940. The Schedule 13G/A provides that the shares
noted as beneficially owned by Kayne Anderson include: (i) 10,850,251 shares beneficially
owned by Virtus Investment Advisers, Inc., One Financial Plaza, Hartford, Connecticut 06103,
for which such person has shared voting and dispositive power, and (ii) 10,610,230 shares
beneficially owned by Virtus Equity Trust, on behalf of Virtus KAR Small Cap Growth Fund,
101 Munson Street, Greenfield, Massachusetts 01301, for which such person has shared voting
and dispositive power. The business address of Kayne Andersen Rudnick Investment Management,
LLC is 2000 Avenue of the Stars, Ste. 1110, Los Angeles, CA 90067. |
| (5) | Does
not include any shares indirectly owned by this individual as a result of the individual’s
membership interest in the MidOcean Sponsor. Each of these individuals disclaims beneficial
ownership of any shares except to the extent of their pecuniary interest therein. |
| (6) | Does
not include any shares indirectly owned by this individual as a result of the individual’s
securities interest in the Holley Parent Holdings, LLC. Each of these individuals disclaims
beneficial ownership of any shares except to the extent of their pecuniary interest therein. |
| (7) | Includes 28,153 shares underlying vested restricted stock units that
Mr. Tomlinson was offered in connection with his retirement on February 6, 2023. As of the date of this proxy statement, the Company
and Mr. Tomlinson are in discussions regarding the terms of his separation. |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, executive officers
and holders of more than 10% of Holley’s stock to file reports with the SEC regarding their ownership and changes in ownership of
our securities. Based upon our examination of the copies of Forms 3, 4, and 5, and amendments thereto filed electronically with the SEC
and the written representations of our directors, executive officers and 10% stockholders, we believe that, during fiscal 2022, our directors,
executive officers and 10% stockholders complied with all Section 16(a) filing requirements, except that the Form 4 filings for Messrs.
Coady and Basham were filed late due to administrative errors and the Form 4/A filing Empower Sponsor Holdings LLC was filed late due
to administrative errors.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
This proxy statement is being provided to you in connection with the solicitation
of proxies by the Board of Directors of the Company for use at the Annual Meeting to be held on Tuesday, May 9, 2023 at 8:00 a.m. Central
Time, or at any adjournments or postponements thereof.
WHERE
IS THE ANNUAL MEETING BEING HELD?
The
Board has determined that the Annual Meeting should be held online this year via live audiocast. We believe that this is the right choice
for Holley and its stockholders as it provides expanded stockholder access, improves communications and, given the ongoing pandemic,
promotes the health and safety of participants by allowing them to participate from any location. This format also reduces the environmental
impact of the Annual Meeting. The Company has endeavored to provide stockholders with the same rights and opportunities for participation
in the Annual Meeting online as an in-person meeting.
HOW
CAN I PARTICIPATE IN AND VOTE AT THE ANNUAL MEETING ONLINE?
Stockholders
of record as of the close of business on March 17, 2023, the record date, are entitled to participate in and vote at the Annual Meeting.
To participate in the Annual Meeting, including to vote, ask questions, and view the list of registered stockholders as of the record
date during the meeting, stockholders of record should go to the Annual Meeting website at www.virtualshareholdermeeting.com/HLLY2023,
enter the 16-digit control number found on your proxy card or Notice and follow the instructions on the website.
If
your shares are held in street name and your voting instruction form indicates that you may vote those shares through the http://www.proxyvote.com
website, then you may access, participate in, and vote at the Annual Meeting with the 16-digit access code indicated on that voting instruction
form. Otherwise, stockholders who hold their shares in street name should contact their bank, broker or other nominee (preferably at
least 5 days before the Annual Meeting) and obtain a “legal proxy” in order to be able to attend, participate in, or vote
at the Annual Meeting.
The
Annual Meeting will begin promptly at 8:00 a.m. Central Time on Tuesday, May 9, 2023. Online check-in will begin at approximately 7:45 a.m. Central Time, and we encourage you to provide sufficient time before the Annual Meeting begins to check-in. Technicians will be
available to assist you with any difficulties you may have accessing the Annual Meeting.
Stockholders
may submit questions before the Annual Meeting at www.proxyvote.com and during the Annual Meeting at the meeting website. We plan to
answer as many questions as possible during the time permitted. More information regarding the question and answer process, including
the number and types of questions permitted, and how questions will be recognized, answered, and disclosed, will be available in the
meeting rules of conduct, which will be posted on the Annual Meeting website.
WHAT
PROPOSALS WILL BE ADDRESSED AT THE ANNUAL MEETING?
Stockholders will be asked to consider the following proposals at the Annual
Meeting:
| 1. | To elect two Class II directors named in this proxy statement; and |
| 2. | To ratify the appointment of Grant Thornton as the Company’s independent registered public accounting firm for 2023. |
We will also consider any other business that properly comes before the
Annual Meeting.
HOW
DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?
Our
Board unanimously recommends that stockholders vote “FOR” each nominee for director and “FOR” the
ratification of the selection of Grant Thornton as our independent registered public accounting firm.
WHO
MAY VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS?
Stockholders
who owned shares of the Company’s common stock, par value $.0001 per share, as of the close of business on March 17, 2023 are entitled
to vote at the Annual Meeting. As of the record date, there were 118,265,966 shares of our common stock issued and outstanding.
HOW
MANY VOTES MUST BE PRESENT TO HOLD THE ANNUAL MEETING?
In
order for us to conduct the Annual Meeting, a quorum, consisting of a majority of the voting power of the stock issued and outstanding
and entitled to vote at the Annual Meeting, must be present or represented by proxy.
HOW
MANY VOTES DO I HAVE?
Each
share of common stock is entitled to one vote on each matter that comes before the Annual Meeting.
WHAT
IS THE DIFFERENCE BETWEEN A STOCKHOLDER OF RECORD AND A BENEFICIAL OWNER OF SHARES HELD IN STREET NAME?
Stockholder of Record. If your shares are registered directly in
your name with the Company’s transfer agent, Continental Stock Transfer & Trust Company, you are considered the stockholder
of record with respect to those shares, and the proxy materials were sent directly to you by the Company.
Beneficial
Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar
organization, then you are the beneficial owner of shares held in “street name,” and the proxy materials were forwarded to
you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the
Annual Meeting. As a beneficial owner, you have the right to instruct that organization on how to vote the shares held in your account.
Those instructions are contained in a “vote instruction form.”
WHAT
IS THE PROXY CARD?
The
proxy card enables you to appoint Carly Kennedy and Jesse Weaver as your representatives at the Annual Meeting. By completing and returning
the proxy card, you are authorizing Carly Kennedy and Jesse Weaver to vote your shares at the Annual Meeting in accordance with your
instructions on the proxy card. This way, your shares will be voted whether or not you attend the Annual Meeting. Even if you plan to
attend the Annual Meeting, it is strongly recommended that you complete and return your proxy card before the Annual Meeting date in
case your plans change. If a proposal comes up for vote at the Annual Meeting that is not on the proxy card, the proxies will vote your
shares, under your proxy, according to their best judgment.
IF
I AM A STOCKHOLDER OF RECORD OF THE COMPANY’S SHARES, HOW DO I VOTE?
Before the Annual Meeting, you may vote:
| ● | By mail, by completing, signing, and dating your proxy card (if you have received a paper copy of a proxy card by mail). |
| ● | Online at www.proxyvote.com. |
| ● | By telephone, at 1-800-690-6903. |
During the Annual Meeting, you may vote online at www.virtualshareholdermeeting.com/HLLY2023.
IF I AM A BENEFICIAL OWNER OF SHARES HELD IN STREET NAME,
HOW DO I VOTE?
Beneficial owners should check their voting instruction form for how to
vote in advance of and how to participate in the Annual Meeting.
WILL MY SHARES BE VOTED IF I DO NOT PROVIDE MY PROXY?
If you hold your shares directly in your own name, they will not be voted
if you do not provide a proxy.
Your shares may be voted under certain circumstances if they are held in
the name of a brokerage firm, bank, broker-dealer, or other similar organization. Brokerage firms, banks, broker-dealers, and other similar
organizations generally have the authority to vote shares not voted by customers on certain “routine” matters, including the
ratification of an independent registered public accounting firm. Accordingly, at the Annual Meeting, your shares may only be voted by
your brokerage firm, bank, broker-dealer, or other similar organization for the ratification of our independent registered public accounting
firm.
Brokers are prohibited from exercising discretionary authority on non-routine
matters. The election of directors is considered a non-routine matter, and therefore brokers cannot exercise discretionary authority regarding
this proposal for beneficial owners who have not returned proxies to the brokers (so-called “broker non-votes”). In the case
of broker non-votes, and in cases where you abstain from voting on a matter when present at the Annual Meeting and entitled to vote, those
shares will still be counted for purposes of determining if a quorum is present.
WHAT VOTE IS REQUIRED TO ELECT DIRECTORS?
Directors are elected by a plurality of the votes cast at the Annual Meeting.
As a result, the nominees who receive the highest number of shares voted “for” his or her election are elected.
A “withhold” vote against a director will have no direct effect
on his or her election. Broker non-votes will have no effect on this proposal.
WHAT VOTE IS REQUIRED TO RATIFY THE SELECTION BY OUR
AUDIT COMMITTEE OF GRANT THORNTON AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM?
Approval of the proposal to ratify the selection of Grant Thornton as our
independent registered public accounting firm requires the affirmative vote of at least a majority of the votes cast by stockholders present
in person or represented by proxy and entitled to vote thereon.
Abstentions are not considered votes cast and will have no effect on this
proposal. Because this is considered a “routine” matter, we do not expect there to be any broker non-votes.
CAN I CHANGE MY VOTE AFTER I HAVE VOTED?
You may revoke your proxy and change your vote at any time before the final
vote at the Annual Meeting. You may revoke your proxy or change your vote by voting at a later date by Internet or telephone or, if you
received a paper copy of a proxy card by mail, by signing and returning a new proxy card with a later date or by attending the Annual
Meeting online and voting. Your attendance at the Annual Meeting online will not automatically revoke your proxy unless you vote again
at the Annual Meeting or specifically request that your prior proxy be revoked by delivering to the Company’s Chief Financial Officer
at 1801 Russellville Road, Bowling Green, KY 42101 a written notice of revocation prior to the Annual Meeting.
Please note, however, that if your shares are held of record by a brokerage
firm, bank or other nominee, you must instruct your broker, bank or other nominee that you wish to change your vote by following the procedures
on the voting form provided to you by the broker, bank or other nominee.
WHAT HAPPENS IF I DO NOT INDICATE HOW TO VOTE MY PROXY?
If you vote by proxy card and sign your proxy card without providing further
instructions, your shares will be voted “FOR” each of the director nominees and “FOR” the ratification of Grant
Thornton to serve as our independent registered public accounting firm for the fiscal year ended December 31, 2023.
IS MY VOTE KEPT CONFIDENTIAL?
Proxies, ballots and voting tabulations identifying stockholders are kept
confidential and will not be disclosed except as may be necessary to meet legal requirements.
WHERE DO I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?
We will announce preliminary voting results at the Annual Meeting. The
final voting results will be tallied by the inspector of elections and published in the Company’s Current Report on Form 8-K, which
the Company will file with the SEC within four business days following the Annual Meeting.
WHO BEARS THE COST OF SOLICITING PROXIES?
The Company will bear the cost of soliciting proxies in the accompanying
form and will reimburse brokerage firms and others for expenses involved in forwarding proxy materials to beneficial owners or soliciting
their execution. In addition to solicitations by mail, the Company, through its directors and officers, may solicit proxies in person,
by telephone or by electronic means. Such directors and officers will not receive any special remuneration for these efforts.
OTHER MATTERS
Other Business
We are not currently aware of any business
to be acted upon at the Annual Meeting other than the matters discussed in this proxy statement. The form of proxy accompanying this proxy
statement confers discretionary authority upon the named proxy holders with respect to amendments or variations to the matters identified
in the accompanying Notice of Annual Meeting and with respect to any other matters which may properly come before the Annual Meeting or
any adjournment or postponement thereof. If other matters do properly come before the Annual Meeting, or at any such adjournment or postponement
of the Annual Meeting, we expect that shares of our common stock, represented by properly submitted proxies, will be voted by the proxy
holders in accordance with the recommendations of our Board.
Submission of Stockholder Proposals for the 2024 Annual
Meeting
Rule 14a-8 Proposals. For any proposal to be considered for inclusion
in our proxy statement and form of proxy for submission to the stockholders at our 2024 annual meeting of stockholders, it must be submitted
in writing and comply with the requirements of Rule 14a-8 of the Exchange Act. Such proposals must be received by the Company at its offices
at 1801 Russellville Road, Bowling Green, KY 42101 no later than November 29, 2023.
Advance Notice Proposals and Nominations. In addition, our Bylaws
provide notice procedures for stockholders to nominate a person as a director and to propose business to be considered by stockholders
at a meeting (but not for inclusion in the proxy statement). Notice of a nomination or proposal must be delivered to the Company at 1801
Russellville Road, Bowling Green, KY 42101 no later than the 90th day, nor earlier than the 120th day, prior to the first anniversary
of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30
days before or more than 30 days after such anniversary date, notice by the stockholder to be timely must be so delivered not later than
the close of business on the later of (i) the 90th day prior to such annual meeting or (ii) the 10th day following the day on which public
announcement of the date of the annual meeting is first made by us. Accordingly, for our 2024 annual meeting of stockholders, notice of
a nomination or proposal must be delivered to us no later than February 9, 2024 and no earlier than January 10, 2024. Nominations and
proposals also must satisfy the other requirements set forth in the Bylaws.
In addition to satisfying the deadlines in the advance notice provisions
of our bylaws, a stockholder who intends to solicit proxies in support of nominees submitted under these advance notice provisions must
provide the notice required under Rule 14a-19 to the Company no later than March 10, 2023.
Householding Information
Unless we have received contrary instructions, we may send a single copy
of this proxy statement to any household at which two or more stockholders reside. This process, known as “householding,”
reduces the volume of duplicate information received at any one household, helps to reduce our expenses, and benefits the environment.
However, if stockholders prefer to receive multiple sets of our disclosure documents at the same address this year or in future years,
the stockholders should follow the instructions described below. Similarly, if an address is shared with another stockholder and together,
both of the stockholders would like to receive only a single set of our disclosure documents, the stockholders should follow these instructions:
If the shares are registered in the name of the stockholder, the stockholder should contact our offices by sending a written request to
1801 Russellville Road, Bowling Green, KY 42101 or calling 270-782-2900, to inform us of his or her request; or if a bank, broker or other
nominee holds the shares, the stockholder should contact the bank, broker or other nominee directly.
Where You Can Find More Information
We file annual and quarterly reports and other reports and information
with the SEC. We distribute to our stockholders annual reports containing financial statements audited by our independent registered public
accounting firm and, upon request, quarterly reports for the first three quarters of each fiscal year containing unaudited financial information.
In addition, the reports and other information are filed through Electronic Data Gathering, Analysis and Retrieval (known as “EDGAR”)
system and are publicly available on the SEC’s website, located at http://www.sec.gov.
We will provide without charge to you, upon written or oral request,
a copy of the Annual Report on Form 10-K for the fiscal year ended December 31, 2022, including the financial statements and schedules.
Any requests for copies of information, reports or other filings with the SEC should be directed to Investor Relations, Holley Inc.,
1801 Russellville Road, Bowling Green, KY 42101.
1801 Russellville Road
Bowling Green, KY 42101
www.holley.com
